[Federal Register Volume 85, Number 131 (Wednesday, July 8, 2020)]
[Notices]
[Pages 41040-41045]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-14613]


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FEDERAL RESERVE SYSTEM


Proposed Agency Information Collection Activities; Comment 
Request

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Temporary approval of information collection; notice, request 
for comment.

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SUMMARY: The Board has temporarily revised the Capital Assessments and 
Stress Testing Reports (FR Y-14A/Q/M; OMB No. 7100-0341) pursuant to 
the authority delegated to the Board by the Office of Management and 
Budget (OMB), per OMB Regulations on Controlling Paperwork Burdens on 
the Public. The temporary revisions, which would collect data 
pertaining to certain aspects of the Coronavirus Aid, Relief, and 
Economic Security Act, information on firm activity associated with 
various Federal Reserve lending facilities, and information regarding 
emerging risks arising from the coronavirus disease 2019 (COVID-19) 
pandemic, are applicable to reports beginning with the July 31, 2020, 
or September 30, 2020, as of date. Additionally, the Board invites 
comment on a proposal to extend for three years, with revision, the FR 
Y-14A/Q/M reports in order to address questions related to the 
reporting of certain current expected credit losses (CECL) and capital 
data, which would be applicable to reports beginning with the December 
31, 2020, as of date.

DATES: Comments must be submitted on or before September 8, 2020.

ADDRESSES: You may submit comments, identified by FR Y-14A, FR Y-14Q, 
or FR Y-14M, by any of the following methods:
     Agency website: https://www.federalreserve.gov/. Follow 
the instructions for submitting comments at https://www.federalreserve.gov/apps/foia/proposedregs.aspx.
     Email: [email protected]. Include the 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 website at 
https://www.federalreserve.gov/apps/foia/proposedregs.aspx as 
submitted, unless modified for technical reasons or to remove 
personally identifiable information at the commenter's request. 
Accordingly, comments will not be edited to remove any identifying or 
contact information. Public comments may also be viewed electronically 
or in paper in Room 146, 1709 New York Avenue NW, Washington, DC 20006, 
between 9:00 a.m. and 5:00 p.m. on weekdays. For security reasons, the 
Board requires that visitors make an appointment to inspect comments. 
You may do so by calling (202) 452-3684. Upon arrival, visitors will be 
required to present valid government-issued photo identification and to 
submit to security screening in order to inspect and photocopy 
comments.
    Additionally, commenters may send a copy of their comments to the 
Office of Management and Budget (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 Paperwork Reduction Act 
(PRA) OMB submission, including the reporting form and instructions, 
supporting statement, and other documentation will be placed into OMB's 
public docket files, if approved. These documents will also be made 
available on the Board's public website at https://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) 452-3829.

SUPPLEMENTARY INFORMATION: On June 15, 1984, OMB delegated to the Board 
authority under the PRA to approve and assign OMB control numbers to 
collections of information 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. Pursuant to its 
delegated authority, the Board may temporarily approve a revision to a 
collection of information, without providing opportunity for public 
comment, if the Board determines that a change in an existing 
collection must be instituted quickly and that public participation in 
the approval process would defeat the purpose of the collection or 
substantially interfere with the Board's

[[Page 41041]]

ability to perform its statutory obligation.
    As discussed below, the Board has made certain temporary revisions 
to the FR Y-14A/Q/M information collection. The Board's delegated 
authority requires that the Board, after temporarily approving a 
collection, publish a notice soliciting public comment. Therefore, the 
Board is also inviting comment on a proposal to extend the FR Y-14A/Q/M 
information collection for three years, with these revisions.

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 Board's functions, including whether the 
information has practical utility;
    b. The accuracy of the Board'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 startup 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 Board 
should modify the proposal.

Final Approval Under OMB Delegated Authority of the Temporary Revision 
of, and Proposal To Extend for Three Years, With Revision, of the 
Following Information Collection

    Report title: Capital Assessments and Stress Testing Reports.
    Agency form number: FR Y-14A/Q/M.
    OMB control number: 7100-0341.
    Frequency: Annually, quarterly, and monthly.
    Respondents: These collections of information are applicable to 
bank holding companies (BHCs), U.S. intermediate holding companies 
(IHCs), and covered savings and loan holding companies (SLHCs) \1\ with 
$100 billion or more in total consolidated assets, as 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 Holding Companies (FR Y-9C; OMB No. 7100-0128); or (ii) 
if the firm has not filed an FR Y-9C for each of the most recent four 
quarters, then 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. Reporting is required as of the first day of the 
quarter immediately following the quarter in which the respondent meets 
this asset threshold, unless otherwise directed by the Board.
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    \1\ Covered SLHCs are those which are not substantially engaged 
in insurance or commercial activities. For more information, see the 
definition of ``covered savings and loan holding company'' provided 
in 12 CFR 217.2 and 12 CFR 238.2(ee). SLHCs with $100 billion or 
more in total consolidated assets become members of the FR Y-14Q and 
FR Y-14M panels effective June 30, 2020, and the FR Y-14A panel 
effective December 31, 2020. See 84 FR 59032 (November 1, 2019).
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    Estimated number of respondents: FR Y-14A/Q: 36; FR Y-14M: 34.\2\
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    \2\ The estimated number of respondents for the FR Y-14M is 
lower than for the FR Y-14Q and FR Y-14A because, in recent years, 
certain respondents to the FR Y-14A and FR Y-14Q have not met the 
materiality thresholds to report the FR Y-14M due to their lack of 
mortgage and credit activities. The Board expects this situation to 
continue for the foreseeable future.
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    Estimated average hours per response: FR Y-14A: 1,085 hours; FR Y-
14Q: 2,142 hours; FR Y-14M: 1,072 hours; FR Y-14 On-going Automation 
Revisions: 480 hours; FR Y-14 Attestation On-going Attestation: 2,560 
hours.
    Estimated annual burden hours: FR Y-14A: 39,060 hours; FR Y-14Q: 
308,448 hours; FR Y-14M: 437,376 hours; FR Y-14 On-going Automation 
Revisions: 17,280 hours; FR Y-14 Attestation On-going Attestation: 
33,280 hours.
    General description of report: This family of information 
collections is composed of the following three reports:
     The annual \3\ 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.\4\
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    \3\ In certain circumstances, a BHC or IHC may be required to 
re-submit its capital plan. See 12 CFR 225.8(e)(4). Firms that must 
re-submit their capital plan generally also must provide a revised 
FR Y-14A in connection with their resubmission.
    \4\ On October 10, 2019, the Board issued a final rule that 
eliminated the requirement for firms subject to Category IV 
standards to conduct and publicly disclose the results of a company-
run stress test. See 84 FR 59032 (Nov. 1, 2019). That final rule 
maintained the existing FR Y-14A/Q/M substantive reporting 
requirements for these firms in order to provide the Board with the 
data it needs to conduct supervisory stress testing and inform the 
Board's ongoing monitoring and supervision of its supervised firms. 
However, as noted in the final rule, the Board intends to provide 
greater flexibility to banking organizations subject to Category IV 
standards in developing their annual capital plans and consider 
further change to the FR Y-14A/Q/M forms as part of a separate 
proposal. See 84 FR 59032, 59063.
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     The quarterly FR Y-14Q collects granular data on various 
asset classes, including loans, securities, trading assets, and PPNR 
for the reporting period.
     The monthly FR Y-14M is comprised of three retail 
portfolio- and loan-level schedules, and one detailed address-matching 
schedule to supplement two of the portfolio and loan-level schedules.
    The data collected through the FR Y-14A/Q/M reports provide the 
Board with the information needed to help ensure that large firms have 
strong, firm[hyphen]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 reports are used to 
support the Board's annual Comprehensive Capital Analysis and Review 
(CCAR) and Dodd-Frank Act Stress Test (DFAST) exercises, which 
complement 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, as 
well as 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 of 
respondent financial institutions. Respondent firms are currently 
required to complete and submit up to 17 filings each year: One annual 
FR Y-14A filing, four quarterly FR Y-14Q filings, and 12 monthly FR Y-
14M filings. Compliance with the information collection is mandatory.
    Current actions and proposed revisions: The Board has temporarily 
revised the FR Y-14A/Q/M reports to implement changes necessary in 
response to the coronavirus disease 2019 (COVID-19) pandemic. 
Specifically, the Board has temporarily revised the FR Y-14A/Q/M 
reports to collect data pertaining to certain aspects of the 
Coronavirus Aid, Relief, and Economic Security Act (CARES Act),\5\ as

[[Page 41042]]

well as information on firm activity associated with the Paycheck 
Protection Program (PPP) \6\ and Federal Reserve lending facilities, 
such as the Main Street Lending Program (MSLP),\7\ that have been 
established to support markets and the broader economy during the 
ongoing COVID-19 pandemic. The Board has also temporarily revised the 
FR Y-14A/Q/M reports to receive FR Y-14Q, Schedule H (Wholesale) on a 
more frequent basis, as well as to make other revisions, to better 
understand the evolving effects of the COVID-19 pandemic on bank 
positions and the broader economy.
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    \5\ Coronavirus Aid, Relief, and Economic Security Act, Public 
Law 116-136, 134 Stat. 281 (Mar. 27, 2020).
    \6\ See 85 FR 20387 (April 13, 2020).
    \7\ https://www.federalreserve.gov/newsevents/pressreleases/monetary20200409a.htm.
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    In addition, in response to various questions received from the 
industry following the publication of the final rule to change the 
current expected credit losses methodology (CECL) transition 
provisions,\8\ the Board is proposing to revise the FR Y-14A to allow 
firms to accurately reflect in their reporting the greater flexibility 
on CECL implementation afforded in the interim final rule and to make 
minor revisions and clarifications to several capital items on the FR 
Y-14A and FR Y-14Q reports. The Board notes that the information 
associated with the temporary revisions to the FR Y-14A/Q/M reports are 
not available from other sources, such as the FR Y-9C.
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    \8\ See 85 FR 17723 (March 31, 2020).
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Temporary Revisions to the FR Y-14A/Q/M

    In response to the COVID-19 pandemic, the Board has temporarily 
revised the FR Y-14A/Q/M reports to change the submission frequency of 
one FR Y-14Q schedule, incorporate the reporting of loans in loss 
mitigation or forbearance programs, collect information on firm 
activity associated with the PPP, MSLP, and other Federal Reserve 
lending facilities. The revised submission frequency of FR Y-14Q, 
Schedule H (Wholesale) is effective beginning with the report as of 
July 31, 2020. All other FR Y-14Q and FR Y-14M temporary revisions are 
effective beginning with reports as of September 30, 2020. In addition, 
the FR Y-14Q instructions specify that attestations are not required 
for non-quarter-end submissions, or for new items temporarily added as 
part of this notice. The Board has determined that it must revise the 
FR Y-14Q and FR Y-14M quickly and that public participation in the 
approval process would defeat the purpose of the collection of 
information, as delaying the revisions would result in the collection 
of incomplete information, and would interfere with the Board's ability 
to perform its statutory duties pursuant to section 165 of the Dodd-
Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank 
Act).\9\ These temporary revisions expire six months after the date of 
publication of this notice in the Federal Register, unless extended by 
the Board (i.e., data associated with these temporary revisions are 
only required to be submitted up to and including data as of December 
31, 2020--firms are not required to continue to submit data associated 
with these temporary revisions for any as of dates in 2021 without 
explicit reauthorization from the Board).
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    \9\ 12 U.S.C. 5365.
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FR Y-14Q Reporting Frequency

    Effective for data as of July 31, 2020, the Board has temporarily 
revised the submission frequency of FR Y-14Q, Schedule H (Wholesale) 
from a quarterly basis to a monthly basis for Category I-III firms. 
This schedule has month-end as-of dates and is due either 30 days after 
the as of date, or seven days after the FR Y-9C submission date (i.e., 
at the same time as most of the FR Y-14Q), depending on whether the as 
of date aligns with a quarter-end date. In order to effectively 
understand and react to the potentially quickly evolving effects of the 
COVID-19 pandemic on bank positions and the broader economy, 
particularly with respect to corporate and commercial real estate 
exposures, the Board needs the information on this schedule on a more 
frequent basis. Note that Schedule H data submitted monthly may be used 
for supervisory purposes including, but not limited to, stress testing. 
In addition, the Board has revised the FR Y-14Q instructions to 
indicate the Board may require submission of the FR Y-14Q, or certain 
schedules or items on the FR Y-14Q, on a more frequent basis in times 
of crisis.

Loans in Loss Mitigation or Forbearance Programs

    As described in the Interagency Statement on Loan Modifications and 
Reporting for Financial Institutions Working with Customers Affected by 
the Coronavirus Guidance,\10\ the CARES Act, among other things, 
``creates a forbearance program for federally backed mortgage loans, 
protects borrowers from negative credit reporting due to loan 
accommodations related to the National Emergency, and provides 
financial institutions the option to temporarily suspend certain 
requirements under U.S. generally accepted accounting principles (GAAP) 
related to troubled debt restructurings (TDR) for a limited period of 
time to account for the effects of COVID-19.'' In the Guidance, the 
Board and other regulatory agencies encouraged financial institutions 
to work prudently with borrowers who are or maybe unable to meet their 
contractual payment obligations because of the effects of COVID-19.
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    \10\ https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20200407a1.pdf.
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    Because firms may hold a larger number of loans in forbearance 
programs and loans with other loss mitigation circumstances during the 
COVID-19 pandemic, the Board has temporarily revised certain FR Y-14Q 
and FR Y-14M schedules to add fields and options to existing fields to 
collect information on loans in forbearance programs and other loss 
mitigation circumstances.
FR Y-14Q, Schedule A (Retail)
    In order to capture loss mitigation and forbearance loan balances, 
the Board has temporarily added the ``$ Loss mitigation and 
forbearance'' summary variable to the six retail schedules that do not 
currently capture this information. Specifically, the summary variable 
has been added to the following schedules:
     Schedule A.1 (International Auto Loan);
     Schedule A.3 (International Credit Card);
     Schedule A.4 (International Home Equity);
     Schedule A.5 (International First Lien Mortgage);
     Schedule A.6 (International Other Consumer Schedule); and
     Schedule A.7 (US Other Consumer).
    Three retail schedules already have summary variables to capture 
information regarding loss mitigation and modified loans. However, in 
order to be consistent across Schedule A, the Board has temporarily 
replaced the following summary variables with the same ``$ Loss 
mitigation and forbearance'' summary variable as described above:
     Schedule A.2 (US Auto Loan), Field #26 (``$ Loss 
mitigation'');
     Schedule A.8 (International Small Business), Field #6 (``$ 
Modifications''); and
     Schedule A.9 (US Small Business), Field #6 (``$ 
Modifications'').
FR Y-14Q, Schedule H (Wholesale)
    The Board has temporarily added the ``Modifications Flag'' item to 
Schedules H.1 (Corporate) and H.2 (Commercial

[[Page 41043]]

Real Estate) (items 109 and 70, respectively) to capture information on 
loans in loss mitigation or forbearance programs because of the COVID-
19 pandemic. Prior to this revision, it was not possible to identify 
loans in these programs on these schedules. Loans in loss mitigation 
and forbearance programs have different risk characteristics than other 
loans reported on this schedule, and therefore need to be separately 
identified.
FR Y-14Q, Schedule J (Retail Fair Value Option/Held for Sale (FVO/HFS))
    The Board has temporarily added Column J (Loss Mitigation) to 
Schedule J to capture information on FVO/HFS loans in loss mitigation 
programs. Loans in loss mitigation programs have different risk 
characteristics than other loans reported on this schedule, and 
therefore need to be separately identified.
FR Y-14M, Schedule B (Home Equity)
    In order to capture information regarding loans in forbearance 
programs and for consistency with the corresponding item on FR Y-14M, 
Schedule A (First Lien), the Board has temporarily added an option (``9 
= Forbearance plan'') to item 61 (``Workout Type Completed'').

Paycheck Protection Program (PPP)

    On April 9, 2020, the Federal Reserve announced it would help 
facilitate the Small Business Administration's PPP by supplying 
liquidity to participating financial institutions through term 
financing backed by PPP loans to small businesses.\11\ The PPP provides 
loans to small businesses so that they can keep their workers on the 
payroll. The Paycheck Protection Program Liquidity Facility (PPPLF) 
extends credit to eligible financial institutions that originate PPP 
loans, taking the loans as collateral at face value.
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    \11\ https://www.federalreserve.gov/newsevents/pressreleases/monetary20200409a.htm.
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FR Y-14Q, Schedule A (Retail)
    In order to identify loans fully guaranteed by the U.S. government, 
such as loans associated with the PPP, the Board has temporarily added 
the ``$ Under federally guaranteed programs'' (item 13) summary 
variable to Schedule A.9 (US Small Business). This summary variable is 
necessary as the credit risk characteristics of loans fully guaranteed 
under federal programs differ from other loans reported on Schedule 
A.9, and therefore these loans need to be reported separately from 
other small business exposures for appropriate evaluation during the 
stress test.
FR Y-14Q, Schedule H
    In response to questions received from the industry, the Board has 
temporarily revised the instructions to Schedules H.1 and H.2 to 
explicitly exclude PPP loans. The Board does not need information for 
PPP loans on these schedules.
FR Y-14Q, Schedule M (Balances)
    The Board has temporarily added item 2.b.(1),''Paycheck Protection 
Program (PPP) loans,'' to Schedule M.1. (Quarter-end Balances), to 
capture the balance of PPP loans. The Board has also temporarily added 
references to new item 2.b.(1) to Schedule M.2 (FR Y-9C 
Reconciliation). In addition, the Board temporarily has added language 
to the instructions for items 2.a, ``Graded C&I loans,'' and 2.b, 
``Small business loans,'' requiring that PPP loans be excluded from 
these items. PPP loans have different risk characteristics than non-
guaranteed loans, and therefore need to be separately identified.

Main Street Lending Program

    On April 9, 2020, the Board announced the MSLP, which will enhance 
support for small and mid-sized businesses that were in good financial 
standing before the crisis by offering 4-year loans to companies 
employing up to 10,000 workers or with revenues of less than $2.5 
billion.\12\ Additionally, businesses with up to 15,000 employees or up 
to $5 billion in annual revenue are now eligible, compared to the 
initial program terms, which were for companies with up to 10,000 
employees and $2.5 billion in revenue.\13\ Principal and interest 
payments will be deferred for one year. Under the MSLP, banks will 
retain a share of loans, selling the remaining share to the Main Street 
facility.
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    \12\ https://www.federalreserve.gov/newsevents/pressreleases/monetary20200409a.htm.
    \13\ https://www.federalreserve.gov/newsevents/pressreleases/monetary20200430a.htm.
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FR Y-14Q, Schedule A
    The Board has temporarily added the following items to Schedule 
A.9: item 14, ``$ Main Street New Loan Facility (MSNLF),'' item 15, ``$ 
Main Street Priority Loan Facility (MSPLF),'' and item 16, ``$ Main 
Street Expanded Loan Facility (MSELF).'' MSLP loans have different risk 
characteristics than other loans reported on this schedule, and 
therefore need to be separately identified.
FR Y-14Q, Schedule H
    The Board has temporarily added the ``Extended Facility ID'' item 
to Schedules H.1 and H.2 (items 110 and 71, respectively). The Board 
has also temporarily added options to the ``Credit Facility Purpose'' 
on Schedule H.1 (item 25) and the ``Loan Purpose'' item on Schedule H.2 
(item 22) to capture information on MSLP loans. Specifically, the Board 
temporarily has added the following options: ``MSLP New Loan 
Facility,'' ``MSLP Expanded Loan Facility,'' and ``MSLP Priority Loan 
Facility.'' MSLP loans have different risk characteristics than other 
loans reported on these schedules, and therefore need to be separately 
identified.
FR Y-14Q, Schedule K (Supplemental)
    In order to capture MSLP loans that aren't reported on FR Y-14Q, 
Schedules A and H, the Board temporarily has added three columns to 
Schedule K: D.1, ``Main Street Loan Program New Loan Facility loans 
under $1M in committed balance,'' D.2, Main Street Loan Program 
Expanded Loan Facility loans under $1M in committed balance,'' and D.3, 
Main Street Loan Program Priority Loan Facility loans under $1M in 
committed balance.'' In addition, the Board has temporarily added 
language to the instructions for column D, ``Outstanding Balance of 
Commercial Real Estate (CRE) and Corporate loans under $1M in committed 
balance,'' requiring that firms exclude MSLP loans balances from this 
column.

Other Federal Reserve Lending Facilities

FR Y-14Q, Schedule B (Securities)
    The Board temporarily has added an item (``COVID-19 facility'') to 
Schedule B.1 (Main Schedule) to capture securities that have been 
pledged under a Federal Reserve facility that supports the flow of 
credit during the COVID-19 pandemic (e.g., Money Market Mutual Fund 
Liquidity Facility). This information is needed to determine the amount 
of protection provided by the put option positions associated with 
these facilities.
FR Y-14Q, Schedule F (Trading)
    The Board temporarily has created new submission types for Schedule 
F dedicated to capturing information on trading assets that have been 
pledged to Federal Reserve lending facilities. The submission type 
would mirror the other submission types of the trading schedule and 
firms would complete the submission type in the same manner as for 
other submission types, as outlined

[[Page 41044]]

in the Schedule F instructions, unless otherwise indicated. This 
information is needed to determine the amount of protection provided by 
the put option positions associated with these facilities.

Other Revisions Related to the COVID-19 Pandemic

FR Y-14Q, Schedule D (Regulatory Capital)
    In order to provide capital relief related to CECL to align with 
the purpose of the interim CECL final rule and CARES Act, the Board 
temporarily has revised Schedule D to allow firms to apply the CECL 
transition provisions to reported values.

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

    As noted, the Board would collect the temporary items described 
above through the December 31, 2020, as-of date, unless the Board 
determines an extension is necessary. In addition, the Board is 
proposing to make several revisions to FR Y-14A, Supplemental 
Collection of CECL Information, and capital schedules across the FR Y-
14A and FR Y-14Q, effective for the December 31, 2020, as-of date.

Supplemental Collection of CECL Information

    In order to accurately reflect the CECL transition provision as 
modified by the interim CECL final rule, as well as the CARES Act, the 
Board proposes to revise the instructions to the Supplemental 
Collection of CECL Information schedule of the FR Y-14A. Since this 
schedule was designed to capture data surrounding the CECL transition 
provision before the interim CECL final rule, several items on the 
schedule need to be revised.
    First, the Board proposes to revise the schedule to only require it 
to be reported one time by firms, as opposed to being reported 
repeatedly over the course of the CECL transition horizon. This 
revision is necessary since the interim CECL final rule revised the day 
one impact to include the CECL, deferred tax asset (DTA), and adjusted 
allowance for credit losses (AACL) transitional amounts. As a result of 
this change, the Board no longer needs information over the course of 
the CECL transition horizon.
    Second, under the CARES Act, firms can delay adopting CECL until 
December 31, 2020, or until the end of the national emergency, 
whichever comes sooner. Therefore, firms may not have adopted CECL on 
the timetable expected prior to the COVID-19 pandemic. Given that firms 
may CECL adopt at different times throughout the year, the following 
items would be revised to require firms to report expected values if 
the firm adopts in the first quarter of a given year (i.e., before the 
data are due in early April), and actual values if the firm adopted 
CECL in the second through the fourth quarters of a given year. The 
instructions would clarify that firms that adopt CECL in the second 
through fourth quarters of a given year would submit actual data in the 
reporting year (e.g., if a firm adopts CECL in September of 2020, then 
it would report actual data for the December 31, 2020, FR Y-14A 
submission). This revision would apply to the following items:
     Item 3, ``Adoption of Current Expected Credit Loss 
Methodology--ASC Topic 326'';
     Item 4, ``Allowances for credit losses recognized upon the 
acquisition of purchased credit-deteriorated assets'';
     Item 5, ``Effect of adoption of current expected credit 
losses methodology on allowances for credit losses on loans and leases 
held for investment and held-to-maturity debt securities'';
     Item 6, ``Total allowance for credit losses'';
     Item 6a, ``Allowance for credit losses on loans and leases 
held for investment'';
     Item 6b, ``Allowance for credit losses on held-to-maturity 
securities''; and
     Item 6c, ``Allowance for credit losses on available-for-
sale securities''.

Capital

    Due to various questions received from the industry regarding 
reporting of several capital items, the Board proposes changes to these 
items.
    On December 23, 2019, the Board finalized revisions to the FR Y-
14A/Q/M reports.\14\ As part of those revisions, the Board provided 
guidance on how firms should reflect the impact of the ``global market 
shock'' on items subject to adjustment or deduction from capital. 
However, the Board omitted FR Y-14A, Schedule A.1.d (Capital), item 68, 
``Permitted offsetting short positions in relation to the specific 
gross holdings included above'' from this guidance. The Board is now 
proposing to allow firms to reflect the impact of the ``global market 
shock'' for this item.
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    \14\ See 84 FR 70529 (December 23, 2019).
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    FR Y-14A, Schedule A.1.d, already captures data for aggregate non-
significant investments in the capital of unconsolidated financial 
entities, including the form of common stock, additional tier 1 
capital, and additional tier 2 capital in item 64 (``Aggregate non-
significant investments in the capital of unconsolidated financial 
institutions, including in the form of common stock, additional tier 1, 
and tier 2 capital''). However, in order to properly derive item 66 
(``Amount of non-significant investments that exceed the 10 percent 
deduction threshold for non-significant investments''), the Board has 
determined that it needs to isolate the amount of aggregate non-
significant investments in the capital of unconsolidated financial 
institutions in the form of common stock. Therefore, the Board proposes 
to renumber existing item 64 to item 64a, and add item 64b, ``Aggregate 
non-significant investments in the capital of unconsolidated financial 
institutions in the form of common stock.'' As a result, the Board also 
proposes to revise the derivation of item 66 to reference items 64a and 
64b.
    Finally, to ensure consistent reporting across firms, the Board 
proposes to revise the instructions for FR Y-14A, Schedule A.1.d, item 
113 (``Valuation allowances related to DTAs arising from temporary 
differences'') and FR Y-14Q, Schedule D (Regulatory Capital), item 16 
(``Valuation allowances related to DTAs arising from temporary 
differences'') to clarify that these items should be reported as 
positive values.
    The Board proposes to extend the FR Y-14A/Q/M for three years, with 
the revisions discussed above, in order to permit continued accurate 
reporting.
    Legal authorization and confidentiality: The Board has the 
authority to require BHCs to file the FR Y-14A/Q/M reports pursuant to 
section 5(c) of the Bank Holding Company Act (``BHC Act''), (12 U.S.C. 
1844(c)), and pursuant to section 165(i) of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act (Dodd-Frank Act) (12 U.S.C. 5365(i)) 
as amended by section 401(a) and (e) of the Economic Growth, Regulatory 
Relief, and Consumer Protection Act (EGRRCPA).\15\ The Board has 
authority to require SLHCs to file the FR Y-14A/Q/M reports pursuant to 
section 10(b) of the Home Owners' Loan Act (12 U.S.C. 1467a(b)), as 
amended by section 369(8) and 604(h)(2) of the Dodd-Frank Act. Lastly, 
the Board has authority to require U.S. IHCs of FBOs to file the FR Y-
14A/Q/M reports pursuant to section 5 of the BHC Act, as well as 
pursuant to sections 102(a)(1) and 165 of the Dodd-Frank Act (12 U.S.C. 
5311(a)(1) and 5365).\16\ In

[[Page 41045]]

addition, section 401(g) of EGRRCPA (12 U.S.C. 5365 note) provides that 
the Board has the authority to establish enhanced prudential standards 
for foreign banking organizations with total consolidated assets of 
$100 billion or more, and clarifies that nothing in section 401 ``shall 
be construed to affect the legal effect of the final rule of the 
Board... entitled `Enhanced Prudential Standard for [BHCs] and Foreign 
Banking Organizations' (79 FR 17240 (March 27, 2014)), as applied to 
foreign banking organizations with total consolidated assets equal to 
or greater than $100 million.'' \17\ The FR Y-14A/Q/M reports are 
mandatory. The information collected in the FR Y-14A/Q/M reports is 
collected as part of the Board's supervisory process, and therefore, 
such information is afforded confidential treatment pursuant to 
exemption 8 of the Freedom of Information Act (FOIA) (5 U.S.C. 
552(b)(8)). In addition, confidential commercial or financial 
information, which a submitter actually and customarily treats as 
private, and which has been provided pursuant to an express assurance 
of confidentiality by the Board, is considered exempt from disclosure 
under exemption 4 of the FOIA (5 U.S.C. 552(b)(4)).\18\
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    \15\ Public Law 115-174, Title IV 401(a) and (e), 132 Stat. 
1296, 1356-59 (2018).
    \16\ Section 165(b)(2) of the Dodd-Frank Act (12 U.S.C. 
5365(b)(2)) refers to ``foreign-based bank holding company.'' 
Section 102(a)(1) of the Dodd-Frank Act (12 U.S.C. 5311(a)(1)) 
defines ``bank holding company'' for purposes of Title I of the 
Dodd-Frank Act to include foreign banking organizations that are 
treated as bank holding companies under section 8(a) of the 
International Banking Act of 1978 (12 U.S.C. 3106(a)). The Board has 
required, pursuant to section 165(b)(1)(B)(iv) of the Dodd-Frank Act 
(12 U.S.C. 5365(b)(1)(B)(iv)) certain foreign banking organizations 
subject to section 165 of the Dodd-Frank Act to form U.S. 
intermediate holding companies. Accordingly, the parent foreign-
based organization of a U.S. IHC is treated as a BHC for purposes of 
the BHC Act and section 165 of the Dodd-Frank Act. Because Section 
5(c) of the BHC Act authorizes the Board to require reports from 
subsidiaries of BHCs, section 5(c) provides additional authority to 
require U.S. IHCs to report the information contained in the FR Y-
14A/Q/M reports.
    \17\ The Board's Final Rule referenced in section 401(g) of 
EGRRCPA specifically stated that the Board would require IHCs to 
file the FR Y-14A/Q/M reports. See 79 FR 17240, 17304 (March 27, 
2014).
    \18\ Please note that the Board publishes a summary of the 
results of the Board's CCAR testing pursuant to 12 CFR 
225.8(f)(2)(v), and publishes a summary of the results of the 
Board's DFAST stress testing pursuant to 12 CFR 252.46(b) and 12 CFR 
238.134, which includes aggregate data. In addition, under the 
Board's regulations, covered companies must also publicly disclose a 
summary of the results of the Board's DFAST stress testing. See 12 
CFR 252.58; 12 CFR 238.146. The public disclosure requirement 
contained in 12 CFR 252.58 for covered BHCs and covered IHCs is 
separately accounted for by the Board in the Paperwork Reduction Act 
clearance for FR YY (OMB No. 7100-0350) and the public disclosure 
requirement for covered SLHCs is separately accounted for in by the 
Board in the Paperwork Reduction Act clearance for FR LL (OMB No. 
7100-NEW).
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    Consultation outside the agency: There has been no consultation 
outside the agency.
    Board of Governors of the Federal Reserve System, July 1, 2020.

Michele Taylor Fennell,
Assistant Secretary of the Board.
[FR Doc. 2020-14613 Filed 7-7-20; 8:45 am]
BILLING CODE 6210-01-P