[Federal Register Volume 86, Number 202 (Friday, October 22, 2021)]
[Notices]
[Pages 58723-58725]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-23056]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency


Agency Information Collection Activities: Information Collection 
Renewal; Comment Request; Libor Self-Assessment

AGENCY: Office of the Comptroller of the Currency (OCC), Treasury. 
ACTION: Notice and request for comment.
SUMMARY: The OCC, as part of its continuing effort to reduce paperwork 
and respondent burden, invites the general public and other Federal 
agencies to take this opportunity to comment on a new information 
collection as required by the Paperwork Reduction Act of 1995 (PRA). In 
accordance with the requirements of the PRA, the OCC may not conduct or 
sponsor, and the respondent is not required to respond to, an 
information

[[Page 58724]]

collection unless it displays a currently valid Office of Management 
and Budget (OMB) control number. The OCC is soliciting comment 
concerning renewal of a collection of information titled, ``Libor Self-
Assessment.''

DATES: Comments must be submitted on or before December 21, 2021.

ADDRESSES: Commenters are encouraged to submit comments by email, if 
possible. You may submit comments by any of the following methods:
     Email: [email protected].
     Mail: Chief Counsel's Office, Attention: Comment 
Processing, Office of the Comptroller of the Currency, Attention: 1557-
0349, 400 7th Street SW, Suite 3E-218, Washington, DC 20219.
     Hand Delivery/Courier: 400 7th Street SW, Suite 3E-218, 
Washington, DC 20219.
     Fax: (571) 465-4326.
    Instructions: You must include ``OCC'' as the agency name and 
``1557-0349'' in your comment. In general, the OCC will publish 
comments on www.reginfo.gov without change, including any business or 
personal information provided, such as name and address information, 
email addresses, or phone numbers. 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.
    Following the close of this notice's 60-day comment period, the OCC 
will publish a second notice with a 30-day comment period. You may 
review comments and other related materials that pertain to this 
information collection beginning on the date of publication of the 
second notice for this collection by the method set forth in the next 
bullet.
     Viewing Comments Electronically: Go to www.reginfo.gov. 
Hover over the ``Information Collection Review'' tab. Underneath the 
``Currently under Review'' section heading, from the drop-down menu 
select ``Department of Treasury'' and then click ``submit.'' This 
information collection can be located by searching by OMB control 
number ``1557-0349'' or ``Libor Self-Assessment.'' Upon finding the 
appropriate information collection, click on the related ``ICR 
Reference Number.'' On the next screen, select ``View Supporting 
Statement and Other Documents'' and then click on the link to any 
comment listed at the bottom of the screen.
     For assistance in navigating www.reginfo.gov, please 
contact the Regulatory Information Service Center at (202) 482-7340.

FOR FURTHER INFORMATION CONTACT: Shaquita Merritt, Clearance Officer, 
(202) 649-5490, Chief Counsel's Office, Office of the Comptroller of 
the Currency, 400 7th Street SW, Washington, DC 20219.

SUPPLEMENTARY INFORMATION: Under the PRA (44 U.S.C. 3501-3520), Federal 
agencies must obtain approval from the OMB for each collection of 
information that they conduct or sponsor. ``Collection of information'' 
is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) to include agency 
requests or requirements that members of the public submit reports, 
keep records, or provide information to a third party. Section 
3506(c)(2)(A) of title 44 requires Federal agencies to provide a 60-day 
notice in the Federal Register concerning each proposed collection of 
information, including each renewal of an existing collection of 
information, before submitting the collection to OMB for approval. To 
comply with this requirement, the OCC is publishing notice of the 
renewal of the collection of information set forth in this document, 
which was approved on an emergency basis.
    Title: Libor Self-Assessment.
    OMB Control No.: 1557-0349.
    Type of Review: Regular.
    Description: The expected cessation of the London InterBank Offered 
Rate (Libor) prompted the OCC to create a self-assessment tool for 
banks to use in preparing for the expected Libor cessation. The self-
assessment tool may be used in assessing the appropriateness of a 
bank's Libor transition plan, the execution of the plan by its 
management, and related matters.
    The Intercontinental Exchange Libor is a reference rate that is 
intended to reflect the cost of unsecured interbank borrowing. Libor is 
published daily in five currencies with seven maturities ranging from 
overnight to 12 months. It is used globally in the over-the-counter 
derivatives market, bonds, loan products, and securitizations. As of 
the end of 2020, $223 trillion of financial instruments were exposed to 
U.S. dollar (USD) Libor as the primary reference rate.\1\
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    \1\ https://www.newyorkfed.org/medialibrary/Microsites/arrc/files/2021/USD-LIBOR-transition-progress-report-mar-21.pdf.
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    While certain reference rates have ceased to be reported in the 
past, the significant exposure of the financial markets to Libor 
creates the need for banks to assess whether they are identifying 
applicable risks, preparing for Libor cessation, and successfully 
transitioning to replacement reference rates. Libor is referenced 
globally, and its cessation could affect banks of all sizes through 
direct or indirect exposure.
    There is risk of market disruptions, litigation, and destabilized 
balance sheets if acceptable replacement rates do not attract 
sufficient market-wide acceptance or if contracts cannot seamlessly 
transition to new rates. A bank's risk exposure from expected Libor 
cessation depends on the bank's specific circumstances. Many community 
banks may not offer products or services that use Libor. However, 
community banks could have Libor exposure in positions such as Federal 
Home Loan Bank (FHLB) borrowings, mortgage-backed securities, or bonds 
in the banks' investment portfolios.
    Libor exposure can exist in all product categories and lines of 
business, both on or off the balance sheet, and in asset management 
activities. Risk can also emanate from third-party relationships 
because Libor is often used in pricing models, financial models, and in 
other parts of banks' infrastructure, such as core processing.
    The ubiquity of Libor, present in over $200 trillion notional 
contracts, makes moving off the rate incredibly complicated. Many 
existing contracts do not include sufficient provisions if Libor 
becomes unavailable (known as fallback provisions). Without adequate 
preparation, Libor cessation could cause market disruption and present 
risks to banks and their customers. In addition, fallback provision 
language does not sufficiently account for a permanent cessation of 
Libor. The Federal banking agencies published a statement communicating 
that banks should discontinue entering into contracts that use USD 
Libor as a reference rate as soon as practicable and in any event by 
the end of 2021 (with a few exceptions for orderly market support).\2\
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    \2\ https://www.occ.gov/news-issuances/bulletins/2020/bulletin-2020-104.html#ft1.
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    Given that the OCC expects banks to discontinue making Libor loans 
by the end of 2021, the prevalence of Libor, and the remaining work to 
be done within the timeframe described above, the OCC is making this 
self-assessment tool available to banks, due to the immediate need and 
the brief duration of use, to help banks prepare for Libor-related 
risk.
    Banks may use the self-assessment to determine whether they have 
risk management processes in place to

[[Page 58725]]

identify and mitigate their Libor transition risks. Not all sections or 
questions will apply to all banks. Applicable risks (e.g., operational, 
compliance, strategic, and reputation) can be identified when scoping 
and completing Libor cessation preparedness assessments.
    Affected Public: Businesses or other for-profit.
    Burden Estimates:
    Estimated Number of Respondents: 1,096. Estimated Annual Burden: 
8,768 hours.
    Frequency of Response: On occasion.
    Comments: Comments submitted in response to this notice will be 
summarized and included in the request for OMB approval. All comments 
will become a matter of public record. Comments are invited on:
    (a) Whether the collections of information are necessary for the 
proper performance of the OCC's functions, including whether the 
information has practical utility;
    (b) The accuracy of the OCC's estimates of the burden of the 
information collections, including the validity of the methodology and 
assumptions used;
    (c) Ways to enhance the quality, utility, and clarity of the 
information to be collected; and
    (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.
    (e) Estimates of capital or start-up costs and costs of operation, 
maintenance, and purchase of services to provide information.

Theodore J. Dowd,
Deputy Chief Counsel, Office of the Comptroller of the Currency.
[FR Doc. 2021-23056 Filed 10-21-21; 8:45 am]
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