Proposed Agency Information Collection Activities; Comment

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

FEDERAL RESERVE SYSTEM

FEDERAL DEPOSIT INSURANCE CORPORATION

Proposed Agency Information Collection Activities; Comment

AGENCIES: Office of the Comptroller of the Currency (OCC), Treasury;

Board of Governors of the Federal Reserve System (Board); and Federal

Deposit Insurance Corporation (FDIC).

ACTION: Notice and request for comment.

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BACKGROUND: In accordance with the requirements of the Paperwork

Reduction Act of 1995 (44 U.S.C. chapter 35), the OCC, the Board, and

the FDIC (the ``agencies'') may not conduct or sponsor, and the

respondent is not required to respond to, an information collection

that has been extended, revised, or implemented on or after October 1,

1995, unless it displays a currently valid Office of Management and

Budget (OMB) control number. Proposed revisions to the following

currently approved collections of information have received approval

from the Federal Financial Institutions Examination Council (FFIEC), of

which the agencies are members, and are hereby published for comment.

At the end of the comment period, the comments and recommendations

received will be analyzed to determine the extent to which the proposed

revisions should be modified prior to the agencies' submission of them

to OMB for review and approval. Comments are invited on: (a) Whether

the proposed revisions to the following collections of information are

necessary for the proper performance of the agencies' functions,

including whether the information has practical utility; (b) the

accuracy of the agencies' estimate of the burden of the information

collections as they are proposed to be revised, including the validity

of the methodology and assumptions used; (c) ways to enhance the

quality, utility, and clarity of the information to be collected; and

(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.

DATES: Comments must be submitted on or before January 16, 1996.

ADDRESSES: Interested parties are invited to submit written comments to

any or all of the agencies. All comments, which should refer to the OMB

control number(s), will be shared among the agencies.

OCC: Written comments should be submitted to the Communications

Division, Ninth Floor, Office of the Comptroller of the Currency, 250 E

Street, S.W., Washington, D.C. 20219; Attention: Paperwork Docket No.

1557-0081 [FAX number (202) 874-5274; Internet address:

[email protected]]. Comments will be available for inspection

and photocopying at that address.

Board: Written comments should be addressed to Mr. William W.

Wiles, Secretary, Board of Governors of the Federal Reserve System,

20th and C Streets, N.W., Washington, D.C. 20551, or delivered to the

Board's mail room between 8:45 a.m. and 5:15 p.m., and to the security

control room outside of those hours. Both the mail room and the

security control room are accessible from the courtyard entrance on

20th Street between Constitution Avenue and C Street, N.W. Comments

received may be inspected in room M-P-500 between 9:00 a.m. and 5:00

p.m., except as provided in section 261.8 of the Board's Rules

Regarding Availability of Information, 12 CFR 261.8(a).

FDIC: Written comments should be sent to Jerry L. Langley,

Executive Secretary, Attention: Room F-402, Federal Deposit Insurance

Corporation, 550 17th Street, N.W., Washington, D.C. 20429. Comments

may be hand-delivered to Room F-402, 1776 F Street, N.W., Washington,

D.C. 20429, on business days between 8:30 a.m. and 5:00 p.m. [FAX

number (202) 898-3838; Internet address: [email protected]]. Comments

will be available for inspection and photocopying in Room 7118, 550

17th Street, N.W., Washington, D.C. 20429, between 9:00 a.m. and 4:30

p.m. on business days.

A copy of the comments may also be submitted to the OMB desk

officer for the agencies: Milo Sunderhauf, Office of Information and

Regulatory Affairs, Office of Management and Budget, New Executive

Office Building, Room 3208, Washington, D.C. 20503.

FOR FURTHER INFORMATION CONTACT: A copy of the proposed revisions to

the collections of information may be requested from any of the agency

clearance officers whose names appear below.

OCC: Jessie Gates, OCC Clearance Officer, (202) 874-5090, Office of

the Comptroller of the Currency, 250 E Street, SW., Washington, DC

20219.

Board: Mary M. McLaughlin, Board Clearance Officer, (202) 452-3829,

Division of Research and Statistics, Board of Governors of the Federal

Reserve System, 20th and C Streets, NW., Washington, DC 20551. For the

hearing impaired only, Telecommunications Device for the Deaf (TDD),

Dorothea Thompson, (202) 452-3544, Board of Governors of the Federal

Reserve System, 20th and C Streets, NW., Washington, DC 20551.

FDIC: Steven F. Hanft, FDIC Clearance Officer, (202) 898-3907,

Office of the Executive Secretary, Federal Deposit Insurance

Corporation, 550 17th Street NW., Washington, DC 20429.

SUPPLEMENTARY INFORMATION: Proposal to revise the following currently

approved collections of information:

Title: Consolidated Reports of Condition and Income.

Form Number: FFIEC 031, 032, 033, 034.

For OCC:

OMB Number: 1557-0081.

Frequency of Response: Quarterly.

Affected Public: National Banks.

Estimated Number of Respondents: 2,900 national banks.

Estimated Time per Response: 38.02 burden hours.

Estimated Total Annual Burden: 441,024 burden hours.

For Board:

OMB Number: 7100-0036.

Frequency of Response: Quarterly.

Affected Public: State Member Banks.

Estimated Number of Respondents: 1,002 state member banks.

Estimated Time per Response: 44.01 burden hours.

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Estimated Total Annual Burden: 176,392 burden hours.

For FDIC:

OMB Number: 3064-0052.

Frequency of Response: Quarterly.

Affected Public: Insured State Nonmember Commercial and Savings Banks.

Estimated Number of Respondents: 7,011 insured state nonmember

commercial and savings banks.

Estimated Time per Response: 27.87 burden hours.

Estimated Total Annual Burden: 781,473 burden hours.

The estimated time per response varies by agency because of

differences in the composition of the banks under each agency's

supervision (e.g., size distribution of banks, types of activities in

which they are engaged, and number of banks with foreign offices).

General Description of Report: This information collection is

mandatory: 12 U.S.C. 161 (for national banks), 12 U.S.C. 324 (for state

member banks), and 12 U.S.C. 1817 (for insured state nonmember

commercial and savings banks). Except for select sensitive items, this

information collection is not given confidential treatment. Small

businesses (i.e., small banks) are affected.

Abstract: Consolidated Reports of Condition and Income are filed

quarterly with the agencies for their use in monitoring the condition

and performance of reporting banks and the industry as a whole. The

reports are also used by the FDIC to calculate banks' deposit insurance

assessments.

Current Actions: The new items that would be added to the Call

Report are necessary to enhance the supervisory process for monitoring

regulatory capital ratios, liquidity ratios, sales of assets, off-

balance sheet derivative contracts, and managed credit card

receivables. A number of items would be consolidated or deleted.

Type of Review: Revisitation.

The proposed revisions to the Consolidated Reports of Condition and

Income (Call Report) that are the subject of this notice have been

approved by the FFIEC for implementation as of the March 31, 1996,

report date. The proposed changes affect several existing Call Report

schedules. Unless otherwise indicated, the Call Report changes apply to

all four sets of report forms (FFIEC 031, 032, 033, and 034).

Nonetheless, as is customary for Call Report changes, banks are advised

that, for the March 31, 1996, report date, reasonable estimates may be

provided for any new or revised item for which the requested

information is not readily available.

On August 2, 1995, the agencies jointly published for a 60-day

public comment period a proposed Supervisory Policy Statement

Concerning A Supervisory Framework for Measuring and Assessing Banks'

Interest Rate Risk Exposure (60 FR 39495, August 2, 1995). That

proposal included proposed Call Report schedules and draft instructions

that would be implemented beginning with the March 31, 1996, report

date, except by small banks that meet certain exemption criteria.

Because comments were invited regarding the proposed Call Report

interest rate risk reporting requirements and their paperwork

implications, the proposed interest rate risk schedules are not covered

by this notice.

The proposed revisions are summarized as follows:

Deletions and Reductions in Detail

The level of detail would be reduced in two areas for banks that

file the FFIEC 031, 032, and 033 report forms (i.e., banks with $100

million or more in assets or with foreign offices). (Smaller banks that

file the FFIEC 034 report forms do not provide these detailed data.)

First, the breakdown of nontransaction accounts by type of depositor in

the deposit schedule (Schedule RC-E) would contain fewer categories.

The separate items for nontransaction accounts of ``U.S. branches and

agencies of foreign banks'' and ``Other commercial banks in the U.S.''

would be combined into a single item. Similarly, the separate items for

nontransaction accounts of ``Foreign branches of other U.S. banks'' and

``Other banks in foreign countries'' would be combined.

Second, a single income statement item for trading revenue would

replace the separate items for foreign exchange trading gains (losses)

and other trading gains (losses). The memorandum items providing a

four-way breakdown of trading revenue by risk exposure (interest rate,

foreign exchange, equity, and commodity and other), which were added in

March 1995, would continue to be collected. The sum of the memorandum

items would equal the new single income statement item.

Call Report items in the four following areas would be deleted:

(1) Memorandum items for total deposits, total demand deposits, and

total time and savings deposits (in domestic offices) that have been

collected in the deposit schedule for deposit insurance assessment

purposes (Schedule RC-E, Memorandum items 4, 4.a, and 4.b).

(2) A deposit schedule memorandum item for total deposits (in

domestic offices) denominated in foreign currencies (Schedule RC-E,

Memorandum item 1.d).

(3) An income statement memorandum item for foreign tax credits

(Schedule RI, Memorandum item 3). (This item has been completed only by

banks that file the FFIEC 031, 032, and 033 report forms, i.e., banks

with $100 million or more in assets or with foreign offices.)

(4) An income statement memorandum item for the taxable equivalent

adjustment to pretax income (Schedule RI, Memorandum item 4). (This

item has been applicable only to banks with foreign offices and $1

billion or more in assets that file the FFIEC 031 report forms.)

New Items

Call Report items in the following areas would be added:

(1) Capital and Asset Amounts Used in Calculating Regulatory Capital

Ratios

At present, the Call Report includes a variety of items in several

schedules which the agencies use to calculate the leverage and risk-

based capital ratios for individual banks. However, a comparison of the

agencies' regulatory capital standards to the information currently

reported in the Call Report reveals that the Call Report does not

collect all of the information that the agencies need to calculate each

bank's Tier 1, Tier 2, and total capital in strict accordance with the

definitions in the agencies' capital standards. Nevertheless, according

to informal input received from bankers, banks routinely calculate

their regulatory capital ratios at least quarterly for internal

management purposes.

Thus, rather than introducing new Call Report items for specific

elements of the regulatory capital ratio calculations that are not

currently reported so that further refinements can be made to the

banking agencies' formulas for calculating capital ratios, banks would

begin to report the end results of their own internal regulatory

capital analyses. Six new items would cover Tier 1 capital, Tier 2

capital, total risk-based capital, total risk-weighted assets (the

denominator of the risk-based capital ratio, i.e., net of deductions),

the excess amount of the allowance for loan and lease losses (if any),

and ``average total assets'' (the denominator of the leverage capital

ratio, i.e., net of deductions).

Banks would not be required to go to greater lengths to identify

and determine the amounts to be reported in the six new capital-related

items than they are currently doing when they calculate their capital

ratios for internal

[[Page 57620]]

management purposes. Beginning to collect the six regulatory capital

items in 1996 may provide a basis for eliminating at a later date some

items now reported in the Call Report solely for risk-based capital

calculation purposes. To assist banks in accurately reporting these

capital items, an optional regulatory capital worksheet would be

developed, provided regularly to banks, and updated as necessary.

In addition, the agencies understand that bankers and other

interested parties have found it difficult and time-consuming to

calculate the regulatory capital ratios for other banks using existing

Call Report data. Consequently, the addition of these six items should

simplify bankers' calculations of other banks' capital ratios as well

as calculations made by other public users of bank Call Reports.

(2) Short-Term Liabilities and Assets

The staffs of the agencies plan to revise the liquidity ratios in

the Uniform Bank Performance Report (UBPR) to focus on short-term and

total non-core liabilities (instead of so-called ``volatile

liabilities'') as well as short-term assets and liabilities. As a

result, changes would be made to the reporting of maturity and

repricing data for certain categories of liabilities and assets.

Accordingly, the following changes would be implemented:

(a) Other borrowed money--On the Call Report balance sheet, the

two-way breakdown of ``Other borrowed money'' based on the original

maturity of the borrowing would be changed to a two-way breakdown based

on remaining maturity (Schedule RC, item 16).

(b) Time deposits--A number of changes would be made in the

reporting of these data.

First, the maturity and repricing data for open-account time

deposits of $100,000 or more, which are currently included with the

maturity and repricing data for time deposits of less than $100,000 (in

Schedule RC-E, Memorandum item 5), would be switched so that these data

are included with the maturity and repricing data for time certificates

of deposit of $100,000 or more (in Schedule RC-E, Memorandum item 6).

(Schedule RC-E, Memorandum items 5 and 6 are not applicable to FDIC-

supervised savings banks that must complete the Call Report's

supplemental Schedule RC-J.)

Second, the maturity and repricing data for fixed rate and floating

rate time deposits of less than $100,000, which are currently reported

on a combined basis (in Schedule RC-E, Memorandum item 5), would be

split so that the remaining maturity of fixed rate time deposits of

less than $100,000 would be reported separately from the repricing

frequency of floating rate time deposits of less than $100,000. A new

time interval would also be added for these time deposits. Fixed rate

time deposits less than $100,000 would contain a maturity category of

over 12 months and floating rate time deposits of less than $100,000

would include a repricing interval of less frequently than annually.

(Schedule RC-E, Memorandum item 5 is not applicable to FDIC-supervised

savings banks that must complete the Call Report's supplemental

Schedule RC-J.)

Third, two new Memorandum items would be collected in the deposit

schedule for floating rate time deposits of $100,000 or more with a

remaining maturity of one year or less and for floating rate time

deposits of less than $100,000 with a remaining maturity of one year or

less. These items would be collected from commercial banks. For FDIC-

supervised savings banks, two new Memorandum items would be collected

in supplemental Schedule RC-J for time deposits of $100,000 or more

with a remaining maturity of one year or less and for time deposits of

less than $100,000 with a remaining maturity of one year or less.

(c) Brokered deposits and deposits in foreign offices--New

Memorandum items would be created for (i) Brokered deposits issued in

denominations of less than $100,000 with a remaining maturity of one

year or less, (ii) brokered deposits issued in denominations of

$100,000 or more with a remaining maturity of one year or less, and

(ii) for banks that file the FFIEC 031 version of the Call Report, time

deposits in foreign offices with a remaining maturity of one year or

less.

(d) Loans--For commercial banks, a single Memorandum item for

floating rate loans with a remaining maturity of one year or less would

be added to the loan schedule (Schedule RC-C). For FDIC-supervised

savings banks, a single Memorandum item for loans with a remaining

maturity of one year or less would be added to supplemental Schedule

RC-J.

(e) Debt securities--For FDIC-supervised savings banks, a single

Memorandum item for debt securities with a remaining maturity of one

year or less would be added to supplemental Schedule RC-J. Savings

banks would begin to complete this new item instead of an existing

Memorandum item in the securities schedule on floating rate debt

securities with a remaining maturity of one year or less (Schedule RC-

B, Memorandum item 6). Commercial banks would continue to complete

existing Memorandum item 6 in Schedule RC-B. In the new Memorandum item

for savings banks, held-to-maturity securities would be reported at

amortized cost and available-for-sale securities would be reported at

fair value, consistent with the method of reporting these two

categories of securities in the Schedule RC-B Memorandum item.

(3) Small Business Obligations Sold With Recourse

The agencies have issued rules to implement section 208 of the

Riegle Community Development and Regulatory Improvement Act of 1994.

(For OCC: 60 FR 47455, September 13, 1995. For Board: 60 FR 45612,

August 31, 1995. For FDIC: 60 FR 45606, August 31, 1995.) Section 208

provides that a qualifying insured depository institution that sells

small business loans and leases on personal property with recourse is

required to include only the amount of retained recourse in its risk-

weighted assets when calculating its risk-based capital ratios,

provided certain conditions are met. Section 208 also states that

qualifying institutions should report these transactions in accordance

with generally accepted accounting principles (GAAP) in the Call

Report.

To be a qualifying institution, a bank must be well capitalized

based on capital ratio calculations made without regard to the

preferential capital treatment that Section 208 authorizes for these

transactions. In addition, in general, for purposes of determining a

bank's capital category under the prompt corrective action rules, the

capital ratio calculations must be made without regard to the

preferential Section 208 treatment.

The Call Report instructions for ``sales of assets'' will be

revised to incorporate the GAAP reporting treatment for sales of small

business obligations with recourse by qualifying institutions.

Additionally, to enable the agencies to determine the capital ratios of

institutions that have engaged in transactions covered by Section 208

on the ``without regard to'' basis mentioned above, Call Report items

would be added for (i) the outstanding amount of small business

obligations sold with recourse and (ii) the amount of retained recourse

on such obligations.

(4) Credit Losses on Off-Balance Sheet Derivative Contracts

Banks that file the FFIEC 031 and 032 report forms (i.e., banks

with $300 million or more in assets or with foreign offices) began to

report information about past due derivatives in the Call

[[Page 57621]]

Report in 1994. However, some banks have incurred credit losses on

their derivative contracts, but the agencies cannot track these losses

for individual institutions or for the industry as a whole. Therefore,

a new item would be added in which those banks that are required to

report past due derivative data would also report their year-to-date

credit losses on derivatives.

On a related matter, the Call Report instructions for reporting

amounts associated with derivatives that are past due 90 days or more

would be revised so that banks would begin to also include information

about derivatives that, while not technically past due, are with

counterparties that are not expected to pay the full amounts owed to

the institution under the derivative contracts.

(5) Change in Frequency of Reporting on Securitized Credit Card

Receivables

In order to evaluate the financial performance of credit card banks

and other banks with credit card operations that have securitized and

sold credit card receivables, the volume of receivables on all of the

credit card accounts managed or serviced by a bank, both on and off of

the books, must be known. Banks that file the FFIEC 031 and 032 report

forms (i.e., banks with $300 million or more in assets or with foreign

offices) report annually as of September 30 the outstanding amount of

``Credit cards and related plans'' that have been securitized and sold

without recourse with servicing retained. In contrast, these banks

report the amount of ``Credit cards and related plans'' on their books

each quarter. Given the growth in the volume of bank credit card

securitizations, these banks would begin to report the outstanding

amount of securitized credit card receivables that they service on a

quarterly rather than annual basis.

Instructional Changes

The following changes, which may affect how some banks report

certain information in the Call Report, would be made to the

instructions.

(1) Reporting of low level recourse for risk-based capital

purposes--The three banking agencies amended their risk-based capital

standards earlier this year to incorporate the low level recourse rule.

(For OCC: 60 FR 17986, April 10, 1995. For Board: 60 FR 8177, February

13, 1995. For FDIC: 60 FR 15858, March 28, 1995.) Under this rule, when

a bank has transferred assets with recourse, the amount of risk-based

capital that must be maintained is limited to the bank's maximum

contractual exposure under the recourse agreement if this is less than

the amount of capital that would have to be held against the

outstanding amount of the transferred assets.

In the Call Report materials distributed to banks for the first

three quarters of this year, interim guidance has been provided on how

low level recourse transactions should be reported in the risk-based

capital schedule (Schedule RC-R). Under this interim guidance, a bank's

maximum contractual exposure in a low level recourse transaction is

multiplied by a factor that is a function of the risk weight category

applicable to the transferred assets. The resulting amount is then

reported in the Schedule RC-R item for the applicable risk weight and

would thereby be included in the bank's risk-weighted assets. This

interim guidance would now be formally incorporated into the Call

Report instructions.

(2) Reporting of quarterly averages in a quarter when push down

accounting has been applied--The instructions for the quarterly average

calculations in Schedule RC-K would be clarified to indicate that banks

acquired in push down transactions should calculate quarterly averages

using only amounts for the days since the acquisition in the numerator

and the number of days since the acquisition in the denominator.

(3) Instructions for Schedule RC-R, item 8, ``On-balance sheet

asset values excluded from the calculation of the risk-based capital

ratio''--Schedule RC-R, item 8, includes any positive fair values

carried on the balance sheet for interest rate, foreign exchange,

equity derivative, and commodity and other contracts that are treated

as off-balance sheet instruments for risk-based capital purposes.

Because the fair values of such contracts, if positive, are included in

the calculation of their credit equivalent amounts for risk-based

capital purposes, the reporting of these amounts in item 8 ensures that

they are not ``double counted'' when the agencies calculate a bank's

risk-weighted assets.

In contrast, the existing instructions indicate that accrued

receivables associated with off-balance sheet derivative contracts are

to be excluded from item 8 and assigned to the appropriate risk weight

category in the same manner as other on-balance sheet items. However,

consistent with GAAP, institutions may include accrued receivables

related to derivative contracts in the fair value of such contracts.

Thus, the instructions would be revised to permit institutions to

report accrued receivables in item 8 when these amounts are included in

a bank's credit equivalent amount calculations.

(4) Other--Instructions for mortgage servicing rights and trading

accounts would be revised to bring them into conformity with GAAP.

Clarifications or other conforming changes would also be made to

several other instructions.

Request for Comment

Comments submitted in response to this Notice will be shared among

the agencies and will be summarized or included in the agencies'

requests for OMB approval. All comments will become a matter of public

record. Written comments should address the accuracy of the burden

estimates and ways to minimize burden including the use of automated

collection techniques or the use of other forms of information

technology as well as other relevant aspects of the information

collection request.

Dated: November 8, 1995.

James F.E. Gillespie,

Director, Legislative and Regulatory Activities Division, Office of the

Comptroller of the Currency.

Board of Governors of the Federal Reserve System, November 7, 1995.

William W. Wiles,

Secretary of the Board.

Dated at Washington, DC, this 9th day of November 1995.

Federal Deposit Insurance Corporation.

Jerry L. Langley,

Executive Secretary.

[FR Doc. 95-28251 Filed 11-15-95; 8:45 am]

BILLING CODES OCC: 4810-33-P 1/3; Board: 6210-01-P 1/3; FDIC: 6714-01-P

1/3