# FDIC FIL-95-2006: Proposed Revisions to Regulatory Reports Filed by Banks and Savings Associations

> Federal · Agency guidance · Superseded

URL: https://www.frixlaw.com/law-library/statutes/FDIC_FIL06095

## Section

- **Citation:** FDIC FIL-95-2006
- **Heading:** Proposed Revisions to Regulatory Reports Filed by Banks and Savings Associations
- **Jurisdiction:** Federal
- **Kind:** Agency guidance
- **Status:** Superseded
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** FDIC Financial Institution Letters / Proposed Revisions to Regulatory Reports Filed by Banks and Savings Associations

## Text

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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63849
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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63850
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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63851
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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63852
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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63853
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.
VerDate Aug<31>2005
15:25 Oct 30, 2006
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cprice-sewell on PROD1PC66 with NOTICES

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/FDIC_FIL06095. Check the current official text before relying on it. Not legal advice.