Proposed Revisions to Regulatory Reports Filed by Banks and Savings Associations

63848

Federal Register / Vol. 71, No. 210 / Tuesday, October 31, 2006 / Notices

16 The efforts of the MENA FATF are particularly

exemplary of international efforts to combat

terrorist abuse of charities. MENA FATF Member

States have issued a best practices paper, based on

the FATF’s international standard for combating

terrorist abuse of the non-profit sector, tailored to

the specific religious, social, and economic values

of the region. The comprehensive framework,

crafted by the MENA FATF, outlines legislative,

regulatory, and procedural measures to ensure that

the charitable sector is not misused or abused by

terrorist financiers. The MENA FATF charities best

practices paper is an indispensable tool for the

Middle East and North Africa region in helping to

protect against terrorist abuse of charities by

offering guidance to promote transparency and

accountability in the charitable sector.

activities; (iii) facilitating international

action to address these abuses; and (iv)

conducting comprehensive outreach to

the charitable sector to raise awareness

of terrorist exploitation and the steps

charities can take to protect themselves

from such abuse.

U.S. designations of charities and

charitable officials demonstrate the

breadth of the problem of terrorist

infiltration and exploitation of the

charitable sector. To date, the United

States has designated forty-three

charities worldwide and twenty-nine

associated individuals for their support

of terrorist organizations and operations.

These seventy-two charities and

individuals comprise over fifteen

percent of all U.S.-designated terrorist

supporters or financiers, indicating the

primary importance of charities as a

critical means of support for terrorist

organizations and activities

ated forty-three

charities worldwide and twenty-nine

associated individuals for their support

of terrorist organizations and operations.

These seventy-two charities and

individuals comprise over fifteen

percent of all U.S.-designated terrorist

supporters or financiers, indicating the

primary importance of charities as a

critical means of support for terrorist

organizations and activities. Treasury

maintains a summary of all designated

charities, including unclassified

background information summarizing

the basis of each designation, to assist

the donor and charitable communities

in identifying those charities associated

with terrorist financing and support.

Further information and press releases

relating to these designations are

available on the Treasury Web site at

http://www.treas.gov/offices/

enforcement/key-issues/protecting/

charities_exec-orders.shtml.

In addition to these ongoing efforts by

Treasury and the U.S. Government,

other countries and organizations from

around the world have recognized and

helped curb abuse of the charitable

sector by terrorist organizations. The

Financial Action Task Force (FATF)—

the premier inter-governmental

organization responsible for developing

and promoting global policies to combat

money laundering and terrorist

financing—has studied the problem of

terrorist financing and abuse across the

charitable sector globally and has

published typologies of such abuse. The

FATF has also published Best Practices

for Non-Profit Organizations and more

recently issued interpretive guidance

strengthening the international standard

for combating terrorist abuse of non-

profit organizations

undering and terrorist

financing—has studied the problem of

terrorist financing and abuse across the

charitable sector globally and has

published typologies of such abuse. The

FATF has also published Best Practices

for Non-Profit Organizations and more

recently issued interpretive guidance

strengthening the international standard

for combating terrorist abuse of non-

profit organizations. Additionally, FATF

style regional bodies (FSRBs) such as

the Asia Pacific Group (APG), Eurasian

Group (EAG) and the Middle East and

North Africa Financial Action Task

Force (MENA FATF) are developing

typologies and studies on the active

threat of terrorist financing and support

through charities that operate within

their regions.16 These organizations and

their member countries are

implementing measures to actively

combat this threat through the

development and application of

supervisory, investigative, and financial

authorities to identify and dismantle

charities engaged in terrorist financing

or support. Many of these documents,

which underscore the threat that

terrorist organizations and operations

pose to the charitable sector, are

available on the Treasury Web site at

http://www.treas.gov/offices/

enforcement/key-issues/protecting/

index.shtml.

Treasury continually engages in

outreach and updates its Web site to

communicate useful information

regarding: (i) The ongoing risks of

terrorist abuse in the charitable sector;

(ii) ongoing U.S. and other

governmental efforts to mitigate these

risks and combat terrorist abuse, and

on the Treasury Web site at

http://www.treas.gov/offices/

enforcement/key-issues/protecting/

index.shtml.

Treasury continually engages in

outreach and updates its Web site to

communicate useful information

regarding: (i) The ongoing risks of

terrorist abuse in the charitable sector;

(ii) ongoing U.S. and other

governmental efforts to mitigate these

risks and combat terrorist abuse, and

(iii) steps the sector can take to protect

against such abuse. Treasury’s

Guidelines represent one essential

component and product of the ongoing

outreach that Treasury is conducting

with the charitable sector to empower

and protect the sector from terrorist

abuse. Another example of available

resources is Treasury’s December 2005

advisory paper, which provides

information to charities delivering relief

in areas affected by the 2005 South Asia

earthquake by detailing typologies of

terrorist abuse of charities and reports

on activity by militant and terrorist

groups in those areas. This paper also

shows, through media reports, the

extent to which terrorist organizations

pose a risk to charities trying to deliver

aid in unstable areas, where terrorist

organizations themselves and/or their

charitable fronts are often engaged in

delivering relief as an effective

recruitment mechanism in building

broader support for their organizations.

Treasury will continue its outreach

and informational efforts as part of its

larger mission to combat terrorist

financing and safeguard the charitable

sector from terrorist abuse.

[FR Doc

where terrorist

organizations themselves and/or their

charitable fronts are often engaged in

delivering relief as an effective

recruitment mechanism in building

broader support for their organizations.

Treasury will continue its outreach

and informational efforts as part of its

larger mission to combat terrorist

financing and safeguard the charitable

sector from terrorist abuse.

[FR Doc. 06–8961 Filed 10–30–06; 8:45 am]

BILLING CODE 4811–37–P

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the

Currency

FEDERAL RESERVE SYSTEM

FEDERAL DEPOSIT INSURANCE

CORPORATION

DEPARTMENT OF THE TREASURY

Office of Thrift Supervision

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); Federal Deposit

Insurance Corporation (FDIC); and

Office of Thrift Supervision (OTS),

Treasury.

ACTION: Joint 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, the

FDIC, and the OTS (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 a

proposal to extend, with revision, the

Consolidated Reports of Condition and

Income (Call Report) for banks and the

Thrift Financial Report (TFR) for

savings associations, 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 and the agencies

should modify the proposed revisions

prior to giving final approval

of Condition and

Income (Call Report) for banks and the

Thrift Financial Report (TFR) for

savings associations, 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 and the agencies

should modify the proposed revisions

prior to giving final approval. The

agencies will then submit the revisions

to OMB for review and approval.

DATES: Comments must be submitted on

or before January 2, 2007.

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: Communications Division,

Office of the Comptroller of the

Currency, Public Information Room,

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Federal Register / Vol. 71, No. 210 / Tuesday, October 31, 2006 / Notices

Mailstop 1–5, Attention: 1557–0081,

250 E Street, SW., Washington, DC

20219. In addition, comments may be

sent by fax to (202) 874–4448, or by

electronic mail to

regs.comments@occ.treas.gov. You can

inspect and photocopy the comments at

the OCC’s Public Information Room, 250

E Street, SW., Washington, DC 20219.

You can make an appointment to

inspect the comments by calling (202)

874–5043.

Board: You may submit comments,

which should refer to ‘‘Consolidated

Reports of Condition and Income, 7100–

0036,’’ by any of the following methods:

• Agency Web site: http://

www.federalreserve.gov. Follow the

instructions for submitting comments

on the http://www.federalreserve.gov/

generalinfo/foia/ProposedRegs.cfm.

• Federal eRulemaking Portal: http://

www.regulations.gov. Follow the

instructions for submitting comments.

• E-mail:

regs.comments@federalreserve.gov.

Include docket number in the subject

line of the message

thods:

• Agency Web site: http://

www.federalreserve.gov. Follow the

instructions for submitting comments

on the http://www.federalreserve.gov/

generalinfo/foia/ProposedRegs.cfm.

• Federal eRulemaking Portal: http://

www.regulations.gov. Follow the

instructions for submitting comments.

• E-mail:

regs.comments@federalreserve.gov.

Include docket number in the subject

line of the message.

• Fax: 202–452–3819 or 202–452–

3102.

• Mail: Jennifer J. Johnson, Secretary,

Board of Governors of the Federal

Reserve System, 20th Street and

Constitution Avenue, NW., Washington,

DC 20551.

All public comments are available

from the Board’s Web site at http://

www.federalreserve.gov/generalinfo/

foia/ProposedRegs.cfm as submitted,

unless modified for technical reasons.

Accordingly, your comments will not be

edited to remove any identifying or

contact information. Public comments

may also be viewed electronically or in

paper in Room MP–500 of the Board’s

Martin Building (20th and C Streets,

NW.) between 9 a.m. and 5 p.m. on

weekdays.

FDIC: You may submit comments,

which should refer to ‘‘Consolidated

Reports of Condition and Income, 3064–

0052,’’ by any of the following methods:

• http://www.FDIC.gov/regulations/

laws/federal/notices.html.

• E-mail: comments@FDIC.gov.

Include ‘‘Consolidated Reports of

Condition and Income, 3064–0052’’ in

the subject line of the message.

• Mail: Steven F. Hanft (202–898–

3907), Clearance Officer, Attn:

Comments, Room MB–2088, Federal

Deposit Insurance Corporation, 550 17th

Street, NW., Washington, DC 20429.

• Hand Delivery: 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.

Public Inspection: All comments

received will be posted without change

to http://www.fdic.gov/regulations/laws/

federal/notices.html including any

personal information provided

Street, NW., Washington, DC 20429.

• Hand Delivery: 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.

Public Inspection: All comments

received will be posted without change

to http://www.fdic.gov/regulations/laws/

federal/notices.html including any

personal information provided.

Comments may be inspected at the FDIC

Public Information Center, Room E–

1002, 3501 Fairfax Drive, Arlington, VA

22226, between 9 a.m. and 5 p.m. on

business days.

OTS: You may submit comments,

identified by ‘‘1550–0023 (TFR:

Schedule DI Revisions),’’ by any of the

following methods:

• Federal eRulemaking Portal: http://

www.regulations.gov. Follow the

instructions for submitting comments.

• E-mail address:

infocollection.comments@ots.treas.gov.

Please include ‘‘1550–0023 (TFR:

Schedule DI Revisions)’’ in the subject

line of the message and include your

name and telephone number in the

message.

• Fax: (202) 906–6518.

• Mail: Information Collection

Comments, Chief Counsel’s Office,

Office of Thrift Supervision, 1700 G

Street, NW., Washington, DC 20552,

Attention: ‘‘1550–0023 (TFR: Schedule

DI Revisions).’’

• Hand Delivery/Courier: Guard’s

Desk, East Lobby Entrance, 1700 G

Street, NW., from 9 a.m. to 4 p.m. on

business days, Attention: Information

Collection Comments, Chief Counsel’s

Office, Attention: ‘‘1550–0023 (TFR:

Schedule DI Revisions).’’

Instructions: All submissions received

must include the agency name and OMB

Control Number for this information

collection. All comments received will

be posted without change to the OTS

Internet Site at http://www.ots.treas.gov/

pagehtml.cfm?catNumber=67&an=1,

including any personal information

provided.

Docket: For access to the docket to

read background documents or

comments received, go to http://

www.ots.treas.gov/

pagehtml.cfm?catNumber=67&an=1

e and OMB

Control Number for this information

collection. All comments received will

be posted without change to the OTS

Internet Site at http://www.ots.treas.gov/

pagehtml.cfm?catNumber=67&an=1,

including any personal information

provided.

Docket: For access to the docket to

read background documents or

comments received, go to http://

www.ots.treas.gov/

pagehtml.cfm?catNumber=67&an=1. In

addition, you may inspect comments at

the Public Reading Room, 1700 G Street,

NW., by appointment. To make an

appointment for access, call (202) 906–

5922, send an e-mail to

public.info@ots.treas.gov, or send a

facsimile transmission to (202) 906–

7755. (Prior notice identifying the

materials you will be requesting will

assist us in serving you.) We schedule

appointments on business days between

10 a.m. and 4 p.m. In most cases,

appointments will be available the next

business day following the date we

receive a request.

Additionally, commenters may send a

copy of their comments to the OMB

desk officer for the Agencies by mail to

the Office of Information and Regulatory

Affairs, U.S. Office of Management and

Budget, New Executive Office Building,

Room 10235, 725 17th Street, NW.,

Washington, DC 20503, or by fax to

(202) 395–6974.

FOR FURTHER INFORMATION CONTACT: For

further information about the revisions

discussed in this notice, please contact

any of the agency clearance officers

whose names appear below. In addition,

copies of the Call Report forms can be

obtained at the FFIEC’s Web site

(http://www.ffiec.gov/

ffiec_report_forms.htm). Copies of the

TFR can be obtained from the OTS’s

Web site (http://www.ots.treas.gov/

main.cfm?catNumber=2&catParent=0).

OCC: Mary Gottlieb, OCC Clearance

Officer, or Camille Dickerson, (202)

874–5090, Legislative and Regulatory

Activities Division, Office of the

Comptroller of the Currency, 250 E

Street, SW., Washington, DC 20219.

Board: Michelle E

ww.ffiec.gov/

ffiec_report_forms.htm). Copies of the

TFR can be obtained from the OTS’s

Web site (http://www.ots.treas.gov/

main.cfm?catNumber=2&catParent=0).

OCC: Mary Gottlieb, OCC Clearance

Officer, or Camille Dickerson, (202)

874–5090, Legislative and Regulatory

Activities Division, Office of the

Comptroller of the Currency, 250 E

Street, SW., Washington, DC 20219.

Board: Michelle E. Long, Federal

Reserve 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.

Telecommunications Device for the Deaf

(TDD) users may call (202) 263–4869.

FDIC: Steven F. Hanft, Paperwork

Clearance Officer, (202) 898–3907, Legal

Division, Federal Deposit Insurance

Corporation, 550 17th Street, NW.,

Washington, DC 20429.

OTS: Marilyn K. Burton, OTS

Clearance Officer, at

marilyn.burton@ots.treas.gov, (202)

906–6467, or facsimile number (202)

906–6518, Litigation Division, Chief

Counsel’s Office, Office of Thrift

Supervision, 1700 G Street, NW.,

Washington, DC. 20552.

SUPPLEMENTARY INFORMATION: The

agencies are proposing to revise and

extend for three years the Call Report

and the TFR, which are currently

approved collections of information.

1. Report Title: Consolidated Reports

of Condition and Income (Call Report).

Form Number: Call Report: FFIEC 031

(for banks with domestic and foreign

offices) and FFIEC 041 (for banks with

domestic offices only). Frequency of

Response: Quarterly. Affected Public:

Business or other for-profit.

OCC: OMB Number: 1557–0081.

Estimated Number of Respondents:

1,900 national banks. Estimated Time

per Response: 44.31 burden hours.

Estimated Total Annual Burden:

336,756 burden hours.

Board: OMB Number: 7100–0036.

Estimated Number of Respondents: 919

state member banks

r banks with

domestic offices only). Frequency of

Response: Quarterly. Affected Public:

Business or other for-profit.

OCC: OMB Number: 1557–0081.

Estimated Number of Respondents:

1,900 national banks. Estimated Time

per Response: 44.31 burden hours.

Estimated Total Annual Burden:

336,756 burden hours.

Board: OMB Number: 7100–0036.

Estimated Number of Respondents: 919

state member banks. Estimated Time per

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Federal Register / Vol. 71, No. 210 / Tuesday, October 31, 2006 / Notices

Response: 51.27 burden hours.

Estimated Total Annual Burden:

188,469 burden hours.

FDIC: OMB Number: 3064–0052.

Estimated Number of Respondents:

5,247 insured state nonmember banks.

Estimated Time per Response: 35.52

burden hours. Estimated Total Annual

Burden: 745,494 burden hours.

The estimated time per response for

the Call Report is an average that varies

by agency because of differences in the

composition of the institutions under

each agency’s supervision (e.g., size

distribution of institutions, types of

activities in which they are engaged,

and existence of foreign offices). The

average reporting burden for the Call

Report is estimated to range from 16 to

630 hours per quarter, depending on an

individual institution’s circumstances.

2. Report Title: Thrift Financial

Report (TFR). Form Number: OTS 1313

(for savings associations). Frequency of

Response: Quarterly. Affected Public:

Business or other for-profit.

OTS: OMB Number: 1550–0023.

Estimated Number of Respondents: 854

savings associations. Estimated Time

per Response: 36.5 burden hours.

Estimated Total Annual Burden:

124,684 burden hours.

The TFR estimates in this notice are

carried forward from the burden

estimates that appeared in OTS’s final

Paperwork Reduction Act notice

concerning items related to retirement

deposit accounts (71 FR 47866, August

18, 2006)

3.

Estimated Number of Respondents: 854

savings associations. Estimated Time

per Response: 36.5 burden hours.

Estimated Total Annual Burden:

124,684 burden hours.

The TFR estimates in this notice are

carried forward from the burden

estimates that appeared in OTS’s final

Paperwork Reduction Act notice

concerning items related to retirement

deposit accounts (71 FR 47866, August

18, 2006).

General Description of Reports

These information collections are

mandatory: 12 U.S.C. 161 (for national

banks), 12 U.S.C. 324 (for state member

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

nonmember commercial and savings

banks), and 12 U.S.C. 1464 (for savings

associations). Except for selected data

items, these information collections are

not given confidential treatment.

Abstract

Institutions submit Call Report and

TFR data to the agencies each quarter

for the agencies’ use in monitoring the

condition, performance, and risk profile

of individual institutions and the

industry as a whole.

Call Report and TFR data provide the

most current statistical data available for

evaluating institutions’ corporate

applications, for identifying areas of

focus for both on-site and off-site

examinations, and for monetary and

other public policy purposes. The

agencies use Call Report and TFR data

in evaluating interstate merger and

acquisition applications to determine, as

required by law, whether the resulting

institution would control more than ten

percent of the total amount of deposits

of insured depository institutions in the

United States. Call Report and TFR data

are also used to calculate all

institutions’ deposit insurance and

Financing Corporation assessments,

national banks’ semiannual assessment

fees, and the OTS’s assessments on

savings associations.

Current Actions

I

e resulting

institution would control more than ten

percent of the total amount of deposits

of insured depository institutions in the

United States. Call Report and TFR data

are also used to calculate all

institutions’ deposit insurance and

Financing Corporation assessments,

national banks’ semiannual assessment

fees, and the OTS’s assessments on

savings associations.

Current Actions

I. Overview

The four agencies are proposing to

replace certain information currently

collected in the Call Report and TFR for

deposit insurance assessment purposes

with the information described in

proposed amendments to Part 327 of the

FDIC’s regulations (71 FR 28790, May

18, 2006). The four agencies also

propose to revise the information

collected in the Call Report and TFR on

time deposits, particularly with respect

to certain retirement accounts affected

by the FDIC’s amended deposit

insurance regulations.

In addition, the OCC, the Board, and

the FDIC (the banking agencies) propose

to implement a number of other changes

to the Call Report requirements, most of

which are expected to apply to a small

percentage of banks. First, the banking

agencies would revise the Call Report to

collect certain data on fair value

measurements from those institutions

that choose, under generally accepted

accounting principles, to apply a fair

value option to one or more financial

instruments and one or more classes of

servicing assets and liabilities and from

certain institutions that report trading

assets and liabilities. The banking

agencies will also collect an item to

capture the change in the fair value of

liabilities under the fair value option

that is attributable to a change in a

bank’s own creditworthiness for

purposes of measuring a bank’s

regulatory capital under the banking

agencies’ capital adequacy standards.

Second, the banking agencies propose to

collect certain data in the Call Report on

1–4 family residential mortgages with

terms that allow for negative

amortization

value of

liabilities under the fair value option

that is attributable to a change in a

bank’s own creditworthiness for

purposes of measuring a bank’s

regulatory capital under the banking

agencies’ capital adequacy standards.

Second, the banking agencies propose to

collect certain data in the Call Report on

1–4 family residential mortgages with

terms that allow for negative

amortization. The banking agencies

currently do not collect any supervisory

data on such loans. Finally, the banking

agencies propose to clarify the Call

Report instructions for assets serviced

for others by explicitly stating that such

servicing includes the servicing of loan

participations.

These proposed revisions to the Call

Report and the TFR, which have been

approved for publication by the FFIEC

and are discussed in more detail below,

would take effect as of March 31, 2007,

and, for certain deposit insurance

assessment revisions, March 31, 2008.

The specific wording of the captions for

the new or revised Call Report and TFR

data items discussed in this proposal

and the numbering of these data items

should be regarded as preliminary.

Type of Review: Revision and

extension of currently approved

collections.

II. Discussion of Proposed Revisions

A. Deposit Insurance Assessment

Revisions to the Call Report and TFR

On May 18, 2006, the FDIC issued

proposed amendments to Part 327 of its

regulations, ‘‘Assessments,’’ under

which the FDIC’s computation of

deposit insurance assessments for

certain institutions would be

determined using daily averages for

deposits rather than quarter-end

balances. In addition to the proposed

amendments, the agencies are proposing

to revise and reduce the overall

reporting requirements related to

deposit insurance assessments in both

the Call Report and the TFR in order to

simplify regulatory reporting. Key

elements of the proposed revised

reporting requirements are:

• Institutions will separately report

deposits rather than quarter-end

balances. In addition to the proposed

amendments, the agencies are proposing

to revise and reduce the overall

reporting requirements related to

deposit insurance assessments in both

the Call Report and the TFR in order to

simplify regulatory reporting. Key

elements of the proposed revised

reporting requirements are:

• Institutions will separately report

(a) gross deposits as defined in Section

3(l) of the Federal Deposit Insurance Act

(FDI Act) (12 U.S.C. 1813(l)) before any

allowable exclusions and (b) allowable

exclusions;

• The same data items will be

reported for both quarter-end and daily

average deposits;

• All institutions will report using

quarter-end deposits and allowable

exclusions; and

• All institutions with $300 million

or more in assets, and other institutions

that meet specified criteria, will also

report daily averages for deposits and

allowable exclusions in addition to

quarter-end amounts.

The proposal would provide an

interim period covering the March 31,

2007, through December 31, 2007,

report dates during which institutions

can submit Call Reports and TFRs using

either the current or revised formats for

reporting data for measuring their

assessment base. An institution that

chooses to begin reporting under the

revised format in any quarter during the

interim period must continue to report

under the revised format through the

rest of the interim period and may not

revert back to the current reporting

format. The revised reporting format

will take effect for all institutions on

March 31, 2008, at which time the

current format will be eliminated.

Although no institution that chooses to

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d and may not

revert back to the current reporting

format. The revised reporting format

will take effect for all institutions on

March 31, 2008, at which time the

current format will be eliminated.

Although no institution that chooses to

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Federal Register / Vol. 71, No. 210 / Tuesday, October 31, 2006 / Notices

report under the revised format during

the 2007 interim period would be

required to report daily averages during

this period, any institution may elect to

report daily averages as of any quarter-

end report date in 2007. However, once

an institution begins to report daily

averages (even during the interim

period), it must continue to report daily

averages each quarter thereafter in its

Call Report or TFR.

Currently, the assessment base

definition as detailed in 12 CFR 327.5

of the FDIC’s regulations has been

driven by the agencies’ regulatory

reporting requirements. Therefore, as

the reporting requirements for deposits

in the Call Report and TFR changed

over time, the regulatory definition of

the assessment base required periodic

updates. As a result of the Federal

Deposit Insurance Reform Act, the FDIC

has proposed to revise the definition of

the assessment base within its

regulations to be consistent with Section

3(l) of the FDI Act. This will eliminate

the need for periodic updates to the

FDIC’s assessment regulations in

response to outside factors and allow a

simplification of the associated

reporting requirements. In addition, to

address timing issues with quarter-end

reporting, the FDIC will use daily

average deposits and exclusions over

the quarter instead of quarter-end totals

for deposits and exclusions to compute

the assessment base for institutions with

$300 million or more in assets and other

institutions who meet specified criteria,

which are discussed below

ociated

reporting requirements. In addition, to

address timing issues with quarter-end

reporting, the FDIC will use daily

average deposits and exclusions over

the quarter instead of quarter-end totals

for deposits and exclusions to compute

the assessment base for institutions with

$300 million or more in assets and other

institutions who meet specified criteria,

which are discussed below. Any

institution that reports less than $300

million in assets and does not meet the

other specified criteria may opt

permanently to determine its

assessment base using daily averages.

At present, 23 items are required in

the Call Report to determine a bank’s

assessment base and eight items are

required in the TFR to determine a

savings association’s assessment base.

The agencies are proposing changes to

the way the assessment base is reported

that would effectively reduce the

number of reported items to as few as

two for certain small institutions

(without foreign offices) and no more

than six for other institutions.

Specifically, the banking agencies are

proposing to replace items 1 through 12

(including their subitems) on Schedule

RC–O, ‘‘Other Data for Deposit

Insurance and FICO Assessments,’’ and

OTS is proposing to replace the eight

items in the section of Schedule DI,

‘‘Consolidated Deposit Information,’’ for

‘‘Deposit and Escrow Data for Deposit

Insurance Premium Assessments’’ with

the following six items:

• Total Deposit Liabilities as Defined

in Section 3(l) of the FDI Act before

Exclusions;

• Total Allowable Exclusions

(including Foreign Deposits);

• Total Foreign Deposits (included in

Total Allowable Exclusions);

• Total Daily Average of Deposit

Liabilities as Defined in Section 3(l) of

the FDI Act before Exclusions;

• Total Daily Average Allowable

Exclusions (including Foreign Deposits);

• Total Daily Average Foreign

Deposits (included in Total Daily

Average Allowable Exclusions)

llowable Exclusions

(including Foreign Deposits);

• Total Foreign Deposits (included in

Total Allowable Exclusions);

• Total Daily Average of Deposit

Liabilities as Defined in Section 3(l) of

the FDI Act before Exclusions;

• Total Daily Average Allowable

Exclusions (including Foreign Deposits);

• Total Daily Average Foreign

Deposits (included in Total Daily

Average Allowable Exclusions).

Thus, instead of starting with deposits

as reported on the balance sheet of the

Call Report and TFR and making

adjustments to these reported deposits

for purposes of measuring an

institution’s assessment base, which is

the present method, the computation of

the institution’s assessment base under

the proposed amendments to the FDIC’s

assessment regulations and these

proposed regulatory reporting revisions

will start with the gross total deposit

liabilities that meet the statutory

definition of deposits in Section 3(l) of

the FDI Act before any allowable

exclusions from the definition. The

allowable exclusions, which are set

forth in Section 3(l)(5) and other

sections of the FDI Act and in the

FDIC’s regulations, include foreign

deposits (including International

Banking Facility deposits) and other

deposits described below. As the next

step in the assessment base calculation,

an institution would report the total

amount of all allowable exclusions from

the statutory definition of deposits (with

separate disclosure of foreign deposits,

if any). Total Deposit Liabilities as

Defined in Section 3(l) of the FDI Act

before Exclusions minus Total

Allowable Exclusions would be the

institution’s Assessment Base. As

previously stated, the computation will

use either quarter-end balances or daily

averages.

The net amount of unposted debits

and credits will now not be considered

within the definition of the assessment

base. For institutions that report daily

averages, these debits and credits are

captured in the next day’s deposits and

thus are reflected in the averages

stitution’s Assessment Base. As

previously stated, the computation will

use either quarter-end balances or daily

averages.

The net amount of unposted debits

and credits will now not be considered

within the definition of the assessment

base. For institutions that report daily

averages, these debits and credits are

captured in the next day’s deposits and

thus are reflected in the averages. For

consistency and because they should

not materially affect assessment bases,

unposted debits and credits will also

not be considered for institutions that

only report quarter-end balances.

The agencies believe that the amount

of gross total deposit liabilities that meet

the statutory definition of deposits is

typically found in and supported by the

control totals in an institution’s deposit

systems that provide the detail

sufficient to track, control, and handle

inquiries from depositors about their

specific individual accounts.

These deposit systems can be

automated or manual. In any case,

control totals for deposit liabilities

should be readily available, which

should ease an institution’s transition to

the revised regulatory reporting

requirements. Compared to the amount

of information that an institution

currently reports in order to determine

its assessment base, the proposed

changes to the reporting requirements

should also facilitate the reporting of

daily averages for deposits and

allowable exclusions since many of the

presently reported adjustments will not

need to be tracked and averaged

separately.

Section 3(1) of the FDI Act states that the

term ‘‘deposit’’ means

an institution

currently reports in order to determine

its assessment base, the proposed

changes to the reporting requirements

should also facilitate the reporting of

daily averages for deposits and

allowable exclusions since many of the

presently reported adjustments will not

need to be tracked and averaged

separately.

Section 3(1) of the FDI Act states that the

term ‘‘deposit’’ means

(1) The unpaid balance of money or its

equivalent received or held by a bank or

savings association in the usual course of

business and for which it has given or is

obligated to give credit, either conditionally

or unconditionally, to a commercial,

checking, savings, time, or thrift account, or

which is evidenced by its certificate of

deposit, thrift certificate, investment

certificate, certificate of indebtedness, or

other similar name, or a check or draft drawn

against a deposit account and certified by the

bank or savings association, or a letter of

credit or a traveler’s check on which the bank

or savings association is primarily liable:

Provided, That, without limiting the

generality of the term ‘‘money or its

equivalent’’, any such account or instrument

must be regarded as evidencing the receipt of

the equivalent of money when credited or

issued in exchange for checks or drafts or for

a promissory note upon which the person

obtaining any such credit or instrument is

primarily or secondarily liable, or for a

charge against a deposit account, or in

settlement of checks, drafts, or other

instruments forwarded to such bank or

savings association for collection,

(2) Trust funds as defined in this Act

received or held by such bank or savings

association, whether held in the trust

department or held or deposited in any other

department of such bank or savings

association,

ndarily liable, or for a

charge against a deposit account, or in

settlement of checks, drafts, or other

instruments forwarded to such bank or

savings association for collection,

(2) Trust funds as defined in this Act

received or held by such bank or savings

association, whether held in the trust

department or held or deposited in any other

department of such bank or savings

association,

(3) Money received or held by a bank or

savings association, or the credit given for

money or its equivalent received or held by

a bank or savings association, in the usual

course of business for a special or specific

purpose, regardless of the legal relationship

thereby established, including without being

limited to, escrow funds, funds held as

security for an obligation due to the bank or

savings association or others (including

funds held as dealers reserves) or for

securities loaned by the bank or savings

association, funds deposited by a debtor to

meet maturing obligations, funds deposited

as advance payment on subscriptions to

United States Government securities, funds

held for distribution or purchase of

securities, funds held to meet its acceptances

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Federal Register / Vol. 71, No. 210 / Tuesday, October 31, 2006 / Notices

1 In order to calculate the money stock measure

M2, the Federal Reserve takes M1 (which consists

of currency held by the public, traveler’s checks,

demand deposits, and other checkable deposits)

and adds (1) savings deposits, (2) small-

denomination time deposits (time deposits in

amounts of less than $100,000) less Individual

Retirement Account (IRA) and Keogh balances at

depository institutions, and (3) balances in retail

money market mutual funds, less IRA and Keogh

balances at money market mutual funds

e public, traveler’s checks,

demand deposits, and other checkable deposits)

and adds (1) savings deposits, (2) small-

denomination time deposits (time deposits in

amounts of less than $100,000) less Individual

Retirement Account (IRA) and Keogh balances at

depository institutions, and (3) balances in retail

money market mutual funds, less IRA and Keogh

balances at money market mutual funds.

or letters of credit, and withheld taxes:

Provided, That there shall not be included

funds which are received by the bank or

savings association for immediate application

to the reduction of an indebtedness to the

receiving bank or savings association, or

under condition that the receipt thereof

immediately reduces or extinguishes such an

indebtedness,

(4) Outstanding draft (including advice or

authorization to charge a bank’s or a savings

association’s balance in another bank or

savings association), cashier’s check, money

order, or other officer’s check issued in the

usual course of business for any purpose,

including without being limited to those

issued in payment for services, dividends, or

purchases, and

(5) Such other obligations of a bank or

savings association as the Board of Directors,

after consultation with the Comptroller of the

Currency, Director of the Office of Thrift

Supervision, and the Board of Governors of

the Federal Reserve System, shall find and

prescribe by regulation to be deposit

liabilities by general usage, except that the

following shall not be a deposit for any of the

purposes of this Act or be included as part

of the total deposits or of an insured deposit:

(A) Any obligation of a depository

institution which is carried on the books and

records of an office of such bank or savings

association located outside of any State,

unless—

by regulation to be deposit

liabilities by general usage, except that the

following shall not be a deposit for any of the

purposes of this Act or be included as part

of the total deposits or of an insured deposit:

(A) Any obligation of a depository

institution which is carried on the books and

records of an office of such bank or savings

association located outside of any State,

unless—

(i) Such obligation would be a deposit if it

were carried on the books and records of the

depository institution, and would be payable

at, an office located in any State; and

(ii) The contract evidencing the obligation

provides by express terms, and not by

implication, for payment at an office of the

depository institution located in any State;

(B) Any international banking facility

deposit, including an international banking

facility time deposit, as such term is from

time to time defined by the Board of

Governors of the Federal Reserve System in

regulation D or any successor regulation

issued by the Board of Governors of the

Federal Reserve System; and

(C) Any liability of an insured depository

institution that arises under an annuity

contract, the income of which is tax deferred

under section 72 of the Internal Revenue

Code of 1986.

The total amount of allowable exclusions

from the assessment base will be reported

separately for any institution that maintains

such records as will readily permit

verification of the correctness of its

assessment base. These exclusions include:

Foreign deposits: The obligations described

in subparagraphs (A) and (B) of section 3(l)(5)

of the FDI Act, quoted above, which

generally relate to foreign deposits.

Reciprocal balances: Any demand deposit

due from or cash item in the process of

collection due from any depository

institution (not including a foreign bank or

foreign office of another U.S

ent base. These exclusions include:

Foreign deposits: The obligations described

in subparagraphs (A) and (B) of section 3(l)(5)

of the FDI Act, quoted above, which

generally relate to foreign deposits.

Reciprocal balances: Any demand deposit

due from or cash item in the process of

collection due from any depository

institution (not including a foreign bank or

foreign office of another U.S. depository

institution) up to the total of the amount of

deposit balances due to cash and cash items

in the process of collection due such

depository institution.

Drafts drawn on other depository

institutions: Any outstanding drafts

(including advices and authorization to

charge the depository institution’s balance in

another bank) drawn in the regular course of

business by the reporting depository

institution.

Pass-through reserve balances: Reserve

balances passed through to the Federal

Reserve by the reporting institution that are

also reflected as deposit liabilities of the

reporting institution. This is not applicable to

an institution that does not act as a

correspondent institution in any pass-

through reserve balance relationship. An

institution that is not a member of the

Federal Reserve System generally cannot act

as a pass-through correspondent unless it

maintains an account for its own reserve

balances directly with the Federal Reserve.

Depository institution investment

contracts: Liabilities arising from depository

institution investment contracts that are not

treated as insured deposits under section

11(a)(5) of the Federal Deposit Insurance Act

(12 U.S.C. 1821(a)(5)). A Depository

Institution Investment Contract is a

separately negotiated depository agreement

between an employee benefit plan and an

insured depository institution that guarantees

a specified rate for all deposits made over a

prescribed period and expressly permits

benefit-responsive withdrawals or transfers

der section

11(a)(5) of the Federal Deposit Insurance Act

(12 U.S.C. 1821(a)(5)). A Depository

Institution Investment Contract is a

separately negotiated depository agreement

between an employee benefit plan and an

insured depository institution that guarantees

a specified rate for all deposits made over a

prescribed period and expressly permits

benefit-responsive withdrawals or transfers.

In addition to quarter-end balance

reporting, institutions that meet certain

criteria would be required to report

average daily deposit liabilities and

average daily allowable exclusions to

determine their assessment base

effective March 30, 2008. The amounts

to be reported would be averages of the

balances as of the close of business for

each day for the calendar quarter. For

days that an office of the reporting

institution (or any of its subsidiaries or

branches) is closed (e.g., Saturdays,

Sundays, or holidays), the amounts

outstanding from the previous business

day would be used. An office is

considered closed if there are no

transactions posted to the general ledger

as of that date.

The requirement for an institution to

report daily averages would apply to

any institution that:

(1) Reports $300 million or more in

total assets in its March 31, 2007, Call

Report or TFR. The institution would be

required to report daily averages

beginning in its March 31, 2008, Call

Report or TFR.

(2) Reports $300 million or more in

total assets in two consecutive Call

Reports or TFRs beginning with its June

30, 2007, report. The institution would

be required to report daily averages in

its Call Report or TFR beginning March

31, 2008, or on the report date six

months after the second consecutive

quarter in which it reported $300

million or more in total assets,

whichever is later. For example, if an

institution reported $300 million or

more in total assets in its reports for

June 30 and September 30, 2007, it

would begin to report daily averages in

its report for March 31, 2008

Report or TFR beginning March

31, 2008, or on the report date six

months after the second consecutive

quarter in which it reported $300

million or more in total assets,

whichever is later. For example, if an

institution reported $300 million or

more in total assets in its reports for

June 30 and September 30, 2007, it

would begin to report daily averages in

its report for March 31, 2008. If the

institution reported $300 million or

more in total assets in its reports for

December 31, 2007, and March 31, 2008,

it would begin to report daily averages

in its report for September 30, 2008.

(3) Becomes newly insured after

March 31, 2007. The institution would

be required to report daily averages in

its Call Report or TFR beginning March

31, 2008, or on the first report date after

becoming insured, whichever is later. If

daily averages are reported in the first

Call Report or TFR the institution files

after becoming insured, the daily

averages would include only the dollar

amounts for the days since the

institution began operations.

After an institution has begun to

report daily averages for its total

deposits and allowable exclusions,

either voluntarily or because it is

required to do so, the institution cannot

switch back to reporting only quarter-

end balances.

An insured depository institution

reporting less than $300 million in total

assets in its March 31, 2007, Call Report

or TFR may continue to determine its

assessment base using quarter-end

balances until it meets one of the

requirements for reporting daily

averages described above. Alternatively,

the institution may opt permanently to

determine its assessment base using

daily averages.

B

n insured depository institution

reporting less than $300 million in total

assets in its March 31, 2007, Call Report

or TFR may continue to determine its

assessment base using quarter-end

balances until it meets one of the

requirements for reporting daily

averages described above. Alternatively,

the institution may opt permanently to

determine its assessment base using

daily averages.

B. Revision of Certain Time Deposit

Information on the Call Report and TFR

The Federal Reserve uses data from

Call Report Schedule RC–E, Deposit

Liabilities, and from TFR Schedule DI,

Consolidated Deposit Information, to

ensure accurate construction of the

monetary aggregates for monetary policy

purposes.1 In order to more accurately

calculate the monetary aggregates, the

banking agencies propose to revise two

Schedule RC–E items, Memorandum

items 2.b, ‘‘Total time deposits of less

than $100,000,’’ and 2.c, ‘‘Total time

deposits of $100,000 or more,’’ and add

a new Memorandum item 2.c.(1) to this

schedule.

In Schedule RC–E, Memorandum item

2.b would be revised to include

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Federal Register / Vol. 71, No. 210 / Tuesday, October 31, 2006 / Notices

2 The FASB’s three-level fair value hierarchy

gives the highest priority to quoted prices in active

markets for identical assets or liabilities (Level 1)

and the lowest priority to unobservable inputs

(Level 3). Level 1 inputs are quoted prices in active

markets for identical assets or liabilities that the

reporting bank has the ability to access at the

measurement date (e.g., the Call Report date). Level

2 inputs are inputs other than quoted prices

included within Level 1 that are observable for the

asset or liability, either directly or indirectly. Level

3 inputs are unobservable inputs for the asset or

liability

quoted prices in active

markets for identical assets or liabilities that the

reporting bank has the ability to access at the

measurement date (e.g., the Call Report date). Level

2 inputs are inputs other than quoted prices

included within Level 1 that are observable for the

asset or liability, either directly or indirectly. Level

3 inputs are unobservable inputs for the asset or

liability.

3 The banking agencies also are planning to issue

further guidance on the regulatory capital treatment

of this cumulative change, and are considering

possible regulatory changes.

brokered time deposits issued in

denominations of $100,000 or more that

are participated out by the broker in

shares of less than $100,000 as well as

brokered certificates of deposit issued in

$1,000 amounts under a master

certificate of deposit. Memorandum

item 2.c would be revised to exclude

such brokered time deposits. In

addition, as a result of the increase in

the deposit insurance limit for certain

retirement plan deposit accounts from

$100,000 to $250,000 earlier this year, a

new Memorandum item 2.c.(1) would

be added to Schedule RC–E to

separately identify the portion of the

total time deposits of $100,000 or more

reported in Memorandum item 2.c that

represents IRA and Keogh Plan

accounts.

For the same reasons, OTS proposes

to add two new items to Schedule DI of

the TFR. These data items would be (1)

Time Deposits of $100,000 or More

(excluding brokered time deposits

participated out by the broker in shares

of less than $100,000 and brokered

certificates of deposit issued in $1,000

amounts under a master certificate of

deposit) and (2) IRA/Keogh Accounts

included in Time Deposits of $100,000

or More.

C. Reporting of Certain Fair Value

Measurements and the Use of the Fair

Value Option in the Call Report

On September 15, 2006, the Financial

Accounting Standards Board (FASB)

issued Statement No

less than $100,000 and brokered

certificates of deposit issued in $1,000

amounts under a master certificate of

deposit) and (2) IRA/Keogh Accounts

included in Time Deposits of $100,000

or More.

C. Reporting of Certain Fair Value

Measurements and the Use of the Fair

Value Option in the Call Report

On September 15, 2006, the Financial

Accounting Standards Board (FASB)

issued Statement No. 157, Fair Value

Measurements (FAS 157), which is

effective for banks and other entities for

fiscal years beginning after November

15, 2007. Earlier adoption of FAS 157 is

permitted as of the beginning of an

earlier fiscal year, provided the bank has

not yet issued a financial statement or

filed a Call Report for any period of that

fiscal year. Thus, a bank with a calendar

year fiscal year may voluntarily adopt

FAS 157 as of January 1, 2007. The fair

value measurements standard provides

guidance on how to measure fair value

and would require banks and other

entities to disclose the inputs used to

measure fair value based on a three-

level hierarchy for all assets and

liabilities that are remeasured at fair

value on a recurring basis.2

The FASB plans to issue a final

standard, The Fair Value Option for

Financial Assets and Financial

Liabilities, before year-end 2006, which

would be effective for banks and other

entities for fiscal years beginning after

December 15, 2006. The FASB’s Fair

Value Option standard would allow

banks and other entities to report certain

financial assets and liabilities at fair

value with the changes in fair value

included in earnings. The banking

agencies anticipate that relatively few

banks will elect to use the fair value

option for a significant portion of their

financial assets and liabilities.

The banking agencies plan to clarify

the Call Report instructions to explain

where financial assets and liabilities

measured under the fair value option

should be reported in the existing line

items of the Call Report

ings. The banking

agencies anticipate that relatively few

banks will elect to use the fair value

option for a significant portion of their

financial assets and liabilities.

The banking agencies plan to clarify

the Call Report instructions to explain

where financial assets and liabilities

measured under the fair value option

should be reported in the existing line

items of the Call Report. The banking

agencies are also proposing to add a

new Schedule RC–Q to the Call Report

to collect data, by major asset and

liability category, on the amount of

assets and liabilities to which the fair

value option has been applied along

with separate disclosure of the amount

of such assets and liabilities whose fair

values were estimated under level two

and under level three of the FASB’s fair

value hiearchy. The categories are:

• Securities held for purposes other

than trading with changes in fair value

reported in current earnings;

• Loans and leases;

• All other financial assets and

servicing assets;

• Deposit liabilities;

• All other financial liabilities and

servicing liabilities; and

• Loan commitments (not accounted

for as derivatives).

In addition, the banking agencies

propose to collect data on trading assets

and trading liabilities in the new

schedule from those banks that

complete Schedule RC–D, Trading

Assets and Liabilities, i.e., banks that

reported average trading assets of $2

million or more for any quarter of the

preceding calendar year. In the

proposed new schedule, such banks

would report the carrying amount of

trading assets and trading liabilities

whose fair values were estimated under

level two and under level three of the

FASB’s fair value hierarchy. Trading

assets and trading liabilities are required

to be reported at fair value and, thus, are

not covered under the fair value option.

The banking agencies anticipate using

this fair value information to make

appropriate risk assessments for on-site

examinations and off-site surveillance

fair values were estimated under

level two and under level three of the

FASB’s fair value hierarchy. Trading

assets and trading liabilities are required

to be reported at fair value and, thus, are

not covered under the fair value option.

The banking agencies anticipate using

this fair value information to make

appropriate risk assessments for on-site

examinations and off-site surveillance.

The addition of these data items should

result in minimal additional reporting

burden for banks because FAS 157

requires disclosure of amounts under all

three levels of the fair value hierarchy

on a quarterly and annual basis in

financial statements.

The FASB’s fair value measurements

standard requires banks and other

entities to consider the effect of a

change in their own creditworthiness

when determining the fair value of a

financial liability. The banking agencies

are proposing to add one new item to

Schedule RC–R, Regulatory Capital, for

the cumulative change in the fair value

of all financial liabilities accounted for

under the fair value option that is

attributable to changes in the bank’s

own creditworthiness.3 This amount

would be excluded from the bank’s

retained earnings for purposes of

determining Tier 1 capital under the

banking agencies’ regulatory capital

standards.

The banking agencies plan to clarify

the instructions to Schedule RI for the

treatment of interest income on

financial assets and interest expense on

financial liabilities measured under a

fair value option. The instructions

would be modified to instruct banks to

separate the contractual year-to-date

amount of interest earned on financial

assets and interest incurred on financial

liabilities that are reported under a fair

value option from the overall year-to-

date fair value adjustment and report

these contractual amounts in the

appropriate interest income or interest

expense items on Schedule RI.

D

ctions

would be modified to instruct banks to

separate the contractual year-to-date

amount of interest earned on financial

assets and interest incurred on financial

liabilities that are reported under a fair

value option from the overall year-to-

date fair value adjustment and report

these contractual amounts in the

appropriate interest income or interest

expense items on Schedule RI.

D. Reporting of Certain Data in the Call

Report on 1–4 Family Residential

Mortgage Loans With Terms That Allow

for Negative Amortization

Recently, the volume of 1–4 family

residential mortgage loan products

whose terms allow for negative

amortization and the number of

institutions providing borrowers with

such loans has increased significantly.

Loans with this feature are structured in

a manner that may result in an increase

in the loan’s principal balance even

when the borrower’s payments are

technically current. When loans with

negative amortization are not prudently

underwritten and not properly

monitored, they raise safety and

soundness concerns. However, due to

the classification of these loans with all

other 1–4 family residential mortgage

loans in the Call Report, the banking

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agencies have no readily available

means of identifying the industry’s

exposure to such loans. Therefore, the

banking agencies propose to collect

some Call Report items to monitor the

extent of use of negatively amortizing

residential mortgage loans in the

industry.

The banking agencies propose to

collect one memorandum item from all

banks on Schedule RC–C, Part I, Loans

and Leases, for the total amount of

closed-end loans with negative

amortization features secured by 1–4

family residential properties

agencies propose to collect

some Call Report items to monitor the

extent of use of negatively amortizing

residential mortgage loans in the

industry.

The banking agencies propose to

collect one memorandum item from all

banks on Schedule RC–C, Part I, Loans

and Leases, for the total amount of

closed-end loans with negative

amortization features secured by 1–4

family residential properties. In

addition, the banking agencies propose

to collect two memorandum items on

Schedule RC–C and one memorandum

item on Schedule RI, Income Statement,

from banks with a significant volume of

negatively amortizing 1–4 family

residential mortgage loans. The banking

agencies’ determination of the threshold

for significant volume would be based

on the aggregate carrying amount of

negatively amortizing loans being in

excess of a certain dollar amount, e.g.,

$100 million or $250 million, or in

excess of a certain percentage of the

total loans and leases (in domestic

offices) reported on Schedule RC–C,

e.g., five percent or ten percent. For

reporting during 2007, a bank with

negatively amortizing loans would

determine whether it met the size

threshold for reporting the three

additional memorandum items using

data reported in its December 31, 2006,

Call Report. For reporting in 2008 and

subsequent years, the determination

would be based on data from the

previous year-end Call Report. The

banking agencies request comment on

the specific dollar amount and

percentage of loans that should be used

in setting the size threshold for

additional reporting on negatively

amortizing loans.

The two additional Schedule RC–C

memorandum items are (1) the total

maximum remaining amount of negative

amortization contractually permitted on

closed-end loans secured by 1–4 family

residential properties and (2) the total

amount of negative amortization on

closed-end loans secured by 1–4 family

residential properties that is included in

the carrying amount of these loans

tizing loans.

The two additional Schedule RC–C

memorandum items are (1) the total

maximum remaining amount of negative

amortization contractually permitted on

closed-end loans secured by 1–4 family

residential properties and (2) the total

amount of negative amortization on

closed-end loans secured by 1–4 family

residential properties that is included in

the carrying amount of these loans. The

Schedule RI memorandum item is year-

to-date noncash income on closed-end

loans with a negative amortization

feature secured by 1–4 family

residential properties. Banks with

negatively amortizing 1–4 family

residential loans in excess of the

reporting threshold for these items

would report these three items for the

entire calendar year following the end of

any calendar year when this threshold

was exceeded.

For the same reasons, OTS proposed

on July 31, 2006, to add two new items

to Schedule LD of the TFR (71 FR

43286). These items would be the total

amount of (1) 1–4 dwelling adjustable

rate mortgage loans with negative

amortization and (2) total capitalized

negative amortization on 1–4 dwelling

adjustable rate mortgage loans.

E. Call Report Instructional Clarification

for Servicing of Loan Participations

Banks report the outstanding

principal balance of assets serviced for

others in Memorandum item 2 of

Schedule RC–S, ‘‘Servicing,

Securitization, and Asset Sale

Activities.’’ In Memorandum items 2.a

and 2.b, banks disclose the amounts of

1–4 family residential mortgages

serviced with recourse and without

recourse, respectively. Memorandum

item 2.c covers all other loans and

financial assets serviced for others, but

banks are required to disclose the

amount of such servicing only if the

servicing volume is more than

$10 million

n, and Asset Sale

Activities.’’ In Memorandum items 2.a

and 2.b, banks disclose the amounts of

1–4 family residential mortgages

serviced with recourse and without

recourse, respectively. Memorandum

item 2.c covers all other loans and

financial assets serviced for others, but

banks are required to disclose the

amount of such servicing only if the

servicing volume is more than

$10 million. The instructions for

Memorandum item 2 do not explicitly

state whether a bank that has sold a

participation in a 1–4 family residential

mortgage or other loan or financial asset,

which it continues to service, should

include the servicing in Memorandum

item 2.a, 2.b, or 2.c, as appropriate. The

absence of clear instructional guidance

has resulted in questions from bankers

and has produced diversity in practice

among banks.

Subject to the reporting threshold that

applies to Memorandum data item 2.c,

Memorandum data item 2 was intended

to cover the entire volume of loans and

other financial assets for which banks

perform the servicing function,

regardless of whether the servicing

involves whole loans and other

financial assets or only portions thereof,

as is typically the case with loan

participations. The risks and

responsibilities inherent in servicing are

present whether all or part of a loan or

financial asset is serviced for the benefit

of another party. Accordingly, the

banking agencies propose to clarify the

instructions to Memorandum item 2 of

Schedule RC–S to explicitly state that

the amount of loan participations

serviced for others should be included

in this item.

III. Request for Comment

Public comment is requested on all

aspects of this joint notice. Comments

are invited on:

(a) Whether the proposed revisions to

the Call Report and TFR collections of

information are necessary for the proper

performance of the agencies’ functions,

including whether the information has

practical utility;

ions

serviced for others should be included

in this item.

III. Request for Comment

Public comment is requested on all

aspects of this joint notice. Comments

are invited on:

(a) Whether the proposed revisions to

the Call Report and TFR 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’

estimates 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;

(d) Ways to minimize the burden of

information collections on respondents,

including through the use of automated

collection techniques or other forms of

information technology; and

(e) Estimates of capital or start up

costs and costs of operation,

maintenance, and purchase of services

to provide information.

Comments submitted in response to

this joint 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 as well as

other relevant aspects of the information

collection request.

Dated: September 25, 2006.

Stuart E. Feldstein,

Assistant Director, Legislative and Regulatory

Activities Division, Office of the Comptroller

of the Currency.

Board of Governors of the Federal Reserve

System, October 23, 2006.

Jennifer J. Johnson,

Secretary of the Board.

Dated at Washington, DC, this 24th day of

October, 2006.

Federal Deposit Insurance Corporation.

Robert E. Feldman,

Executive Secretary.

Dated: October 20, 2006.

Deborah Dakin,

Senior Deputy Chief Counsel, Regulations and

Legislation Division, Office of Thrift

Supervision.

[FR Doc

f Governors of the Federal Reserve

System, October 23, 2006.

Jennifer J. Johnson,

Secretary of the Board.

Dated at Washington, DC, this 24th day of

October, 2006.

Federal Deposit Insurance Corporation.

Robert E. Feldman,

Executive Secretary.

Dated: October 20, 2006.

Deborah Dakin,

Senior Deputy Chief Counsel, Regulations and

Legislation Division, Office of Thrift

Supervision.

[FR Doc. 06–8982 Filed 10–30–06; 8:45 am]

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

6720–01–P

DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

Additional Designation of Entities

Pursuant to Executive Order 12978

AGENCY: Office of Foreign Assets

Control, Treasury.

ACTION: Notice.

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