[Federal Register Volume 80, Number 181 (Friday, September 18, 2015)]
[Notices]
[Pages 56539-56549]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-23402]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

FEDERAL RESERVE SYSTEM

FEDERAL DEPOSIT INSURANCE CORPORATION


Proposed Agency Information Collection Activities; Comment 
Request

AGENCY: Office of the Comptroller of the Currency (OCC), Treasury; 
Board of Governors of the Federal Reserve System (Board); Federal 
Deposit Insurance Corporation (FDIC).

ACTION: Joint notice and request for comment.

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SUMMARY: In accordance with the requirements of the Paperwork Reduction 
Act (PRA) of 1995 (44 U.S.C. chapter 35), the OCC, the Board, and the 
FDIC (the ``agencies'') may not conduct or sponsor, and the respondent 
is not required to respond to, an information collection unless it 
displays a currently valid Office of Management and Budget (OMB) 
control number. The Federal Financial Institutions Examination Council 
(FFIEC), of which the agencies are members, has approved the agencies' 
publication for public comment of a proposal to extend, with revision, 
the Consolidated Reports of Condition and Income (Call Report), which 
are currently approved collections of information. The deletions of 
certain existing data items, the revisions of certain reporting 
thresholds and certain existing data items, the addition of certain new 
data items, and certain instructional revisions generally are proposed 
to take effect as of the December 31, 2015, or the March 31, 2016, 
report date, depending on the nature of the proposed reporting change. 
At the end of the comment period, the comments and recommendations 
received will be analyzed to determine the extent to which the FFIEC 
and the agencies should modify the proposed revisions prior to giving 
final approval. The agencies will then submit the revisions to OMB for 
review and approval.

DATES: Comments must be submitted on or before November 17, 2015.

ADDRESSES: Interested parties are invited to submit written comments to 
any or all of the agencies. All comments, which should refer to the OMB 
control number(s), will be shared among the agencies.
    OCC: Because paper mail in the Washington, DC area and at the OCC 
is subject to delay, commenters are encouraged to submit comments by 
email, if possible. Comments may be sent to: Legislative and Regulatory 
Activities Division, Office of the Comptroller of the Currency, 
Attention ``1557-0081, FFIEC 031 and 041,'' 400 7th Street SW., Suite 
3E-218, Mail Stop 9W-11, Washington, DC 20219. In addition, comments 
may be sent by fax to (571) 465-4326 or by electronic mail to 
[email protected].
    You may personally inspect and photocopy comments at the OCC, 400 
7th Street SW., Washington, DC 20219. For security reasons, the OCC 
requires that visitors make an appointment to inspect comments. You may 
do so by calling (202) 649-6700. Upon arrival, visitors will be 
required to present valid government-issued photo identification and 
submit to security screening in order to inspect and photocopy 
comments.
    All comments received, including attachments and other supporting 
materials, are part of the public record and subject to public 
disclosure. Do not include any information in your comment or 
supporting materials that you consider confidential or inappropriate 
for public disclosure.
    Board: You may submit comments, which should refer to ``FFIEC 031 
and FFIEC 041,'' by any of the following methods:
     Agency Web site: http://www.federalreserve.gov. Follow the 
instructions for submitting comments at: http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: [email protected]. Include the 
reporting form numbers in the subject line of the message.
     Fax: (202) 452-3819 or (202) 452-3102.
     Mail: Robert DeV. Frierson, Secretary, Board of Governors 
of the Federal Reserve System, 20th Street and Constitution Avenue NW., 
Washington, DC 20551.
    All public comments are available from the Board's Web site at 
www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, 
unless modified for technical reasons. Accordingly, your comments will 
not be edited to remove any identifying or contact information. Public 
comments may also be viewed electronically or in paper in Room MP-500 
of the Board's Martin Building (20th and C Streets, NW.) between 9:00 
a.m. and 5:00 p.m. on weekdays.
    FDIC: You may submit comments, which should refer to ``FFIEC 031 
and FFIEC 041,'' by any of the following methods:
     Agency Web site: http://www.fdic.gov/regulations/laws/federal/ . Follow the instructions for submitting comments on the 
FDIC's Web site.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: [email protected]. Include ``FFIEC 031 and FFIEC 
041'' in the subject line of the message.
     Mail: Gary A. Kuiper, Counsel, Attn: Comments, Room MB-
3074, Federal Deposit Insurance Corporation, 550 17th Street NW., 
Washington, DC 20429.
     Hand Delivery: Comments may be hand delivered to the guard 
station at the rear of the 550 17th Street Building (located on F 
Street) on business days between 7:00 a.m. and 5:00 p.m.
    Public Inspection: All comments received will be posted without 
change to http://www.fdic.gov/regulations/laws/federal/ including any 
personal information provided. Paper copies of public comments may be 
requested from the FDIC Public Information Center by

[[Page 56540]]

telephone at (877) 275-3342 or (703) 562-2200.
    Additionally, commenters may send a copy of their comments to the 
OMB desk officer for the agencies by mail to the Office of Information 
and Regulatory Affairs, U.S. Office of Management and Budget, New 
Executive Office Building, Room 10235, 725 17th Street NW., Washington, 
DC 20503; by fax to (202) 395-6974; or by email to 
[email protected].

FOR FURTHER INFORMATION CONTACT: For further information about the 
proposed revisions to the Call Report discussed in this notice, please 
contact any of the agency staff whose names appear below. In addition, 
copies of the Call Report forms can be obtained at the FFIEC's Web site 
(http://www.ffiec.gov/ffiec_report_forms.htm).
    OCC: Kevin Korzeniewski, Senior Attorney, (202) 649-5490, for 
persons who are deaf or hard of hearing, TTY, (202) 649-5597, 
Legislative and Regulatory Activities Division, Office of the 
Comptroller of the Currency, 400 7th Street SW., Washington, DC 20219.
    Board: Mark Tokarski, Acting Federal Reserve Board Clearance 
Officer, (202) 452-3829, Office of the Chief Data Officer, Board of 
Governors of the Federal Reserve System, 20th and C Streets NW., 
Washington, DC 20551. Telecommunications Device for the Deaf (TDD) 
users may call (202) 263-4869.
    FDIC: Gary A. Kuiper, Counsel, (202) 898-3877, and John Popeo, 
Counsel, (202) 898-6923, Legal Division, Federal Deposit Insurance 
Corporation, 550 17th Street NW., Washington, DC 20429.

SUPPLEMENTARY INFORMATION: The agencies are proposing to revise and 
extend for three years the Call Report, which is currently an approved 
collection of information for each agency.
    Report Title: Consolidated Reports of Condition and Income (Call 
Report).
    Form Number: Call Report: FFIEC 031 (for banks and savings 
associations with domestic and foreign offices) and FFIEC 041 (for 
banks and savings associations with domestic offices only).
    Frequency of Response: Quarterly.
    Affected Public: Business or other for-profit.

OCC

    OMB Number: 1557-0081.
    Estimated Number of Respondents: 1,503 national banks and federal 
savings associations.
    Estimated Time per Response: 59.41 burden hours per quarter to 
file.
    Estimated Total Annual Burden: 357,173 burden hours to file.

Board

    OMB Number: 7100-0036.
    Estimated Number of Respondents: 850 state member banks.
    Estimated Time per Response: 59.90 burden hours per quarter to 
file.
    Estimated Total Annual Burden: 203,660 burden hours to file.

FDIC

    OMB Number: 3064-0052.
    Estimated Number of Respondents: 4,036 insured state nonmember 
banks and state savings associations.
    Estimated Time per Response: 44.56 burden hours per quarter to 
file.
    Estimated Total Annual Burden: 719,377 burden hours to file.
    The estimated time per response for the quarterly filings of the 
Call Report is an average that varies by agency because of differences 
in the composition of the institutions under each agency's supervision 
(e.g., size distribution of institutions, types of activities in which 
they are engaged, and existence of foreign offices). The average 
reporting burden for the filing of the Call Report as it is proposed to 
be revised is estimated to range from 20 to 775 hours per quarter, 
depending on an individual institution's circumstances.
    Type of Review: Revision and extension of currently approved 
collections.

General Description of Reports

    These information collections are mandatory: 12 U.S.C. 161 (for 
national banks), 12 U.S.C. 324 (for state member banks), 12 U.S.C. 1817 
(for insured state nonmember commercial and savings banks), and 12 
U.S.C. 1464 (for federal and state savings associations). At present, 
except for selected data items, these information collections are not 
given confidential treatment.

Abstract

    Institutions submit Call Report data to the agencies each quarter 
for the agencies' use in monitoring the condition, performance, and 
risk profile of individual institutions and the industry as a whole. 
Call Report data serve a regulatory or public policy purpose by 
assisting the agencies in fulfilling their missions of ensuring the 
safety and soundness of financial institutions and the financial system 
and the protection of consumer financial rights, as well as agency-
specific missions affecting national and state-chartered institutions, 
e.g., monetary policy, financial stability, and deposit insurance. Call 
Reports are the source of the most current statistical data available 
for identifying areas of focus for on-site and off-site examinations. 
The agencies use Call Report data in evaluating institutions' corporate 
applications, including, in particular, interstate merger and 
acquisition applications for which, as required by law, the agencies 
must determine whether the resulting institution would control more 
than ten percent of the total amount of deposits of insured depository 
institutions in the United States. Call Report data also are used to 
calculate institutions' deposit insurance and Financing Corporation 
assessments and national banks' and federal savings associations' 
semiannual assessment fees.

Current Actions

I. Introduction

    The FFIEC launched a formal initiative in December 2014 to identify 
potential opportunities to reduce burden associated with Call Report 
requirements for community banks. In embarking on this effort, the 
FFIEC was responding to industry concerns about the cost and burden 
associated with the Call Report. The FFIEC's formal initiative 
comprises actions in five areas, which are discussed below. In 
addition, as a foundation for the actions it is undertaking, the FFIEC 
has developed a set of guiding principles for use in evaluating 
potential additions and deletions of Call Report data items and other 
revisions to the Call Report. In general, any Call Report changes must 
meet three guiding principles: (1) The data items serve a long-term 
regulatory or public policy purpose by assisting the FFIEC's member 
entities in fulfilling their missions of ensuring the safety and 
soundness of financial institutions and the financial system and the 
protection of consumer financial rights, as well as entity-specific 
missions affecting national and state-chartered institutions; (2) The 
data items to be collected maximize practical utility and minimize, to 
the extent practicable and appropriate, burden on financial 
institutions; and (3) Equivalent data items are not readily available 
through other means.
    As a first action under the FFIEC's Call Report burden-reduction 
initiative, the agencies are publishing this Federal Register notice 
and requesting comment on a number of proposed burden-reducing changes 
and certain other proposed Call Report revisions identified during 
their most recent statutorily mandated review of the information 
collected in the Call Report.\1\ Implementation of the

[[Page 56541]]

revisions identified during that review had been deferred while the 
agencies adopted changes to the reporting of regulatory capital 
information in the Call Report to implement the revised regulatory 
capital rules issued in July 2013 that took effect as of January 1, 
2014, and January 1, 2015.\2\
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    \1\ This review is mandated by section 604 of the Financial 
Services Regulatory Relief Act of 2006 (12 U.S.C. 1817(a)(11)).
    \2\ See 78 FR 48932 (August 12, 2013); 79 FR 2527 (January 14, 
2014); 79 FR 35634 (June 23, 2014); and 80 FR 5618 (February 2, 
2015).
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    The FFIEC and the agencies also identified and incorporated into 
this proposal certain other burden-reducing changes to the Call Report 
in addition to those identified in the most recent statutorily mandated 
review of the Call Report. The burden-reducing changes included as part 
of this first action are not intended to be the only group of Call 
Report revisions designed to lessen reporting burden for reporting 
institutions and, in particular, for community banks. Additional 
burden-reducing changes to the Call Report are expected to result from 
the other actions being taken by the agencies under the FFIEC's Call 
Report burden-reduction initiative.
    As the second action, the agencies have accelerated the start of 
the next statutorily mandated review of the existing Call Report data 
items, which otherwise would have commenced in 2017. Users of Call 
Report data items at the FFIEC's member entities are participating in a 
series of surveys being conducted over an 18-month period that began in 
mid-July 2015. As an integral part of these surveys, users are being 
asked to fully explain the need for each Call Report data item, how it 
is used, the frequency with which it is needed, and the population of 
institutions from which it is needed. Call Report schedules have been 
placed into groups and prioritized for review, generally based on 
perceived burden as cited by banking industry representatives. Based on 
the results of the surveys, the agencies will identify data items that 
will be considered for elimination, less frequent collection, or new or 
upwardly revised reporting thresholds. Burden-reducing reporting 
changes will be proposed for implementation on a flow basis as they are 
identified during the sequential reviews of groups of Call Report 
schedules rather than waiting until the completion of the entire 
review.
    As a third action, the agencies are considering the feasibility and 
merits of creating a less burdensome version of the quarterly Call 
Report for institutions that meet certain criteria, which may include 
an asset-size reporting threshold or activity limitations. For example, 
a report for eligible institutions could exclude the Call Report 
schedules and items not applicable to institutions below the specified 
asset-size threshold. The agencies plan to complete their analysis 
regarding the concept of such a Call Report by year-end 2015. Any plan 
for a new version of the Call Report would need to be approved by the 
FFIEC and implemented by the agencies in compliance with the applicable 
requirements under the PRA.
    A fourth action for the agencies is to better understand, through 
industry dialogue, the aspects of reporting institutions' Call Report 
preparation process that are significant sources of reporting burden, 
including where manual intervention by an institution's staff is 
necessary to report particular information. As an initial step toward 
gaining this understanding, representatives from the FFIEC's member 
entities plan to visit a limited number of institutions that have 
expressed their willingness to host a visit during the third quarter of 
2015. Institution staff would be asked to show how they prepare their 
Call Reports and explain which schedules or data items take a 
significant amount of time or manual processes to complete and the 
reasons for this. Findings from on-site visits would help the agencies 
determine the nature and form of further banker outreach. The 
information obtained from these activities would assist the agencies in 
evaluating whether and how it may be possible to reduce reporting 
burden by revising or redefining Call Report data items.
    As the fifth action, the agencies plan to offer periodic training 
to bankers via teleconferences and webinars that would explain upcoming 
reporting changes and could also provide guidance on areas of the Call 
Report bankers find challenging to complete. These events should 
benefit institutions by reducing Call Report preparation training 
costs. The first training session was a banker teleconference on 
February 25, 2015, that included a presentation on the revised Call 
Report Schedule RC-R regulatory capital reporting requirements that 
took effect on March 31, 2015, followed by a question-and-answer 
session. The slide presentation used during the teleconference, an 
audio recording of this presentation, and a transcript of the entire 
teleconference have been posted on the FFIEC's Web site.

II. Overview

    The agencies are proposing to implement a number of revisions to 
the Call Report requirements in December 2015 or March 2016, depending 
on the nature of the proposed revision. The proposed changes, which are 
discussed in detail in Sections III.A through III.E below and would 
take effect in December 2015 unless otherwise indicated, include:
     Deletions of certain existing data items pertaining to 
other-than-temporary impairments from Schedule RI, Income Statement; 
troubled debt restructurings from Schedule RC-C, Part I, Loans and 
Leases, and Schedule RC-N, Past Due and Nonaccrual Loans, Leases, and 
Other Assets; loans covered by FDIC loss-sharing agreements from 
Schedule RC-M, Memoranda, and Schedule RC-N; and unused commitments to 
asset-backed commercial paper conduits with an original maturity of one 
year or less in Schedule RC-R, Part II, Risk-Weighted Assets;
     Increases in existing reporting thresholds for certain 
data items in five Call Report schedules \3\ and the establishment of a 
reporting threshold for certain data items in Schedule RC-S, Servicing, 
Securitization, and Asset Sale Activities;
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    \3\ The data items for which components in excess of specified 
reporting thresholds are required to be itemized and described are 
included in Schedule RI-E, Explanations; Schedule RC-D, Trading 
Assets and Liabilities; Schedule RC-F, Other Assets; Schedule RC-G, 
Other Liabilities; and Schedule RC-Q, Assets and Liabilities 
Measured at Fair Value on a Recurring Basis.
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     Instructional revisions addressing the reporting of home 
equity lines of credit that convert from revolving to non-revolving 
status in Schedule RC-C, Part I; securities for which a fair value 
option is elected in Schedule RC, Balance Sheet; and net gains (losses) 
and other-than-temporary impairments on equity securities that do not 
have readily determinable fair values in Schedule RI;
     New and revised data items and information of general 
applicability, including:
    [cir] Increasing the time deposit size threshold used to report 
certain deposit information from $100,000 to $250,000 in Schedule RC-E, 
Deposit Liabilities; Schedule RI; and Schedule RC-K, Quarterly 
Averages; \4\
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    \4\ Effective in March 2016 for the data items for the interest 
expense on and quarterly averages of time deposits in Schedules RI 
and RC-K, respectively.
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    [cir] Revising the statements used to describe the level of 
external auditing work performed for the reporting institution during 
the preceding year in Schedule RC (effective in March 2016);
    [cir] Adding contact information for the reporting institution's 
Chief Executive Officer;

[[Page 56542]]

    [cir] Reporting the Legal Entity Identifier for the reporting 
institution if it already has one (on the Call Report cover page);
    [cir] Creating additional preprinted captions for itemizing and 
describing components of certain items that exceed reporting thresholds 
in Schedules RC-F and RI-E; and
    [cir] Eliminating the concept of extraordinary items and revising 
affected data items in Schedule RI (effective in March 2016); and
     New and revised data items of limited applicability, 
including:
    [cir] Revising the reporting of certain securities measured under a 
fair value option in Schedule RC-Q and moving the existing Memorandum 
items for the fair value and unpaid principal balance of loans (not 
held for trading) measured under a fair value option from Schedule RC-
C, Part I, to Schedule RC-Q;
    [cir] Revising the information reported in Schedule RI Memorandum 
items by institutions with total assets of $100 billion or more on the 
impact on trading revenues of changes in credit and debit valuation 
adjustments (effective in March 2016);
    [cir] Adding a new item on ``dually payable'' deposits in foreign 
branches of U.S. banks to Schedule RC-E, Part II, Deposits in Foreign 
Offices, on the FFIEC 031 report; and
    [cir] Revising the information reported about the supplementary 
leverage ratio by advanced approaches institutions in Schedule RC-R, 
Part I, Regulatory Capital Components and Ratios (effective in March 
2016).
    For the Call Report revisions proposed to take effect in December 
2015, the agencies invite comment on any difficulties that institutions 
would encounter in implementing any of these revisions in their year-
end 2015 Call Reports.
    For the December 31, 2015, and March 31, 2016, report dates, as 
applicable, institutions may provide reasonable estimates for any new 
or revised Call Report data item initially required to be reported as 
of that date for which the requested information is not readily 
available. The specific wording of the captions for the new or revised 
Call Report data items discussed in this proposal and the numbering of 
these data items should be regarded as preliminary.

III. Discussion of Proposed Call Report Revisions

A. Deletions of Existing Data Items

    Based on the agencies' review of the information that institutions 
are required to report in the Call Report, the agencies have determined 
that the continued collection of the following items is no longer 
necessary and are proposing to eliminate them effective December 31, 
2015:
    (1) Schedule RI, Memorandum items 14.a and 14.b, on other-than-
temporary impairments \5\
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    \5\ Institutions would continue to complete Schedule RI, 
Memorandum item 14.c, on net impairment losses recognized in 
earnings.
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    (2) Schedule RC-C, Memorandum items 1.f.(2), 1.f.(5), and 1.f.(6) 
(and 1.f.(7) on the FFIEC 031), on troubled debt restructurings in 
certain loan categories that are in compliance with their modified 
terms;
    (3) Schedule RC-N, Memorandum items 1.f.(2), 1.f.(5), and 1.f.(6) 
(and 1.f.(7) on the FFIEC 031), on troubled debt restructurings in 
certain loan categories that are 30 days or more past due or on 
nonaccrual;
    (4) Schedule RC-M, items 13.a.(5)(a) through (d) (and (e) on the 
FFIEC 031), on loans in certain loan categories that are covered by 
FDIC loss-sharing agreements; and
    (5) Schedule RC-N, items 11.e.(1) through (4) (and (5) on the FFIEC 
031), on loans in certain loan categories that are covered by FDIC 
loss-sharing agreements and are 30 days or more past due or on 
nonaccrual.
    In addition, when Schedule RC-R, Part II, is completed properly, 
item 18.b on unused commitments to asset-backed commercial paper 
conduits with an original maturity of one year or less is not needed 
because such commitments should already have been reported in item 10 
as off-balance sheet securitization exposures. The instructions for 
item 18.b explain that these unused commitments should be reported in 
item 10 and that amounts should not be reported in item 18.b. 
Accordingly, the agencies are proposing to delete existing item 18.b 
from Schedule RC-R, Part II. Existing item 18.c of Schedule RC-R, Part 
II, for unused commitments with an original maturity exceeding one year 
would then be renumbered as item 18.b.

B. New Reporting Threshold and Increases in Existing Reporting 
Thresholds

    In five Call Report schedules, institutions are currently required 
to itemize and describe each component of an existing item when the 
component exceeds both a specified percentage of the item and a 
specified dollar amount.\6\ Based on a preliminary evaluation of the 
existing reporting thresholds, the agencies have concluded that the 
dollar portion of the thresholds that currently apply to these items 
can be increased to provide a reduction in reporting burden without a 
loss of data that would be necessary for supervisory or other public 
policy purposes. The percentage portion of the existing thresholds 
would not be changed. Accordingly, the agencies are proposing to raise 
from $25,000 to $100,000 the dollar portion of the threshold for 
itemizing and describing components of:
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    \6\ See footnote 3.
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    (1) Schedule RI-E, item 1, ``Other noninterest income;''
    (2) Schedule RI-E, item 2, ``Other noninterest expense;''
    (3) Schedule RC-F, item 6, ``All other assets;''
    (4) Schedule RC-G, item 4, ``All other liabilities;''
    (5) Schedule RC-Q, Memorandum item 1, ``All other assets;'' and
    (6) Schedule RC-Q, Memorandum item 2, ``All other liabilities.''
    The agencies also are proposing to raise from $25,000 to $1,000,000 
the dollar portion of the threshold for itemizing and describing 
components of ``Other trading assets'' and ``Other trading 
liabilities'' in Schedule RC-D, Memorandum items 9 and 10.
    In addition, because institutions with less than $1 billion in 
total assets typically do not provide support for asset-backed 
commercial paper conduits, the agencies are proposing to exempt such 
institutions from completing Schedule RC-S, Memorandum items 3.a.(1), 
3.a.(2), 3.b.(1), and 3.b.(2), on credit enhancements and unused 
liquidity commitments provided to asset-backed commercial paper 
conduits.
    These proposed threshold changes would take effect December 31, 
2015.

C. Instructional Revisions

    The following proposed instructional revisions would take effect 
December 31, 2015.
1. Reporting Home Equity Lines of Credit that Convert From Revolving to 
Non-Revolving Status
    Institutions report the amount outstanding under revolving, open-
end lines of credit secured by 1-4 family residential properties 
(commonly known as home equity lines of credit or HELOCs) in item 
1.c.(1) of Schedule RC-C, Part I, Loans and Leases. Closed-end loans 
secured by 1-4 family residential properties are reported in Schedule 
RC-C, Part I, item 1.c.(2)(a) or (b), depending on whether the loan is 
a first or a junior lien.\7\
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    \7\ Information also is separately reported for open-end and 
closed-end loans secured by 1-4 family residential properties in 
Schedule RI-B, Part I, Charge-offs and Recoveries on Loans and 
Leases; Memorandum items in Schedule RC-C, Part I; Schedule RC-D; 
Schedule RC-M; and Schedule RC-N.

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[[Page 56543]]

    A HELOC is a line of credit secured by a lien on a 1-4 family 
residential property that generally provides a draw period followed by 
a repayment period. During the draw period, a borrower has revolving 
access to unused amounts under a specified line of credit. During the 
repayment period, the borrower can no longer draw on the line of 
credit, and the outstanding principal is either due immediately in a 
balloon payment or is repaid over the remaining loan term through 
monthly payments. The Call Report instructions do not address the 
reporting treatment for a home equity line of credit when it reaches 
its end-of-draw period and converts from revolving to nonrevolving 
status. Such a loan no longer has the characteristics of a revolving, 
open-end line of credit and, instead, becomes a closed-end loan. In the 
absence of instructional guidance that specifically addresses this 
situation, the agencies have found diversity in how these credits are 
reported in Schedule RC-C, Part I. Some institutions continue to report 
home equity lines of credit that have converted to non-revolving 
closed-end status in item 1.c.(1) of Schedule RC-C, Part I, as if they 
were still revolving open-end lines of credit, while other institutions 
recategorize such loans and report them as closed-end loans in item 
1.c.(2)(a) or (b), as appropriate.
    Therefore, to address this absence of instructional guidance and 
promote consistency in reporting, the agencies are proposing to clarify 
the instructions for reporting loans secured by 1-4 family residential 
properties to specify that after a revolving open-end line of credit 
has converted to non-revolving closed-end status, the loan should be 
reported in Schedule RC-C, Part I, item 1.c.(2)(a) or (b), as 
appropriate. In proposing this clarification, the agencies request 
comment on whether an instructional requirement to recategorize HELOCs 
as closed-end loans for Call Report purposes would create difficulties 
for institutions' loan recordkeeping systems. If so, commenters are 
encouraged to describe the difficulties this recategorization would 
create.
2. Reporting Treatment for Securities for Which a Fair Value Option Is 
Elected
    The Call Report Glossary entry for ``Trading Account'' currently 
states that ``all securities within the scope of the Financial 
Accounting Standards Board's (FASB) Accounting Standards Codification 
(ASC) Topic 320, Investments-Debt and Equity Securities (formerly FASB 
Statement No. 115, ``Accounting for Certain Investments in Debt and 
Equity Securities''), that a bank has elected to report at fair value 
under a fair value option with changes in fair value reported in 
current earnings should be classified as trading securities.'' This 
reporting treatment was based on language contained in former FASB 
Statement No. 159, ``The Fair Value Option for Financial Assets and 
Financial Liabilities,'' but that language was not codified when 
Statement No. 159 was superseded by current ASC Topic 825, Financial 
Instruments. Thus, under U.S. GAAP as currently in effect, the 
classification of all securities within the scope of ASC Topic 320 that 
are accounted for under a fair value option as trading securities is no 
longer required. Accordingly, to bring the ``Trading Account'' Glossary 
entry into conformity with current U.S. GAAP, the agencies are 
proposing to revise the statement from the Glossary entry quoted above 
by replacing ``should be classified'' with ``may be classified.''
    This revision to the ``Trading Account'' Glossary entry means that 
an institution that elects the fair value option for securities within 
the scope of ASC Topic 320 would be able to classify such securities as 
held-to-maturity or available-for-sale in accordance with this topic 
based on the institution's intent and ability with respect to the 
securities. In addition, an institution could choose to classify 
securities for which a fair value option is elected as trading 
securities.
    Institutions that have been required to classify all securities 
within the scope of ASC Topic 320 that are accounted for under a fair 
value option as trading securities also should consider the related 
proposed changes to Schedule RC-Q, Assets and Liabilities Measured at 
Fair Value on a Recurring Basis, which are discussed in Section III.E.1 
below.
3. Net Gains (Losses) on Sales of, and Other-Than-Temporary Impairments 
on, Equity Securities That Do Not Have Readily Determinable Fair Values
    Institutions report investments in equity securities that do not 
have readily determinable fair values and are not held for trading (and 
to which the equity method of accounting does not apply) in Schedule 
RC-F, item 4, and on the Call Report balance sheet in Schedule RC, item 
11, ``Other assets.'' If such equity securities are held for trading, 
they are reported in Schedule RC, item 5, and in Schedule RC-D, item 9 
and Memorandum item 7.b, if applicable. In contrast, investments in 
equity securities with readily determinable fair values that are not 
held for trading are reported as available-for-sale securities in 
Schedule RC, item 2.b, and in Schedule RC-B, item 7, whereas those held 
for trading are reported in Schedule RC, item 5, and in Schedule RC-D, 
item 9 and Memorandum item 7.a, if applicable.
    In general, investments in equity securities that do not have 
readily determinable fair values are accounted for in accordance with 
ASC Subtopic 325-20, Investments--Other--Cost Method Investments 
(formerly Accounting Principles Board Opinion No. 18, ``The Equity 
Method of Accounting for Investments in Common Stock''), but are 
subject to the impairment guidance in ASC Topic 320, Investments--Debt 
and Equity Securities (formerly FASB Staff Position No. FAS 115-2 and 
FAS 124-2, ``Recognition and Presentation of Other-Than-Temporary 
Impairments'').
    The Call Report instructions for Schedule RI, Income Statement, 
address the reporting of realized gains (losses), including other-than-
temporary impairments, on held to-maturity and available-for-sale 
securities as well as the reporting of realized and unrealized gains 
(losses) on trading securities and other assets held for trading. 
However, the Schedule RI instructions do not specifically explain where 
to report realized gains (losses) on sales or other disposals of, and 
other-than-temporary impairments on, equity securities that do not have 
readily determinable fair values and are not held for trading (and to 
which the equity method of accounting does not apply).
    The instructions for Schedule RI, item 5.k, ``Net gains (losses) on 
sales of other assets (excluding securities),'' direct institutions to 
``[r]eport the amount of net gains (losses) on sales and other 
disposals of assets not required to be reported elsewhere in the income 
statement (Schedule RI).'' The instructions for item 5.k further advise 
institutions to exclude net gains (losses) on sales and other disposals 
of securities and trading assets. The intent of this wording was to 
cover securities designated as held-to-maturity, available-for-sale, 
and trading securities because there are separate specific items 
elsewhere in Schedule RI for the reporting of realized gains (losses) 
on such securities (items 6.a, 6.b, and 5.c, respectively). Thus, the 
agencies are proposing to revise the instructions for Schedule RI, item 
5.k, by clarifying that the exclusions from this item of net gains 
(losses) on securities and trading

[[Page 56544]]

assets apply to held-to-maturity, available-for-sale, and trading 
securities and other assets held for trading. At the same time, the 
agencies are proposing to add language to the instructions for Schedule 
RI, item 5.k, that explains that net gains (losses) on sales and other 
disposals of equity securities that do not have readily determinable 
fair values and are not held for trading (and to which the equity 
method of accounting does not apply), as well as other-than-temporary 
impairments on such securities, should be reported in item 5.k. The 
agencies also are proposing to remove the parenthetic ``(excluding 
securities)'' from the caption for item 5.k and add in its place a 
footnote to this item advising institutions to exclude net gains 
(losses) on sales of trading assets and held-to-maturity and available-
for-sale securities.

D. New and Revised Data Items and Information of General Applicability

1. Increase in the Time Deposit Size Threshold
    Section 335 of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Pub. L. 111-203) permanently increased the standard 
maximum deposit insurance amount (SMDIA) from $100,000 to $250,000 
effective July 21, 2010. The SMDIA had been increased temporarily from 
$100,000 to $250,000 by Section 136 of the Emergency Economic 
Stabilization Act of 2008 (Pub. L. 110-343). In response to the 
increase in the limit of deposit insurance coverage, the reporting of 
the amount of ``Total time deposits of $100,000 or more'' in Memorandum 
item 2.c of Schedule RC-E, Deposit Liabilities, was revised as of the 
March 31, 2010, report date. As of that date, institutions began to 
separately report their ``Total time deposits of $100,000 through 
$250,000'' (Memorandum item 2.c) and their ``Total time deposits of 
more than $250,000'' (Memorandum item 2.d).
    However, the reporting of the quarterly averages, interest expense, 
and maturity and repricing data for time deposits of $100,000 or more 
in Schedules RC-K, RI, and RC-E, respectively, have not been updated to 
reflect the permanent $250,000 deposit insurance limit. In this regard, 
in its comment letter to the agencies in response to their first 
request for comments under the Economic Growth and Regulatory Paperwork 
Reduction Act of 1996,\8\ the American Bankers Association recommended 
revising the Schedule RC-E deposit reporting items to reflect the new 
FDIC insurance limit of $250,000. Accordingly, the agencies are 
proposing to revise the time deposit size threshold that applies to the 
reporting of this information to bring it into alignment with the 
SMDIA. These proposed changes are illustrated in the following table:
---------------------------------------------------------------------------

    \8\ 79 FR 32172, June 4, 2014.

------------------------------------------------------------------------
                                                      Proposed revised
    Call report schedule          Current item              item
------------------------------------------------------------------------
Schedule RC-K, Quarterly      Item 11.b, ``Time     Item 11.b, ``Time
 Averages.                     deposits of           deposits of
                               $100,000 or more''.   $250,000 or less''.
                              Item 11.c, ``Time     Item 11.c, ``Time
                               deposits of less      deposits of more
                               than $100,000''.      than $250,000''.
Schedule RI, Income           Item 2.a.(2)(b),      Item 2.a.(2)(b),
 Statement \9\.                Interest expense on   Interest expense on
                               ``Time deposits of    ``Time deposits of
                               $100,000 or more''.   $250,000 or less''.
                              Item 2.a.(2)(c),      Item 2.a.(2)(c),
                               Interest expense on   Interest expense on
                               ``Time deposits of    ``Time deposits of
                               less than             more than
                               $100,000''.           $250,000''.
Schedule RC-E, Deposit        Memorandum item 3.a,  Memorandum item 3.a,
 Liabilities.                  ``Time deposits of    ``Time deposits of
                               less than $100,000    $250,000 or less
                               with a remaining      with a remaining
                               maturity or next      maturity or next
                               repricing date of''.  repricing date
                                                     of''.
                              Memorandum item 3.b,  Memorandum item 3.b,
                               ``Time deposits of    ``Time deposits of
                               less than $100,000    $250,000 or less
                               with a remaining      with a remaining
                               maturity of one       maturity of one
                               year or less''.       year or less''.
                              Memorandum item 4.a,  Memorandum item 4.a,
                               ``Time deposits of    ``Time deposits of
                               $100,000 or more      more than $250,000
                               with a remaining      with a remaining
                               maturity or next      maturity or next
                               repricing date of''.  repricing date
                                                     of''.
                              Memorandum item 4.b,  Memorandum item 4.b,
                               ``Time deposits of    ``Time deposits of
                               $100,000 through      more than $250,000
                               $250,000 with a       with a remaining
                               remaining maturity    maturity of one
                               of one year or        year or less''.
                               less''.
                              Memorandum item 4.c,
                               ``Time deposits of
                               more than $250,000
                               with a remaining
                               maturity of one
                               year or less''
------------------------------------------------------------------------

    The proposed changes to Schedules RC-K and RI would take effect 
March 31, 2016. The agencies are proposing to implement the changes to 
Schedule RC-E as of December 31, 2015, but comment is specifically 
requested on whether institutions' deposit recordkeeping systems will 
be able to support the proposed change in the reporting of maturity and 
repricing data in Memorandum items 3 and 4 as of that date.
---------------------------------------------------------------------------

    \9\ The item numbers shown for Schedule RI are from the FFIEC 
041 report form for institutions with domestic offices only. On the 
FFIEC 031 report form for institutions with domestic and foreign 
offices, the item numbers are items 2.a.(1)(b)(2) and 2.a.(1)(b)(3).
---------------------------------------------------------------------------

2. Level of External Auditing Work Performed for the Reporting 
Institution During the Preceding Year
    Each year in the March Call Report, each institution indicates in 
Schedule RC, Memorandum item 1, the most comprehensive level of 
auditing work performed by independent external auditors during the 
preceding calendar year for the institution or its parent holding 
company. In completing Memorandum item 1, each institution selects from 
nine statements describing a range of levels of auditing work the one 
statement that best describes the level of auditing work performed for 
it. Certain statements from which an institution must choose do not 
reflect current auditing practices performed in accordance with 
applicable standards and procedures promulgated by the U.S. auditing 
standard setters, namely the Public Company Accounting Oversight Board 
(PCAOB) and the Auditing Standards Board (ASB) of the American

[[Page 56545]]

Institute of Certified Public Accountants. The PCAOB establishes 
auditing and related professional practice standards to be used in the 
performance and reporting of audits of the financial statements of 
public companies. The ASB establishes auditing, attestation, and 
quality control standards applicable to the performance and issuance of 
audit and attestation reports for entities that are not public 
companies, e.g. private companies.
    The PCAOB's Auditing Standard No. 5 (AS 5), An Audit of Internal 
Control Over Financial Reporting That Is Integrated with An Audit of 
Financial Statements, became effective for fiscal years ending on or 
after November 15, 2007, and provides guidance regarding the 
integration of audits of internal control over financial reporting with 
audits of financial statements. To further emphasize the integration of 
these two audits, the PCAOB revised AS 5 in December 2010 by adding a 
statement that ``the auditor cannot audit internal control over 
financial reporting without also auditing the financial statements.'' 
Those public companies not required to undergo an audit of internal 
control over financial reporting must have an audit of their financial 
statements.
    The ASB has separately provided similar guidance in Attestation 
Section 501 (AT 501), An Examination of an Entity's Internal Control 
over Financial Reporting That Is Integrated with an Audit of Its 
Financial Statements, which became effective for integrated audits for 
periods ending on or after December 15, 2008. Consistent with the 
PCAOB, the ASB states in AT 501 that ``[t]he examination of internal 
control should be integrated with an audit of financial statements'' 
and ``[a]n auditor should not accept an engagement to review an 
entity's internal control or a written assertion thereon.'' Under the 
ASB's previous attestation standards, an entity could engage an 
external auditor to examine and attest to the effectiveness of its 
internal control over financial reporting without auditing the entity's 
financial statements. Thus, at present, unless a private company is 
required to or elects to have an integrated internal control 
examination and financial statement audit, the private company may be 
required to or can choose to have an external auditor perform an audit 
of its financial statements, but it may not engage an external auditor 
to perform a standalone internal control examination.
    The existing wording of statements 1, 2, and 3 of Schedule RC, 
Memorandum item 1, reads as follows:
    1 = Independent audit of the bank conducted in accordance with 
generally accepted auditing standards by a certified public accounting 
firm which submits a report on the bank.
    2 = Independent audit of the bank's parent holding company 
conducted in accordance with generally accepted auditing standards by a 
certified public accounting firm which submits a report on the 
consolidated holding company (but not on the bank separately).
    3 = Attestation on bank management's assertion on the effectiveness 
of the bank's internal control over financial reporting by a certified 
public accounting firm.
    Because these three statements no longer fully and properly 
describe the types of external auditing services performed for 
institutions or their parent holding companies under current 
professional standards and to enhance the information institutions 
provide the agencies annually about the level of auditing external work 
performed for them, the agencies are proposing to replace existing 
statements 1 and 2 with new statements 1a, 1b, 2a, and 2b and to 
eliminate existing statement 3 effective March 31, 2016. The revised 
statements would read as follows:
    1a = An integrated audit of the reporting institution's financial 
statements and internal control over financial reporting conducted in 
accordance with the standards of the American Institute of Certified 
Public Accountants (AICPA) or the Public Company Accounting Oversight 
Board (PCAOB) by an independent public accountant that submits a report 
on the institution.
    1b = An audit of the reporting institution's financial statements 
conducted in accordance with auditing standards of the AICPA or the 
PCAOB by an independent public accountant that submits a report on the 
institution.
    2a = An integrated audit of the reporting institution's parent 
holding company's consolidated financial statements and internal 
control over financial reporting conducted in accordance with the 
standards of the AICPA or the PCAOB by an independent public accountant 
that submits a report on the consolidated holding company (but not on 
the institution separately).\10\
---------------------------------------------------------------------------

    \10\ The instructions for statement 2a would indicate this 
statement also applies to a reporting institution with $5 billion or 
more in total assets and a rating lower than 2 under the Uniform 
Financial Institutions Rating System that is required by Section 
36(i)(1) of the Federal Deposit Insurance Act (12 U.S.C. 
1831m(i)(1)) to have its internal control over financial reporting 
audited at the institution level, but undergoes a financial 
statement audit at the consolidated holding company level.
---------------------------------------------------------------------------

    2b = An audit of the reporting institution's parent holding 
company's consolidated financial statements conducted in accordance 
with the auditing standards of the AICPA or the PCAOB by an independent 
public accountant that submits a report on the consolidated holding 
company (but not on the institution separately).
3. Chief Executive Officer Contact Information
    All reporting institutions have been requested to provide 
``Emergency Contact Information'' as part of their Call Report 
submissions since September 2002. This information request was added to 
the Call Report so that the agencies could distribute critical, time-
sensitive information to emergency contacts at institutions should such 
a need arise. The primary contact should be a senior official of the 
institution who has decision-making authority. The primary contact may 
or may not be the institution's Chief Executive Officer (CEO). 
Information for a secondary contact also should be provided if such a 
person is available at an institution. The emergency contact 
information is for the confidential use of the agencies and is not 
released to the public.
    The agencies periodically need to communicate with the CEOs of 
reporting institutions via email, but they currently do not have a 
complete list of CEO email addresses that would enable an agency to 
communicate directly to institutions' CEOs. The CEO communications are 
initiated or approved by persons at the agencies' senior management 
levels and would involve topics including new initiatives, policy 
notifications, and assessment information. For example, the FDIC 
initiates distributions of deposit insurance assessment notifications 
addressed to the CEOs of insured depository institutions, which are 
posted to each institution's FDICconnect account. However, in the 
absence of an up-to-date database of CEO email addresses that can be 
used for sending assessment notifications, the FDIC currently sends an 
email to each institution's FDICconnect user or users and requests that 
they download the notification and any attachments, and provide them to 
their CEO.
    To streamline the agencies' CEO communication process, the agencies 
are proposing to request CEO contact information, including email 
addresses, in the Call Report separately from, but in a manner similar 
to, the currently

[[Page 56546]]

requested ``Emergency Contact Information'' beginning as of December 
31, 2015. As with the ``Emergency Contact Information,'' the proposed 
CEO contact information would be for the confidential use of the 
agencies and would not be released to the public. The agencies intend 
for CEO email addresses to be used judiciously and only for significant 
matters requiring CEO-level attention. Having a comprehensive database 
of CEO contact information, including email addresses, would allow the 
agencies to communicate important and time-sensitive information 
directly to CEOs.
4. Reporting the Legal Entity Identifier
    The Legal Entity Identifier (LEI) is a 20-digit alpha-numeric code 
that uniquely identifies entities that engage in financial 
transactions. The recent financial crisis spurred the development of a 
Global LEI System (GLEIS). Internationally, regulators and market 
participants have recognized the importance of the LEI as a key 
improvement in financial data systems. The Group of Twenty (G-20) 
nations directed the Financial Stability Board (FSB) to lead the 
coordination of international regulatory work and deliver concrete 
recommendations on the GLEIS by mid-2012, which in turn were endorsed 
by the G-20 later that same year. In January 2013, the LEI Regulatory 
Oversight Committee (ROC), including participation by regulators from 
around the world, was established to oversee the GLEIS on an interim 
basis. With the establishment of the full Global LEI Foundation in 
2014, the ROC continues to review and develop broad policy standards 
for LEIs. The OCC, the Board, and the FDIC are all members of the ROC.
    The LEI system is designed to facilitate several financial 
stability objectives, including the provision of higher quality and 
more accurate financial data. In the United States, the Financial 
Stability Oversight Council (FSOC) has recommended that regulators and 
market participants continue to work together to improve the quality 
and comprehensiveness of financial data both nationally and globally. 
In this regard, the FSOC also has recommended that its member agencies 
promote the use of the LEI in reporting requirements and rulemakings, 
where appropriate.\11\
---------------------------------------------------------------------------

    \11\ Financial Stability Oversight Council 2015 Annual Report, 
page 14 at (http://www.treasury.gov/initiatives/fsoc/studies-reports/Documents/2015%20FSOC%20Annual%20Report.pdf).
---------------------------------------------------------------------------

    Effective beginning October 31, 2014, the Board started requiring 
holding companies to provide their LEI on the cover pages of the FR Y-
6, FR Y-7, and FR Y-10 reports \12\ only if a holding company already 
has an LEI. Thus, if a reporting holding company does not have an LEI, 
it is not required to obtain one for purposes of these Board reports. 
Additionally, on July 2, 2015, the Board published in the Federal 
Register notice of final approval of a proposal to expand the 
collection of the LEI to all holding company subsidiary banking and 
nonbanking legal entities reportable on certain schedules of the FR Y-
10 and in one section of the FR Y-6 and FR Y-7 if an LEI has already 
been issued for the reportable entity.\13\ With respect to the Call 
Report, the agencies are proposing to have institutions provide their 
LEI on the cover page of the report beginning December 31, 2015, only 
if an institution already has an LEI. As with the Board reports, an 
institution that does not have an LEI would not be required to obtain 
one for purposes of reporting it on the Call Report.
---------------------------------------------------------------------------

    \12\ FR Y-6, Annual Report of Holding Companies; FR Y-7, Annual 
Report of Foreign Banking Organizations; and FR Y-10, Report of 
Changes in Organizational Structure (OMB No. 7100-0297).
    \13\ 80 FR 38202.
---------------------------------------------------------------------------

5. Additional Preprinted Captions for Itemizing and Describing 
Components of Certain Items That Exceed Reporting Thresholds
    As mentioned above in Section III.B, institutions are required to 
itemize and describe each component of certain items in five Call 
Report schedules when the component exceeds both a specified percentage 
of the item and a specified dollar amount. To simplify and streamline 
the reporting of these components and thereby reduce reporting burden, 
preprinted captions have been provided for those components of each of 
these items that, based on the agencies' review of the components 
previously reported for these items, institutions most frequently 
itemize and describe. When a preprinted caption is provided for a 
particular component of an item, an institution is not required to 
report the amount of that component when the amount falls below the 
applicable reporting thresholds.
    Based on the most recent review of the component descriptions 
manually entered by reporting institutions because preprinted captions 
were not available, the agencies plan to add one new preprinted caption 
to Schedule RI-E, item 1, ``Other noninterest income,'' two new 
preprinted captions to Schedule RI-E, item 2, ``Other noninterest 
expense,'' and three new preprinted captions to Schedule RC-F, item 6, 
``All other assets,'' effective December 31, 2015.\14\ The introduction 
of these new preprinted captions is intended to simplify institutions' 
compliance with the requirement to itemize and describe those 
components of these items that exceed the applicable reporting 
thresholds (which are being proposed to be revised in Section II.B). 
The new preprinted caption for ``Other noninterest income'' is ``Income 
and fees from wire transfers.'' The two new preprinted captions for 
``Other noninterest expense'' are ``Other real estate owned expenses'' 
and ``Insurance expenses (not included in employee benefits, premises 
and fixed assets expenses, and other real estate owned expenses).'' The 
three new preprinted captions for ``All other assets'' are ``Computer 
software,'' ``Accounts receivable,'' and ``Receivables from foreclosed 
government-guaranteed mortgage loans.''
---------------------------------------------------------------------------

    \14\ The addition of one of the new preprinted captions to 
Schedule RC-F, item 6, is based on the expected usage of a component 
resulting from the FASB's issuance of Accounting Standards Update 
(ASU) No. 2014-14, ``Classification of Certain Government-Guaranteed 
Mortgage Loans upon Foreclosure,'' that is in effect for certain 
institutions and will become effective for other institutions later 
in 2015 or in 2016 depending, in part, of their fiscal years.
---------------------------------------------------------------------------

6. Extraordinary Items
    In January 2015, the FASB issued ASU No. 2015-01, ``Simplifying 
Income Statement Presentation by Eliminating the Concept of 
Extraordinary Items.'' This ASU eliminates the concept of extraordinary 
items from U.S. GAAP. At present, ASC Subtopic 225-20, Income 
Statement--Extraordinary and Unusual Items (formerly Accounting 
Principles Board Opinion No. 30, ``Reporting the Results of 
Operations''), requires an entity to separately classify, present, and 
disclose extraordinary events and transactions. An event or transaction 
is presumed to be an ordinary and usual activity of the reporting 
entity unless evidence clearly supports its classification as an 
extraordinary item. For Call Report purposes, if an event or 
transaction currently meets the criteria for extraordinary 
classification, an institution must segregate the extraordinary item 
from the results of its ordinary operations and report the 
extraordinary item in its income statement in Schedule RI, item 11, 
``Extraordinary items and other adjustments, net of income taxes.''
    ASU 2015-01 is effective for fiscal years, and interim periods 
within those fiscal years, beginning after December 15, 2015. Thus, for 
example, institutions with a calendar year fiscal year must begin to 
apply the ASU in their Call

[[Page 56547]]

Reports for March 31, 2016.\15\ After an institution adopts ASU 2015-
01, any event or transaction that would have met the criteria for 
extraordinary classification before the adoption of the ASU should be 
reported in Schedule RI, item 5.l, ``Other noninterest income,'' or 
item 7.d, ``Other noninterest expense,'' as appropriate, unless the 
event or transaction would otherwise be reportable in another item of 
Schedule RI.
---------------------------------------------------------------------------

    \15\ Early adoption of ASU 2015-01 is permitted provided that 
the guidance is applied from the beginning of the fiscal year of 
adoption.
---------------------------------------------------------------------------

    Consistent with the elimination of the concept of extraordinary 
items in ASU 2015-01, the agencies plan to revise the instructions for 
Schedule RI, item 11, and remove the term ``extraordinary items'' from 
and revise the captions for Schedule RI, item 8, ``Income (loss) before 
income taxes and extraordinary items and other adjustments,'' item 10, 
``Income (loss) before extraordinary items and other adjustments,'' and 
item 11, effective March 31, 2016. After the concept of extraordinary 
items has been eliminated and such items would no longer be reportable 
in Schedule RI, item 11, only the results of discontinued operations 
would be reportable in item 11.\16\ Accordingly, effective March 31, 
2016, the revised captions for Schedule RI, items 8, 10, and 11, would 
become ``Income (loss) before income taxes and discontinued 
operations,'' ``Income (loss) before discontinued operations,'' and 
``Discontinued operations, net of applicable income taxes,'' 
respectively. Similarly, the caption for Schedule RI-E, item 3, would 
be changed from ``Extraordinary items and other adjustments and 
applicable income tax effect'' to ``Discontinued operations and 
applicable income tax effect.'' \17\
---------------------------------------------------------------------------

    \16\ The outdated reference to the reporting of the cumulative 
effect of certain changes in accounting principles in the 
instructions for item 11, which is inconsistent with the guidance in 
the Call Report Glossary entry for ``Accounting Changes,'' would be 
deleted from the instructions.
    \17\ Items 3.c.(1) and (2) also would be removed from Schedule 
RI-E.
---------------------------------------------------------------------------

E. New and Revised Data Items of Limited Applicability

1. Changes to Schedule RC-Q, Assets and Liabilities Measured at Fair 
Value on a Recurring Basis
    Schedule RC-Q is completed by institutions that had:
     Total assets of $500 million or more as of the beginning 
of their fiscal year; or
     Total assets of less than $500 million as of the beginning 
of their fiscal year and either:
    [cir] Have elected to report financial instruments or servicing 
assets and liabilities at fair value under a fair value option with 
changes in fair value recognized in earnings, or
    [cir] Are required to complete Schedule RC-D, Trading Assets and 
Liabilities.
    Institutions required to complete Schedule RC-Q are currently 
required to treat securities they have elected to report at fair value 
under a fair value option as part of their trading securities. As a 
consequence, institutions must include fair value information for their 
fair value option securities, if any, in Schedule RC-Q two times: 
First, as part of the fair value information they report for their 
``Other trading assets'' in item 5.b of the schedule, and then on a 
standalone basis in item 5.b.(1), ``Nontrading securities at fair value 
with changes in fair value reported in current earnings.'' This 
reporting treatment flows from the existing provision of the Glossary 
entry for ``Trading Account'' that, as discussed above, requires an 
institution that has elected to report securities at fair value under a 
fair value option to classify the securities as trading securities. 
However, as further discussed above, the agencies are proposing to 
remove this requirement because it is not consistent with current U.S. 
GAAP. As a result, an institution's fair value option securities can be 
classified as held-to-maturity, available-for-sale, or trading 
securities in accordance with the guidance in Topic 320, Investments-
Debt and Equity Securities.
    In its current form, Schedule RC-Q contains an item for available-
for-sale securities along with the items identified above for ``Other 
trading assets,'' which includes securities designated as trading 
securities, and ``Nontrading securities at fair value with changes in 
fair value reported in current earnings.'' However, Schedule RC-Q does 
not include an item for held-to-maturity securities because, given the 
existing instructional requirements for fair value option securities, 
the held-to-maturity category includes only securities reported at 
amortized cost. By removing the requirement to report all fair value 
option securities within the scope of ASC Topic 320 as trading 
securities, as proposed earlier in this notice, the agencies are 
further proposing to replace item 5.b.(1) of Schedule RC-Q for 
nontrading securities accounted for under a fair value option with a 
new item for any ``Held-to-maturity securities'' to which a fair value 
option is applied. In this regard, existing item 1 for ``Available-for-
sale securities'' would be renumbered as item 1.b and fair value 
information for any fair value option securities designated as ``Held-
to-maturity securities'' would be reported in a new item 1.a of 
Schedule RC-Q. These changes to Schedule RC-Q would take effect 
December 31, 2015.
    In addition, at present, institutions that have elected to measure 
loans (not held for trading) at fair value under a fair value option 
are required to report the fair value and unpaid principal balance of 
such loans in Memorandum items 10 and 11 of Schedule RC-C, Part I, 
Loans and Leases. Because Schedule RC-C, Part I, must be completed by 
all institutions, Memorandum items 10 and 11 also must be completed by 
all institutions although only a nominal number of institutions with 
less than $500 million in assets have disclosed reportable amounts for 
any of the categories of fair value option loans reported in the 
subitems of these two Memorandum items. Accordingly, the agencies are 
proposing to move Memorandum items 10 and 11 on the fair value and 
unpaid principal balance of fair value option loans from Schedule RC-C, 
Part I, to Schedule RC-Q effective December 31, 2015, and to designate 
them as Memorandum items 3 and 4. With only a limited number of 
institutions with less than $500 million in assets meeting the criteria 
for completing Schedule RC-Q, moving Memorandum items 10 and 11 from 
Schedule RC-C, Part I, to Schedule RC-Q should simplify Schedule RC-C, 
Part I, and thereby mitigate some of the reporting burden associated 
with Schedule RC-C, Part I.
2. Revisions to the Reporting of the Impact on Trading Revenues of 
Changes in Credit and Debit Valuation Adjustments by Institutions With 
Total Assets of $100 Billion or More
    Institutions that reported average trading assets of $2 million or 
more for any quarter of the preceding calendar year must report a 
breakdown of their trading revenue (as reported in Schedule RI, item 
5.c) by underlying risk exposure in Schedule RI, Memorandum items 8.a 
though 8.e. The five types of risk exposure are interest rate, foreign 
exchange, equity security and index, credit, and commodity and other. 
Institutions required to provide this five-way breakdown of their 
trading revenue that have $100 billion or more in total assets must 
also report the ``Impact on trading revenue of changes in the 
creditworthiness of the bank's derivative counterparties on the bank's 
derivative assets'' and the ``Impact on trading revenue of changes in 
the creditworthiness of the bank on the bank's derivative liabilities'' 
in

[[Page 56548]]

Schedule RI, Memorandum items 8.f and 8.g, respectively. Memorandum 
items 8.f and 8.g were intended to capture the amounts included in 
trading revenue that resulted from calendar year-to-date changes in the 
reporting institution's credit valuation adjustments (CVA) and debit 
valuation adjustments (DVA).
    The agencies have found inconsistent reporting of CVAs and DVAs by 
the institutions completing Memorandum items 8.f and 8.g of Schedule 
RI, which affects the analysis of reported trading revenues. Some 
institutions report CVAs and DVAs in these two items on a gross basis 
while other institutions report these adjustments on a net (of hedging) 
basis. Furthermore, at present, institutions may report a net CVA and 
DVA of hedges under only one of the five types of underlying risk 
exposures (e.g., the overall net CVA and DVA amount is reported 
entirely with trading revenue from credit exposures) when the net CVA 
and net DVA should be properly allocated to each of the five different 
underlying types of risk exposures.
    Consistent reporting of the impact on trading revenue from year-to-
date changes in CVAs and DVAs is necessary to ensure the accuracy of 
the data available to examiners for planning and conducting safety and 
soundness examinations of institutions' trading activities and to the 
agencies for their analyses of derivatives and trading activities, and 
changes therein, at the industry and institution level. Furthermore, 
proper allocations of CVAs and DVAs (net of hedging) to the appropriate 
type of underlying risk exposure are necessary to avoid overstating the 
trading revenue from some types of underlying risk exposure and 
understating the trading revenue from other types, which may result in 
examiners and agency analysts reaching improper conclusions about the 
effectiveness of institutions' trading activities and their management 
of CVA and DVA risks.
    To enhance the quality of the trading revenue information reported 
by the largest institutions in the U.S., promote consistency across 
institutions in the reporting of CVAs and DVAs, enable examiners to 
make more informed judgments about institutions' effectiveness in 
managing CVA and DVA risks, and provide a more complete picture of 
reported trading revenue, the agencies are proposing to replace 
existing Memorandum items 8.f and 8.g of Schedule RI with a tabular set 
of data items effective March 31, 2016. In this proposed table, those 
institutions that meet the criteria for completing these two Memorandum 
items (i.e., institutions that reported average trading assets of $2 
million or more for any quarter of the preceding calendar year and have 
$100 billion or more in total assets) would separately present their 
gross CVAs and DVAs (Memorandum items 8.f.(1) and 8.g.(1)) and any 
related CVA and DVA hedging results (Memorandum items 8.f.(2) and 
8.g.(2)) by type of underlying risk exposure. The institutions also 
would report its gross trading revenue (Memorandum item 8.h) by type of 
underlying risk exposure before including positive or negative net CVAs 
and net DVAs (columns A through E). The sum of the amounts reported in 
Memorandum item 8.h, ``Gross trading revenue,'' plus the net CVA of 
hedges (the sum of columns A through E of Memorandum item 8.f.(1) minus 
the sum of columns A through E of Memorandum item 8.f.(2)), and plus 
the net DVA of hedges (the sum of the columns A through E of Memorandum 
item 8.g.(1) minus the sum of columns A through E of Memorandum item 
8.g.(2)) must equal Schedule RI, item 5.c, ``Trading revenue.'' For 
purposes of this proposed tabular set of data items, the agencies are 
further proposing to require CVA and DVA amounts, as well as their 
hedges, to be allocated to the type of underlying risk exposure (e.g., 
interest rates, foreign exchange, and equity) that gives rise to the 
CVA and the DVA.
    In proposing that the institutions with assets of $100 billion or 
more report expanded information on the impact on trading revenues of 
changes in CVAs and DVAs, related hedging results, and gross trading 
revenues, the agencies request comment on the availability of these 
data by type of underlying risk exposure at those institutions that 
would be subject to this reporting requirement.
3. Dually Payable Deposits in Foreign Branches of U.S. Banks
    Under the Federal Deposit Insurance Act (FDI Act), deposit 
obligations carried on the books and records of foreign branches of 
U.S. banks are not considered deposits, unless the funds are payable 
both in the foreign branch and at an office of the bank in the United 
States (that is, they are dually payable). In September 2013, the FDIC 
issued a final rule amending its deposit insurance regulations to 
clarify that deposits carried on the books and records of a foreign 
branch of a U.S. bank are not insured deposits even if they are made 
payable both at that branch and at an office of the bank in any state 
of the United States.\18\ In addition, the final rule provides an 
exception for Overseas Military Banking Facilities operated under 
Department of Defense regulations.
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    \18\ See 78 FR 56583 (September 13, 2013).
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    The final rule does not affect the ability of a U.S. bank to make a 
foreign deposit dually payable. Should a bank do so, its foreign branch 
deposits would be treated as deposit liabilities under the FDI Act's 
depositor preference regime in the same way as, and on an equal footing 
with, domestic uninsured deposits. In general, ``depositor preference'' 
refers to a resolution distribution regime in which the claims of 
depositors have priority over (that is, are satisfied before) the 
claims of general unsecured creditors. Thus, if deposits held in 
foreign branches of U.S. banks located outside the United States are 
made dually payable, that is, made payable at both the foreign office 
and a branch of the bank located in the United States, the holders of 
such deposits would receive depositor preference in the event of the 
U.S. bank's failure.
    To enable the FDIC to monitor the volume and trend of dually 
payable deposits in the foreign branches of U.S. banks, the agencies 
are proposing to add a new Memorandum item 2 to Schedule RC-E, Part II, 
on the FFIEC 031 Call Report effective December 31, 2015. The FFIEC 031 
is applicable only to banks with foreign offices. The proposed new 
information on the amount of dually payable deposits at foreign 
branches of U.S. banks would enable the FDIC to determine, as required 
by statute, the least costly method of resolving a particular bank if 
it fails and the potential loss to the Deposit Insurance Fund. This 
requires the FDIC to plan for the distribution of the proceeds from the 
liquidation of the failed bank's assets, including consideration not 
only of insured deposits, but also other deposit liabilities for 
purposes of depositor preference, such as domestic uninsured deposits 
and dually payable deposits in foreign branches of the particular U.S. 
bank, which take priority over general unsecured liabilities.
4. Revisions To Implement the Supplementary Leverage Ratio for Advanced 
Approaches Institutions
    Schedule RC-R, Part I, item 45, applies to the reporting of the 
supplementary leverage ratio (SLR) by advanced approaches 
institutions.\19\ In

[[Page 56549]]

the sample Call Report forms and the Call Report instruction book for 
report dates before March 31, 2015, the caption for item 45 and the 
instructions for this item both indicated that, effective for report 
dates on or after January 1, 2015, advanced approaches institutions 
should begin to report their SLR in the Call Report as calculated for 
purposes of Schedule A, item 98, of the FFIEC 101, Regulatory Capital 
Reporting for Institutions Subject to the Advanced Capital Adequacy 
Framework.\20\ However, the agencies temporarily suspended the 
collection of Schedule RC-R, Part I, item 45, before it took effect 
March 31, 2015, due to amendments to the SLR rule\21\ and the need for 
updates to the associated SLR data collection in the FFIEC 101.
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    \19\ In general, an advanced approaches institution (i) has 
consolidated total assets (excluding assets held by an insurance 
underwriting subsidiary) on its most recent year-end regulatory 
report equal to $250 billion or more; (ii) has consolidated total 
on-balance sheet foreign exposure on its most recent year-end 
regulatory report equal to $10 billion or more (excluding exposures 
held by an insurance underwriting subsidiary); (iii) is a subsidiary 
of a depository institution that uses the advanced approaches to 
calculate its total risk-weighted assets; (iv) is a subsidiary of a 
bank holding company or savings and loan holding company that uses 
the advanced approaches to calculate its total risk-weighted assets; 
or (v) elects to use the advanced approaches to calculate its total 
risk-weighted assets.
    \20\ OMB numbers: For the OCC, 1557-0239; for the Board, 7100-
0319; and for the FDIC, 3064-0159.
    \21\ See 79 FR 57725 (September 26, 2014). The amendments to the 
SLR rule took effect January 1, 2015.
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    The agencies have finalized the most recent revisions to the SLR 
rule, which requires all advanced approaches institutions to disclose 
three items: the numerator of the SLR (Tier 1 capital, which is already 
reported in Call Report Schedule RC-R), the denominator of the SLR 
(total leverage exposure), and the ratio itself.\22\ As part of the 
revisions to the FFIEC 101, the SLR section of the FFIEC 101 will apply 
only to top-tier advanced approaches institutions (generally, bank and 
savings and loan holding companies), and not to their subsidiary 
depository institutions. Therefore, lower tier advanced approaches 
depository institutions generally will not report SLR data in the FFIEC 
101, and will need to do so in the Call Report, which would satisfy the 
SLR disclosure requirement in the revised SLR rule.\23\
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    \22\ See 80 FR 41409 (July 15, 2015). The disclosure requirement 
is set forth in the agencies' regulatory capital rules (12 CFR 3.172 
(OCC); 12 CFR 217.172 (Board), and 12 CFR 324.172 (FDIC)).
    \23\ Because certain depository institutions are exempt from 
filing the FFIEC 101, but must still report their SLR components and 
ratio, the agencies are proposing the depository institution-level 
collection of SLR data in the Call Report rather than in the FFIEC 
101.
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    Thus, the agencies are proposing to add a new item 45.a to Schedule 
RC-R, Part I, in which an advanced approaches depository institution 
(regardless of parallel run status) would report total leverage 
exposure as calculated under the agencies' SLR rule.
    The agencies also are proposing to renumber current item 45 of 
Schedule RC-R, Part I, as item 45.b, to collect an institution's SLR. 
The ratio to be reported in item 45.b would equal Tier 1 capital 
reported on Schedule RC-R, Part I, item 26, divided by total leverage 
exposure reported in proposed item 45.a. Renumbered item 45.b would no 
longer reference the FFIEC 101 because lower tier depository 
institutions would no longer be calculating or reporting their SLRs on 
the FFIEC 101.
    The reporting of the proposed SLR information would take effect 
March 31, 2016.

IV. Request for Comment

    Public comment is requested on all aspects of this joint notice. 
Comments are invited on:
    (a) Whether the proposed revisions to the collections of 
information that are the subject of this notice are necessary for the 
proper performance of the agencies' functions, including whether the 
information has practical utility;
    (b) The accuracy of the agencies' estimates of the burden of the 
information collections as they are proposed to be revised, including 
the validity of the methodology and assumptions used;
    (c) Ways to enhance the quality, utility, and clarity of the 
information to be collected;
    (d) Ways to minimize the burden of information collections on 
respondents, including through the use of automated collection 
techniques or other forms of information technology; and
    (e) Estimates of capital or start-up costs and costs of operation, 
maintenance, and purchase of services to provide information.
    Comments submitted in response to this joint notice will be shared 
among the agencies. All comments will become a matter of public record.

    Dated: September 8, 2015.
Stuart Feldstein,
Director, Legislative and Regulatory Activities Division, Office of the 
Comptroller of the Currency.
    Dated: September 11, 2015.
Michael Lewandowski,
Associate Secretary of the Board, Board of Governors of the Federal 
Reserve System.
    Dated at Washington, DC, this 9th day of September, 2015.
Robert E. Feldman,
Executive Secretary, Federal Deposit Insurance Corporation.
[FR Doc. 2015-23402 Filed 9-17-15; 8:45 am]
BILLING CODE 4810-33P; 6210-01-P; 6714-01-P