Agency Information Collection Activities: Proposed Collection; Comment Request

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

FEDERAL DEPOSIT INSURANCE CORPORATION

Agency Information Collection Activities: Proposed Collection;

Comment Request

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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SUMMARY: 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. The Federal Financial Institutions Examination Council

(FFIEC), of which the agencies are members, has recently approved the

agencies' publication for public comment of proposed revisions to the

Foreign Branch Report of Condition (Foreign Branch Report), which is

currently an approved collection of information. At the end of the

comment period, the comments and recommendations received will be

analyzed to determine the extent to which the FFIEC should modify the

[[Page 68815]]

proposed revisions prior to giving its final approval. The agencies

will then submit the revisions to OMB for review and approval. Comments

are invited on: (a) whether the proposed revisions to the following

collection 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 collection as it is 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; (d) ways to minimize the burden of information collection

on respondents, including through the use of automated collection

techniques or other forms of information technology; and (e) estimates

of capital or start-up costs and costs of operation, maintenance, and

purchase of services to provide information.

DATES: Comments must be submitted on or before February 28, 1997.

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, Third Floor, Office of the Comptroller of the Currency, 250 E

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

1557-0099 [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 addressed to the Office of the

Executive Secretary, 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. Comments may be sent through

facsimile to: (202) 898-3838 or by the Internet to: [email protected].

Comments will be available for inspection at the FDIC Public

Information Center, room 100, 801 17th Street, N.W., Washington, D.C.,

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: Alexander T. Hunt, 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 collection of information may be requested from the agency

clearance officers whose names appear below.

OCC: Jessie Gates, OCC Clearance Officer, or Dionne Walsh, (202)

874-5090, Legislative and Regulatory Activities Division, Office of the

Comptroller of the Currency, 250 E Street, S.W., Washington, D.C.

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, N.W., Washington, D.C. 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, 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 N.W., Washington, D.C. 20429.

SUPPLEMENTARY INFORMATION:

Proposal to Revise the Following Currently Approved Collection of

Information

Title: Foreign Branch Report of Condition.

Form Number: FFIEC 030.

Frequency of Response: Annually, and quarterly for significant

branches.

Affected Public: Business or other for profit.

For OCC

OMB Number: 1557-0099.

Estimated Number of Respondents: 234 annual respondents; 59

quarterly respondents.

Estimated Time per Response: 3.9 burden hours.

Estimated Total Annual Burden: 1833 burden hours.

For Board

OMB Number: 7100-0071.

Estimated Number of Respondents: 100 annual respondents; 33

quarterly respondents.

Estimated Time per Response: 3.9 burden hours.

Estimated Total Annual Burden: 904.80 burden hours.

For FDIC

OMB Number: 3064-0011.

Estimated Number of Respondents: 41 annual respondents; 1 quarterly

respondent.

Estimated Time per Response: 3.9 burden hours.

Estimated Total Annual Burden: 175.50 burden hours.

General Description of Report: This information collection is

mandatory: 12 U.S.C. 321, 324, and 602 (Board); 12 U.S.C. 602 (OCC);

and 12 U.S.C. 1828 (FDIC). This information collection is given

confidential treatment (5 U.S.C. 552 (b)(8)). Small businesses (that

is, small banks) are not affected.

Abstract: This report contains asset and liability information for

foreign branches of insured U.S. commercial banks and is required for

regulatory and supervisory purposes. The information is used to analyze

the foreign operations of U.S. commercial banks. All foreign branches

of U.S. banks regardless of charter type file this report with the

appropriate Federal Reserve District Bank. The Federal Reserve collects

this information on behalf of the U.S. bank's primary federal bank

regulatory agency.

Current Actions: New items would be added to the Foreign Branch

Report to enhance the agencies' ability to monitor asset quality and

the usage of off-balance sheet transactions and to conform the

reporting of securities to generally accepted accounting principles

(GAAP). The Foreign Branch Report's instructions reference the

reporting standards used in the Consolidated Reports of Condition and

Income (FFIEC 031; OMB No. 7100-0036 for Board; 3064-0052 for FDIC;

1557-0081 for OCC). The FFIEC 031 instructions are being revised by

eliminating instructions that differ from GAAP, effective with the

March 1997 report date. Thus, the Foreign Branch Report's instructions

would conform to GAAP by reference to the FFIEC 031 instructions. In

addition, the criteria used to determine whether a respondent files

this report on a quarterly basis would be revised.

Type of Review: Revision.

The FFIEC has approved the agencies' publication of this notice's

proposed revisions to the Foreign Branch Report.

[[Page 68816]]

Implementation of these revisions would take place as of the June 30,

1997, report date for quarterly respondents, and as of the December 31,

1997, report date for annual respondents. As is customary for Foreign

Branch Report changes, quarterly respondents are advised that, for the

June 30, 1997, report date, reasonable estimates may be provided for

any new or revised item for which the requested information is not

readily available. The specific wording of the captions for the new or

revised items discussed below should be regarded as preliminary.

Asset Quality

The Foreign Branch Report currently does not collect information on

past due and nonaccrual loans and lease financing receivables. For more

than ten years, such information has been collected for the

consolidated banking entity as a whole on the FFIEC 031, Consolidated

Reports of Condition and Income. The FFIEC 031 form's disclosures have

proven to be a valuable source of information about the asset quality

of the consolidated banking entity's loan and lease portfolio. The

disclosure of similar information on the Foreign Branch Report would

identify potential asset quality problems in specific foreign branch

operations sooner than would otherwise be possible and improve the

agencies' ability to develop appropriate supervisory measures,

including the agencies' targeting of examination resources to

particular foreign branches.

Three new items would be added to collect information on past due

and nonaccrual loans and leases of the foreign branch in a manner

consistent with the reporting of such data in the FFIEC 031 form. The

items would be ``Past due 30 through 89 days and still accruing,''

``Past due 90 days or more and still accruing,'' and ``Nonaccrual.''

The collection would cover all loans and leases reported by the branch.

Off-Balance-Sheet Transactions

The Foreign Branch Report currently includes a minimal number of

items that disclose a branch's involvement in off-balance-sheet

transactions. The agencies propose to expand the number of disclosures

on off-balance-sheet transactions to include information on the

notional value of exchange swaps, the notional value of other swaps,

the amount of unused securities underwriting commitments, the amount of

unused commitments on loans and all other lines of credit, and the

aggregate amount of all other off-balance-sheet liabilities. The FFIEC

031 form collects similar information on unused commitments and off-

balance-sheet transactions; however, the FFIEC 031 form collects more

detailed breakdowns for commitments and additional breakdowns for the

underlying risk exposures related to swaps. The collection of

information on off-balance-sheet activities in the Foreign Branch

Report, although less extensive than the off-balance-sheet information

collected from the consolidated banking entity on the FFIEC 031 form,

would improve the agencies' overall ability to monitor risk exposures

resulting from a foreign branch's involvement in off-balance-sheet

activities.

In addition, a new item for trading liabilities, including amounts

resulting from derivative transactions, would be added in a manner

consistent with the reporting of such data in the FFIEC 031 form. The

new item would improve the agencies' ability to monitor foreign branch

trading operations involving third parties and would be a complement to

the existing item for assets held in trading accounts (which is being

recaptioned as trading assets to conform this item to the FFIEC 031

form caption).

Securities

The reporting for branch holdings of debt and equity securities

would be revised to be consistent with the three GAAP categories as

prescribed by Financial Accounting Standards Board Statement No. 115,

``Accounting for Certain Investments in Debt and Equity Securities''

(FASB 115). FASB 115 established three categories of securities: held-

to-maturity securities, available-for-sale securities, and trading

securities, each of which has its own basis of accounting. FASB 115

permits an entity to include debt securities in the held-to-maturity

category only if it has the positive intent and ability to hold those

debt securities to maturity. Under FASB 115, the accounting basis of

held-to-maturity debt securities is amortized cost. Securities in the

available-for-sale category under FASB 115 are those debt securities

not acquired for trading purposes for which an entity does not have the

positive intent and ability to hold to maturity and those equity

securities with readily determinable fair values that it does not

intend to trade as part of its trading account. Under FASB 115,

available-for-sale securities are reported at fair value on the

balance-sheet. Trading securities are those debt and equity securities

that an entity buys and holds principally for the purpose of selling in

the near term.

The two existing breakdowns for securities on the Foreign Branch

Report would be amended to collect information on debt and equity

securities in a manner consistent with the reporting of such data in

the FFIEC 031 form which already conforms to FASB 115. Items 4.a. and

4.b. on the Foreign Branch Report would be revised into items for

``Held-to-maturity securities'' and ``Available-for-sale securities.''

Trading securities would continue to be reported on the Foreign Branch

Report in item 5, Trading Assets.

Quarterly Reporting

The Foreign Branch Report is currently filed on a quarterly basis

by significant branches, that is, branches with either: (1) total

assets of $2 billion or more, or (2) commitments to purchase foreign

currencies and U.S. dollar exchange (spot, forwards, and futures) of $5

billion or more. The agencies propose to revise the scope of off-

balance-sheet transactions used in the quarterly filing criteria to

include all those off-balance-sheet derivatives proposed herein to be

covered by the Foreign Branch Report. Thus, the Foreign Branch Report

would be filed quarterly by significant branches with either: (1) total

assets of $2 billion or more, or (2) commitments to purchase foreign

currencies and U.S. dollar exchange (spot, forwards, and futures), all

other futures and forwards contracts, options contracts, and the

notional value of interest rate swaps, exchange swaps and other swaps

of $5 billion or more. The revised criteria are consistent with the

expanded disclosures for off-balance-sheet transactions that are part

of this proposed revision.

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.

[[Page 68817]]

Dated: December 20, 1996.

Karen Solomon,

Director, Legislative and Regulatory Activities Division, Office of the

Comptroller of the Currency.

Board of Governors of the Federal Reserve System, December 23,

1996.

William W. Wiles,

Secretary of the Board.

Dated at Washington, D.C., this 16th day of December, 1996.

Federal Deposit Insurance Corporation

Steven F. Hanft,

Assistant Executive Secretary (Regulatory Analysis).

[FR Doc. 96-33064 Filed 12-27-96; 8:45 am]

BILLING CODE 4810-33-P; 6210-01-P; 6714-01-P