[Federal Register Volume 82, Number 110 (Friday, June 9, 2017)]
[Notices]
[Pages 26793-26799]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-12009]


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FEDERAL RESERVE SYSTEM


Proposed Agency Information Collection Activities; Comment 
Request

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Notice, request for comment.

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SUMMARY: The Board of Governors of the Federal Reserve System (Board) 
invites comment on a proposal to extend for three years, with revision, 
the mandatory Capital Assessments and Stress Testing information 
collection applicable to bank holding companies (BHCs) with total 
consolidated assets of $50 billion or more and U.S. intermediate 
holding companies (IHCs) established by foreign banking organizations.
    On June 15, 1984, the Office of Management and Budget (OMB) 
delegated to the Board authority under the Paperwork Reduction Act 
(PRA) to approve of and assign OMB numbers to collection of information 
requests and requirements conducted or sponsored by the Board. In 
exercising this delegated authority, the Board is directed to take 
every reasonable step to solicit comment. In determining whether to 
approve a collection of information, the Board will consider all 
comments received from the public and other agencies.

DATES: Comments must be submitted on or before August 8, 2017.

ADDRESSES: You may submit comments, identified by FR Y-14A/Q/M, by any 
of the following methods:
     Agency Web site: http://www.federalreserve.gov. Follow the 
instructions for submitting comments at http://www.federalreserve.gov/apps/foia/proposedregs.aspx.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: [email protected]. Include OMB 
number in the subject line of the message.
     FAX: (202) 452-3819 or (202) 452-3102.
     Mail: Ann E. Misback, 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 
http://www.federalreserve.gov/apps/foia/proposedregs.aspx 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 form in Room 
3515, 1801 K Street (between 18th and 19th Streets NW.) Washington, DC 
20006 between 9:00 a.m. and 5:00 p.m. on weekdays.
    Additionally, commenters may send a copy of their comments to the 
OMB Desk Officer, Shagufta Ahmed, Office of Information and Regulatory 
Affairs, Office of Management and Budget, New Executive Office 
Building, Room 10235, 725 17th Street NW., Washington, DC 20503 or by 
fax to (202) 395-6974.

FOR FURTHER INFORMATION CONTACT: A copy of the PRA OMB submission, 
including the proposed reporting form and instructions, supporting 
statement, and other documentation will be placed into OMB's public 
docket files, once approved. These documents will also be made 
available on the Federal Reserve Board's public Web site at: http://www.federalreserve.gov/apps/reportforms/review.aspx or may be requested 
from the agency clearance officer, whose name appears below.
    Federal Reserve Board Clearance Officer, Nuha Elmaghrabi, Office of 
the Chief Data Officer, Board of Governors of the Federal Reserve 
System, Washington, DC 20551 (202) 452-3884. Telecommunications Device 
for the Deaf (TDD) users may contact (202) 263-4869, Board of Governors 
of the Federal Reserve System, Washington, DC 20551.

SUPPLEMENTARY INFORMATION:

[[Page 26794]]

Request for Comment on Information Collection Proposal

    The Board invites public comment on the following information 
collection, which is being reviewed under authority delegated by the 
OMB under the PRA. Comments are invited on the following:
    a. Whether the proposed collection of information is necessary for 
the proper performance of the Federal Reserve's functions; including 
whether the information has practical utility;
    b. The accuracy of the Federal Reserve's estimate of the burden of 
the proposed information collection, 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 collection 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.
    At the end of the comment period, the comments and recommendations 
received will be analyzed to determine the extent to which the Federal 
Reserve should modify the proposed revisions prior to giving final 
approval.

Proposal To Approve Under OMB Delegated Authority the Extension for 
Three Years, With Revision, of the Following Report

    Report title: Capital Assessments and Stress Testing.
    Agency form number: FR Y-14A/Q/M.
    OMB control number: 7100-0341.
    Effective Dates: September 30, 2017, or December 31, 2017.
    Frequency: Annually, semi-annually, quarterly, and monthly.
    Respondents: The respondent panel consists of any top-tier bank 
holding company (BHC) or intermediate holding company (IHC) that has 
$50 billion or more in total consolidated assets, as determined based 
on: (i) The average of the firm's total consolidated assets in the four 
most recent quarters as reported quarterly on the firm's Consolidated 
Financial Statements for Bank Holding Companies (FR Y-9C) (OMB No. 
7100-0128); or (ii) the average of the firm's total consolidated assets 
in the most recent consecutive quarters as reported quarterly on the 
firm's FR Y-9Cs, if the firm has not filed an FR Y-9C for each of the 
most recent four quarters. Reporting is required as of the first day of 
the quarter immediately following the quarter in which it meets this 
asset threshold, unless otherwise directed by the Board.
    Estimated annual reporting hours: FR Y-14A: Summary, 69,312 hours; 
Macro Scenario, 2,356 hours; Operational Risk, 684 hours; Regulatory 
Capital Instruments, 798 hours; Business Plan Changes, 608 hours; 
Adjusted capital plan submission, 500 hours. FR Y-14Q: Retail, 2,280 
hours; Securities, 1,976 hours; Pre-provision net revenue (PPNR), 
108,072 hours; Wholesale, 22,952 hours; Trading, 84,744 hours; 
Regulatory Capital Transitions, 3,496 hours; Regulatory Capital 
Instruments, 8,208 hours; Operational risk, 7,600 hours; Mortgage 
Servicing Rights (MSR) Valuation, 1,288 hours; Supplemental, 608 hours; 
Retail Fair Value Option/Held for Sale (Retail FVO/HFS), 1,440 hours; 
Counterparty, 22,616 hours; and Balances, 2,432 hours. FR Y-14M: 1st 
lien mortgage, 222,912 hours; Home Equity, 185,760 hours; and Credit 
Card, 104,448 hours. FR Y-14 On-going automation revisions, 18,240 
hours. FR Y-14 Attestation On-going audit and review, 33,280 hours.
    Estimated average hours per response: FR Y-14A: Summary, 912 hours; 
Macro Scenario, 31 hours; Operational Risk, 18 hours; Regulatory 
Capital Instruments, 21 hours; Business Plan Changes, 16 hours; 
Adjusted capital plan submission, 100 hours. FR Y-14Q: Retail, 15 
hours; Securities, 13 hours; PPNR, 711 hours; Wholesale, 151 hours; 
Trading, 1,926 hours; Regulatory Capital Transitions, 23 hours; 
Regulatory Capital Instruments, 54 hours; Operational risk, 50 hours; 
MSR Valuation, 23 hours; Supplemental, 4 hours; Retail FVO/HFS, 15 
hours; Counterparty, 514 hours; and Balances, 16 hours. FR Y-14M: 1st 
Lien Mortgage, 516 hours; Home Equity, 516 hours; and Credit Card, 512 
hours. FR Y-14 On-going automation revisions, 480 hours. FR Y-14 
Attestation On-going audit and review, 2,560 hours.
    Number of respondents: 38.
    Legal authorization and confidentiality: The FR Y-14 series of 
reports are authorized by section 165 of the Dodd-Frank Act, which 
requires the Board to ensure that certain BHCs and nonbank financial 
companies supervised by the Board are subject to enhanced risk-based 
and leverage standards in order to mitigate risks to the financial 
stability of the United States (12 U.S.C. 5365). Section 5(c) of the 
Bank Holding Company Act (BHCA) authorizes the Board to require bank 
holding companies and any subsidiary of such company to submit reports 
to the Board.\1\ In addition, certain foreign banking organizations are 
treated as bank holding companies for purposes of the BHCA under 
section 8(a) of the International Banking Act (IBA).\2\ Because section 
5(c) of the BHCA permits the Board to require reports from subsidiaries 
of bank holding companies, including subsidiaries of foreign banking 
organizations that are treated as bank holding companies, section 5(c) 
authorizes the Board to require any such subsidiary of a foreign 
banking organization to report to the Board. Therefore, the Board is 
authorized under section 5(c) of the BHCA to require the FR Y-14 from 
each U.S. intermediate holding company (IHC) of a foreign banking 
organization that is a bank holding company and under sections 5(c) of 
the BHCA and section 8(a) of the IBA from each U.S. IHC that is a 
subsidiary of a foreign banking organization treated as a bank holding 
company.
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    \1\ See 12 U.S.C. 1844(c).
    \2\ See 12 U.S.C. 3106(a).
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    As these data are collected as part of the supervisory process, 
they are subject to confidential treatment under exemption 8 of the 
Freedom of Information Act (FOIA) (5 U.S.C. 552(b)(8)). In addition, 
commercial and financial information contained in these information 
collections may be exempt from disclosure under exemption 4 of FOIA (5 
U.S.C. 552(b)(4)), if disclosure would likely have the effect of (1) 
impairing the government's ability to obtain the necessary information 
in the future, or (2) causing substantial harm to the competitive 
position of the respondent. Such exemptions would be made on a case-by-
case basis.
    Abstract: The data collected through the FR Y-14A/Q/M reports 
provide the Board with the information and perspective needed to help 
ensure that large firms have strong, firm-wide risk measurement and 
management processes supporting their internal assessments of capital 
adequacy and that their capital resources are sufficient given their 
business focus, activities, and resulting risk exposures. The annual 
Comprehensive Capital Analysis and Review (CCAR) exercise complements 
other Board supervisory efforts aimed at enhancing the continued 
viability of large firms, including continuous monitoring of firms' 
planning and management of liquidity and funding resources and regular 
assessments of credit, market and operational risks, and associated 
risk management practices. Information gathered in this data collection 
is also used in the supervision and regulation

[[Page 26795]]

of these financial institutions. To fully evaluate the data 
submissions, the Board may conduct follow-up discussions with, or 
request responses to follow up questions from, respondents.
    The Capital Assessments and Stress Testing information collection 
consists of the FR Y-14A, Q, and M reports. The semi-annual FR Y-14A 
collects quantitative projections of balance sheet, income, losses, and 
capital across a range of macroeconomic scenarios and qualitative 
information on methodologies used to develop internal projections of 
capital across scenarios.\3\ The quarterly FR Y-14Q collects granular 
data on various asset classes, including loans, securities, and trading 
assets, and pre-provision net revenue (PPNR) for the reporting period. 
The monthly FR Y-14M comprises three retail portfolio and loan-level 
collections, and one detailed address matching collection to supplement 
two of the portfolio and loan-level collections.
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    \3\ BHCs that must re-submit their capital plan generally also 
must provide a revised FR Y-14A in connection with their 
resubmission.
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    Current Actions: The Board proposes (1) revising and extending for 
three years the Capital Assessments and Stress Testing information 
collection (FR Y-14A/Q/M; OMB No. 7100-0341); (2) modifying the scope 
of the global market shock component of the Board's stress tests 
(global market shock) in a manner that would include certain U.S. 
intermediate holding companies (IHCs) of foreign banking organizations 
(FBOs); and (3) making other changes to the FR Y-14 reports.
    The Board's enhanced prudential standards rule requires certain 
large FBOs to establish U.S. IHCs, which are subject to the same 
capital and stress testing standards that apply to domestic bank 
holding companies.\4\ All U.S. IHCs formed in 2016 with total 
consolidated assets over $50 billion will become subject to supervisory 
stress tests in 2018. Even though several of these U.S. IHCs have 
significant trading and counterparty exposures, none of them would be 
subject to the global market shock in 2018 under the current standard.
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    \4\ 12 CFR 252.153 (79 FR 17240 (March 27, 2014)).
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    Specifically, the draft initial notice would amend the FR Y-14 to 
apply the global market shock to any domestic bank holding company or 
U.S. IHC that is subject to supervisory stress tests and that (1) has 
aggregate trading assets and liabilities of $50 billion or more, or 
aggregate trading assets and liabilities equal to 10 percent or more of 
total consolidated assets, and (2) is not a ``large and noncomplex 
firm'' under the Board's capital plan rule.\5\ As a result of the 
proposed change, five U.S. IHCs are expected to become subject to the 
global market shock, and the six domestic bank holding companies that 
meet the current materiality threshold would remain subject to the 
exercise under the new threshold.\6\ The annual reporting burden 
associated with the addition of the five U.S. IHCs to the global market 
shock is estimated at 9,736 hours per firm for a total increase of 
approximately 48,800 hours.
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    \5\ A large and noncomplex firm is defined under the capital 
plan rule as a firm that has average total consolidated assets of at 
least $50 billion but less than $250 billion, has average total 
nonbank assets of less than $75 billion, and is not identified as 
global systemically important bank holding company (GSIB) under the 
Board's rules. 12 CFR 225.8(d)(9).
    \6\ The firms are Credit Suisse Holdings (USA), Inc., Barclays 
US LLC, DB USA Corporation, HSBC North America Holdings Inc., and 
UBS Americas Holdings LLC.
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    The proposed revisions to the FR Y-14M consist of adding two items 
related to subsidiary identification and balance amounts, which 
facilitate use of these data by the Office of the Comptroller of the 
Currency (OCC). The addition of these items would also result in the 
removal of an existing item that identifies loans where the reported 
balance is the cycle-ending balance.
    A limited number of other changes to the FR Y-14 are proposed. In 
connection with these proposed changes, two schedules on the FR Y-14A 
would be removed from the collection. The proposed revisions to the FR 
Y-14 would be effective with the reports as of September 30, 2017, 
except for certain revisions to the FR Y-14A reports, for which the 
first collection would be the December 31, 2017, as of date, as noted 
in the detailed schedule sections below.
    The total current annual burden for the FR Y-14A/Q/M is estimated 
to be 858,138 hours and, with the changes proposed in this memorandum, 
is estimated to increase by 48,472 hours for 906,610 aggregate burden 
hours. The proposed modifications to the scope of the global market 
shock are estimated to increase the annual reporting burden by 
approximately 48,800 hours in the aggregate. All of the increase in 
burden due to the modification of the global market shock is 
attributable to the five U.S. IHCs that would become subject to the 
global market shock submitting the FR Y-14 trading and counterparty 
schedules on a quarterly basis. None of the increased burden would fall 
on domestic bank holding companies that are subject to the global 
market shock.
    The addition of items to the FR Y-14M represents 1,200 total 
additional burden hours. Excluding the proposed modifications to the 
global market shock and modification to the FR Y-14M reports, the 
further changes would result in an overall net decrease of 1,408 
reporting hours.
    These data are, or would be, used to assess the capital adequacy of 
BHCs and U.S. IHCs using forward-looking projections of revenue and 
losses to support supervisory stress test models and continuous 
monitoring efforts, as well as to inform the Board's operational 
decision-making as it continues to implement the Dodd-Frank Wall Street 
Reform and Consumer Protection Act (Dodd Frank Act).

Proposed Revisions to the FR Y-14A/Q/M

Proposed Global Market Shock Modifications

    The U.S. operations of FBOs became more complex, interconnected, 
and concentrated in the years leading up to the financial crisis. The 
financial crisis demonstrated that these large FBOs operating in the 
U.S. could pose a similar threat to financial stability as large U.S. 
financial companies. Prior to the crisis, U.S. branches and agencies of 
FBOs, traditional net recipients of funding, began receiving less 
funding from their parent institutions and providing significant 
funding to non-U.S. affiliates. The vulnerabilities of foreign banks' 
U.S. operations became particularly apparent as FBOs became 
disproportionate users of Federal Reserve lending facilities during the 
financial crisis; many of these FBOs required extraordinary support 
from home- and host-country central banks and governments.
    To mitigate certain weaknesses in the existing framework for 
supervising and regulating these organizations revealed during the 
crisis, and to recognize the important role that FBOs play in the U.S. 
financial system, the Board issued a rule imposing enhanced prudential 
standards on large FBOs and capital standards on U.S. bank holding 
company subsidiaries of FBOs (enhanced prudential standards rule).\7\ 
The rule aimed to strengthen the capital and liquidity positions of the 
U.S. operations of FBOs and promote a level playing field among all 
banking firms operating in the U.S. by requiring FBOs with U.S. non-
branch assets of $50 billion or more to establish a U.S. IHC. Under the 
rule, U.S. IHCs are subject to the same risk-based capital and leverage

[[Page 26796]]

requirements applicable to domestic bank holding companies and to many 
of the same enhanced prudential standards, including capital planning 
and stress testing requirements.
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    \7\ See 77 FR 6628 (December 28, 2012) and 79 FR 17240 (March 
27, 2014).
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    The enhanced prudential standards rule included the following 
transition periods:
     January 1, 2015: FBOs with U.S. non-branch assets of $50 
billion or more as of June 30, 2014, were required to submit an 
implementation plan to the Board outlining the proposed process to come 
into compliance with the rule's requirements;
     July 1, 2016: U.S. IHCs were required to be established 
and are subject to risk-based capital requirements;
     2017 CCAR/DFAST cycle: Newly established IHCs are subject 
to the capital plan rule (but are not subject to full CCAR);
     January 1, 2018: U.S. IHCs are subject to leverage capital 
requirements; and
     2018 CCAR/DFAST cycle: Newly established IHCs are subject 
to CCAR and supervisory stress tests.
    The FR Y-14 data are critical inputs to the CCAR exercise and 
supervisory stress tests. In 2016, the Board finalized the requirement 
for IHCs to file certain regulatory reports applicable to bank holding 
companies, including the FR Y-14 reports. However, because of their 
current asset size, no U.S. IHCs are required to submit trading and 
counterparty data on the FR Y-14 reports and not subject to the global 
market shock. The global market shock applies hypothetical asset price 
shocks to a firm's trading book, private equity positions, and 
counterparty exposures as of a point in time, resulting in 
instantaneous losses and a reduction in capital. Under the Board's 
stress test rules, the global market shock applies to firms with 
significant trading activity as specified in the FR Y-14 report.\8\ The 
FR Y-14 currently provides that firms with $500 billion or more in 
total consolidated assets have significant trading activity.
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    \8\ See 12 CFR 252.54(b)(2)(i).
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    The materiality threshold for the global market shock is based on 
the trailing four-quarter average of total consolidated assets of the 
holding company. The current scope of applicability of $500 billion or 
more in total consolidated assets was intended to capture domestic bank 
holding companies with significant trading businesses. As noted, the 
$500 billion threshold, however, does not capture any U.S. IHC. 
Applying the market shock to certain U.S. IHCs would help the Board 
more accurately identify the firms' risks and capital needs. In 
addition, applying the market shock to these IHCs would result in a 
more comparable treatment to large domestic bank holding companies with 
similar exposures and business models.
    The proposal would modify the FR Y-14 reporting thresholds for the 
FR Y-14Q, Schedule F (Trading) and Schedule L (Counterparty), and FR Y-
14A, Schedule A.4 (Summary--Trading) and Schedule A.5 (Summary--
Counterparty Credit Risk), collections to apply the global market shock 
to firms based in part on the trading activities of a firm. (As noted, 
under the proposal the global market shock would apply to any firm 
subject to supervisory stress tests that (1) has aggregate trading 
assets and liabilities of $50 billion or more, or aggregate trading 
assets and liabilities equal to 10 percent or more of total 
consolidated assets, and (2) is not a large and noncomplex firm.) The 
IHCs that meet the proposed materiality threshold would be:
     Required to submit data surrounding trading and 
counterparty exposures on the FR Y-14A/Q reports (FR Y-14A Schedules 
A.4 and A.5, (Trading and Counterparty, respectively); FR Y-14Q 
Schedules F and L (Trading and Counterparty, respectively)) effective 
with the reports as of September 30, 2017; and
     Subject to the global market shock exercise beginning with 
the 2018 CCAR/DFAST exercise.
    Collecting the FR Y-14 data beginning with the reports as of 
September 30, 2017, would provide the firms with one quarter before the 
2018 CCAR/DFAST exercise to identify any questions regarding intended 
reporting or submission requirements and receive clarifying responses, 
and would also give the Board an initial view of data quality and the 
opportunity to request remediation of issues in advance of the use of 
these data as part of the global market shock.
    The revised scope of application for the global market shock is 
more closely tailored to the market risk of firms. The proposed 
definition of total trading activity is similar to the applicability 
criteria in the Board's market risk rule, which applies to any BHC with 
aggregate trading assets and trading liabilities of either (1) 10 
percent or more of total assets, or (2) $1 billion or more.\9\ Large 
and noncomplex firms would continue to be excluded from the global 
market shock.\10\ This is consistent with the goal to reduce the 
compliance burden for the smaller and less complex firms that 
participate in CCAR.
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    \9\ See 12 CFR 217.201(b).
    \10\ ``Large and noncomplex firms'' is defined by the capital 
plan rule and would align with recently finalized modifications to 
the capital plan rule. See 12 CFR 225.8(d)(9) as described in 82 FR 
9308 (February 3, 2017).
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    A threshold based on aggregate trading assets and liabilities of 10 
percent of total assets would capture cases where market risk is a key 
risk for a firm on a relative basis. As of December 31, 2016, the firms 
subject to the capital plan rule on average had a ratio of tier 1 
capital to total assets of 8.9 percent. Thus, 10 percent of the total 
assets of these firms on average represents more than 100 percent of 
their tier 1 capital. A 10 percent threshold would also align with one 
of the two thresholds used to identify firms that are subject to the 
Board's market risk rule, which requires firms to have risk management 
processes in place to address their market risk.\11\
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    \11\ Notably, the proposed relative materiality threshold is 
much higher than the materiality criteria for other Y-14 schedules 
because the proposed 10 percent threshold is defined in terms of 
total assets rather than tier 1 capital.
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    The separate $50 billion trading activity threshold would capture 
cases where a firm has total trading assets and liabilities that are 
significant on an absolute basis but less than 10 percent of the firm's 
total assets. Adopting the $50 billion threshold, as an alternative to 
the current $500 billion total assets threshold, would better capture 
the market risk of the largest firms that participate in CCAR. Notably, 
the four largest BHCs that do not currently participate in the global 
market shock on average have total assets of $378 billion as of 
December 31, 2016, but have trading activity of significantly less than 
$50 billion (as of December 31, 2016, $9.45 billion on average). As of 
December 31, 2016, the only firm that would be subject to the global 
market shock based solely on the proposed $50 billion asset threshold 
is a BHC that currently is subject to the global market shock under the 
current $500 billion total assets threshold.
Proposed Revisions to the FR Y-14A & FRY-14Q
    The proposed revisions to the FR Y-14A and FR Y-14Q consist of 
modifying reported items and instructions by clarifying the intended 
reporting of existing items, and seek to further align reported items 
with methodology, standards, and treatment on other regulatory reports 
or within the FR Y-14 schedules. In this regard, the Board is proposing 
updates to certain FR Y-14Q instructions and changes to the reporting 
structure and requirements of

[[Page 26797]]

existing items. In addition, the Board proposes eliminating two 
schedules from the FR Y-14A, to reduce burden on the reporting 
institutions. The proposal would also result in the addition of a new 
sub-schedule to supplement the existing collection of business plan 
change information and would be consistent with the structure of data 
reported elsewhere on the FR Y-14A. The proposed changes to the FR Y-
14Q outlined below would be effective September 30, 2017, while the 
proposed changes to the FR Y-14A would be effective with submissions 
for December 31, 2017.

FR Y-14A, Schedule A (Summary)

    Schedule A.3 (AFS/HTM Securities) The Board proposes modifying the 
instructions for sub-schedules A.3.a and A.3.c to clarify the reporting 
of ``Credit Loss portion'' and ``Non-Credit Loss Portion'' information. 
To eliminate contradictory treatment in reporting these items, the 
instructions for Schedule A.3.a (Projected OTTI for AFS Securities and 
HTM by Security) and A.3c (Projected OTTI for AFS and HTM Securities by 
Portfolio) would be modified to specifically reference which item firms 
should report losses on.
    In addition, the text describing the reporting of positions on the 
FR Y-14A, Schedule A.3.c., will be removed from the report form and 
incorporated into the instructions for this sub-schedule.
    Schedule A.5 (Counterparty) The Board proposes adding an item to 
capture the FVA for an exposure to a counterparty separately from 
credit valuation adjustment (CVA). Some respondents have been including 
FVA in their reported CVA loss estimates. The addition of this item 
would clarify the appropriate reporting of both FVA and CVA, and enable 
the Board to more accurately model losses associated with counterparty 
risk.

FR Y-14A, Schedule D (Regulatory Capital Transitions)

    The Board proposes eliminating FR Y-14A, Schedule D (Regulatory 
Capital Transitions) from the information collection. This schedule 
collected a five-year projection reflecting fully phased-in revised 
regulatory capital rules. With the CCAR 2018 collection (FR Y-14 
reports as-of December 31, 2017), the majority of the five-year 
forecast projects data beyond the first quarter of 2019, the date as of 
which transition provisions will be fully phased-in, diminishing the 
value-added by collecting these projections.

FR Y-14A, Schedule F (Business Plan Changes)

    Schedule F.2 (Pro Forma Balance Sheet M&A) The Board proposes the 
addition of a new BPC (FR Y-14A, Schedule F) sub-schedule, ``Pro Forma 
Balance Sheet M&A,'' to be submitted annually, beginning with the 
reports as of December 31, 2017, by any firm reporting a business plan 
change as defined on the existing Schedule F. The items on the sub-
schedule would consist of items on Schedule A.1.b (Balance Sheet) of 
the FR Y-14A, Schedule A (Summary) and would complement the information 
already collected on the FR Y-14A, Schedule F (BPC). Currently, the 
post-acquisition fair value of the asset is collected on the existing 
FR Y-14A Schedule F, but no information on the pre-acquisition book 
value of the asset, purchase accounting adjustments, or fair value 
adjustments is collected.
    The inclusion of the proposed ``Pro Forma Balance Sheet M&A'' sub-
schedule would standardize the collection of pre-acquisition book 
value, purchase accounting adjustments, and fair value adjustments 
data, on a granular level, thereby allowing for improved validation of 
merger and acquisition accounting. While certain data regarding 
purchase accounting and fair value adjustments are available in the 
supporting documentation submitted by respondents, the granularity, 
structure, and amount of information provided is inconsistent across 
firms. The Board expects that the incremental burden of this new sub-
schedule should be minimal, given that the pro forma information that 
would be required is related to what a firm must submit in its 
application for regulatory approval and that the data items would be 
similar to those collected on the existing Balance Sheet sub-schedule. 
In addition, the standardized collection of this information on a new 
sub-schedule, which would only be completed in the case of a merger or 
acquisition, should limit ad hoc follow-up during the CCAR quarter.
    With the addition of the aforementioned sub-schedule, the Board 
proposes that the existing BPC data collection be renamed to ``Post 
Acquisition BPC'' and become a sub-schedule (Schedule F.1) of the FR Y-
14A, Schedule F.

FR Y-14A, Schedule G (Retail Repurchase Exposures)

    As communicated on February 3, 2017, in a press release regarding 
``Enhancements to Federal Reserve Models Used to Estimate Post-Stress 
Capital Ratios'' the Board notified firms of key enhancements to 
certain aspects of the Board's models.\12\ Specifically, in an effort 
to better align the operational risk and mortgage repurchase models, 
for DFAST 2017, the Board retired the mortgage repurchase model and 
used an enhanced operational risk model to capture losses. In 
accordance with the shift in modeling these losses, the Board proposes 
eliminating FR Y-14A, Schedule G (Retail Repurchase Exposures) from the 
information collection.
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    \12\ See ``Enhancements to Federal Reserve Models Used to 
Estimate Post-Stress Capital Ratios.'' (February 3, 2017), available 
at: https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20170203al.pdf.
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Proposed Elimination of Extraordinary Items
    In January of 2015, an amendment (ASU No. 2015-01) to the FASB 
Accounting Standards Codification, Income Statement--Extraordinary and 
Unusual Items (FASB Subtopic 225-30), simplified the income statement 
presentation through the elimination of the concept of extraordinary 
items from generally accepted accounting principles. As a result, the 
Board proposes making changes consistent with this amendment to the FR 
Y-14A and FR Y-14Q reports. Specifically, references to the term 
``extraordinary items'' would be eliminated from the FR Y-14A, Schedule 
A.1.a (Income Statement) and the FR Y-14Q, Schedule H (Wholesale) forms 
and instructions, and where appropriate, replaced with ``discontinued 
operations.'' This change would be effective September 30, 2017.

FR Y-14Q, Schedule A (Retail)

    Effective with the FR Y-14 reports as of September 30, 2017, the 
Board proposes modifying the instructions for the FR Y-14Q, Schedule 
A.3 (Retail--International Credit Card) to include consumer credit and 
charge cards reported in FR Y-9C, Schedule HC-C, line item 6.d in 
addition to those included in Schedule HC-C, line item 6.a. The 
discrepancy in line item references relates to recently updated 
guidance regarding the reporting of charge cards on the FR Y-9C. These 
modifications would eliminate unintended differences in reporting that 
recently arose between the FR Y-14 and the FR Y-9C data series.

FR Y-14Q, Schedule C (Regulatory Capital Instruments)

    The Board proposes minor changes to the FR Y-14Q, Schedule C (RCI) 
to clarify the reporting of certain information within the existing 
items on

[[Page 26798]]

the schedule. The reporting of this information has been inconsistent 
across firms, and the modification of existing guidance in the 
instructions would seek to improve firms' understanding of where to 
report these data and information. Both changes would be effective with 
reports as of September 30, 2017.
    First, the Board proposes enhancing the instructions for the 
``Comments'' field in all three sub-schedules. Currently, the 
instructions for Columns K and AA, respectively, note only that firms 
should provide any supporting information, without any indication of 
what types of information are expected. The proposal would modify the 
instructions for the comments column to specify that firms should 
indicate within the comments how the amounts reported on these sub-
schedules tie back to amounts approved in the firm's capital plan.
    Finally, the Board proposes adding three additional types of 
instruments to be reported in Column C (Instrument Type) on Schedules 
C.1, C.2, and C.3 to capture issuances of capital instruments related 
to employee stock compensation (e.g., de novo common stock or treasury 
stock), changes in a firm's additional paid-in-capital (APIC) related 
to unvested employee stock compensation, and changes in an IHC's APIC 
through the remission of capital to a foreign parent.
    The first additional instrument type will be added to capture 
regulatory capital associated with employee stock compensation (Common 
Stock--Employee Stock Compensation) that is currently grouped under 
``Common Stock (CS)''. Additionally, two new instrument types will be 
added to capture changes in APIC associated with employee stock 
compensation (APIC--Employee Stock Compensation) and with remissions of 
capital to a foreign parent entity (APIC--Foreign Parent) of the 
respective IHC. These changes would provide for a more complete view of 
regulatory capital, clarify the type of instruments to be captured on 
this schedule, allow for more precise reporting, and track the accrual 
of employee stock compensation. For U.S. IHCs, the changes would allow 
the Board to measure and monitor capital that a U.S. IHC remits to the 
foreign parent through mechanisms other than common stock dividends. 
The instructions also would be updated to indicate the expected 
reporting of these items.

FR Y-14Q, Schedule F (Trading)

    For the September 30, 2017, submission, the Board proposes 
modifying the breakouts of vintage years on Schedule F.14 (Securitized 
Products) to be relative to the reporting date rather than in specified 
years. The report included the current breakouts of vintage years since 
the report's inception and, because they are static breakouts, they 
have since become outdated. This change would result in no structural 
changes to the reporting form.

FR Y-14Q, Schedule H (Wholesale)

    The Board proposes several changes to the FR Y-14Q, Schedule H 
(Wholesale), as outlined below, all of which would be effective with 
the September 30, 2017, report date. These changes include the 
modification or clarification of certain item definitions and allowable 
values within those schedules.
    Recent comments and questions provided by respondents via the FR Y-
14 frequently asked questions process (FAQs) resulted in several 
suggestions to refine or modify the instructions for Schedules H.1 and 
H.2 (Corporate and CRE, respectively). Respondents indicated that the 
Disposition Flag and Credit Facility Type fields on the FR Y-14Q 
Schedules H.1 and H.2 do not provide reporting options to capture 
commitments to commit that expire. The Board agrees there is currently 
no way to report or identify commitments to commit within the current 
reporting structure. Therefore, in response to this feedback, the Board 
proposes expanding the Disposition Flag (Schedule H.1, Corporate, Item 
98, and Schedule H.2, CRE, item 61) and Credit Facility Type (Schedule 
H.1, Corporate, Item 20) to include an option for commitment to commit. 
These changes would allow respondents to report, and the Board to 
identify, commitments to commit.
    Firms also noted there could be potential inconsistencies across 
respondents in the reporting of utilized exposures under the current 
instructions because the instructions do not explicitly state that 
Utilized Exposure/Outstanding Balance should be net of deferred fees 
and costs. To create consistency in reporting and to align with GAAP 
accounting standards, the Board proposes modifying the Utilized 
Exposure/Outstanding Balance (Schedule H.1, Corporate, item 25 and 
Schedule H.2, CRE, item 3) and Committed Exposure (Schedule H.1, 
Corporate, item 24 and Schedule H.2, CRE, item 5) items to explicitly 
state these items are net of deferred fees and costs. This change would 
enable the calculation of par as this field and fair value adjustment 
definitions would be aligned and be consistent with the FR Y-9C.
    The Board has also identified two other areas of the instructions 
for Schedule H (Wholesale) that require modification to align with 
existing standards or to address gaps in reporting. First, the Board 
proposes updating the instructions for the ASC 310-30 item (Schedule 
H.1, Corporate, item 31 and Schedule H.2, CRE, item 47) to be 
consistent with purchase credit impaired (PCI) accounting standards and 
terminology. While the ASC 310-30 field already exists, the 
instructions, as currently written, are not clear, and the proposed 
changes should improve consistency of reporting and availability of 
information regarding PCIs with minimal additional burden.
    Finally, the Board proposes modifying the Participation Flag field 
(Item 7) on Schedule H.2 (CRE) to be mandatory rather than optional. 
The Participation Flag indicates if a CRE loan is participated or 
syndicated among other financial institutions and if it is part of the 
Shared National Credit Program. Currently, the item Participation 
Interest (Item 59) on Schedule H.2 (CRE) is mandatory, but the 
Participation Flag is optional, which leads to gaps in reporting of 
information regarding these loans and an inability to match loans 
across institutions. Changing the Participation Flag field to mandatory 
would also align with the treatment of these items on the FR Y-14Q, 
Schedule H.1 (Corporate). Almost all reporting firms already choose to 
report the participation flag field. Therefore, the Board expects the 
information is readily available and the overall impact of this change 
should be minimal in terms of the information reported by most firms.

FR Y-14Q, Schedule J (FVO/HFS)

    Effective with the FR Y-14 reports as of September 30, 2017, the 
Board proposes modifying the instructions for the FR Y-14Q, Schedule J, 
Table 1, item 7, Credit Card Loans (Not in Forward Contracts) by 
expanding the scope of the definition for this item. Currently, this 
line item includes the unpaid principal balance (column A) and carrying 
value (column B) for extensions of credit to individuals for household, 
family, and other personal expenditures arising from credit cards, as 
defined in the FR Y-9C, Schedule HC-C, item 6.a. Although small and 
medium enterprise (SME) and corporate cards are not broken out or 
separately defined on the FR Y-9C, they are broken out and separately 
defined across several schedules of the FR Y14 reports, creating a 
reporting gap. The proposed change would expand the scope of the

[[Page 26799]]

FR Y-14Q, Schedule J, Table 1, item 7, to include the unpaid principal 
balance and carrying value of SME and corporate cards, as defined in 
the FR Y-14Q, Schedule M.1 (Balances). To the extent that Schedule J, 
Table 2 references definitions associated with Table 1, the change in 
definition would apply to Table 2 as well.
    In addition to these substantive changes to the instructions, the 
Board proposes incorporating clarifying changes to other line items in 
Schedule J to address typographical errors and eliminate some 
unnecessary language as outlined in the draft instructions associated 
with this proposal.

FR Y-14Q, Schedule L (Counterparty)

    The Board proposes several changes to the FR Y-14Q, Schedule L 
(Counterparty) as outlined below. All of the changes would be effective 
with the September 30, 2017, report date. These modifications include 
changing the ranking methodology of information collected on certain 
sub-schedules, consolidating certain existing tables, and collecting 
new information. Although the collection of new information creates 
additional burden on respondents, the Board anticipates these changes 
would enhance supervisory modeling by allowing for the reporting of 
more detailed, consistent information and would facilitate a more 
effective collection of the counterparty exposures in XML since its 
transition in 2016.
    Two changes would seek to simplify the ranking required for 
reporting positions and address questions and feedback received 
regarding ranking methodology. First, the ranking methodologies for 
Schedules L.5 (Counterparty--Securities transactions profile, top 25 
counterparties) and L.6 (Counterparty--Derivatives profile, top 25 
counterparties) would be modified to require the top 25 counterparties 
to be reported as ranked by gross current exposure and net current 
exposure for the four quarterly unstressed submissions to simplify the 
ranking required. The ranking for the stressed/CCAR submission would 
remain unchanged. Second, the currently separate collections of 
counterparties as ranked by derivatives and securities financing 
transactions (SFTs), respectively, would be combined to be one 
collection of counterparties that would be reported according to all 
ranking methodologies to simplify the reporting structure. The 
schedules with asset category-level information, L.5.2 (Counterparty--
SFT assets) and L.6.2 (Counterparty--Derivative assets), would remain 
in their current structure.
    Consistent with the change proposed to the FR Y-14A, Schedule A.5 
(Counterparty), additional or offline CVA reserves would be required to 
be reported according to five reserve type categories, notably FVA, on 
the FR Y-14Q, Schedule L.1e (Counterparty--Aggregate derivative data by 
ratings and collateral), similar to information previously collected on 
an ad hoc basis.
    Finally, the proposal would require the reporting of notional 
amounts and weighted-average time to maturity for positions included on 
Schedules L.1 (Counterparty--Derivatives profile, by counterparty & 
aggregated across counterparties) and L.6 (Counterparty--Derivatives 
profile, top 25 counterparties). This information would support firm-
provided unstressed and stressed reported exposure amounts.

FR Y-14Q, Schedule M (Balances)

    In line with the changes to the FR Y-14Q, Schedule A.3 (Retail--
International Credit Cards), the Board proposes modifying the 
instructions and the form for the FR Y-14Q, Schedule M (Balances). The 
proposal would update the FR Y-9C references in certain FR Y-14 items 
to align these items with the reporting of charge cards on the FR Y-9C 
report, in line with recently updated guidance regarding the reporting 
of charge cards. Specifically, the instructions for Schedule M.1 
(Quarter-end Balances), line item 3.b (Charge cards) will be modified 
to also include charge card loans to consumers included in FR Y-9C, 
Schedule HC-C, line item 6.d (Other consumer loans) (where 6.d replaces 
9.b.(2) (All other loans)). Similarly, on the form for Schedule M.2 (FR 
Y-9C Reconciliation), line item 3.b under Charge cards will be modified 
to reflect charge card loans reported in FR Y-9C, Schedule HC-C, line 
6.d instead of line 9.b.(2).
Proposed Revisions to the FR Y-14M
    The proposed revisions to the FR Y-14M consist of adding a line 
item to collect the RSSD ID (the unique identifier assigned to 
institutions by the Board) of any chartered national bank that is a 
subsidiary of the BHC and that is associated with a loan or portfolio 
reported, and add a line item to collect the month-ending balance for 
credit card borrowers. Both items would be effective for reports as of 
September 30, 2017. The actual burden associated with reporting the 
proposed items is expected to increase only minimally, as the OCC 
previously collected the two items from a limited number of firms and 
supplement the monthly retail schedules collected by the Board. The 
addition of the items would allow the firms to submit a single monthly 
data set that both the Board and OCC could use rather than requiring 
separate, potentially overlapping reporting. This approach, which was 
recommended by a commenter to a proposed OCC data collection, would be 
less burdensome than requiring firms to revert to submitting multiple 
collections.\13\
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    \13\ See 80 Fed. Reg. 35739.
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Schedules A, B, D (First Lien, Home Equity, and Credit Card)

    For reports as of September 30, 2017, the Board proposes adding an 
item to collect the RSSD ID (the unique identifier assigned to 
institutions by the Board) of any chartered national bank that is a 
subsidiary of the BHC and that is associated with a loan or portfolio 
reported on the FR Y-14M schedules. This identifier would allow for 
clearer mapping of exposures and understanding the sources of risk. It 
would also allow for segmentation of loans and portfolios by each 
national bank charter if a holding company owns multiple national bank 
charters.

Schedule D (Credit Card)

    For the report as of September 30, 2017, the Board proposes 
breaking out the total outstanding balance reported on Schedule D 
(Credit Card) into two items: Cycle-Ending Balance (existing item 15) 
and Month-Ending Balance. Currently, the instructions request that 
firms report the total outstanding balance for the account at the end 
of the current month's cycle (i.e., Cycle-Ending Balance). The total 
balance outstanding on the account as of the month-end reporting date 
is reported only if cycle ending balance is not available. The Board 
anticipates both cycle-end and month-end balances are readily available 
and maintained by firms and these items had previously been part of the 
credit card-related collection of the OCC. Collection of these two 
distinct items would distinguish between types of borrowers with 
varying risk characteristics and allow for a more detailed evaluation 
of company-run stress test results. The addition of the month-ending 
balance item would replace the Cycle Ending Balance Flag (item 16), 
which would be eliminated.

    Board of Governors of the Federal Reserve System, June 6, 2017.
Ann E. Misback,
Secretary of the Board.
[FR Doc. 2017-12009 Filed 6-8-17; 8:45 am]
 BILLING CODE 6210-01-P