[Federal Register Volume 87, Number 173 (Thursday, September 8, 2022)]
[Notices]
[Pages 55005-55007]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-19324]


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FEDERAL RESERVE SYSTEM


Agency Information Collection Activities: Announcement of Board 
Approval Under Delegated Authority and Submission to OMB

AGENCY: Board of Governors of the Federal Reserve System.

SUMMARY: The Board of Governors of the Federal Reserve System (Board) 
is adopting a proposal to extend for three years, with revision, the 
Financial Statements for Holding Companies (FR Y-9 reports; OMB Control 
Number 7100-0128).

FOR FURTHER INFORMATION CONTACT: 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.
    Office of Management and Budget (OMB) Desk Officer for the Federal 
Reserve Board, 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.

SUPPLEMENTARY INFORMATION: On June 15, 1984, OMB delegated to the Board 
authority under the Paperwork Reduction Act (PRA) to approve and assign 
OMB control numbers to collections of information conducted or 
sponsored by the Board. Board-approved collections of information are 
incorporated into the official OMB inventory of currently approved 
collections of information. The OMB inventory, as well as copies of the 
PRA Submission, supporting statements, and approved collection of 
information instrument(s) are available at https://www.reginfo.gov/public/do/PRAMain. These documents are also available on the Federal 
Reserve 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 above.
    Final Approval under OMB Delegated Authority of the Extension for 
Three Years, with Revision, of the Following Information Collection:
    Collection title: Financial Statements for Holding Companies.
    Collection identifier: FR Y-9C, FR Y-9LP, FR Y-9SP, FR Y-9ES, and 
FR Y-9CS.
    OMB control number: 7100-0128.
    Effective Date: September 30, 2022.
    Frequency: Quarterly, semiannually, and annually.
    Respondents: Bank holding companies (BHCs), savings and loan 
holding companies (SLHCs), securities holding companies, and U.S. 
intermediate holding companies (IHCs) (collectively, holding 
companies).\1\
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    \1\ The following depository institution holding companies are 
exempt: (1) a unitary savings and loan holding company with 
primarily commercial assets that meets the requirements of section 
10(c)(9)(c) of the Home Owners' Loan Act, for which thrifts make up 
less than 5 percent of its consolidated assets; and (2) a SLHC that 
primarily holds insurance-related assets and does not otherwise 
submit financial reports with the Securities and Exchange Commission 
pursuant to sections 13 or 15(d) of the Securities Exchange Act of 
1934.
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    Estimated number of respondents:
Reporting
    FR Y-9C (non-advanced approaches holding companies with less than 
$5 billion in total assets): 119; FR Y-9C (non-advanced approaches 
holding companies with $5 billion or more in total assets): 221; FR Y-
9C (advanced approaches holding companies): 9; FR Y-9LP: 412; FR Y-9SP: 
3,708; FR Y-9ES: 78; FR Y-9CS: 236.
Recordkeeping
    FR Y-9C: 349; FR Y-9LP: 412; FR Y-9SP: 3,708; FR Y-9ES: 78; FR Y-
9CS: 236.
    Estimated average hours per response:
Reporting
    FR Y-9C (non-advanced approaches holding companies with less than 
$5 billion in total assets): 35.74; FR Y-9C (non-advanced approaches 
holding companies with $5 billion or more in total assets): 44.94; FR 
Y-9C (advanced approaches holding companies): 50.16; FR Y-9LP: 5.27; FR 
Y-9SP: 5.45; FR Y-9ES: 0.50; FR Y-9CS: 0.50.
Recordkeeping
    FR Y-9C: 1; FR Y-9LP: 1; FR Y-9SP: 0.50; FR Y-9ES: 0.50; FR Y-9CS: 
0.50.
    Estimated annual burden hours:
Reporting
    FR Y-9C (non-advanced approaches holding companies with less than 
$5 billion in total assets): 17,012; FR Y-9C (non-advanced approaches 
holding companies with $5 billion or more in total assets): 39,727; FR 
Y-9C (advanced approaches holding companies): 1,806; FR Y-9LP: 8,685; 
FR Y-9SP: 40,417; FR Y-9ES: 39; FR Y-9CS: 472.
Recordkeeping
    FR Y-9C: 1,396; FR Y-9LP: 1,648; FR Y-9SP: 3,708; FR Y-9ES: 39; FR 
Y-9CS: 472.
    General description of collection: The FR Y-9 family of reporting 
forms continues to be the primary source of financial data on holding 
companies that examiners rely on in the intervals between on-site 
inspections. The Board requires holding companies to provide 
standardized financial statements to fulfill the Board's statutory 
obligation to supervise these organizations. Financial data from these 
reporting forms are used to detect emerging financial problems,

[[Page 55006]]

to review performance and conduct pre-inspection analysis, to monitor 
and evaluate capital adequacy, to evaluate holding company mergers and 
acquisitions, and to analyze a holding company's overall financial 
condition to ensure the safety and soundness of its operations. The FR 
Y-9C, FR Y-9LP, and FR Y-9SP serve as standardized financial statements 
for the holding companies. The FR Y-9ES is a financial statement for 
holding companies that are Employee Stock Ownership Plans. The Board 
uses the voluntary FR Y-9CS (a free-form supplement) to collect 
additional information deemed to be critical and needed in an expedited 
manner. Holding companies file the FR Y-9C on a quarterly basis, the FR 
Y-9LP quarterly, the FR Y-9SP semiannually, the FR Y-9ES annually, and 
the FR Y-9CS on a schedule that is determined when this supplement is 
used.
    Legal authorization and confidentiality: The reporting and 
recordkeeping requirements associated with the Y-9 series of reports 
are authorized for BHCs pursuant to section 5 of the Bank Holding 
Company Act (BHC Act); \2\ for SLHCs pursuant to section 10(b)(2) and 
(3) of the Home Owners' Loan Act; \3\ for IHCs pursuant to section 5 of 
the BHC Act, as well as pursuant to sections 102(a)(1) and 165 of the 
Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank 
Act); \4\ and for securities holding companies pursuant to section 618 
of the Dodd-Frank Act.\5\
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    \2\ 12 U.S.C. 1844.
    \3\ 12 U.S.C. 1467a(b)(2) and (3).
    \4\ 12 U.S.C. 5311(a)(1) and 5365; Section 165(b)(2) of Title I 
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, 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-9 series of reports.
    \5\ 12 U.S.C. 1850a(c)(1)(A).
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    Except for the FR Y-9CS report, which is collected on a voluntary 
basis, the obligation to submit the remaining reports in the FR Y-9 
series of reports and to comply with the recordkeeping requirements set 
forth in the respective instructions to each of the other reports is 
mandatory.
    Certain information collected on the FR Y-9C and FR Y-9SP Reports 
is kept confidential by the Board. The following items are kept 
confidential under exemption 4 of the Freedom of Information Act (FOIA) 
because these data items reflect commercial and financial information 
that is both customarily and actually treated as private by the 
respondent: \6\
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    \6\ 12 U.S.C. 552(b)(4).
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     FR Y-9C, Schedule HI, memoranda item 7(g), ``FDIC deposit 
insurance assessments;''
     FR Y-9C, Schedule HC-P, item 7(a) ``Representation and 
warranty reserves for 1-4 family residential mortgage loans sold to 
U.S. government agencies and government sponsored agencies;''
     FR Y-9C, Schedule HC-P, item 7(b) ``Representation and 
warranty reserves for 1-4 family residential mortgage loans sold to 
other parties;''
     FR Y-9C, Schedule HC-C, Part I, Memorandum items 16.a and 
16.b, for eligible loan modifications under Section 4013 of the 2020 
Coronavirus Aid, Relief, and Economic Security Act; and
     FR Y-9C, Schedule HC and FR Y-9SP, Schedule SC, Memoranda 
item 2.b., the name and email address of the external auditing firm's 
engagement partner.\7\
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    \7\ The Board has assured respondents that this information will 
be treated as confidential since the collection of this data item 
was proposed in 2004, under the assumption that the identity of the 
engagement partner is treated as private information by HCs.
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    In some circumstances, disclosing these data items may also reveal 
confidential examination and supervisory information protected from 
disclosure under exemption 8 of the FOIA.\8\ The Board has previously 
assured submitters that these data items will be treated as 
confidential.
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    \8\ 12 U.S.C. 552(b)(8).
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    In addition, the Chief Executive Officer Contact Information 
section of both the FR Y-9C and FR Y-9SP is kept confidential pursuant 
to exemption 6 of the FOIA, which applies to personnel and medical 
files the disclosure of which would constitute a clearly unwarranted 
invasion of personal privacy,\9\ and exemption 8, which applies to 
information contained in or related to examination, operating, or 
condition reports prepared by, on behalf of, or for the use of an 
agency responsible for the regulation or supervision of financial 
institutions.\10\
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    \9\ 5 U.S.C. 552(b)(6).
    \10\ 5 U.S.C. 552(b)(8).
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    Aside from the data items described above, data collected by the FR 
Y-9 reports generally are not accorded confidential treatment. As 
provided in the Board's Rules Regarding Availability of 
Information,\11\ however, a respondent may request confidential 
treatment for any data items the respondent believes should be withheld 
pursuant to a FOIA exemption. The Board will review any such request to 
determine if confidential treatment is appropriate and will inform the 
respondent if the request for confidential treatment has been granted 
or denied.
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    \11\ 12 CFR part 261.
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    To the extent that the instructions to the FR Y-9 reports direct 
the financial institution to retain the workpapers and related 
materials used in preparation of each report, such material would only 
be obtained by the Board as part of the examination or supervision of 
the financial institution. Accordingly, such information is considered 
confidential pursuant to exemption 8 of the FOIA.\12\ In addition, the 
workpapers and related materials may also be protected by exemption 4 
of the FOIA, to the extent such financial information is customarily 
and actually treated as private by the respondent.\13\
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    \12\ 5 U.S.C. 552(b)(8).
    \13\ 5 U.S.C. 552(b)(4).
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    Current actions: On October 8, 2020, the Board published a notice 
in the Federal Register (85 FR 63553) requesting public comment for 60 
days on the extension, with revision, of the FR Y-9 reports. The 
comment period for this notice expired on December 7, 2020. On January 
4, 2021, the Board published a final Federal Register (86 FR 92) notice 
addressing the public comments received and finalizing all proposed 
changes except those related to last-of-layer hedging, discussed below. 
There were no comments received on the initial Federal Register notice 
(85 FR 63553) on the proposed changes related to last-of-layer hedging.
    In accounting standards update (ASU) No. 2017-12, Derivatives and 
Hedging (Topic 815)--Targeted Improvements to Accounting for Hedging 
Activities, the Financial Standards Accounting Board (FASB) added the 
last-of-layer method to its hedge accounting standards to lessen the 
difficulties institutions encountered under existing accounting rules 
when seeking to enter into a fair value hedge of the interest rate risk 
of a closed portfolio of prepayable financial assets or one or more 
beneficial interests secured by a portfolio of prepayable financial 
instruments. Typically, prepayable financial assets would be loans and 
available-for-sale debt securities. Under ASU 2017-12, there are no 
limitations on the types of qualifying assets that

[[Page 55007]]

could be grouped together in a last-of-layer hedge other than meeting 
the following two criteria: (1) They must be prepayable financial 
assets that have a contractual maturity date beyond the period being 
hedged and (2) they must be eligible for fair value hedge accounting of 
interest rate risk (for example, fixed-rate instruments). For example, 
fixed-rate residential mortgages, auto loans, and collateralized 
mortgage obligations could all be grouped and hedged together in a 
single last-of-layer closed portfolio. For a last-of-layer hedge, ASC 
paragraph 815-10-50-5B states that an institution may need to allocate 
the related fair value hedge basis adjustment (FVHBA) ``to meet the 
objectives of disclosure requirements in other Topics.'' This ASC 
paragraph then explains that the institution ``may allocate the basis 
adjustment on an individual asset basis or on a portfolio basis using a 
systematic and rational method.'' Due to the aggregation of assets in a 
last-of-layer closed portfolio, institutions may find it challenging to 
allocate the related FVHBA to the individual loan or AFS debt security 
level when necessary for financial reporting purposes.
    In March 2018, the FASB added a project to its agenda to expand 
last-of-layer hedging to multiple layers, thereby providing more 
flexibility to entities when applying hedge accounting to a closed 
portfolio of prepayable assets. In connection with this project, the 
FASB anticipated that there would be diversity in practice if entities 
were required to allocate portfolio-level, last-of-layer FVHBAs to more 
granular levels, which in turn could potentially hamper data quality 
and comparability. In addition, the allocation would increase 
operational burden on institutions with little, if any, added value to 
risk management or to users of the financial statements. Therefore, for 
financial reporting purposes, the FASB tentatively decided that it 
would require these FVHBAs to be presented as a reconciling item, i.e., 
in the aggregate for loans and AFS debt securities, in disclosures 
required by other areas of United States generally accepted accounting 
principles (U.S. GAAP).
    As a result, in the October 2020 notice, the Board proposed to 
implement changes to the FR Y-9C related to the FASB's expected 
expansion of last-of-layer hedging to multiple layers, providing more 
flexibility to entities when applying hedge accounting to a closed 
portfolio of prepayable assets. Specifically, the Board proposed 
changes to FR Y-9C, Schedules HC-C, Loans and Lease Financing 
Receivables and HC-B, Securities. Following the FASB's expected 
adoption of a final last-of-layer hedge accounting standard, the 
instructions for Schedule HC-C, item 11, ``LESS: Any unearned income on 
loans reflected in items 1-9 above,'' would have been revised to 
explicitly state that last-of-layer FVHBAs associated with the loans 
reported in Schedule HC-C, should be included in this item. In 
addition, the Board proposed to rename existing item 7 for Schedule HC-
B, ``Investments in mutual funds and other equity securities with 
readily determinable fair values,'' to ``Unallocated last-of-layer fair 
value hedge basis adjustments.'' Holding companies would have reported 
amounts for last-of-layer FVHBAs on AFS debt securities only in item 7, 
column C, ``Available-for-sale: Amortized Cost''.
    However, the FASB had not adopted the expected expansion of last-
of-layer hedging by January 2021, when the Board approved the other 
revisions to the FR Y-9 reports that had been proposed in the October 
2020 notice. Therefore, the Board did not adopt the proposed revisions 
relating to last-of-layer hedging in the January 2021 notice and 
instead noted that it would consider whether to finalize the proposed 
revisions when the FASB adopted a final standard.
    On March 28, 2022, the FASB issued ASU 2022-01, to implement last-
of-layer hedging.\14\ The ASU is considered to be a modification of 
U.S. GAAP. This ASU expands the current single-layer method and allows 
for multiple hedged layers of a single closed portfolio, as anticipated 
by the October 2020 notice. Additionally, ASU 2022-01:
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    \14\ ASU 2022-01--Derivatives and Hedging (Topic 815): Fair 
Value Hedging--Portfolio Layer Method (fasb.org).
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     Expands the scope of the portfolio layer method from 
prepayable assets to also include nonprepayable assets;
     Specifies eligible hedging instruments in a single-layer 
hedge;
     Provides additional guidance on the accounting for and 
disclosure of FVHBA under the portfolio layer method; and
     Specifies how hedge basis adjustments should be considered 
when determining credit losses for the assets included in the closed 
portfolio.
    The ASU 2022-01 applies to all entities that elect to apply the 
portfolio layer method of hedge accounting. For public business 
entities, this ASU is effective for fiscal years beginning after 
December 15, 2022, and interim periods within those fiscal years. For 
all other entities, the ASU is effective for fiscal years beginning 
after December 15, 2023, and interim periods within those fiscal years. 
Early adoption is permitted.
    In light of the issuance of ASU 2022-01 by the FASB, the Board has 
adopted the revisions to the FR Y-9C related to the expansion of last-
of-layer hedging proposed in October 2020, with certain modifications 
to account for the specific content of ASU 2022-01. Specifically, the 
Board has renamed HC-B, line item 7 to ``Unallocated portfolio layer 
fair value hedge basis adjustments'' instead of '' Unallocated last-of-
layer fair value hedge basis adjustments'' to align with the scope of 
ASU 2022-01. Additionally, the Board is updating the FR Y-9C 
instructions for Schedules HC-B, Securities, and HC-C, Loans and 
Leases, to fully align with U.S. GAAP as detailed in ASU 2022-01.

    Board of Governors of the Federal Reserve System, September 1, 
2022.
Michele Taylor Fennell,
Deputy Associate Secretary of the Board.
[FR Doc. 2022-19324 Filed 9-7-22; 8:45 am]
BILLING CODE 6210-01-P