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34801

Federal Register / Vol. 65, No. 105 / Wednesday, May 31, 2000 / Notices

1 On the FDIC’s web site, draft copies of the

proposed Call Report forms will be attachments to

the Financial Institution Letter that transmits this

proposal to all institutions that file Call Reports.

Continued

commenters in the same docket

questioned NHTSA’s research in

justifying the proposed release timing

requirement. Freightliner indicates that

one commenter stated that it is difficult

to determine the effect of trailer release

timing and tractor/trailer release

differentials on compatibility and

suggested testing indicated 0.90 second

is sufficient. Freightliner also indicates

that another commenter argued that a

1.00 second release timing would be

more practical and accomplish the

objective of the proposal, and that

NHTSA stated that:

A short glad hand release time is not as

important for safety and, in fact, it is not

desirable to have the glad hand release before

the tractor brakes.

Freightliner believes that requiring

the rearmost vehicle to release last tends

to ‘‘stretch’’ out the unit (vehicle

combination) and make it more stable,

and that slower than the required

release time may actually help overall

stability.

Freightliner summarizes its petition

by stating that an estimated 280 to 2170

tractors were manufactured without

quick release valves such that the glad

hand release timing may be slightly

higher than the 0.75 second specified in

FMVSS No. 121, and that nearly all

(99.6 percent) do not exceed 0.90

second. Freightliner believes that this

timing difference of 0.0 to 0.15 second

has no discernable or measurable effect

on braking performance and thus no

detrimental effect on highway safety.

Therefore, it requests that we grant its

petition to exempt it from the

notification and remedy requirements of

the Motor Vehicle Safety Act.

Comments and Docket Submissions

Interested persons are invited to

submit written data, views, and

arguments on Freightliner’s petition for

inconsequential noncompliance

described above

on braking performance and thus no

detrimental effect on highway safety.

Therefore, it requests that we grant its

petition to exempt it from the

notification and remedy requirements of

the Motor Vehicle Safety Act.

Comments and Docket Submissions

Interested persons are invited to

submit written data, views, and

arguments on Freightliner’s petition for

inconsequential noncompliance

described above. Comments should refer

to the Docket Number and be submitted

to Docket Management at the address

given above under ADDRESSES.

All comments received before the

close of business on the closing date

indicated below will be considered. The

application, supporting materials, and

comments also will be filed in the

docket. Comments received after the

closing date will also be filed and

considered to the extent possible. When

the petition is granted or denied, the

notice will be published in the Federal

indicated below.

Comment closing date: June 30, 2000.

(15 U.S.C. 1417; delegation of authority

at 49 CFR 1.50 and 49 CFR 501.8)

Issued on: May 23, 2000.

Stephen R. Kratzke,

Associate Administrator for Safety

Performance Standards.

[FR Doc. 00–13536 Filed 5–30–00; 8:45 am]

BILLING CODE 4910–59–P

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the

Currency

FEDERAL RESERVE SYSTEM

FEDERAL DEPOSIT INSURANCE

CORPORATION

Proposed Agency Information

Collection Activities; 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.

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 unless it displays a currently

valid Office of Management and Budget

(OMB) control number

FDIC).

ACTION: Notice and request for comment.

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 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 approved the

agencies’ publication for public

comment of proposed revisions to the

Consolidated Reports of Condition and

Income (Call Report), which are

currently approved collections 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

proposed revisions prior to giving its

final approval. The agencies will then

submit the revisions to OMB for review

and approval.

DATES: Comments must be submitted on

or before July 31, 2000.

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, Office of the Comptroller of

the Currency, 250 E Street, SW, Third

Floor, Attention: 1557–0081,

Washington, DC 20219. In addition,

comments may be sent by facsimile

transmission to (202) 874–5274, or by

electronic mail to

regs.comments@occ.treas.gov.

Comments will be available for

inspection and photocopying at the

OCC’s Public Reference Room, 250 E

Street, SW, Washington, DC 20219

between 9 a.m. and 5 p.m. on business

days. Appointments for inspection of

comments may be made by calling (202)

874–5043.

Board: Written comments should be

addressed to Jennifer J

transmission to (202) 874–5274, or by

electronic mail to

regs.comments@occ.treas.gov.

Comments will be available for

inspection and photocopying at the

OCC’s Public Reference Room, 250 E

Street, SW, Washington, DC 20219

between 9 a.m. and 5 p.m. on business

days. Appointments for inspection of

comments may be made by calling (202)

874–5043.

Board: Written comments should be

addressed to Jennifer J. Johnson,

Secretary, Board of Governors of the

Federal Reserve System, 20th and C

Streets, NW, Washington, DC 20551,

submitted by electronic mail to

regs.comments@federalreserve.gov, 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, NW. Comments received may

be inspected in room M–P–500 between

9 a.m. and 5 p.m., except as provided

in section 261.12 of the Board’s Rules

Regarding Availability of Information,

12 CFR 261.12(a).

FDIC: Written comments should be

addressed to Robert E. Feldman,

Executive Secretary, Attention:

Comments/OES, Federal Deposit

Insurance Corporation, 550 17th Street,

NW, Washington, DC 20429. Comments

may be hand-delivered to the guard

station at the rear of the 550 17th Street

Building (located on F Street), on

business days between 7 a.m. and 5 p.m.

[FAX number: (202) 898–3838; Internet

address: comments@fdic.gov].

Comments may be inspected and

photocopied in the FDIC Public

Information Center, Room 100, 801 17th

Street, NW, Washington, DC, between 9

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, DC 20503

ted and

photocopied in the FDIC Public

Information Center, Room 100, 801 17th

Street, NW, Washington, DC, between 9

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, DC 20503.

FOR FURTHER INFORMATION CONTACT:

Draft copies of the two versions of the

Call Report forms that are proposed to

replace the current four versions of the

Call Report may be obtained at the

FFIEC’s web site (www.ffiec.gov) and at

the FDIC’s web site.1 Draft copies of

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34802

Federal Register / Vol. 65, No. 105 / Wednesday, May 31, 2000 / Notices

Financial Institution Letters can be accessed at

http://www.fdic.gov/news/news/financial/2000/

index.html.

2 The FFIEC 031 report form would continue to

be filed by banks with domestic and foreign offices.

At present, the FFIEC 032 report form is filed by

banks with domestic offices only and $300 million

or more in total assets, the FFIEC 033 report form

is filed by banks with domestic offices only and

$100 million or more but less than $300 million in

total assets, and the FFIEC 034 report form is filed

by banks with domestic offices only and less than

$100 million in total assets. The proposed FFIEC

041 report form would replace the FFIEC 032, 033,

and 034 report forms and would be filed by all

banks with domestic offices only.

3 The Annual Report of Trust Assets (FFIEC 001)

and the Annual Report of International Fiduciary

Activities (FFIEC 006): for the OCC, OMB Number

1557–0127; for the Board, OMB Number 7100–

0031; and for the FDIC, OMB Number 3064–0024.

The FDIC does not collect the FFIEC 006.

these proposed revised Call Report

forms also may be requested from any

of the agency clearance officers whose

names appear below

e Annual Report of Trust Assets (FFIEC 001)

and the Annual Report of International Fiduciary

Activities (FFIEC 006): for the OCC, OMB Number

1557–0127; for the Board, OMB Number 7100–

0031; and for the FDIC, OMB Number 3064–0024.

The FDIC does not collect the FFIEC 006.

these proposed revised Call Report

forms also may be requested from any

of the agency clearance officers whose

names appear below.

OCC: Jessie Dunaway, OCC Clearance

Officer, or Camille Dixon, (202) 874–

5090, Legislative and Regulatory

Activities Division, Office of the

Comptroller of the Currency, 250 E

Street, SW, Washington, DC 20219.

Board: Mary M. West, Chief, Financial

Reports Section, (202) 452–3829,

Division of Research and Statistics,

Board of Governors of the Federal

Reserve System, 20th and C Streets,

NW, Washington, DC 20551.

Telecommunications Device for the Deaf

(TDD) users may contact Diane Jenkins,

(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:

Report Title: Consolidated Reports of

Condition and Income.

Form Number: Current form numbers:

FFIEC 031, 032, 033, and 034.

Proposed form numbers: FFIEC 031

and 041.2

Frequency of Response: Quarterly.

Affected Public: Business or other for-

profit.

For OCC:

OMB Number: 1557–0081.

Estimated Number of Respondents:

2,400 national banks.

Estimated Time per Response: 41.76

burden hours.

Estimated Total Annual Burden:

400,865 burden hours.

For Board:

OMB Number: 7100–0036.

Estimated Number of Respondents:

1,014 state member banks.

Estimated Time per Response: 47.56

burden hours.

Estimated Total Annual Burden:

192,903 burden hours.

For FDIC:

OMB Number: 3064–0052.

Estimated Number of Respondents:

5,734 insured state nonmember

banks

Estimated Time per Response: 41.76

burden hours.

Estimated Total Annual Burden:

400,865 burden hours.

For Board:

OMB Number: 7100–0036.

Estimated Number of Respondents:

1,014 state member banks.

Estimated Time per Response: 47.56

burden hours.

Estimated Total Annual Burden:

192,903 burden hours.

For FDIC:

OMB Number: 3064–0052.

Estimated Number of Respondents:

5,734 insured state nonmember

banks.

Estimated Time per Response: 30.81

burden hours.

Estimated Total Annual Burden:

706,633 burden hours.

The estimated time per response is an

average which 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). The time per response for a

bank is estimated to range from 14 to

500 hours, depending on individual

circumstances. In addition, the effect on

the time per response of the proposed

changes to the Call Report that are

discussed in this notice will vary from

bank to bank. After adjusting to the

proposed revisions to the reporting

requirements, many smaller banks

should experience a decrease in time

per response because they do not have

trust powers and are not involved in the

activities for which new information

would be collected. In contrast, the time

per response for some large banks is

expected to increase because the

proposed new information would be

applicable to them and because the

reporting of trust activities would be

moved into the Call Report from two

separate trust activities reports.3

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 selected

items, this information collection is not

given confidential treatment. Small

businesses (i.e., small banks) are

affected

rate trust activities reports.3

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 selected

items, this information collection is not

given confidential treatment. Small

businesses (i.e., small banks) are

affected.

Abstract

Banks file Call Reports with the

agencies each quarter for the agencies’

use in monitoring the condition,

performance, and risk profile of

reporting banks and the industry as a

whole. In addition, Call Reports provide

the most current statistical data

available for evaluating bank corporate

applications such as mergers, for

identifying areas of focus for both on-

site and off-site examinations, and for

monetary and other public policy

purposes. Call Reports are also used to

calculate all banks’ deposit insurance

and Financing Corporation assessments

and national banks’ semiannual

assessment fees.

Current Actions

I. Overview

The agencies are requesting comment

on proposed revisions to the Call Report

that are intended to make the content of

the report more relevant to the agencies.

The more significant revisions include:

• An approximate 10 percent

decrease in the number of currently

existing separately reportable data items

(outside of regulatory capital

information) whose collection is no

longer warranted;

• A new regulatory capital reporting

approach that uses step-by-step

‘‘building blocks’’ to compute the key

elements of the capital ratios;

• Combining the three separate report

forms for banks of different sizes that

have only domestic offices into a single

form while retaining the separate form

for banks with foreign offices;

• New information on:

—Nontraditional and higher risk bank

activities, i.e., subprime loans,

securitizations and asset sale

activities, additional categories of

noninterest income, and restructured

derivative contracts; and

—Federal Home Loan Bank advances

and other borrowings;

• Rep

hat

have only domestic offices into a single

form while retaining the separate form

for banks with foreign offices;

• New information on:

—Nontraditional and higher risk bank

activities, i.e., subprime loans,

securitizations and asset sale

activities, additional categories of

noninterest income, and restructured

derivative contracts; and

—Federal Home Loan Bank advances

and other borrowings;

• Replacing the two separate trust

activities reports with a single,

streamlined trust Call Report schedule;

• Eliminating the confidential

treatment for loans, leases, and other

assets that are past due 30 through 89

days; and

• Eliminating the additional 15-day

period that banks with more than one

foreign office are given for submitting

their Call Reports.

These revised reporting requirements

are also designed to complement the

agencies’ emphasis on risk-focused

supervision. Furthermore, the proposal

addresses certain aspects of sections

307(b) and (c) of the Riegle Community

Development and Regulatory

Improvement Act of 1994 (the Riegle

Act). These sections direct the federal

banking agencies to work jointly toward

more uniform reporting, review the

information that institutions currently

report, and eliminate existing reporting

requirements that are not warranted for

safety and soundness or other public

policy purposes.

Type of Review: Revision of a

currently approved collection.

The proposed revisions to the Call

Report have been approved for

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ns currently

report, and eliminate existing reporting

requirements that are not warranted for

safety and soundness or other public

policy purposes.

Type of Review: Revision of a

currently approved collection.

The proposed revisions to the Call

Report have been approved for

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34803

Federal Register / Vol. 65, No. 105 / Wednesday, May 31, 2000 / Notices

4 These three types of financial institutions file

different regulatory report forms. Banks file Call

Reports, savings associations file Thrift Financial

Reports, and bank holding companies subject to

consolidated reporting requirements file the FR Y–

9C reports.

publication by the FFIEC. The agencies

would implement these proposed Call

Report changes as of the March 31,

2001, report date. Nonetheless, as is

customary for Call Report changes,

banks are advised that, for the March 31,

2001, report date only, 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 and revised Call Report items and

the numbering of the items in the report

forms should be regarded as

preliminary.

II. Streamlining the Existing Reporting

Requirements

The agencies have carefully reviewed

the purposes for which and extent to

which they use each data item that they

currently collect from banks in the Call

Report. This process involved

requesting feedback from the staffs

within the three agencies on the specific

uses of each Call Report item. The

agencies also considered the magnitude

of the aggregate amounts reported for

each item in the Call Report, the number

and size distribution of banks reporting

amounts for each Call Report item, and

bankers’ comments about the most

burdensome aspects of the Call Report

s process involved

requesting feedback from the staffs

within the three agencies on the specific

uses of each Call Report item. The

agencies also considered the magnitude

of the aggregate amounts reported for

each item in the Call Report, the number

and size distribution of banks reporting

amounts for each Call Report item, and

bankers’ comments about the most

burdensome aspects of the Call Report.

Based on this information, the agencies

identified items that appeared to be of

lesser significance to them, taking into

account the effect that eliminating

certain items and reducing the amount

of detail in certain schedules would

have on the agencies. In addition, the

agencies considered ways to limit the

number of banks that are required to

complete certain items and schedules

based on bank size or other criteria in

order to focus the collection of this

information on those institutions for

which the data are most relevant.

Based on the agencies’ evaluations of

their users’ input, the agencies are

proposing to implement numerous

revisions that will streamline the

existing reporting requirements. While

the effect of these revisions on reporting

burden, either through the outright

elimination of items or reductions in the

amount of detail required in certain

areas, will vary across the four existing

sets of reporting requirements, many of

the recommended revisions will affect

information currently reported by

substantially all banks. In other cases,

the recommended changes will apply

only to a subset of banks such as those

with foreign offices or banks within a

particular size range. This burden-

reducing effort will produce an

approximate 10 percent decrease in the

number of separately reportable items

on the four existing sets of Call Report

forms (outside of regulatory capital

information) before considering the

agencies’ new information needs, which

are discussed in Section III below

ubset of banks such as those

with foreign offices or banks within a

particular size range. This burden-

reducing effort will produce an

approximate 10 percent decrease in the

number of separately reportable items

on the four existing sets of Call Report

forms (outside of regulatory capital

information) before considering the

agencies’ new information needs, which

are discussed in Section III below.

These eliminations and reductions in

detail will help the agencies achieve the

objective set forth in section 307(c) of

the Riegle Act, which directs the

agencies to review the information that

institutions currently report in the Call

Report and eliminate existing reporting

requirements that are not warranted for

safety and soundness or other public

policy purposes.

As part of the streamlining process,

the agencies are proposing several

reporting changes that will introduce

more uniformity to certain aspects of

bank regulatory reporting. These

changes will provide more uniformity to

the Call Report requirements themselves

and will bring some elements of the

regulatory reporting requirements for

banks, savings associations, and bank

holding companies into closer

alignment.4 In this regard, over the past

several years, banking organizations

have sought greater consistency among

the reporting requirements imposed on

banks, savings associations, and bank

holding companies. Thus, for example,

the agencies are proposing to eliminate

the differing definitional schemes for

loans that now exist within the Call

Report for banks of different sizes and

to conform other Call Report definitions

to those used by savings associations.

Moreover, the proposed new regulatory

capital reporting approach incorporates

some elements of the format used by

bank holding companies to report

regulatory capital information

are proposing to eliminate

the differing definitional schemes for

loans that now exist within the Call

Report for banks of different sizes and

to conform other Call Report definitions

to those used by savings associations.

Moreover, the proposed new regulatory

capital reporting approach incorporates

some elements of the format used by

bank holding companies to report

regulatory capital information. Other

proposed modifications to the Call

Report are intended to make its form

and content more closely resemble the

manner in which information is

presented in financial statements that

banks prepare in accordance with

generally accepted accounting

principles (GAAP) for other financial

reporting purposes.

An additional outcome of this

streamlining effort is that the agencies

believe that there is no longer a need for

three separate versions of the Call

Report based on asset size for banks

with domestic offices only. The agencies

are therefore proposing to combine

these three reports (FFIEC 032, 033, and

034) into a single report (FFIEC 041).

Nevertheless, within this single report,

certain schedules or items would only

be applicable to banks that meet

specified criteria, e.g., asset size. The

agencies would retain the separate

version of the Call Report for banks with

foreign offices (FFIEC 031).

Increasing the uniformity of the Call

Report requirements, both among banks

and among the different types of

institutions supervised by the federal

financial institution regulators, is a

necessary step toward achieving the

goal of a single set of reporting

requirements for the filing of core

information that is set forth in section

307(b) of the Riegle Act. It should also

reduce reporting burden for banking

organizations comprised of two or more

separate entities that must file

regulatory reports with their primary

federal regulators.

deral

financial institution regulators, is a

necessary step toward achieving the

goal of a single set of reporting

requirements for the filing of core

information that is set forth in section

307(b) of the Riegle Act. It should also

reduce reporting burden for banking

organizations comprised of two or more

separate entities that must file

regulatory reports with their primary

federal regulators.

A. Specific Proposed Deletions,

Reductions in Detail, Changes To

Increase Uniformity in Regulatory

Reporting, and Revisions To Conform

With GAAP (Outside of Regulatory

Capital Reporting)

The agencies propose to delete

existing items from or reduce the

amount of detail currently required in

most of the schedules of the Call Report.

Other changes throughout the existing

report will be made to bring about more

uniformity in the reporting

requirements for banks or among banks

and other types of financial institutions

insured or supervised by the agencies or

to better conform with the requirements

of GAAP. In addition, the specific

location of certain items within the Call

Report will be modified so that it better

matches the presentation required by

GAAP or followed in practice by most

institutions. Some of these revisions

will affect information that is now

collected in all four versions of the Call

Report (FFIEC 031, 032, 033, and 034)

while other changes may affect only one

report form.

A schedule-by-schedule listing of

these proposed revisions, using the

current numbers and captions for the

affected items, follows:

Schedule RC—Balance Sheet: For all

banks:

(1) Item 15.b, ‘‘Demand notes issued

to the U.S. Treasury,’’ would be

eliminated as a separate item and would

be reported instead as part of item 16,

‘‘Other borrowed money.’’

ile other changes may affect only one

report form.

A schedule-by-schedule listing of

these proposed revisions, using the

current numbers and captions for the

affected items, follows:

Schedule RC—Balance Sheet: For all

banks:

(1) Item 15.b, ‘‘Demand notes issued

to the U.S. Treasury,’’ would be

eliminated as a separate item and would

be reported instead as part of item 16,

‘‘Other borrowed money.’’

(2) Items 26.b, ‘‘Net unrealized

holding gains (losses) on available-for-

sale securities,’’ 26.c, ‘‘Accumulated net

gains (losses) on cash flow hedges,’’ and

27, ‘‘Cumulative foreign currency

translation adjustments,’’ would be

combined and reported as

‘‘Accumulated other comprehensive

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Federal Register / Vol. 65, No. 105 / Wednesday, May 31, 2000 / Notices

5 The first two of these components of

‘‘Accumulated other comprehensive income’’

would be separately identified in the proposed new

regulatory capital schedule, which is discussed in

Section II.B. below.

income.’’ 5 In addition, any minimum

pension liability adjustment recognized

in accordance with Financial

Accounting Standards Board (FASB)

Statement No. 87, Employers’

Accounting for Pensions, which banks

have to net against ‘‘Undivided profits

and capital reserves’’ due to the

constraints of the current Call Report

balance sheet, would be included in this

new item for ‘‘Accumulated other

comprehensive income.’’ This change

would conform the presentation of the

equity capital section of the Call Report

balance sheet to FASB Statement No.

130, Reporting Comprehensive Income.

or Pensions, which banks

have to net against ‘‘Undivided profits

and capital reserves’’ due to the

constraints of the current Call Report

balance sheet, would be included in this

new item for ‘‘Accumulated other

comprehensive income.’’ This change

would conform the presentation of the

equity capital section of the Call Report

balance sheet to FASB Statement No.

130, Reporting Comprehensive Income.

(3) Loans and leases held for sale are

currently included on the balance sheet

in item 4.a, ‘‘Loans and leases, net of

unearned income,’’ together with loans

that the bank has the intent and ability

to hold for the foreseeable future or

until maturity or payoff, but loans and

leases held for sale are separately

identified in the loan schedule in

Schedule RC–C, part I, Memorandum

item 5. The agencies propose to move

‘‘Loans and leases held for sale’’ onto

the balance sheet as an asset category

separate from the loan portfolio. This

change will bring the Call Report

balance sheet presentation of these two

categories of loans into conformity with

GAAP. However, loans and leases held

for sale would continue to be reported

with the bank’s other loans in the loan

schedule (Schedule RC–C, part I).

(4) Item 4.c, ‘‘Allocated transfer risk

reserve,’’ would be deleted from the

balance sheet, but would be reported in

the new regulatory capital schedule,

which is discussed in section II.B.

below. Banks would report their loans

and leases net of any allocated transfer

risk reserve in the loan schedule

(Schedule RC–C, part I).

ith the bank’s other loans in the loan

schedule (Schedule RC–C, part I).

(4) Item 4.c, ‘‘Allocated transfer risk

reserve,’’ would be deleted from the

balance sheet, but would be reported in

the new regulatory capital schedule,

which is discussed in section II.B.

below. Banks would report their loans

and leases net of any allocated transfer

risk reserve in the loan schedule

(Schedule RC–C, part I).

(5) A new item for ‘‘Other equity

capital components’’ would be added to

the equity capital section of the balance

sheet. This item would cover treasury

stock and unearned Employee Stock

Ownership Plan shares which, under

GAAP, are to be reported in a contra-

equity account on the balance sheet.

Due to the constraints of the equity

capital section of the current Call Report

balance sheet, banks are forced to report

these amounts as reductions of

undivided profits. Thus, this change

will make the equity capital section

more consistent with GAAP and with

the equity capital section of the balance

sheet in the Thrift Financial Report.

(6) Memorandum item 1 requires all

banks to report the highest level of

comprehensive external auditing work

they have had performed during the

previous year. In November 1999, the

agencies issued a joint policy statement

that encourages banks with less than

$500 million in total assets to consider

engaging an independent public

accountant to perform a full scope

annual audit or, alternatively, an

attestation engagement to examine

management’s assessment of the

effectiveness of their internal control

structure over financial reporting or an

audit of the bank’s balance sheet. A new

code category would be added to

Memorandum item 1 to capture data on

internal control attestations. Also, the

instructions for code categories 1 and 2

of Memorandum item 1, which

currently apply to full scope audits,

would be revised to include balance

sheet audits performed in accordance

with generally accepted auditing

standards

financial reporting or an

audit of the bank’s balance sheet. A new

code category would be added to

Memorandum item 1 to capture data on

internal control attestations. Also, the

instructions for code categories 1 and 2

of Memorandum item 1, which

currently apply to full scope audits,

would be revised to include balance

sheet audits performed in accordance

with generally accepted auditing

standards.

Schedule RC–A—Cash and Balances

Due From Depository Institutions: At

present, this schedule appears only on

the FFIEC 031, 032, and 033 forms,

which means that the schedule is not

completed by banks with domestic

offices only and total assets of less than

$100 million. The agencies are

proposing to reduce the number of

banks with domestic offices only to

which this schedule applies by raising

the size threshold for the schedule from

$100 million to $300 million in total

assets. All banks with foreign offices

would continue to complete Schedule

RC–A. However, for all banks to which

the schedule would remain applicable,

the agencies propose to delete

Memorandum item 1, ‘‘Noninterest-

bearing balances due from commercial

banks in the U.S.’’

Schedule RC–B—Securities: For all

banks:

(1) The three separate items for

‘‘General obligations,’’ ‘‘Revenue

obligations,’’ and ‘‘Industrial

development and similar obligations’’

(items 3.a, 3.b., and 3.c, respectively)

would be combined into a single item

for ‘‘Securities issued by states and

political subdivisions in the U.S.’’

oninterest-

bearing balances due from commercial

banks in the U.S.’’

Schedule RC–B—Securities: For all

banks:

(1) The three separate items for

‘‘General obligations,’’ ‘‘Revenue

obligations,’’ and ‘‘Industrial

development and similar obligations’’

(items 3.a, 3.b., and 3.c, respectively)

would be combined into a single item

for ‘‘Securities issued by states and

political subdivisions in the U.S.’’

(2) Item 6.b, ‘‘All other equity

securities,’’ i.e., equity securities

without readily determinable fair

values, would be moved to a new item

in Schedule RC–F—Other Assets. These

equity securities are outside the scope of

FASB Statement No. 115, Accounting

for Certain Investments in Debt and

Equity Securities. Therefore, including

them in the Call Report with available-

for-sale securities in Schedule RC–B,

albeit at historical cost rather than at fair

value, has not been consistent with

GAAP. Moving equity securities without

readily determinable fair values to the

other assets schedule is intended to

eliminate this inconsistency.

(3) In Memorandum items 2.a and 2.b,

which provide maturity and repricing

data for debt securities (except

collateralized mortgage obligations

(CMOs), real estate mortgage investment

conduits (REMICs), and stripped

mortgage-backed securities), banks

currently report their floating rate debt

securities by repricing frequency. The

agencies are proposing to change this

reporting method so that floating rate

debt securities would instead be

reported based on their next repricing

date in these two memorandum items.

The interest rate risk measurement

models in use at most banks take the

next repricing date, not the repricing

frequency, of floating rate debt

securities into consideration. Therefore,

this proposed change would bring the

Call Report treatment of these securities

into line with banks’ internal risk

measurement systems

d be

reported based on their next repricing

date in these two memorandum items.

The interest rate risk measurement

models in use at most banks take the

next repricing date, not the repricing

frequency, of floating rate debt

securities into consideration. Therefore,

this proposed change would bring the

Call Report treatment of these securities

into line with banks’ internal risk

measurement systems.

Additionally, banks now filing the

FFIEC 034, i.e., banks with domestic

offices only and less than $100 million

in total assets, would begin to report

‘‘Foreign debt securities’’ as a separate

category of securities. These banks

currently report foreign debt securities,

if any, in item 5, ‘‘Other debt

securities.’’ Uniform reporting of foreign

debt securities by all banks is consistent

with the agencies’ emphasis on risk-

focused supervision. This proposed

change would not significantly increase

overall reporting burden because of the

small percentage of banks filing the

FFIEC 034 that hold ‘‘Foreign debt

securities.’’

Schedule RC–C, Part I—Loans and

Leases:

(1) For all banks:

(a) The definition of ‘‘Construction

and land development’’ loans (item 1.a)

and, hence, the definitions for the other

categories of loans secured by real estate

(items 1.b through 1.e) would be revised

to make them consistent with reporting

requirements in this area for savings

associations on the Thrift Financial

Report. The Call Report instructions for

‘‘Construction and land development’’

loans currently direct banks to exclude

from this loan category: (i) Loans to

acquire and hold vacant land and (ii)

construction loans with original

maturities greater than 60 months.

These two types of loans are instead

reported as loans secured by farmland,

1–4 family residential properties,

multifamily residential properties, or

nonfarm nonresidential properties, as

appropriate. The agencies are proposing

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h original

maturities greater than 60 months.

These two types of loans are instead

reported as loans secured by farmland,

1–4 family residential properties,

multifamily residential properties, or

nonfarm nonresidential properties, as

appropriate. The agencies are proposing

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Federal Register / Vol. 65, No. 105 / Wednesday, May 31, 2000 / Notices

to revise the definitions for the five

categories of ‘‘Loans secured by real

estate’’ so that land loans and long-term

construction loans are reported in a

recaptioned item 1.a, ‘‘Construction,

land development, and other land

loans.’’

(b) The separate loan categories for

‘‘Loans to depository institutions’’ and

‘‘Acceptances of other banks’’ (items 2

and 5, respectively) would be combined.

plans’’ to individuals for household,

family, and other personal expenditures,

would be split into separate loan

categories for ‘‘Credit cards’’ and ‘‘Other

revolving credit plans.’’ For banks with

foreign offices, this breakdown would

be provided for both the consolidated

bank and for domestic offices; the

amount of ‘‘Other’’ consumer loans,

currently reported for the consolidated

bank only, would also begin to be

reported for domestic offices.

(d) A single memorandum item for the

total amount of a bank’s ‘‘Loans and

leases restructured and in compliance

with modified terms’’ would replace the

multiple memorandum items in which

banks must currently report information

about such restructured credits

(Memorandum items 1.a and 1.b on the

FFIEC 034, Memorandum items 2.a and

2.b on the FFIEC 033, and Memorandum

items 2.a through 2.c on the FFIEC 031

and 032). Restructured loans secured by

1–4 family residential properties and

restructured consumer loans would

continue to be excluded from the

revised Memorandum item.

in which

banks must currently report information

about such restructured credits

(Memorandum items 1.a and 1.b on the

FFIEC 034, Memorandum items 2.a and

2.b on the FFIEC 033, and Memorandum

items 2.a through 2.c on the FFIEC 031

and 032). Restructured loans secured by

1–4 family residential properties and

restructured consumer loans would

continue to be excluded from the

revised Memorandum item.

(e) In Memorandum items 2.a and 2.b

on the FFIEC 034 and in Memorandum

items 3.a and 3.b on the FFIEC 031, 032,

and 033, which provide maturity and

repricing data for loans and leases,

banks currently report their floating rate

loans by repricing frequency. The

agencies are proposing to change this

reporting method so that floating rate

loans would instead be reported based

on their next repricing date in these two

memorandum items. The interest rate

risk measurement models in use at most

banks take the next repricing date, not

the repricing frequency, of floating rate

loans into consideration. Therefore, this

proposed change would bring the Call

Report treatment of these loans into line

with banks’ internal risk measurement

systems.

(f) The Memorandum items for

‘‘Loans secured by nonfarm

nonresidential properties with a

remaining maturity of over five years’’

and ‘‘Commercial and industrial loans

with a remaining maturity of over three

years’’ (Memorandum items 2.d and 2.e

on the FFIEC 034 and Memorandum

items 3.d and 3.e on the FFIEC 031, 032,

and 033) would be deleted.

(2) For banks that currently file the

FFIEC 033, i.e., banks with domestic

offices only and total assets of $100

million or more but less than $300

million:

(a) The five-way breakdown of ‘‘Loans

to depository institutions’’ (items 2.a.(1)

through 2.c.(2)) would be replaced with

a single item for the total amount of

such loans (plus acceptances of other

banks, as discussed above).

would be deleted.

(2) For banks that currently file the

FFIEC 033, i.e., banks with domestic

offices only and total assets of $100

million or more but less than $300

million:

(a) The five-way breakdown of ‘‘Loans

to depository institutions’’ (items 2.a.(1)

through 2.c.(2)) would be replaced with

a single item for the total amount of

such loans (plus acceptances of other

banks, as discussed above).

(b) The breakdown of ‘‘Commercial

and industrial loans’’ between those to

U.S. addressees and those to non-U.S.

addressees (items 4.a and 4.b) would be

eliminated in favor of a single item for

total ‘‘Commercial and industrial

loans.’’

carrying securities,’’ and item 9.b, ‘‘All

other loans,’’ would be combined into a

single item for ‘‘Other loans.’’

(3) Banks now filing the FFIEC 034,

i.e., banks with domestic offices only

and less than $100 million in total

assets, would begin to report ‘‘Loans to

foreign governments and official

institutions’’ as a separate loan category.

At present, these banks report these

loans, if any, in item 8, ‘‘All other

loans.’’ This proposed change would

result in uniform reporting of these

foreign exposures by all banks and

would enhance the agencies’ risk-

focused supervision. However, it would

not significantly increase overall

reporting burden because of the nominal

number of banks filing the FFIEC 034

that have ‘‘Loans to foreign governments

and official institutions.’’

loans, if any, in item 8, ‘‘All other

loans.’’ This proposed change would

result in uniform reporting of these

foreign exposures by all banks and

would enhance the agencies’ risk-

focused supervision. However, it would

not significantly increase overall

reporting burden because of the nominal

number of banks filing the FFIEC 034

that have ‘‘Loans to foreign governments

and official institutions.’’

(4) Banks now filing the FFIEC 031

and 032, i.e., banks with foreign offices

or with $300 million or more in total

assets, currently report a U.S.-non-U.S.

addressee breakdown of their ‘‘Loans

secured by real estate’’ when they report

their past due and nonaccrual loans in

Schedule RC–N and their loan charge-

offs and recoveries in Schedule RI–B,

part I. However, these banks are not

currently required to report the amount

of ‘‘Loans secured by real estate’’ to U.S.

and non-U.S. addressees as of the report

date in Schedule RC–C, part I. In order

to enhance their ability to evaluate the

performance of real estate loans by

addressee, the agencies are proposing to

add a memorandum item to Schedule

RC–C, part I, for ‘‘Loans secured by real

estate to non-U.S. addressees

(domicile)’’ that would be completed by

banks that would currently file the

FFIEC 031 and 032.

Schedule RC–D—Trading Assets and

Liabilities: This schedule must currently

be completed by banks with either $1

billion or more in total assets or $2

billion or more in par/notional amount

of derivative contracts. To reduce

reporting burden for banks of this asset

size that have minimal trading activity

while, at the same time, focusing for the

first time on banks with less than $1

billion in assets that are engaging in this

activity, the criteria for completing this

schedule would be revised. Thus, the

agencies are proposing that banks that

reported a quarterly average for trading

assets of $2 million or more (in

Schedule RC–K, item 7) for any quarter

of the preceding year would complete

Schedule RC–D

at the same time, focusing for the

first time on banks with less than $1

billion in assets that are engaging in this

activity, the criteria for completing this

schedule would be revised. Thus, the

agencies are proposing that banks that

reported a quarterly average for trading

assets of $2 million or more (in

Schedule RC–K, item 7) for any quarter

of the preceding year would complete

Schedule RC–D. Banks with domestic

offices only and less than $100 million

in total assets would continue to be

exempt from reporting this quarterly

average and from completing Schedule

RC–D.

Schedule RC–E—Deposit Liabilities:

For all banks:

(1) The reporting of demand deposits

by category of depositor in column B of

the body of the deposits schedule would

be eliminated, with banks reporting

instead only the total amount of their

demand deposits in this column. Banks

would continue to provide a category-

by-category breakdown of their total

transaction accounts in column A,

which includes their demand deposits,

but the current duplicate reporting of

demand deposits by category in both

columns A and B would end.

(2) The number of categories of

depositors used in the breakdowns of

transaction and nontransaction accounts

in the body of the deposit schedule

would be reduced.

(a) ‘‘Certified and official checks’’

(item 6 on the FFIEC 034 and item 8 on

the FFIEC 031, 032, and 033) would be

combined with deposits of ‘‘Individuals,

partnerships, and corporations’’ (item

1).

ory in both

columns A and B would end.

(2) The number of categories of

depositors used in the breakdowns of

transaction and nontransaction accounts

in the body of the deposit schedule

would be reduced.

(a) ‘‘Certified and official checks’’

(item 6 on the FFIEC 034 and item 8 on

the FFIEC 031, 032, and 033) would be

combined with deposits of ‘‘Individuals,

partnerships, and corporations’’ (item

1).

(b) Deposits of ‘‘Commercial banks in

the U.S.’’ (item 4) and ‘‘Other depository

institutions in the U.S.’’ (item 5) would

be combined.

However, in order to achieve

uniformity in depositor categories for all

banks, institutions that currently file the

FFIEC 034 would begin to report

deposits of ‘‘Banks in foreign countries’’

separately from deposits of ‘‘Foreign

governments and official institutions’’

instead of on a combined basis (in

current item 7). This change for banks

filing the FFIEC 034 would not

significantly increase reporting burden

because of the limited number of these

banks that currently hold deposits from

these categories of depositors.

(3) Memorandum item 3, ‘‘All NOW

accounts,’’ would be deleted.

(4) In Memorandum items 5.a and 6.a,

which provide maturity and repricing

data for time deposits, banks currently

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Federal Register / Vol. 65, No. 105 / Wednesday, May 31, 2000 / Notices

6 An example of a component of ‘‘Other’’ assets

for which a preprinted caption would need to be

added to the Call Report in 2001 would be

‘‘Derivatives held for purposes other than trading

that have a positive fair value.’’

report their floating rate time deposits

by repricing frequency. The agencies are

proposing to change this reporting

method so that floating time deposits

would instead be reported based on

their next repricing date in these two

memorandum items

d caption would need to be

added to the Call Report in 2001 would be

‘‘Derivatives held for purposes other than trading

that have a positive fair value.’’

report their floating rate time deposits

by repricing frequency. The agencies are

proposing to change this reporting

method so that floating time deposits

would instead be reported based on

their next repricing date in these two

memorandum items. The interest rate

risk measurement models in use at most

banks take the next repricing date, not

the repricing frequency, of floating rate

time deposits into consideration.

Therefore, this proposed change would

bring the Call Report treatment of these

deposits into line with banks’ internal

risk measurement systems.

In addition, for banks that file the

FFIEC 031, i.e., banks with foreign

offices, the agencies are proposing to

modify the reporting of deposits in

foreign offices by category of depositor

(in part II of Schedule RC–E). As was

proposed above for domestic deposits,

‘‘Certified and official checks’’ in

foreign offices (item 5) would be

combined with deposits of ‘‘Individuals,

partnerships, and corporations’’ (item

1). Deposits of U.S. depository

institutions other than banks, currently

reported in ‘‘All other deposits’’ in

foreign offices (item 6), would be

removed from this category and

included with deposits of ‘‘U.S. banks’’

(item 2). This would leave only deposits

of the U.S. Government and of states

and political subdivisions in the U.S.

remaining in what is now the ‘‘All other

deposits’’ category, so this category

would be recaptioned accordingly.

Schedule RC–F—Other Assets: For all

banks:

(1) The scope of item 1, ‘‘Income

earned, not collected on loans,’’ would

be expanded to cover all ‘‘Accrued

interest receivable.’’ Broadening this

category to include interest earned, not

collected on earning assets other than

loans would be more consistent with the

typical presentation of accrued interest

receivable in financial statements

prepared for other financial reporting

purposes.

banks:

(1) The scope of item 1, ‘‘Income

earned, not collected on loans,’’ would

be expanded to cover all ‘‘Accrued

interest receivable.’’ Broadening this

category to include interest earned, not

collected on earning assets other than

loans would be more consistent with the

typical presentation of accrued interest

receivable in financial statements

prepared for other financial reporting

purposes.

(2) The requirement that significant

components of the residual ‘‘Other’’

assets item in Schedule RC–F (item 4)

be itemized and described would be

retained. However, to improve the

usefulness of this information, the

agencies plan to add preprinted

captions for those components of

‘‘Other’’ assets most commonly itemized

and described by banks.6 At present,

several banks may describe the same

type of ‘‘Other’’ asset using different

terminology, which makes it difficult for

the agencies and other users of the Call

Report to identify and compare banks

holding particular types of ‘‘Other’’

assets in amounts exceeding the

threshold for itemization. In addition to

the specific captions that would be

included for ‘‘Other’’ assets, the

agencies would also provide blank text

fields like those presently found in

Schedule RC–F for assets not listed

among the preprinted captions.

Furthermore, the agencies request

comment on suggested alternatives to

the current threshold for itemizing and

describing significant components of

‘‘Other’’ assets, i.e., 25 percent of the

total amount reported for ‘‘Other’’

assets.

(3) Memorandum item 1, ‘‘Deferred

tax assets disallowed for regulatory

capital purposes,’’ would be moved to

the revised regulatory capital schedule

(Schedule RC–R), which is discussed in

Section II.B. below. This proposed

change is part of an effort by the

agencies to place all items collected

principally for regulatory capital

calculation purposes in a revised

Schedule RC–R rather than having these

items scattered across various Call

Report schedules as they are at present.

Schedule RC–G—Other Liabilities: For

all banks:

ory capital schedule

(Schedule RC–R), which is discussed in

Section II.B. below. This proposed

change is part of an effort by the

agencies to place all items collected

principally for regulatory capital

calculation purposes in a revised

Schedule RC–R rather than having these

items scattered across various Call

Report schedules as they are at present.

Schedule RC–G—Other Liabilities: For

all banks:

(1) Item 3, ‘‘Minority interest in

consolidated subsidiaries,’’ would be

moved to the liability side of the

balance sheet (Schedule RC). As a

result, the location where this liability

category appears on the Call Report

balance sheet would correspond to the

location where banks and bank holding

companies are instructed by Article 9 of

the Securities and Exchange

Commission’s Regulation S–X to report

any minority interest on balance sheets

filed with the Securities and Exchange

Commission.

(2) A specific new item for the

‘‘Allowance for credit losses on off-

balance sheet credit exposures,’’ which

must be reported separately on the

balance sheet from the allowance for

loan and lease losses, would be added

to Schedule RC–G. At present, the

limited number of banks that have an

allowance for credit losses on off-

balance credit exposures combine this

allowance with their allowance for loan

and lease losses when completing

Schedule RI–B, part II—Changes in

Allowance for Credit Losses. Because

the allowance for loan and lease losses

is reported on the Call Report balance

sheet (Schedule RC), the amount of the

allowance for credit losses on off-

balance sheet exposures can be derived.

However, as discussed below, the

agencies are proposing to revise the

scope of Schedule RI–B, part II. That

change creates the need for the

proposed new item in Schedule RC–G

so that the agencies can identify the

amount, if any, of a bank’s allowance for

credit losses on off-balance sheet

exposures.

RC), the amount of the

allowance for credit losses on off-

balance sheet exposures can be derived.

However, as discussed below, the

agencies are proposing to revise the

scope of Schedule RI–B, part II. That

change creates the need for the

proposed new item in Schedule RC–G

so that the agencies can identify the

amount, if any, of a bank’s allowance for

credit losses on off-balance sheet

exposures.

(4) The requirement that significant

components of the residual ‘‘Other’’

liabilities item in Schedule RC–G (item

4) be itemized and described would be

retained. However, consistent with the

proposed change described above for

the ‘‘Other’’ assets item in Schedule RC–

F, the agencies plan to add preprinted

captions for those components of

‘‘Other’’ liabilities most commonly

itemized and described by banks.

Likewise, the agencies would provide

blank text fields like those presently

found in Schedule RC–G for liabilities

not listed among the preprinted

captions. The agencies also request

comment on suggested alternatives to

the current threshold for itemizing and

describing significant components of

‘‘Other’’ liabilities, i.e., 25 percent of the

total amount reported for ‘‘Other’’

liabilities.

Schedule RC–H—Selected Balance

Sheet Items for Domestic Offices (FFIEC

031 only): This schedule is completed

by banks with foreign offices.

Memorandum items 1 and 2 for the ‘‘Net

due from the IBF of the domestic offices

of the reporting bank’’ or the ‘‘Net due

to the IBF’’ of these offices would be

deleted. In addition, consistent with the

proposed change to the reporting of

equity securities without readily

determinable fair values discussed

under Schedule RC–B above, item 16.b

of Schedule RC–H, ‘‘All other equity

securities,’’ would be renumbered so

that it is no longer included as part of

a bank’s total held-to-maturity and

available-for-sale securities in item 17 of

Schedule RC–H

ould be

deleted. In addition, consistent with the

proposed change to the reporting of

equity securities without readily

determinable fair values discussed

under Schedule RC–B above, item 16.b

of Schedule RC–H, ‘‘All other equity

securities,’’ would be renumbered so

that it is no longer included as part of

a bank’s total held-to-maturity and

available-for-sale securities in item 17 of

Schedule RC–H.

Schedule RC–I—Selected Assets and

Liabilities of IBFs (FFIEC 031 only): This

schedule is completed by banks with

IBFs and other types of foreign offices.

The agencies are proposing to eliminate

item 2, ‘‘Total IBF loans and lease

financing receivables,’’ item 3, ‘‘IBF

commercial and industrial loans,’’ item

5, ‘‘IBF deposit liabilities due to banks,

including other IBFs,’’ and item 6,

‘‘Other IBF deposit liabilities.’’

Schedule RC–K—Quarterly Averages:

For all banks:

(1) The categories of securities for

which averages would be collected

would be uniform for all banks and

would better correspond with the

securities categories in Schedule RC–B.

In addition, the number of quarterly

averages of securities that banks are

required to report would be reduced or

remain the same. Banks would report

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Federal Register / Vol. 65, No. 105 / Wednesday, May 31, 2000 / Notices

quarterly averages for the three

following categories of securities: (a)

U.S. Treasury securities and U.S.

Government agency obligations, (b)

mortgage-backed securities; and (c) all

other securities.

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quarterly averages for the three

following categories of securities: (a)

U.S. Treasury securities and U.S.

Government agency obligations, (b)

mortgage-backed securities; and (c) all

other securities.

(2) The categories of loans (in

domestic offices) for which averages

would be collected would also be

defined uniformly for all banks required

to report these averages. The loan

category definitions used by all banks in

Schedule RC–K would correspond to

the standard definitions used in the loan

schedule, Schedule RC–C. This would

end the separate loan reporting scheme

for banks with domestic offices only and

less than $300 million in assets which

currently permits these banks to define

for themselves which of their loans to

include in the general loan categories

used in Schedule RC–K (and three other

schedules) on the FFIEC 033 and 034.

Adopting uniform categories and

standard definitions will enable the

agencies to obtain more consistent loan

information for monitoring trends and

critical ratios across banks and within

individual institutions and is a

necessary step toward achieving the

Riegle Act’s goal of a single set of

reporting requirements for core

information.

Thus, banks would report a quarterly

average for total loans (in domestic

offices) and for the five following

categories of loans (in domestic offices):

re consistent loan

information for monitoring trends and

critical ratios across banks and within

individual institutions and is a

necessary step toward achieving the

Riegle Act’s goal of a single set of

reporting requirements for core

information.

Thus, banks would report a quarterly

average for total loans (in domestic

offices) and for the five following

categories of loans (in domestic offices):

(a) Loans secured by real estate; (b)

loans to finance agricultural production

and other loans to farmers (except as

noted below); (c) commercial and

industrial loans; (d) credit cards to

individuals for household, family, and

other personal expenditures; and (e)

other consumer loans. Banks with

foreign offices would also continue to

report a quarterly average for their total

loans in foreign offices. The agencies

would retain the existing Schedule RC–

K reporting threshold for agricultural

loans for banks with domestic offices

only and less than $300 million in

assets. These banks would not be

required to report a quarterly average for

‘‘Loans to finance agricultural

production and other loans to farmers’’

if these loans are less than or equal to

5 percent of total loans. In addition, a

request for comment on the reporting of

average loans by loan category by banks

with domestic offices only and less than

$25 million in assets is addressed in

Section V.B. below.

(3) The quarterly averages for ‘‘Money

market deposit accounts’’ and ‘‘Other

savings deposits’’ (items 9.a and 9.b on

the FFIEC 034; items 11.a and 11.b on

the FFIEC 031, 032, and 033) would be

combined. Banks would report a single

quarterly average for all ‘‘Savings

deposits.’’

In addition, for banks that currently

file the FFIEC 034, i.e., banks with

domestic offices only and less than $100

million in assets, the option to report

the quarterly averages for securities,

loans, leases, and total assets using an

average of four month-end figures

would be eliminated

, 032, and 033) would be

combined. Banks would report a single

quarterly average for all ‘‘Savings

deposits.’’

In addition, for banks that currently

file the FFIEC 034, i.e., banks with

domestic offices only and less than $100

million in assets, the option to report

the quarterly averages for securities,

loans, leases, and total assets using an

average of four month-end figures

would be eliminated. These averages,

like the other averages in Schedule RC–

K, would be calculated using either

daily or weekly figures for the quarter,

which are the other options presently

available to these banks.

Schedule RC–L—Off-Balance Sheet

Items:

(1) For all banks:

(a) Item 6, ‘‘Participations in

acceptances acquired by the reporting

(nonaccepting) bank,’’ and

Memorandum item 3, ‘‘Unused

commitments with an original maturity

exceeding one year,’’ would be collected

only on the proposed new regulatory

capital schedule, discussed in Section

II.B. below, and would be deleted from

Schedule RC–L.

(b) Item 7, ‘‘Securities borrowed,’’

would no longer be collected from all

banks. Instead, the amount of borrowed

securities would be reported, when

appropriate, in item 12, ‘‘Other off-

balance sheet liabilities.’’

9.a, 9.b, and 9.c on the outstanding

principal balance of and amount of

recourse on three categories of financial

asset transfers would be moved from

Schedule RC–L and incorporated into

the proposed new schedule on

securitization and asset sale activities,

which is discussed in Section III.B.

below.

riate, in item 12, ‘‘Other off-

balance sheet liabilities.’’

9.a, 9.b, and 9.c on the outstanding

principal balance of and amount of

recourse on three categories of financial

asset transfers would be moved from

Schedule RC–L and incorporated into

the proposed new schedule on

securitization and asset sale activities,

which is discussed in Section III.B.

below.

(d) The requirement that off-balance

sheet liabilities and assets that exceed

25 percent of equity capital be itemized

and described in items 12 and 13 would

be retained. However, consistent with

the proposed changes described above

for ‘‘Other’’ assets and ‘‘Other’’

liabilities in Schedules RC–F and RC–G,

the agencies plan to add preprinted

captions for those off-balance sheet

items most often itemized and described

by banks.

The agencies would also retain blank

text fields like those presently found in

Schedule RC–L for off-balance sheet

items not listed among the preprinted

captions.

(e) Item 16.b for the gross notional

amount of derivative contracts held for

purposes other than trading that are not

marked to market would be deleted. All

derivative contracts, including those

held for purposes other than trading,

will be marked to market once a bank

adopts FASB Statement No. 133,

Accounting for Derivative Instruments

and Hedging Activities, which is

effective for fiscal years beginning after

June 15, 2000. Thus, item 16.b will no

longer have any relevance in 2001.

(2) For banks that file the FFIEC 031,

032, and 033, i.e., banks with foreign

offices or with $100 million or more in

total assets:

(a) Items 17.c.(1) and (2) for the gross

positive and gross negative fair values of

derivatives held for purposes other than

trading that are not marked to market

would be deleted because of the effect

of FASB Statement No. 133.

l no

longer have any relevance in 2001.

(2) For banks that file the FFIEC 031,

032, and 033, i.e., banks with foreign

offices or with $100 million or more in

total assets:

(a) Items 17.c.(1) and (2) for the gross

positive and gross negative fair values of

derivatives held for purposes other than

trading that are not marked to market

would be deleted because of the effect

of FASB Statement No. 133.

(b) Memorandum item 3.a,

‘‘Participations in commitments with an

original maturity exceeding one year

conveyed to others,’’ would be

eliminated.

(3) For banks that file the FFIEC 031

and 032, i.e., banks with foreign offices

or with $300 million or more in total

assets:

(a) Memorandum item 4, ‘‘Standby

letters of credit (and foreign office

guarantees) issued to non-U.S.

addressees (domicile),’’ would be

deleted.

(b) The information collected in

Memorandum items 5.a, 5.b, and 5.c on

three categories of consumer loans that

have been securitized and sold would

be moved from Schedule RC–L and

incorporated into the proposed new

schedule on securitization and asset sale

activities, which is discussed in section

III.B. below.

Schedule RC–M—Memoranda:

(1) For all banks:

(a) Items 4.a through 4.d, in which

banks report a six-way breakdown of the

‘‘Outstanding principal balance of 1–4

family residential mortgage loans

serviced for others’’ would be moved

from Schedule RC–M and condensed

into a two-way servicing breakdown in

the proposed new schedule on

securitization and asset sale activities,

which is discussed in Section III.B.

below.

emoranda:

(1) For all banks:

(a) Items 4.a through 4.d, in which

banks report a six-way breakdown of the

‘‘Outstanding principal balance of 1–4

family residential mortgage loans

serviced for others’’ would be moved

from Schedule RC–M and condensed

into a two-way servicing breakdown in

the proposed new schedule on

securitization and asset sale activities,

which is discussed in Section III.B.

below.

(b) Item 6.e, ‘‘Amount of intangible

assets that have been grandfathered or

are otherwise qualifying for regulatory

capital purposes,’’ item 7, ‘‘Mandatory

convertible debt, net of common or

perpetual preferred stock dedicated to

redeem the debt,’’ item 9,

‘‘Noncumulative perpetual preferred

stock and related surplus,’’ and

Memorandum item 1, ‘‘Reciprocal

holdings of banking organizations’’

capital instruments,’’ would no longer

be collected as specific items in

Schedule RC–M, but would be

incorporated into the calculation of Tier

1, Tier 2, and total risk-based capital in

the proposed new regulatory capital

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Federal Register / Vol. 65, No. 105 / Wednesday, May 31, 2000 / Notices

7 In addition to the categories of loans secured by

real estate in the current breakdown, banks that file

the FFIEC 031, i.e., banks with foreign offices,

would also separately report their past due and

nonaccrual loans secured by real estate in foreign

offices, but they would no longer separately report

their past due and nonaccrual loans secured by real

estate to U.S. addressees.

schedule, which is discussed in Section

II.B. below.

moved from this schedule and would

appear on the balance sheet (Schedule

RC) as a specific item. This proposed

change would be made to conform to

the FASB’s proposed accounting

standard, Business Combinations and

Intangible Assets, which would require

all goodwill to be aggregated and

presented as a separate line item on the

balance sheet.

Section

II.B. below.

moved from this schedule and would

appear on the balance sheet (Schedule

RC) as a specific item. This proposed

change would be made to conform to

the FASB’s proposed accounting

standard, Business Combinations and

Intangible Assets, which would require

all goodwill to be aggregated and

presented as a separate line item on the

balance sheet.

(d) Items 10.a through 10.f, which

collect data on quarterly sales of

annuities, mutual funds, and

proprietary products, would be

eliminated. In place of these items, each

bank would respond to a ‘‘yes’’ or ‘‘no’’

question asking whether it sells private

label or third party mutual funds and

annuities. In addition, banks would

report the total assets under the

reporting bank’s management in

proprietary mutual funds and annuities.

For banks with proprietary mutual

funds and annuities, reporting the

amount of assets under management

should be significantly less burdensome

than reporting the quarterly sales

volume for these proprietary products.

(e) Item 11, ‘‘Net unamortized realized

deferred gains (losses) on off-balance

sheet derivative contracts included in

assets and liabilities reported in

Schedule RC,’’ and item 12, ‘‘Amount of

assets netted against nondeposit

liabilities (and deposits in foreign

offices) on the balance sheet (Schedule

RC) in accordance with generally

accepted accounting principles,’’ would

be eliminated.

(2) For banks that file the FFIEC 034,

i.e., banks with domestic offices only

and less than $100 million in total

assets, items 3.a, ‘‘Noninterest-bearing

balances due from commercial banks in

the U.S,’’ and 3.b, ‘‘Currency and coin,’’

would be deleted.

(3) For banks that file the FFIEC 031,

032, and 033, i.e., banks with foreign

offices or with $100 million or more in

total assets:

(a) Item 2, ‘‘Federal funds sold and

securities purchased under agreements

to resell with U.S. branches and

agencies of foreign banks,’’ would be

deleted.

terest-bearing

balances due from commercial banks in

the U.S,’’ and 3.b, ‘‘Currency and coin,’’

would be deleted.

(3) For banks that file the FFIEC 031,

032, and 033, i.e., banks with foreign

offices or with $100 million or more in

total assets:

(a) Item 2, ‘‘Federal funds sold and

securities purchased under agreements

to resell with U.S. branches and

agencies of foreign banks,’’ would be

deleted.

(b) Item 13, ‘‘Outstanding principal

balance of loans other than 1–4 family

residential mortgage loans that are

serviced for others,’’ would be moved

from Schedule RC–M to the proposed

new schedule on securitization and

asset sales activities, which is discussed

in section III.B. below. This information

would continue to be reported when

this balance is more than $10 million.

The current requirement that the

balance must also exceed 10 percent of

total assets in order for it to be reported

would be eliminated.

(4) For banks with $1 billion or more

in total assets that file the FFIEC 031

and 032, the U.S.-non-U.S. addressee

breakdown of ‘‘Customers’’ liability to

this bank on acceptances outstanding’’

in items 5.a and 5.b would be

eliminated.

Schedule RC–N—Past Due and

Nonaccrual Loans, Leases, and Other

Assets:

(1) The categories of loans and leases

for which past due and nonaccrual

information would be collected would

be defined uniformly for all banks, but

banks with foreign offices or with $300

million or more in total assets would

provide more detail for certain loan

categories and for leases than other

banks would. The loan category

definitions used by all banks in

Schedule RC–N would correspond to

the standard definitions used in the loan

schedule, Schedule RC–C. As discussed

above under Schedule RC–K, this

proposed change would end the

separate loan reporting scheme for

banks currently filing the FFIEC 033 and

034 which permits these banks to define

for themselves the composition of the

general loan categories used in Schedule

RC–N (and three other schedules)

edule RC–N would correspond to

the standard definitions used in the loan

schedule, Schedule RC–C. As discussed

above under Schedule RC–K, this

proposed change would end the

separate loan reporting scheme for

banks currently filing the FFIEC 033 and

034 which permits these banks to define

for themselves the composition of the

general loan categories used in Schedule

RC–N (and three other schedules). Thus,

all banks would report past due and

nonaccrual information for the

following categories of loans and leases:

(a) Loans secured by real estate using

the current breakdown from the

Memoranda section of the schedule

(Memorandum item 4 on the FFIEC 033

and 034; Memorandum item 3 on the

FFIEC 031 and 032); 7 (b) loans to

depository institutions and acceptances

of other banks; (c) loans to finance

agricultural production and other loans

to farmers (except as noted below); (d)

commercial and industrial loans; (e)

credit cards to individuals for

household, family, and other personal

expenditures; (f) all other consumer

loans; (g) loans to foreign governments

and official institutions; (h) all other

loans; and (i) lease financing

receivables.

Banks with foreign offices or with

$300 million or more in assets would

also continue to report past due and

nonaccrual information for: (a) Loans

secured by real estate to non-U.S.

addressees; (b) loans to foreign banks;

non-U.S. addressees; and (d) lease

financing receivables of non-U.S.

addressees. The agencies would retain

the existing Schedule RC–N reporting

threshold for agricultural loans for

banks with domestic offices only and

less than $300 million in assets. These

banks would not be required to report

past due and nonaccrual data for ‘‘Loans

to finance agricultural production and

other loans to farmers’’ if these loans are

less than or equal to 5 percent of total

loans.

addressees. The agencies would retain

the existing Schedule RC–N reporting

threshold for agricultural loans for

banks with domestic offices only and

less than $300 million in assets. These

banks would not be required to report

past due and nonaccrual data for ‘‘Loans

to finance agricultural production and

other loans to farmers’’ if these loans are

less than or equal to 5 percent of total

loans.

(2) For banks that currently file the

FFIEC 031 and 032, i.e., banks with

foreign offices or with $300 million or