Revisions to the Consolidated Reports of Condition and Income for 2008

12141

Federal Register / Vol. 78, No. 35 / Thursday, February 21, 2013 / Notices

retained for six months after completion

of the charter program.

Not only is it imperative that carriers

and charter operators retain source

documentation, but it is critical that

DOT has access to these records. Given

DOT’s established information needs for

such reports, the underlying support

documentation must be retained for a

reasonable period of time. Absent the

retention requirements, the support for

such reports may or may not exist for

audit/validation purposes and the

relevance and usefulness of the carrier

submissions would be impaired, since

the source of the data could not be

verified on a test basis.

The Confidential Information

Protection and Statistical Efficiency Act

of 2002 (44 U.S.C. 3501 note), requires

a statistical agency to clearly identify

information it collects for non-statistical

purposes. BTS hereby notifies the

respondents and the public that BTS

uses the information it collects under

this OMB approval for non-statistical

purposes including, but not limited to,

publication of both Respondent’s

identity and its data, submission of the

information to agencies outside BTS for

review, analysis, and possible use in

regulatory and other administrative

matters.

Issued in Washington, DC, on February 13,

2013.

William Chadwick, Jr.,

Director, Office of Airline Information.

[FR Doc. 2013–03949 Filed 2–20–13; 8:45 am]

BILLING CODE 4910–HY–P

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the

Currency

FEDERAL RESERVE SYSTEM

FEDERAL DEPOSIT INSURANCE

CORPORATION

Proposed Agency Information

Collection Activities; Comment

Request

AGENCIES: Office of the Comptroller of

the Currency (OCC), Treasury; Board of

Governors of the Federal Reserve

System (Board); and Federal Deposit

Insurance Corporation (FDIC).

ACTION: Joint notice and request for

comment.

SUMMARY: In accordance with the

requirements of the Paperwork

Reduction Act (PRA) of 1995 (44 U.S.C

roposed Agency Information

Collection Activities; Comment

Request

AGENCIES: Office of the Comptroller of

the Currency (OCC), Treasury; Board of

Governors of the Federal Reserve

System (Board); and Federal Deposit

Insurance Corporation (FDIC).

ACTION: Joint notice and request for

comment.

SUMMARY: In accordance with the

requirements of the Paperwork

Reduction Act (PRA) of 1995 (44 U.S.C.

chapter 35), the OCC, the Board, and the

FDIC (the ‘‘agencies’’) may not conduct

or sponsor, and the respondent is not

required to respond to, an information

collection unless it displays a currently

valid Office of Management and Budget

(OMB) control number. The Federal

Financial Institutions Examination

Council (FFIEC), of which the agencies

are members, has approved the

agencies’ publication for public

comment of a proposal to extend, with

revision, the Consolidated Reports of

Condition and Income (Call Report),

which are currently approved

collections of information. The addition

of proposed new data items and the

proposed revisions of some existing data

items would take effect as of the June

30, 2013, report date, except for one

proposed new data item that would be

added to the Call Report effective

December 31, 2013. 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 April 22, 2013.

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: You should direct all written

comments to: Communications

Division, Office of the Comptroller of

the Currency, Mailstop 6W–11,

Attention: 1557–0081, Washington, DC

20219

April 22, 2013.

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: You should direct all written

comments to: Communications

Division, Office of the Comptroller of

the Currency, Mailstop 6W–11,

Attention: 1557–0081, Washington, DC

20219. In addition, comments may be

sent by electronic mail to

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

personally inspect and photocopy

comments at the OCC, 400 7th Street

SW., Washington, DC 20219. For

security reasons, the OCC requires that

visitors make an appointment to inspect

comments. You may do so by calling

(202) 649–6700. Upon arrival, visitors

will be required to present valid

government-issued photo identification

and to submit to security screening in

order to inspect and photocopy

comments.

All comments received, including

attachments and other supporting

materials, are part of the public record

and subject to public disclosure. Do not

enclose any information in your

comment or supporting materials that

you consider confidential or

inappropriate for public disclosure.

Board: You may submit comments,

which should refer to ‘‘Consolidated

Reports of Condition and Income (FFIEC

031 and 041),’’ by any of the following

methods:

• Agency Web Site: http://

www.federalreserve.gov. Follow the

instructions for submitting comments at:

http://www.federalreserve.gov/

generalinfo/foia/ProposedRegs.cfm.

• Federal eRulemaking Portal: http://

www.regulations.gov. Follow the

instructions for submitting comments.

• Email:

regs.comments@federalreserve.gov.

Include reporting form number in the

subject line of the message.

• FAX: (202) 452–3819 or (202) 452–

3102.

• Mail: Robert deV. Frierson,

Secretary, Board of Governors of the

Federal Reserve System, 20th Street and

Constitution Avenue NW., Washington,

DC 20551

rtal: http://

www.regulations.gov. Follow the

instructions for submitting comments.

• Email:

regs.comments@federalreserve.gov.

Include reporting form number in the

subject line of the message.

• FAX: (202) 452–3819 or (202) 452–

3102.

• Mail: Robert deV. Frierson,

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

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 9:00 a.m. and 5:00 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:

• Agency Web Site: http://

www.fdic.gov/regulations/laws/federal/

propose.html. Follow the instructions

for submitting comments on the FDIC

Web site.

• Federal eRulemaking Portal: http://

www.regulations.gov. Follow the

instructions for submitting comments.

• Email: comments@FDIC.gov.

Include ‘‘Consolidated Reports of

Condition and Income, 3064–0052’’ in

the subject line of the message.

• Mail: Gary A. Kuiper, Counsel,

Attn: Comments, Room NYA–5046,

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/propose.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/propose.html including any

personal information provided.

Comments may be inspected at the FDIC

Public Information Center, Room E–

1002, 3501 Fairfax Drive, Arlington, VA

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

business days.

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; by fax to (202)

395–6974; or by email to

oira_submission@omb.eop.gov.

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).

OCC: Mary Gottlieb and Johnny

Vilela, OCC Clearance Officers, (202)

649–6301 and (202) 649–7265,

Legislative and Regulatory Activities

Division, Office of the Comptroller of

the Currency, Washington, DC 20219.

Board: Cynthia Ayouch, 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: Gary A

y Activities

Division, Office of the Comptroller of

the Currency, Washington, DC 20219.

Board: Cynthia Ayouch, 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: Gary A. Kuiper, Counsel, (202)

898–3877, Legal Division, Federal

Deposit Insurance Corporation, 550 17th

Street NW., Washington, DC 20429.

SUPPLEMENTARY INFORMATION: The

agencies are proposing to revise and

extend for three years the Call Report,

which is currently an approved

collection of information for each

agency.

Report Title: Consolidated Reports of

Condition and Income (Call Report).

Form Number: Call Report: FFIEC 031

(for banks and savings associations with

domestic and foreign offices) and FFIEC

041 (for banks and savings associations

with domestic offices only).

Frequency of Response: Quarterly.

Affected Public: Business or other for-

profit.

OCC

OMB Number: 1557–0081.

Estimated Number of Respondents:

1,902 national banks and federal savings

associations.

Estimated Time per Response: 54.87

burden hours per quarter to file.

Estimated Total Annual Burden:

417,416 burden hours to file.

Board

OMB Number: 7100–0036.

Estimated Number of Respondents:

843 state member banks.

Estimated Time per Response: 56.76

burden hours per quarter to file.

Estimated Total Annual Burden:

191,395 burden hours to file.

FDIC

OMB Number: 3064–0052.

Estimated Number of Respondents:

4,464 insured state nonmember banks

and state savings associations.

Estimated Time per Response: 41.53

burden hours per quarter to file.

Estimated Total Annual Burden:

741,560 burden hours to file

Estimated Time per Response: 56.76

burden hours per quarter to file.

Estimated Total Annual Burden:

191,395 burden hours to file.

FDIC

OMB Number: 3064–0052.

Estimated Number of Respondents:

4,464 insured state nonmember banks

and state savings associations.

Estimated Time per Response: 41.53

burden hours per quarter to file.

Estimated Total Annual Burden:

741,560 burden hours to file.

The estimated time per response for

the quarterly filings of 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 filing of

the Call Report as it is proposed to be

revised is estimated to range from 17 to

730 hours per quarter, depending on an

individual institution’s circumstances.

Type of Review: Revision and

extension of currently approved

collections.

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 federal

and state savings associations). At

present, except for selected data items,

these information collections are not

given confidential treatment.

Abstract

Institutions submit Call Report 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 data

provide the most current statistical data

available for evaluating institutions’

corporate applications, identifying areas

of focus for on-site and off-site

examinations, and monetary and other

public policy purposes

encies 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 data

provide the most current statistical data

available for evaluating institutions’

corporate applications, identifying areas

of focus for on-site and off-site

examinations, and monetary and other

public policy purposes. The agencies

use Call Report 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 data also are used to

calculate institutions’ deposit insurance

and Financing Corporation assessments

and national banks’ and federal savings

associations’ semiannual assessment

fees.

Current Actions

I. Overview

The agencies are proposing to

implement a number of revisions to the

Call Report requirements in 2013. These

changes, which are discussed in detail

in Sections II.A through II.F of this

notice, are intended to provide data

needed for reasons of safety and

soundness or other public purposes by

the members of the FFIEC that use Call

Report data to carry out their missions

and responsibilities, including the

agencies, the Bureau of Consumer

Financial Protection (Bureau), and state

supervisors of banks and savings

associations. Several proposed new data

items would be added to the Call Report

as of the June 30, 2013, report date, and

certain existing data items would be

revised as of the same date. One

proposed new data item, which would

be collected annually, would be added

to the Call Report effective December

31, 2013

er

Financial Protection (Bureau), and state

supervisors of banks and savings

associations. Several proposed new data

items would be added to the Call Report

as of the June 30, 2013, report date, and

certain existing data items would be

revised as of the same date. One

proposed new data item, which would

be collected annually, would be added

to the Call Report effective December

31, 2013.

The proposed changes include:

• A screening question that would be

added to Schedule RC–E, Deposit

Liabilities, asking whether the

reporting institution offers separate

deposit products (other than time

deposits) to consumer customers

compared to business customers,

and

Æ For those institutions with $1

billion or more in total assets that

offer separate products, new data

items on the quarter-end amount of

certain types of consumer

transaction accounts and

nontransaction savings deposit

accounts that would be reported in

Schedule RC–E, and

Æ For all institutions that offer

separate products, a new

breakdown on the year-to-date

amounts of certain types of service

charges on consumer deposit

accounts reported as noninterest

income in Schedule RI, Income

Statement;

• Information on international

remittance transfers in Schedule

RC–M, Memoranda, including:

Æ Questions about types of

international remittance transfers

offered, the settlement systems used

to process the transfers, and

whether the number of remittance

transfers provided exceeds or is

expected to exceed the Bureau’s

safe harbor threshold (more than

100 transfers); and

Æ New data items to be reported by

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settlement systems used

to process the transfers, and

whether the number of remittance

transfers provided exceeds or is

expected to exceed the Bureau’s

safe harbor threshold (more than

100 transfers); and

Æ New data items to be reported by

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Federal Register / Vol. 78, No. 35 / Thursday, February 21, 2013 / Notices

1 In general, the determination as to whether an

institution has $1 billion or more in total assets

would be measured as of June 30 of the previous

calendar year, i.e., as of June 30, 2012, for the

proposed new Schedule RC–E reporting

requirements.

2 Percentage is based on analysis of third quarter

2012 Call Report data.

3 See FDIC, 2011 FDIC National Survey of

Unbanked and Underbanked Households 4

(September 2012); Brian K. Bucks, Arthur B.

Kennickell, Traci L. Mach, and Kevin B. Moore,

Changes in U.S. Family Finances from 2004 to

2007: Evidence from the Survey of Consumer

Finances, 95 Federal Reserve Bulletin A1, A20

(February 2009), available at: http://

www.federalreserve.gov/pubs/bulletin/2009/pdf/

scf09.pdf; see also Kevin Foster, Erik Meijer, Scott

Schuh, and Michael Zabek, The 2009 Survey of

Consumer Payment Choice, Federal Reserve Bank of

Boston: Public Policy Discussion Papers, No. 11–1,

at 47 (2011), available at: http://www.bos.frb.org/

economic/ppdp/2011/ppdp1101.pdf.

4 Agency Information Collection Activities, 76 FR

5253, 5261 (Jan. 28, 2011)

erve.gov/pubs/bulletin/2009/pdf/

scf09.pdf; see also Kevin Foster, Erik Meijer, Scott

Schuh, and Michael Zabek, The 2009 Survey of

Consumer Payment Choice, Federal Reserve Bank of

Boston: Public Policy Discussion Papers, No. 11–1,

at 47 (2011), available at: http://www.bos.frb.org/

economic/ppdp/2011/ppdp1101.pdf.

4 Agency Information Collection Activities, 76 FR

5253, 5261 (Jan. 28, 2011).

institutions not qualifying for the

safe harbor on the number and

dollar amount of international

remittance transfers;

• Reporting in Schedule RC–M of all

trade names that an institution uses

to identify physical branches and

Internet Web sites that differ from

the institution’s legal title;

• Additional data to be reported in

Schedule RC–O, Other Data for

Deposit Insurance and FICO

Assessments, by large institutions

and highly complex institutions

(generally, institutions with $10

billion or more in total assets) to

support the FDIC’s large bank

pricing method for insurance

assessments, including a new table

of consumer loans by loan type and

probability of default band, new

data items providing information on

loans secured by real estate in

foreign offices, revisions of certain

existing data items on real estate

loan commitments and U.S.

government-guaranteed real estate

loans to include those in foreign

offices, and revisions to the

information collected on

government-guaranteed assets to

include the portion of non-agency

residential mortgage-backed

securities and loans covered under

FDIC loss-sharing agreements

state in

foreign offices, revisions of certain

existing data items on real estate

loan commitments and U.S.

government-guaranteed real estate

loans to include those in foreign

offices, and revisions to the

information collected on

government-guaranteed assets to

include the portion of non-agency

residential mortgage-backed

securities and loans covered under

FDIC loss-sharing agreements.

• A new data item in Schedule RC–M

applicable only to institutions

whose parent depository institution

holding company is not a bank or

savings and loan holding company

in which the institution would

report the total consolidated

liabilities of its parent depository

institution holding company

annually as of December 31 to

support the Board’s administration

of the financial sector concentration

limit established by Section 622 of

the Dodd-Frank Wall Street Reform

and Consumer Protection Act,

Public Law 111–203 (Dodd-Frank

Act); and

• A revision of the scope of the existing

item in Schedule RI–A, Changes in

Bank Equity Capital, for ‘‘Other

transactions with parent holding

company’’ to include such

transactions with all stockholders.

For the June 30, 2013, and December

31, 2013, report dates, as applicable,

institutions may provide reasonable

estimates for any new or revised Call

Report data item initially required to be

reported as of that date for which the

requested information is not readily

available. The specific wording of the

captions for the new or revised Call

Report data items discussed in this

proposal and the numbering of these

data items should be regarded as

preliminary.

II. Discussion of Proposed Call Report

Revisions

A. Consumer Deposit Account Balances

and Service Charges

The agencies propose to modify

Schedule RC–E, Deposit Liabilities, to

collect and distinguish certain deposit

data by type of depositor for institutions

with $1 billion or more in total assets

in this

proposal and the numbering of these

data items should be regarded as

preliminary.

II. Discussion of Proposed Call Report

Revisions

A. Consumer Deposit Account Balances

and Service Charges

The agencies propose to modify

Schedule RC–E, Deposit Liabilities, to

collect and distinguish certain deposit

data by type of depositor for institutions

with $1 billion or more in total assets.

The agencies also propose to modify

Schedule RI, Income Statement, to

collect data on certain service charges

on consumer deposit accounts (in

domestic offices) from all institutions

that offer such accounts.

To identify the institutions that would

be subject to these proposed new

reporting requirements, the proposed

modifications would include a

screening question in Schedule RC–E

concerning whether an institution offers

consumer deposit accounts, i.e.,

accounts intended for use solely by

individuals for personal, household, or

family purposes. The question would be

added to Schedule RC–E as of the June

30, 2013, report date. If the institution

has $1 billion or more in total assets and

responds affirmatively to the screening

question, the institution would be

subject to the proposed Schedule RC–E

consumer deposit account reporting

requirements discussed below in

Section II.A.1.; otherwise, it would not

be subject to these new Schedule RC–E

reporting requirements.1 Regardless of

how an institution with less than $1

billion in total assets responds to the

screening question, it would be exempt

from the proposed Schedule RC–E

reporting requirements. The agencies

plan to review the aggregate responses

to the screening question after one full

year of implementation to determine

whether to expand the new Schedule

RC–E reporting requirements to some or

all smaller institutions

stitution with less than $1

billion in total assets responds to the

screening question, it would be exempt

from the proposed Schedule RC–E

reporting requirements. The agencies

plan to review the aggregate responses

to the screening question after one full

year of implementation to determine

whether to expand the new Schedule

RC–E reporting requirements to some or

all smaller institutions.

In addition, each institution,

regardless of size, that responds

affirmatively to the screening question

to be added to Schedule RC–E would be

subject to the proposed Schedule RI

reporting requirements discussed below

in Section II.A.2 effective June 30, 2013.

1. Consumer Deposit Account Balances

Schedule RC–E currently requires

institutions to report separately

transaction account and nontransaction

account balances held in domestic

offices according to broad categories of

depositors. Over 90 percent of the

reported balances are attributed to the

category of depositors that includes

‘‘individuals, partnerships, and

corporations.’’ 2 Deposits that are held

by individual consumers are not

distinguished from deposits held by

partnerships or corporations.

Surveys indicate that over 90 percent

of U.S. households maintain at least one

deposit account.3 However, there is

currently no reliable source from which

to calculate the amount of funds held in

consumer accounts.

The agencies propose that institutions

that respond affirmatively to the

screening question and have $1 billion

or more in total assets distinguish

consumer deposits from those held by

partnerships and corporations. More

detailed Call Report data would

significantly enhance the ability of the

agencies and the Bureau to monitor

consumers’ behavior—specifically,

consumer use of deposit accounts as

transactional, savings, and investment

vehicles. Understanding deposit

accounts by depositor type would also

permit improved assessments of

institutional liquidity risk

eld by

partnerships and corporations. More

detailed Call Report data would

significantly enhance the ability of the

agencies and the Bureau to monitor

consumers’ behavior—specifically,

consumer use of deposit accounts as

transactional, savings, and investment

vehicles. Understanding deposit

accounts by depositor type would also

permit improved assessments of

institutional liquidity risk. Thus, more

detailed data could significantly

enhance the ability of the agencies to

assess institutional funding stability.

In 2010, the agencies proposed the

disaggregation of consumer- or

individually-owned deposits from those

of businesses and organizations, i.e.,

partnerships and corporations. That

proposal, however, would have required

banks to distinguish consumer deposit

balances by the account owner taxpayer

identification number (TIN). The TIN

methodology was ultimately deemed to

be too burdensome, and the agencies

withdrew the proposal from

consideration.4

This current proposal is based on an

alternative approach that the agencies

believe to be less burdensome for

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5 The FFIEC and the agencies believe that most

depository institutions with distinct product

offerings have instances in which proprietorships

and microbusinesses utilize consumer deposit

products; however, the amount of these balances is

believed to be only a fraction of total consumer

product balances and thus would not diminish the

value of the substantial insight gained into the

structure of institutions’ deposits.

depository institutions

ory institutions with distinct product

offerings have instances in which proprietorships

and microbusinesses utilize consumer deposit

products; however, the amount of these balances is

believed to be only a fraction of total consumer

product balances and thus would not diminish the

value of the substantial insight gained into the

structure of institutions’ deposits.

depository institutions. Specifically, the

agencies propose to require institutions

to report in Schedule RC–E balances

held in domestic transaction account

products and nontransaction savings

products that the institutions

themselves intended for consumer use

(rather than to report balances held in

accounts actually used exclusively by

individuals). Depository institutions

recognize that consumers exhibit

different needs and behaviors than do

organizations and businesses.

Consequently, the FFIEC and the

agencies believe that most institutions

maintain transaction and nontransaction

savings deposit products specifically

intended for consumer use, typically

assigning different funding credit rates

and tenure assumptions to consumer

deposits than to business and other

types of deposits. The FFIEC and the

agencies believe this distinction will

enable institutions to utilize the same

totals maintained on their deposit

systems of record and in their internal

general ledger accounts to provide the

proposed new consumer deposit

account balance data.5 The agencies

propose to introduce the modifications

to Schedule RC–E for the reporting of

consumer deposit account data in the

Call Report for the second quarter of

2013.

At the same time, the FFIEC and the

agencies anticipate that certain

institutions cater almost exclusively to

non-consumer depositors and, as such,

may not maintain segment-specific

products

sit

account balance data.5 The agencies

propose to introduce the modifications

to Schedule RC–E for the reporting of

consumer deposit account data in the

Call Report for the second quarter of

2013.

At the same time, the FFIEC and the

agencies anticipate that certain

institutions cater almost exclusively to

non-consumer depositors and, as such,

may not maintain segment-specific

products. The proposal aims to identify

these institutions by requiring all

institutions to respond to the screening

question (which would be designated as

Memorandum item 5 of Schedule RC–

E): ‘‘Does your institution offer

consumer deposit accounts, i.e.,

transaction account or nontransaction

savings account deposit products

intended for individuals for personal,

household, or family use?’’ Institutions

with total assets of $1 billion or more

and answering ‘‘yes’’ to this screening

question would be subject to the

proposed new Schedule RC–E consumer

deposit account reporting requirements.

Institutions with total assets less than $1

billion or answering ‘‘no’’ to the

question would be exempt from these

new reporting requirements and would

continue to report deposit totals in

Schedule RC–E as they currently do.

The $1 billion threshold is proposed

to ensure no undue burden on smaller

institutions. However, the agencies

intend to review small institution

responses to the screening question after

one year of implementation to

determine whether to maintain or adjust

the asset size exemption.

The FFIEC and the agencies

understand that most institutions define

time deposit products by tenure and rate

and do not typically maintain time

deposit accounts exclusively targeted to

consumers. Thus, this proposal pertains

only to non-time deposits in domestic

offices

reening question after

one year of implementation to

determine whether to maintain or adjust

the asset size exemption.

The FFIEC and the agencies

understand that most institutions define

time deposit products by tenure and rate

and do not typically maintain time

deposit accounts exclusively targeted to

consumers. Thus, this proposal pertains

only to non-time deposits in domestic

offices.

More specifically, the agencies

propose to revise Schedule RC–E, (part

I), by building on new Memorandum

item 5, the screening question described

above, and adding new Memorandum

item 6, ‘‘Components of total transaction

account deposits of individuals,

partnerships, and corporations,’’ which

would be completed by institutions

with total assets of $1 billion or more

that responded ‘‘yes’’ to the screening

question posed in new Memorandum

item 5. Proposed new Memorandum

item 6 would include the following

three-way breakdown of these

transaction accounts, the sum of which

must equal Schedule RC–E, item 1,

column A.

• In Memorandum item 6.a, ‘‘Deposits

in noninterest-bearing transaction

accounts intended for individuals

for personal, household, or family

use,’’ institutions would report the

amount of deposits reported in

Schedule RC–E, (part I), item 1,

column A, held in noninterest-

bearing transaction accounts (in

domestic offices) intended for

individuals for personal,

household, or family use. The item

would exclude certified and official

checks as well as pooled funds and

commercial products with sub-

account structures, such as escrow

accounts, that are held for

individuals but not eligible for

consumer transacting, saving, or

investing

, held in noninterest-

bearing transaction accounts (in

domestic offices) intended for

individuals for personal,

household, or family use. The item

would exclude certified and official

checks as well as pooled funds and

commercial products with sub-

account structures, such as escrow

accounts, that are held for

individuals but not eligible for

consumer transacting, saving, or

investing.

• In Memorandum item 6.b, ‘‘Deposits

in interest-bearing transaction

accounts intended for individuals

for personal, household, or family

use,’’ institutions would report the

amount of deposits reported in

Schedule RC–E, (part I), item 1,

column A, held in interest-bearing

transaction accounts (in domestic

offices) intended for individuals for

personal, household, or family use.

The item would exclude pooled

funds and commercial products

with sub-account structures, such

as escrow accounts, that are held for

individuals but not eligible for

consumer transacting, saving, or

investing.

• In Memorandum item 6.c, ‘‘Deposits

in all other transaction accounts of

individuals, partnerships, and

corporations,’’ institutions would

report the amount of all other

transaction account deposits

included in Schedule RC–E, (part I),

item 1, column A, that were not

reported in Memorandum items 6.a

and 6.b. If an institution offers one

or more transaction account deposit

products intended for individuals

for personal, household, or family

use, but has other transaction

account deposit products intended

for a broad range of depositors

(which may include individuals

who would use the product for

personal, household, or family use),

the institution would report the

entire amount of these latter

transaction account deposit

products in Memorandum item 6.c

t

products intended for individuals

for personal, household, or family

use, but has other transaction

account deposit products intended

for a broad range of depositors

(which may include individuals

who would use the product for

personal, household, or family use),

the institution would report the

entire amount of these latter

transaction account deposit

products in Memorandum item 6.c.

For example, if an institution has a

single negotiable order of

withdrawal (NOW) account deposit

product that it offers to all

depositors eligible to hold such

accounts, including individuals,

sole proprietorships, certain

nonprofit organizations, and certain

government units, the institution

would report the entire amount of

its NOW accounts in Memorandum

item 6.c. The institution would not

need to identify the NOW accounts

held by individuals for personal,

household, or family use and report

the amount of these accounts in

Memorandum item 6.a.

The agencies also propose to revise

Schedule RC–E, (part I), by adding new

Memorandum item 7, ‘‘Components of

total nontransaction account deposits of

individuals, partnerships, and

corporations,’’ which would be

completed by institutions with total

assets of $1 billion or more that

responded ‘‘yes’’ to the screening

question posed in new Memorandum

item 5. Proposed new Memorandum

item 7 would include breakdowns of the

nontransaction savings deposit accounts

of individuals, partnerships, and

corporations (in domestic offices)

included in Schedule RC–E, item 1,

column C, described below.

Nontransaction savings deposit

accounts consist of money market

deposit accounts (MMDAs) and other

savings deposits. Specifically, proposed

Memorandum item 7.a would include

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es)

included in Schedule RC–E, item 1,

column C, described below.

Nontransaction savings deposit

accounts consist of money market

deposit accounts (MMDAs) and other

savings deposits. Specifically, proposed

Memorandum item 7.a would include

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Federal Register / Vol. 78, No. 35 / Thursday, February 21, 2013 / Notices

6 The breakdown of service charges on deposit

accounts would be reported by all institutions that

answered the screening question in the affirmative,

not just institutions with $1 billion or more in total

assets.

7 Figure is based on analysis of Call Report data.

8 The ratio for all banks was 13.8 percent in 2011

per analysis of Call Report data.

9 Bankrate.com, ‘‘Checking Fees Rise to Record

Highs in 2012,’’ Claes Bell, available at: http://

Continued

breakouts of ‘‘Money market deposit

accounts (MMDAs) of individuals,

partnerships, and corporations.’’

Proposed Memorandum item 7.b would

include breakouts of ‘‘Other savings

deposit accounts of individuals,

partnerships, and corporations.’’

Proposed Memorandum item 7 would

exclude all time deposits of individuals,

partnerships, and corporations reported

in Schedule RC–E, item 1, column C. As

with proposed new Memorandum item

6 on the components of total transaction

accounts of individuals, partnerships,

and corporations, if an institution offers

one or more nontransaction savings

account deposit products intended for

individuals for personal, household, or

family use, but has other nontransaction

savings account deposit products

intended for a broad range of depositors

(which may include individuals who

would use the product for personal,

household, or family use), the

institution would report the entire

amount of these latter nontransaction

savings account deposit products in

Memorandum item 7.a.(2) or 7.b.(2), as

appropriate

usehold, or

family use, but has other nontransaction

savings account deposit products

intended for a broad range of depositors

(which may include individuals who

would use the product for personal,

household, or family use), the

institution would report the entire

amount of these latter nontransaction

savings account deposit products in

Memorandum item 7.a.(2) or 7.b.(2), as

appropriate.

• In Memorandum item 7.a.(1),

‘‘Deposits in MMDAs intended for

individuals for personal,

household, or family use,’’

institutions would report the

amount of deposits reported in

Schedule RC–E, (part I), item 1,

column C, held in MMDAs

intended for individuals for

personal, household, or family use.

The item would exclude MMDAs in

the form of pooled funds and

commercial products with sub-

account structures, such as escrow

accounts, that are held for

individuals but not eligible for

consumer transacting, saving, or

investing.

• In Memorandum item 7.a.(2),

‘‘Deposits in all other MMDAs of

individuals, partnerships, and

corporations,’’ institutions would

report the amount of all other

MMDA deposits included in

Schedule RC–E, (part I), item 1,

column C, that were not reported in

Memorandum item 7.a.(1).

• In Memorandum item 7.b.(1),

‘‘Deposits in other savings deposit

accounts intended for individuals

for personal, household, or family

use,’’ institutions would report the

amount of deposits reported in

Schedule RC–E, (part I), item 1,

column C, held in other savings

deposit accounts intended for

individuals for personal,

household, or family use. The item

would exclude other savings

deposit accounts in the form of

pooled funds and commercial

products with sub-account

structures, such as escrow accounts,

that are held for individuals but not

eligible for consumer transacting,

saving, or investing

E, (part I), item 1,

column C, held in other savings

deposit accounts intended for

individuals for personal,

household, or family use. The item

would exclude other savings

deposit accounts in the form of

pooled funds and commercial

products with sub-account

structures, such as escrow accounts,

that are held for individuals but not

eligible for consumer transacting,

saving, or investing.

• In Memorandum item 7.b.(2),

‘‘Deposits in all other savings

deposit accounts of individuals,

partnerships, and corporations,’’

institutions would report the

amount of all other savings deposits

included in Schedule RC–E, (part I),

item 1, column C, that were not

reported in Memorandum item

7.b.(1).

The sum of Memorandum items

7.a.(1), 7.a.(2), 7.b.(1), and 7.b.(2) plus

the amount of all time deposits of

individuals, partnerships, and

corporations must equal Schedule RC–

E, item 1, column C.

The agencies seek specific comment

on the clarity of the screening question

that would be posed to all institutions

in new Memorandum item 5 of

Schedule RC–E, (part I,) and of the

descriptions of the components of total

transaction and total nontransaction

account deposits of individuals,

partnerships, and corporations that

would be reported in new Memorandum

items 6 and 7 of Schedule RC–E, (part

I,) by institutions with total assets of $1

billion or more that responded ‘‘yes’’ to

the screening question posed in new

Memorandum item 5.

2

RC–E, (part I,) and of the

descriptions of the components of total

transaction and total nontransaction

account deposits of individuals,

partnerships, and corporations that

would be reported in new Memorandum

items 6 and 7 of Schedule RC–E, (part

I,) by institutions with total assets of $1

billion or more that responded ‘‘yes’’ to

the screening question posed in new

Memorandum item 5.

2. Consumer Deposit Service Charges

The agencies propose to modify Call

Report Schedule RI, Income Statement,

by adding new Memorandum item 15 in

which institutions that responded ‘‘yes’’

to the new screening question posed in

Memorandum item 5 of Schedule RC–E,

(part I,) would report a breakdown of

the amount reported in Schedule RI,

item 5.b, ‘‘Service charges on deposit

accounts (in domestic offices).’’ 6 The

proposed breakdown would include

separate items for three categories of

consumer deposit fees: (1) Overdraft-

related service charges, (2) monthly

maintenance charges, and (3) automated

teller machine (ATM) fees. A fourth

item would include all other service

charges and fees on deposit accounts (in

domestic offices) not reported in one of

the first three categories. Although these

new items would be reported on a

calendar year-to-date basis, the agencies

propose to introduce new Memorandum

item 15 of Schedule RI in the Call

Report for the second quarter of 2013.

The aggregate amount of deposit

account fees reported today in Schedule

RI, item 5.b, represents a substantial

portion of industry operating income.

Service charges on deposits totaled

more than $33 billion in 2011 7 and can

include dozens of types of fees that

institutions levy against consumers,

small businesses, large corporations,

and other types of deposit customers

quarter of 2013.

The aggregate amount of deposit

account fees reported today in Schedule

RI, item 5.b, represents a substantial

portion of industry operating income.

Service charges on deposits totaled

more than $33 billion in 2011 7 and can

include dozens of types of fees that

institutions levy against consumers,

small businesses, large corporations,

and other types of deposit customers.

Dependence upon service charges on

deposit accounts is higher for smaller

institutions and may account for 30

percent or more of such an institution’s

noninterest revenues.8

However, there is currently no

comprehensive data source from which

supervisors and policymakers can

estimate or evaluate the composition of

these fees and how they impact

consumers and a depository

institution’s earnings stability. The

agencies thus propose that institutions

that offer consumer deposit accounts

itemize three key categories of service

charges on such deposit accounts:

Overdraft-related service charges on

consumer accounts, monthly

maintenance charges on consumer

accounts, and consumer ATM fees.

More detailed data will support the

agencies and the Bureau in monitoring

the types of transactional costs borne by

consumers. Data specific to overdraft-

related fees is particularly pertinent for

supervisors and policymakers in part

because of recent trends in such fees

and because of concerns about the harm

such fees may impose on some

depositors. The FFIEC and the agencies

believe that, since the early 1990s,

overdraft-related fees have grown in

absolute magnitude and may also have

grown as a share of deposit account

service charges

-

related fees is particularly pertinent for

supervisors and policymakers in part

because of recent trends in such fees

and because of concerns about the harm

such fees may impose on some

depositors. The FFIEC and the agencies

believe that, since the early 1990s,

overdraft-related fees have grown in

absolute magnitude and may also have

grown as a share of deposit account

service charges. Several factors

contributed to this trend, including the

introduction of bank-discretionary

overdraft coverage programs,

consumers’ acclimation to debit cards

and other emerging forms of payment,

and the industry’s embracing of ‘‘free’’

checking products that sacrificed

monthly maintenance fees and

increased reliance on penalty and other

transactional fees to generate service

charge revenues. Bankrate.com’s 2012

Checking Account Survey suggests that

the average fee charged for a single

overdraft transaction has increased

steadily and dramatically over the last

15 years.9

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www.bankrate.com/finance/checking/checking-

fees-record-highs-in-2012.aspx#slide=5.

10 OCC, Guidance on Deposit-Related Consumer

Credit Products, 76 FR 33409 (June 8, 2011)

(proposed guidance); FDIC, Overdraft Payment

Programs and Consumer Protection Final Overdraft

Payment Supervisory Guidance, FIL–81–2010 (Nov.

24, 2010), available at: www.fdic.gov/news/news/

financial/2010/fil10081.html; 74 FR 59033 (Nov. 17,

2009) (amendment of Regulation E); see also 74 FR

5584 (July 29, 2009) (amendment of Regulation DD);

FDIC Study of Bank Overdraft Programs (Nov.

2008), available at: http://www.fdic.gov/bank/

anlytical/overdraft/.

11 12 CFR 1005.17.

12 Figures based on analysis of Call Report data

for depository institutions with $10 billion or more

in total assets

010/fil10081.html; 74 FR 59033 (Nov. 17,

2009) (amendment of Regulation E); see also 74 FR

5584 (July 29, 2009) (amendment of Regulation DD);

FDIC Study of Bank Overdraft Programs (Nov.

2008), available at: http://www.fdic.gov/bank/

anlytical/overdraft/.

11 12 CFR 1005.17.

12 Figures based on analysis of Call Report data

for depository institutions with $10 billion or more

in total assets.

13 Bankrate.com’s 2012 Checking Account Survey

found 39 percent of institutions offering consumer

checking accounts with no minimum balance

requirement or monthly maintenance fee in 2012,

down from 76 percent in 2009. Bankrate.com,

‘‘Checking Fees Rise to Record Highs in 2012,’’

Claes Bell, available at: http://www.bankrate.com/

finance/checking/checking-fees-record-highs-in-

2012.aspx#slide=2.

14 The FDIC’s 2008 Study of Bank Overdraft

Programs provided insight into these fees, but the

data underlying that study is now six years old and

only a small subset of the industry participated in

the study.

More recently, however, overdraft-

related fee revenue as a percentage of

deposit account service charges may

have begun to decline. Regulation and

guidance proposed or issued by various

agencies in recent years and a 2008

study issued by the FDIC raised

concerns about potential consumer

harm resulting from bank-discretionary

overdraft coverage programs.10

Additionally, starting in 2010,

depository institutions have been

prohibited from imposing a charge for

paying an ATM or one-time debit card

transaction unless they have obtained

the consumer’s affirmative consent to

the overdraft service, among other

requirements.11 Consumer advocacy

groups have further raised public

awareness of industry practices, as have

class action lawsuits and settlements

related to such practices. The FFIEC and

the agencies believe that, in response,

many depository institutions have

revised fee schedules, account

agreements, and internal policies and

procedures pertaining to overdraft

transactions

mong other

requirements.11 Consumer advocacy

groups have further raised public

awareness of industry practices, as have

class action lawsuits and settlements

related to such practices. The FFIEC and

the agencies believe that, in response,

many depository institutions have

revised fee schedules, account

agreements, and internal policies and

procedures pertaining to overdraft

transactions. Some industry

representatives contend that these and

other economic factors may have helped

account for a reduction in service

charges on deposit accounts by 22

percent from levels prevailing just two

years ago.12

An institution reliant on declining

deposit fee revenue that makes no other

changes to its business model could be

challenged to maintain a viable retail

banking business. To replace lost

overdraft income, as well as interchange

revenue impacted by the Dodd-Frank

Act’s amendment to Section 920 of the

Electronic Fund Transfer Act, many

institutions have altered their pricing of

checking products to require consumers

to maintain higher average balances or

pay monthly account maintenance

fees.13 Additionally, institutions that

have deployed large ATM networks may

continue to look to recoup their

investment and maintenance costs

through surcharges and foreign ATM

transaction fees. New sources of deposit

service charges could emerge to

contribute to revenue stability but raise

further questions about the amount of

fees consumers must pay to utilize the

banking system

ance

fees.13 Additionally, institutions that

have deployed large ATM networks may

continue to look to recoup their

investment and maintenance costs

through surcharges and foreign ATM

transaction fees. New sources of deposit

service charges could emerge to

contribute to revenue stability but raise

further questions about the amount of

fees consumers must pay to utilize the

banking system.

As a result, greater understanding of

trends in overdraft fees and other

deposit service charges is necessary to

assess institutional health and enhance

understanding of the costs and potential

risks financial services pose to

consumers.14

The FFIEC and the agencies believe

that the vast majority of institutions

track individual categories of deposit

account service charges as distinct

revenue line items within their general

ledger or other management information

systems, which would facilitate the

reporting of service charge information

in the Call Report. However, the FFIEC

and the agencies recognize that internal

accounting and recordkeeping practices

may vary across institutions and that

disaggregating all types of fees could be

burdensome on smaller institutions.

Because the FFIEC and the agencies

believe that overdraft-related, monthly

maintenance, and ATM fees are of most

immediate concern to supervisors and

policymakers, this proposal calls for the

separation of these consumer deposit

service charges only.

As noted in the consumer deposit

balance proposal discussed above, the

FFIEC and the agencies anticipate that

certain institutions cater almost

exclusively to non-consumer markets,

and as such, may not maintain segment-

specific products. The FFIEC and the

agencies do not expect these institutions

to differentiate within their accounting

and operational systems between fees

levied against consumer versus non-

consumer depositors

roposal discussed above, the

FFIEC and the agencies anticipate that

certain institutions cater almost

exclusively to non-consumer markets,

and as such, may not maintain segment-

specific products. The FFIEC and the

agencies do not expect these institutions

to differentiate within their accounting

and operational systems between fees

levied against consumer versus non-

consumer depositors. Thus, the agencies

propose to utilize responses to the

proposed Schedule RC–E consumer

deposit account screening question to

govern deposit service charge reporting

requirements. Specifically, institutions

that report ‘‘yes’’ to the question posed

in proposed Schedule RC–E,

Memorandum item 5, ‘‘Does your

institution offer consumer deposit

accounts, i.e., transaction account or

nontransaction savings account deposit

products intended for individuals for

personal, household, or family use?,’’

would be subject to the proposed new

reporting requirements of Schedule RI,

Memorandum item 15, while those that

respond ‘‘no’’ would not. There is no

proposed exemption from these

Schedule RI reporting requirements for

institutions with total assets less than $1

billion that answer ‘‘yes’’ to the

Schedule RC–E screening question.

As mentioned above, the agencies

propose to add a new Memorandum

item 15, ‘‘Components of service

charges on deposit accounts (in

domestic offices)’’ to Schedule RI,

which would include the following

specific items:

• Memorandum item 15.a, ‘‘Consumer

overdraft-related service charges on

deposit accounts.’’ For deposit

accounts intended for individuals

for personal, household, and family

use, this item would include service

charges and fees related to the

processing of payments and debits

against insufficient funds, including

‘‘nonsufficient funds (NSF) check

charges,’’ that the institution

assesses with respect to items that

it either pays or returns unpaid, and

all subsequent charges levied

against overdrawn accounts, such

as extended or sustained overdraft

fe

family

use, this item would include service

charges and fees related to the

processing of payments and debits

against insufficient funds, including

‘‘nonsufficient funds (NSF) check

charges,’’ that the institution

assesses with respect to items that

it either pays or returns unpaid, and

all subsequent charges levied

against overdrawn accounts, such

as extended or sustained overdraft

fees charged when accounts

maintain a negative balance for a

specified period of time, but not

including those equivalent to

interest and reported elsewhere in

Schedule RI (‘‘Interest and fee

income on loans (in domestic

offices)’’).

• Memorandum item 15.b, ‘‘Consumer

account monthly maintenance

charges.’’ For deposit accounts

intended for individuals for

personal, household, and family

use, this item would include service

charges for account holders’

maintenance of their deposit

accounts with the institution (often

labeled ‘‘monthly maintenance

charges’’), including charges

resulting from the account owners’

failure to maintain specified

minimum deposit balances or meet

other requirements (e.g.,

requirements related to transacting

and to purchasing of other services),

as well as fees for transactional

activity in excess of specified limits

for an account and recurring fees

not subject to waiver.

• Memorandum item 15.c, ‘‘Consumer

customer ATM fees.’’ For deposit

accounts maintained at the

institution and intended for

individuals for personal,

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ty in excess of specified limits

for an account and recurring fees

not subject to waiver.

• Memorandum item 15.c, ‘‘Consumer

customer ATM fees.’’ For deposit

accounts maintained at the

institution and intended for

individuals for personal,

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15 Such service charges are reported in Schedule

RI, item 5.l, ‘‘Other noninterest income,’’ not in

Schedule RI, item 5.b, ‘‘Service charges on deposit

accounts (in domestic offices).’’

16 In January 2013, the Bureau delayed the

February 7, 2013, effective date of the remittance

transfer rule pending the finalization of the

Bureau’s December 2012 proposal. See 78 FR 6025,

January 29, 2013.

household, and family use, this

item would include service charges

for transactions, including deposits

to or withdrawals from deposit

accounts, conducted through the

use of ATMs or remote service units

(RSUs) owned, operated, or branded

by the institution or other

institutions. The item would not

include service charges levied

against deposit accounts

maintained at other institutions for

transactions conducted through the

use of ATMs or RSUs owned,

operated, or branded by the

reporting institution.15

• Memorandum item 15.d, ‘‘All other

service charges on deposit

accounts.’’ This item would include

all other service charges on deposit

accounts (in domestic offices) not

reported in Schedule RI,

Memorandum items 15.a, 15.b, and

15.c. Memorandum item 15.d

would include service charges and

fees on an institution’s deposit

products intended for use by a

broad range of depositors (which

may include individuals), rather

than being intended for individuals

for personal, household, and family

use

r service charges on deposit

accounts (in domestic offices) not

reported in Schedule RI,

Memorandum items 15.a, 15.b, and

15.c. Memorandum item 15.d

would include service charges and

fees on an institution’s deposit

products intended for use by a

broad range of depositors (which

may include individuals), rather

than being intended for individuals

for personal, household, and family

use. Thus, for such deposit

products, an institution would not

need to identify the fees charged to

accounts held by individuals for

personal, household, or family use

and report these fees in one of the

three categories of consumer

deposit fees.

For institutions that report ‘‘yes’’ to

the Schedule RC–E screening question,

the sum of Memorandum items 15.a

through 15.d must equal Schedule RI,

item 5.b, ‘‘Service charges on deposit

accounts (in domestic offices).’’

The agencies seek specific comment

on the clarity of the definitions

proposed for the three categories of

consumer deposit account service

charges and on whether institutions’

general ledger systems or deposit

account processing systems currently

support the separate identification of

these three categories of service charges.

If these systems do not enable

institutions to identify all three service

charge categories for consumer deposits,

comment is requested on the categories

of consumer deposit account service

charges for which data are available.

B. Remittance Transfers

The agencies propose to add a new

item 16 to Schedule RC–M, Memoranda,

to collect data regarding certain

international transfers of funds. The

new item would facilitate supervision

and monitoring related to remittance

transfers, which are a subset of

international transfers of funds that are

newly regulated, but about which there

is no comprehensive information

available

tance Transfers

The agencies propose to add a new

item 16 to Schedule RC–M, Memoranda,

to collect data regarding certain

international transfers of funds. The

new item would facilitate supervision

and monitoring related to remittance

transfers, which are a subset of

international transfers of funds that are

newly regulated, but about which there

is no comprehensive information

available. Subitems within new item 16

would include multiple choice

questions directed to all institutions

regarding their participation in the

remittance market and seek additional

information from those institutions that

provided more than 100 remittance

transfers in the prior calendar year and

expect to provide more than 100

remittance transfers in the current

calendar year. The agencies propose to

introduce new Schedule RC–M, item 16,

in the second quarter of 2013.

Section 1073 of the Dodd-Frank Act

amended the Electronic Fund Transfer

Act (EFTA) to create a consumer

protection regime for remittance

transfers, i.e., certain electronic transfers

of funds requested by a consumer

sender to a designated recipient abroad

that are sent by a remittance transfer

provider. To implement the Dodd-Frank

Act’s remittance transfer requirements,

the Bureau issued rules that were set to

take effect on February 7, 2013. 77 FR

6194 (Feb. 7, 2012); 77 FR 40459 (July

10, 2012); 77 FR 50244 (Aug. 20, 2012)

(collectively, ‘‘remittance transfer

rule’’).

For covered transactions sent by

‘‘remittance transfer providers,’’ the

Dodd-Frank Act generally requires the

provision of disclosures, establishes

cancellation and refund rights, and

requires the investigation and resolution

of errors

ct on February 7, 2013. 77 FR

6194 (Feb. 7, 2012); 77 FR 40459 (July

10, 2012); 77 FR 50244 (Aug. 20, 2012)

(collectively, ‘‘remittance transfer

rule’’).

For covered transactions sent by

‘‘remittance transfer providers,’’ the

Dodd-Frank Act generally requires the

provision of disclosures, establishes

cancellation and refund rights, and

requires the investigation and resolution

of errors. However, the remittance

transfer rule includes a safe harbor

under which a person, including an

insured depository institution, that

provided 100 or fewer remittance

transfers in the previous calendar year

and provides 100 or fewer remittance

transfers in the current calendar year is

deemed not to provide remittance

transfers in the normal course of its

business, and thus is not subject to the

Dodd-Frank Act requirements. 12 CFR

§ 1005.30(f)(2)(i). Furthermore, the

statute provides insured banks, savings

associations, and credit unions a

temporary exception under which they

may provide estimates for certain

disclosures in some instances. The

exception expires five years after the

enactment of the Dodd-Frank Act, i.e.,

on July 21, 2015. If the Bureau

determines that expiration of this

‘‘temporary exception’’ would

negatively affect the ability of insured

institutions to send remittances to

foreign countries, the Bureau may

extend the exception to not longer than

ten years after enactment.

In December 2012, the Bureau issued

a notice of proposed rulemaking

regarding three elements of the

remittance transfer rule, and to propose

that the effective date of the entire rule

be extended until 90 days after the

Bureau issues a final rule. See 77 FR

77187, December 31, 2012. The FFIEC

and the agencies do not expect that the

proposed changes would affect the need

for or the timing of the new item

, the Bureau issued

a notice of proposed rulemaking

regarding three elements of the

remittance transfer rule, and to propose

that the effective date of the entire rule

be extended until 90 days after the

Bureau issues a final rule. See 77 FR

77187, December 31, 2012. The FFIEC

and the agencies do not expect that the

proposed changes would affect the need

for or the timing of the new item.

However, when the effective date of the

rule is finalized, the agencies will

consider whether it may be appropriate

to introduce some or all of new item 16

in the third quarter of 2013 or later,

rather than in the second quarter of

2013.16

The available data regarding the

transactions and institutions covered by

the Dodd-Frank Act remittance transfer

requirements are very limited. For

example, the FFIEC and the agencies

believe that many insured institutions

offer consumers methods to send money

abroad. At the same time, as explained

in the preamble to the Bureau’s rule

published on August 20, 2012, data

collected by the Bureau suggests that a

meaningful number of institutions may

qualify for the 100-transfer safe harbor

in the remittance transfer rule. See 77

FR 50244, 50252. However, the FFIEC

and the agencies are unaware of any

comprehensive data available to identify

reliably the number of institutions that

offer consumers mechanisms for

sending money abroad, or the subset of

such institutions that qualify for the

100-transfer safe harbor.

Similarly, the FFIEC and the agencies

are unaware of any comprehensive

industry data regarding trends in the

remittance transfer market. For example,

some industry participants and industry

associations have suggested that the

Dodd-Frank Act remittance transfer

requirements, as implemented, may

cause some institutions to change or

stop providing remittance transfer

services

safe harbor.

Similarly, the FFIEC and the agencies

are unaware of any comprehensive

industry data regarding trends in the

remittance transfer market. For example,

some industry participants and industry

associations have suggested that the

Dodd-Frank Act remittance transfer

requirements, as implemented, may

cause some institutions to change or

stop providing remittance transfer

services. Such changes would affect

individual institutions’ compliance

requirements, and also could have an

impact on the nature and scope of

services available to consumers who

want to send money abroad. But the

FFIEC and agencies do not know of any

comprehensive data source that will

provide information on whether or not

these changes take place. Existing

research on market trends has tended to

focus on services provided by state-

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17 In response to industry commenters’ suggestion

that the Bureau commit to reevaluating the safe

harbor threshold, the Bureau stated that it intended

to monitor it over time. 77 FR 50244, 50252.

18 This annual screening question would initially

be completed in the Call Report for June 30, 2013,

and in the Call Report for March 31 in subsequent

years.

19 In some cases, even an institution that does not

qualify for the safe harbor related to the term

‘‘normal course of business’’ will not be a

‘‘remittance transfer provider’’ and will not be

required to comply with the Dodd-Frank Act

remittance transfer requirements. See 12 CFR

1005.30(f), comment 30(f)–2.

licensed money transmitters, not those

provided by insured institutions

t

years.

19 In some cases, even an institution that does not

qualify for the safe harbor related to the term

‘‘normal course of business’’ will not be a

‘‘remittance transfer provider’’ and will not be

required to comply with the Dodd-Frank Act

remittance transfer requirements. See 12 CFR

1005.30(f), comment 30(f)–2.

licensed money transmitters, not those

provided by insured institutions.

The lack of comprehensive, reliable

data regarding remittance transfers by

institutions could restrict the agencies’

and the Bureau’s ability to provide

supervisory oversight and to monitor

important industry trends. In the

absence of accurate and comprehensive

market-wide or institution-level data,

the agencies, the Bureau, and other

regulators would likely have to rely on

individual examination findings, ad-hoc

surveys, estimates, or limited public

data to characterize the market as a

whole and to understand institution-

specific activities and risks.

The proposed new Schedule RC–M

item would substantially aid

supervisory oversight and market

monitoring. Institution-specific data

would help examiners to prioritize,

focus, and refine their examinations.

Industry-wide data would also enable

monitoring of industry trends that could

affect both providers and consumers of

remittance transfers. For example,

proposed new item 16 would facilitate

monitoring of market entry and exit.

Such monitoring would improve

understanding of the consumer

payments landscape generally, and

facilitate evaluation of the remittance

transfer rule’s impact. Also, data

regarding the number of remittance

transfers that institutions provide can

contribute to monitoring of the Bureau’s

100-transfer safe harbor, which was the

source of a number of comments and a

range of opinions during the Bureau’s

rulemaking.17 Data regarding the

services offered and systems used by

individual institutions could

additionally enable the FFIEC and the

agencies to more finely tune supervisory

procedures and policies

s that institutions provide can

contribute to monitoring of the Bureau’s

100-transfer safe harbor, which was the

source of a number of comments and a

range of opinions during the Bureau’s

rulemaking.17 Data regarding the

services offered and systems used by

individual institutions could

additionally enable the FFIEC and the

agencies to more finely tune supervisory

procedures and policies.

The proposed new item would also

help inform any later policy decisions

regarding remittance transfers. For

example, the FFIEC and the agencies

expect that the proposed data collection

would contribute to any later analysis of

whether expiration of a temporary

exception for insured institutions would

negatively affect the ability of insured

institutions to send remittances to

foreign countries. As discussed below,

the proposed new item includes a

question regarding the frequency with

which the temporary exception is used;

institutions’ responses could provide

information on the importance of the

exception to individual institutions, or

the market as a whole. Additionally, the

proposed new item could assist the

Board in reporting to Congress on

expansion of the use of the ACH system

and other payment mechanisms for

remittance transfers to foreign countries,

as required by section 1073(b) of the

Dodd-Frank Act, and inform other

statutorily required initiatives related to

remittance transfers, such as assistance

to the Financial Literacy and Education

Commission in executing the Strategy

for Assuring Financial Empowerment as

it relates to remittance transfers, as

required by section 1073(c)(2) of the

Dodd-Frank Act

sfers to foreign countries,

as required by section 1073(b) of the

Dodd-Frank Act, and inform other

statutorily required initiatives related to

remittance transfers, such as assistance

to the Financial Literacy and Education

Commission in executing the Strategy

for Assuring Financial Empowerment as

it relates to remittance transfers, as

required by section 1073(c)(2) of the

Dodd-Frank Act.

To identify market participation, and

changes that occur after the remittance

transfer rule takes effect, the proposed

schedule would include a one-time

question regarding 2012 and an ongoing

quarterly question that asks all

institutions whether, during the relevant

period, they offered to consumers in any

state certain mechanisms for sending

money to recipients abroad. The

categories of mechanisms listed in the

one-time and ongoing question include

international wire transfers,

international ACH transactions, other

proprietary services operated by the

reporting institution, other proprietary

services operated by another party (such

as a state-licensed money transmitter)

for which the reporting institution is an

agent or similar type of business

partner, and ‘‘other.’’ The agencies seek

comment on whether different

categories of mechanisms should be

listed, and whether including the

‘‘other’’ mechanism category is

necessary.

To facilitate monitoring of the 100-

transfer safe harbor and the

identification of institutions that may be

required to comply with the Dodd-Frank

Act remittance transfer requirements, an

additional annual screening question

would seek information from all

institutions as to whether they expect to

qualify for the 100-transfer safe

harbor.18 The item would ask whether

the reporting institution provided more

than 100 remittance transfers in the

previous calendar year or whether it

estimates that it will provide more than

100 remittance transfers in the current

calendar year

additional annual screening question

would seek information from all

institutions as to whether they expect to

qualify for the 100-transfer safe

harbor.18 The item would ask whether

the reporting institution provided more

than 100 remittance transfers in the

previous calendar year or whether it

estimates that it will provide more than

100 remittance transfers in the current

calendar year. An answer of ‘‘yes’’

would indicate that the institution

likely does not qualify for the safe

harbor.

In addition, the subset of institutions

whose answers to the annual screening

question suggests that they likely do not

qualify for the 100-transfer safe harbor 19

would complete three quarterly items

providing additional information about

the reporting institution’s remittance

transfers. Two items would seek

information about institutions’ use of

certain payment, messaging, or

settlement systems for international

wire and international ACH

transactions, which the FFIEC and the

agencies believe currently account for

the great majority of remittance transfers

sent by institutions. The questions

would focus on the systems that an

institution uses in initiating transactions

on its customers’ behalf (rather than

systems used by other institutions

involved in the same transaction). This

information can aid the agencies’

evaluation of institutions’ international

wire and ACH practices. Among other

things, the FFIEC and the agencies

believe that an institution’s choice of

payment, messaging, and settlement

systems may affect the processes it uses

to comply with the Dodd-Frank Act

remittance transfer requirements. For

example, the systems used may affect

the ways in which institutions

investigate and resolve errors.

Specifically, the first of the two items

would seek information on the payment,

messaging, or settlement systems that an

institution uses to process outbound

international wire transfers for

consumers

rocesses it uses

to comply with the Dodd-Frank Act

remittance transfer requirements. For

example, the systems used may affect

the ways in which institutions

investigate and resolve errors.

Specifically, the first of the two items

would seek information on the payment,

messaging, or settlement systems that an

institution uses to process outbound

international wire transfers for

consumers. An institution would be

asked to report whether it uses each of

the listed systems for some, none, or all

of its outbound international wire

transfers for consumers. The systems

listed in this item would include

FedWire, CHIPS, SWIFT, a

correspondent bank of which the

reporting institution is a client, and

other (with an instruction that the

institution identify the ‘‘other’’ system).

The agencies seek comment on whether

these categories of systems are

appropriate, and whether additional

systems should be added to the list for

this item and why.

Similarly, the second item would seek

information on the payment, messaging,

or settlement systems that institutions

use to send outbound international ACH

transactions for consumers. An

institution would be asked to report

whether it uses each of the listed

systems for some, none, or all of its

outbound international ACH

transactions for consumers. The systems

listed in this item would include

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ransactions for consumers. An

institution would be asked to report

whether it uses each of the listed

systems for some, none, or all of its

outbound international ACH

transactions for consumers. The systems

listed in this item would include

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20 ‘‘Two significant digits’’ means that the first

digit in the number is not rounded, and the second

digit is rounded to reflect all the remaining digits.

In other words, for a figure between 100 and 999,

the provider would round to the nearest 10, e.g., for

a figure of 812, the provider would report 810; for

a figure of 816, the provider would report 820. For

figures between 10,000 and 99,999, the provider

would round to the nearest 1,000.

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

1998/fil9846b.html.

FedACH, EPN, SWIFT, a correspondent

bank of which the reporting institution

is a client, and other (with an

instruction that the institution identify

the ‘‘other’’ system). The agencies seek

comment on whether these categories of

systems are appropriate, and whether

additional systems should be added to

the list for this item and why.

Finally, for the subset of institutions

whose answers to the annual screening

question suggest that they likely do not

qualify for the 100-transfer safe harbor,

the proposed new Schedule RC–M items

would seek information on the volume

and dollar value of remittance transfers

provided, and the frequency with which

the reporting institution uses the

temporary exception for insured

institutions. Specifically, the agencies

propose to seek volume and dollar value

information with regard to certain

categories of mechanisms offered to

consumers for international transfers

edule RC–M items

would seek information on the volume

and dollar value of remittance transfers

provided, and the frequency with which

the reporting institution uses the

temporary exception for insured

institutions. Specifically, the agencies

propose to seek volume and dollar value

information with regard to certain

categories of mechanisms offered to

consumers for international transfers.

The agencies propose that these

categories correspond to the categories

in the one-time and ongoing quarterly

question regarding the reporting

institution’s market participation (e.g.,

international wire transfers,

international ACH transactions, other

proprietary services operated by the

reporting institution, other proprietary

services operated by another party, and

‘‘other’’). For each category of

mechanism, a reporting institution

would provide the total number of

qualifying transactions provided in the

prior quarter, the total dollar value of

the principal of such transactions, and

the number of transactions to which the

temporary exception applied. The

subitems would apply to services

offered to consumers, rather than

services provided to another institution

on a correspondent basis.

The agencies propose that the number

of transactions and the related dollar

values should include all transfers (a)

that are ‘‘remittance transfers’’ as

defined in 12 CFR § 1005.30(e),

regardless of whether the institution or

another party is the remittance transfer

provider, and (b) that the institution

does not know for certain are remittance

transfers, but for which the disclosures

described in Subpart B of Regulation E

were provided. The agencies propose

that if the reporting institution did not

provide any remittance transfers to

consumers in the normal course of its

business, it should not be required to

provide the requested number and

dollar value of transactions

the institution

does not know for certain are remittance

transfers, but for which the disclosures

described in Subpart B of Regulation E

were provided. The agencies propose

that if the reporting institution did not

provide any remittance transfers to

consumers in the normal course of its

business, it should not be required to

provide the requested number and

dollar value of transactions.

The agencies recognize that questions

regarding the volume and dollar value

of transactions would seek information

that banks may not have recorded or

compiled previously. However, the

FFIEC and the agencies expect that in

order to comply with the Dodd-Frank

Act remittance transfer requirements,

institutions or their business partners,

such as correspondent banks or

payment networks, may build systems

to enable institutions to identify

remittance transfers as such.

The agencies propose that if

institutions are not reasonably able to

provide actual amounts for the volume

and dollar value of transfers and

number of uses of the temporary

exception, that they provide estimates

that are accurate at least to two

significant digits.20 The agencies seek

comment on the feasibility of such

estimates, as well as comment on the

feasibility of providing actual figures;

the date by which banks may be able to

provide actual figures, if not by June

2013; and the relative benefits or costs

of using a different estimation approach

or a different methodology to report the

requested data, such as the reporting of

transaction volume within certain

ranges (e.g., between 1,000 and 10,000

transfers)

well as comment on the

feasibility of providing actual figures;

the date by which banks may be able to

provide actual figures, if not by June

2013; and the relative benefits or costs

of using a different estimation approach

or a different methodology to report the

requested data, such as the reporting of

transaction volume within certain

ranges (e.g., between 1,000 and 10,000

transfers). With regard to the proposed

Schedule RC–M subitem on the volume

and dollar value of transactions, the

agencies additionally seek comment on

whether the scope of the transactions

included in the calculations is

appropriate, as well as whether the

scope and categories of mechanisms

offered to consumers for international

transfers to be included are appropriate,

or whether other alternatives should be

used and why.

C. Depository Institution Trade Names

Some insured depository institutions

use names other than their legal title as

reflected in their charter to identify

certain of their physical branch offices

or Internet Web sites. The reasons for

using these ‘‘trade names’’ vary: (1) In

the case of physical branch offices, this

is often due to a merger and an interest

in maintaining the presence of the

acquired institution’s well recognized

name in the community or communities

it served; (2) in the case of multiple Web

sites, this is often due not only to

merger activity, but also may be part of

an institution’s specific marketing

efforts and an interest in targeting

particular groups of potential depositors

or borrowers. Even though there may be

valid business reasons for using trade

names, this practice can confuse

customers as to the insured status of the

institution as well as the legal name of

the insured institution that holds their

deposits

tivity, but also may be part of

an institution’s specific marketing

efforts and an interest in targeting

particular groups of potential depositors

or borrowers. Even though there may be

valid business reasons for using trade

names, this practice can confuse

customers as to the insured status of the

institution as well as the legal name of

the insured institution that holds their

deposits. Customers, for example, could

inadvertently exceed the deposit

insurance limits if they do business

with two different branches or Web sites

that are, in fact, not separately insured,

but rather are simply affiliated with the

same insured depository institution.

Furthermore, customers risk monetary

losses if they deal with fraudulent Web

sites using trade names that purport to

be insured depository institutions

because customers cannot confirm

whether the Web sites are, in fact,

affiliated with an insured institution via

the FDIC’s Institution Directory or

BankFind systems.

To address these concerns in relation

to physical branch offices, the agencies

issued an Interagency Statement on

Branch Names in 1998.21 The Statement

describes measures an insured

institution should take to guard against

customer confusion about the identity of

the institution or the extent of FDIC

insurance coverage if the institution

‘‘intends to use a different name for a

branch or other facility’’ or ‘‘over a

computer network such as the Internet.’’

This guidance, however, did not require

institutions to inform customers of their

legal identity nor did it establish a

formal notification requirement for the

trade names an institution uses.

The FDIC regularly receives inquiries

from the public about whether a

particular institution, as identified by

the name on its physical facilities, in

print or other traditional media

advertisements, or on Internet Web

sites, represents an insured depository

institution

f their

legal identity nor did it establish a

formal notification requirement for the

trade names an institution uses.

The FDIC regularly receives inquiries

from the public about whether a

particular institution, as identified by

the name on its physical facilities, in

print or other traditional media

advertisements, or on Internet Web

sites, represents an insured depository

institution. Since June 1999, institutions

have reported the Uniform Resource

Locator (URL) of their primary Internet

Web site address in the Call Report.

Nevertheless, the agencies have found

that many institutions commonly have

multiple Web sites and that Web sites

operated by insured institutions often

do not clearly state the institution’s

legal (chartered) name. Moreover,

because insured institutions are not

required to report the multiple trade

names that they use, including Internet

Web sites other than their primary Web

site, the FDIC’s publicly available

databases that identify insured

institutions do not include trade name

data that links the trade names to a

specific insured institution and its

deposit insurance certificate number. As

a consequence, the FDIC is unable to

effectively serve as an information

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22 See 77 FR 66000, October 31, 2012. In general,

large and highly complex institutions are insured

depository institutions with $10 billion or more in

total assets.

23 See 76 FR 10672, February 25, 2011.

24 76 FR 77321, December 12, 2011.

25 The FDIC’s October 2012 assessments final rule

defines ‘‘higher-risk consumer loans,’’ ‘‘higher-risk

commercial and industrial loans,’’ and ‘‘higher-risk

securitizations’’ in Sections I.A.3, I.A.2, and I.A.5,

respectively, of Appendix C to Subpart A of Part

327 of the FDIC’s regulations

n or more in

total assets.

23 See 76 FR 10672, February 25, 2011.

24 76 FR 77321, December 12, 2011.

25 The FDIC’s October 2012 assessments final rule

defines ‘‘higher-risk consumer loans,’’ ‘‘higher-risk

commercial and industrial loans,’’ and ‘‘higher-risk

securitizations’’ in Sections I.A.3, I.A.2, and I.A.5,

respectively, of Appendix C to Subpart A of Part

327 of the FDIC’s regulations.

resource for depositors and the public

concerning the insured status of a

physical branch office or Internet Web

site that uses a trade name rather than

the legal name of the insured

institution. Although the FDIC

researches trade names and collects

trade name information in response to

inquiries from the public, this

information is incomplete, lags behind

the creation of new trade names, and

depends on inquiries from the public to

identify previously unknown trade

names.

To address the lack of complete and

current information on depository

institutions’ use of trade names that

differ from their legal title to identify

physical branches and Internet Web

sites, the agencies are proposing to

supplement the reporting of each

institution’s primary Internet Web site

address, which is currently reported in

item 8 of Call Report Schedule RC–M,

Memoranda. The agencies propose to

add text fields to Schedule RC–M, item

8, in which an institution that uses one

or more trade names other than its legal

title to identify branch office names and

Internet Web sites would report all trade

names used by these physical locations

and the URLs for all public-facing Web

site addresses affiliated with the

institution. For example, if an

institution’s legal title is ABC National

Bank, but it operates one or more office

locations under the trade name of

‘‘Community Bank of XYZ’’ (as

identified by the signage displayed on

the facility), the institution would report

this trade name (and any other trade

names the institution uses at other office

locations) in revised item 8 of Schedule

RC–M

e

institution. For example, if an

institution’s legal title is ABC National

Bank, but it operates one or more office

locations under the trade name of

‘‘Community Bank of XYZ’’ (as

identified by the signage displayed on

the facility), the institution would report

this trade name (and any other trade

names the institution uses at other office

locations) in revised item 8 of Schedule

RC–M. Similarly, if an institution’s legal

title is DEF State Bank, but it operates

an Internet Web site to solicit deposits

or other business under the trade name

of ‘‘Your Safe and Sound Bank’’ (where

this trade name is more clearly and

prominently displayed on the Web site

than the institution’s legal title, if the

legal title is disclosed at all), the

institution would report the URL for

this Web site (and the URLs for any

other Web sites used to solicit business

under a trade name) in revised item 8

of Schedule RC–M. The agencies seek

comment on the clarity of the

circumstances in which institutions

would report trade names in Schedule

RC–M.

D. Additional Data From Large and

Highly Complex Institutions for Deposit

Insurance Assessment Purposes

On October 9, 2012, the FDIC Board

of Directors approved a final rule

amending certain aspects of the

methodology set forth in the FDIC’s

assessment regulations (12 CFR Part

327) for determining the deposit

insurance assessment rates for large and

highly complex institutions.22 This

‘‘large bank pricing rule,’’ originally

adopted by the FDIC Board in February

2011,23 uses a scorecard method to

determine a large or highly complex

institution’s assessment rate. One of the

financial ratios used in the scorecard is

the ratio of higher-risk assets to Tier 1

capital and reserves

ining the deposit

insurance assessment rates for large and

highly complex institutions.22 This

‘‘large bank pricing rule,’’ originally

adopted by the FDIC Board in February

2011,23 uses a scorecard method to

determine a large or highly complex

institution’s assessment rate. One of the

financial ratios used in the scorecard is

the ratio of higher-risk assets to Tier 1

capital and reserves. The FDIC’s October

2012 assessments final rule, which takes

effect April 1, 2013, (1) revises the

definitions of certain higher-risk assets

in the February 2011 rule, specifically

leveraged loans, which are renamed

‘‘higher-risk commercial and industrial

(C&I) loans and securities,’’ and

subprime consumer loans, which are

renamed ‘‘higher-risk consumer loans’’;

(2) clarifies when an asset must be

classified as higher risk; (3) clarifies the

way securitizations are identified as

higher risk; and (4) further defines terms

that are used in the large bank pricing

rule.

At present, large and highly complex

institutions currently report the amount

of their ‘‘‘Subprime consumer loans’ as

defined for assessment purposes only in

FDIC regulations’’ and their ‘‘‘Leveraged

loans and securities’ as defined for

assessment purposes only in FDIC

regulations’’ in Memorandum items 8

and 9, respectively, of Call Report

Schedule RC–O, Other Data for Deposit

Insurance and FICO Assessments. The

amounts to be reported in Memorandum

items 8 and 9 also generally include

securitizations where more than 50

percent of assets backing the

securitization meet the criteria for

subprime consumer loans or leveraged

loans and securities, but exclude

securitizations reported as trading assets

on the Call Report balance sheet

(Schedule RC). These two Memorandum

items were added to Schedule RC–O as

of the June 30, 2011, report date

ems 8 and 9 also generally include

securitizations where more than 50

percent of assets backing the

securitization meet the criteria for

subprime consumer loans or leveraged

loans and securities, but exclude

securitizations reported as trading assets

on the Call Report balance sheet

(Schedule RC). These two Memorandum

items were added to Schedule RC–O as

of the June 30, 2011, report date.

However, in recognition of concerns

expressed by large and highly complex

institutions about their ability to

identify loans meeting the subprime and

leveraged loan definitions in the FDIC’s

February 2011 assessments final rule,

the agencies provided transition

guidance for reporting subprime

consumer and leveraged loans and

securities in the Schedule RC–O

instructions issued in June 2011. That

transition guidance permitted large and

highly complex institutions to use either

their existing internal methodologies or

definitions found in existing

supervisory guidance to identify and

report ‘‘subprime consumer loans’’ and

‘‘leveraged loans’’ originated or

purchased prior to October 1, 2011, in

lieu of using the definitions of these two

higher-risk asset categories in the FDIC’s

February 2011 final assessments rule.

The original transition date for

identifying and reporting subprime and

leveraged loans has since been

extended, most recently to April 1,

2013.

As stated in the agencies’ final

Paperwork Reduction Act Federal

Register notice pertaining to the

introduction of the Schedule RC–O

reporting requirements for large and

highly complex institutions:

the instructions for reporting subprime and

leveraged loans and securities in the Call

Report * * * specifically reference the

definitions of these high-risk asset categories

that are contained in the FDIC’s assessment

regulations (12 CFR Part 327) as amended by

the FDIC’s February 2011 final rule and then

incorporate the text of these definitions from

the final rule (as well as the previously

mentioned transition guidance)

ime and

leveraged loans and securities in the Call

Report * * * specifically reference the

definitions of these high-risk asset categories

that are contained in the FDIC’s assessment

regulations (12 CFR Part 327) as amended by

the FDIC’s February 2011 final rule and then

incorporate the text of these definitions from

the final rule (as well as the previously

mentioned transition guidance). Accordingly,

if and when one or both of these two

definitions—as used for assessment

purposes—are revised through FDIC

rulemaking, the definitions of these asset

categories in the agencies’ regulatory

reporting instructions will be revised in the

same manner to maintain conformity with

the assessment regulations.24

Now that the FDIC has amended the

definitions of subprime and leveraged

loans and securities in its October 2012

assessments final rule, and has renamed

these higher-risk asset categories, the

agencies will, consistent with the text

quoted above, make corresponding

changes to Memorandum items 8 and 9

of Schedule RC–O. Thus, Memorandum

item 8 will be recaptioned ‘‘‘Higher-risk

consumer loans’ as defined for

assessment purposes only in FDIC

regulations’’ and Memorandum item 9

will be recaptioned ‘‘‘Higher-risk

commercial and industrial loans and

securities’ as defined for assessment

purposes only in FDIC regulations.’’ The

revised instructions for these two

Schedule RC–O Memorandum items

will incorporate the revised definitions

of these higher-risk asset categories

contained in the FDIC’s October 2012

assessments final rule, including the

clarified definitions of higher-risk

securitizations.25 These revisions will

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dum items

will incorporate the revised definitions

of these higher-risk asset categories

contained in the FDIC’s October 2012

assessments final rule, including the

clarified definitions of higher-risk

securitizations.25 These revisions will

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26 The FDIC’s October 2012 assessments final

rules sets forth the ‘‘General Requirements for PD

Estimation’’ in Section I.A.3 of Appendix C to

Subpart A of Part 327 of the FDIC’s regulations.

27 The FDIC’s October 2012 assessments final rule

defines ‘‘nontraditional 1–4 family residential

mortgage loans’’ in Section I.A.4 of Appendix C to

Subpart A of Part 327 of the FDIC’s regulations.

‘‘‘Nontraditional 1–4 family residential mortgage

loans’ as defined for assessment purposes only in

FDIC regulations’’ are reported in Schedule RC–O,

Memorandum item 7, and includes higher-risk

securitizations of such loans.

take effect June 30, 2013, which is the

first report date after the April 1, 2013,

effective date of the FDIC’s October

2012 assessments final rule.

As defined in the October 2012

assessments final rule, a ‘‘higher-risk

consumer loan’’ is a consumer loan

where, as of origination (or, if the loan

has been refinanced, as of refinance),

the probability of default (PD) within

two years (the two-year PD) is greater

than 20 percent,26 excluding, however,

those consumer loans that meet the

definition of a nontraditional 1–4 family

residential mortgage loan.27 Integral to

its decision to adopt this definition in

the October 2012 assessments final rule

was the FDIC’s stated intent to collect

the outstanding balance of consumer

loans, by two-year PD and product type,

in the Call Report as a means to

determine whether the 20 percent

threshold for identifying ‘‘higher-risk

consumer loans’’ should be changed

1–4 family

residential mortgage loan.27 Integral to

its decision to adopt this definition in

the October 2012 assessments final rule

was the FDIC’s stated intent to collect

the outstanding balance of consumer

loans, by two-year PD and product type,

in the Call Report as a means to

determine whether the 20 percent

threshold for identifying ‘‘higher-risk

consumer loans’’ should be changed.

More specifically, the agencies are

proposing that large and highly complex

institutions would report in a tabular

format the outstanding amount of all

consumer loans, including those with a

PD below the high-risk threshold,

stratified by the 10 consumer loan

product types and 12 two-year PD

bands. In addition, for each product

type, institutions would report the

amount of unscorable loans, as defined

in the October 2012 assessments final

rule, and indicate whether the PDs were

derived using scores and default rate

mappings provided by a third-party

vendor or an internal approach. The 10

proposed consumer loan product types

are:

(1) ‘‘Nontraditional 1–4 family

residential mortgage loans’’ included in

Schedule RC–C, part I, item 1.c.(2)(a)

and (b);

(2) ‘‘Closed-end loans secured by first

liens on 1–4 family residential

properties’’ as defined for Call Report

Schedule RC–C, part I, item 1.c.(2)(a),

excluding first liens reported as

nontraditional 1–4 family residential

mortgage loans;

(3) ‘‘Closed-end loans secured by

junior liens on 1–4 family residential

properties’’ as defined for Schedule RC–

C, part I, item 1.c.(2)(b), excluding

junior liens reported as nontraditional

1–4 family residential mortgage loans;

(4) ‘‘Revolving, open-end loans

secured by first liens on 1–4 family

residential properties and extended

under lines of credit’’ included in

Schedule RC–C, part I, item 1.c.(1);

(5) ‘‘Revolving, open-end loans

secured by junior liens on 1–4 family

residential properties and extended

under lines of credit’’ included in

Schedule RC–C, part I, item 1.c.(1);

mily residential mortgage loans;

(4) ‘‘Revolving, open-end loans

secured by first liens on 1–4 family

residential properties and extended

under lines of credit’’ included in

Schedule RC–C, part I, item 1.c.(1);

(5) ‘‘Revolving, open-end loans

secured by junior liens on 1–4 family

residential properties and extended

under lines of credit’’ included in

Schedule RC–C, part I, item 1.c.(1);

(6) ‘‘Credit cards’’ as defined for

Schedule RC–C, part I, item 6.a;

(7) ‘‘Automobile loans’’ as defined for

Schedule RC–C, part I, item 6.c;

(8) ‘‘Student loans’’ included in

Schedule RC–C, part I, item 6.d;

(9) ‘‘Other consumer loans (including

single payment and installment) and

revolving credit plans other than credit

cards’’ included in Schedule RC–C, part

I, items 6.b and 6.d, but excluding

student loans; and

(10) ‘‘Consumer leases,’’ as defined for

Schedule RC–C, part I, item 10.a.

The 12 proposed two-year PD bands

for consumer loans are: (1) less than or

equal to 1 percent; (2) 1.01 to 4 percent;

(3) 4.01 to 7 percent; (4) 7.01 to 10

percent; (5) 10.01 to 14 percent; (6)

14.01 to 16 percent; (7) 16.01 to 18

percent; (8) 18.01 to 20 percent; (9)

20.01 to 22 percent; (10) 22.01 to 26

percent; (11) 26.01 to 30 percent; and

(12) greater than 30 percent.

At present, the amounts that large and

highly complex institutions report for

‘‘nontraditional 1–4 family residential

mortgage loans,’’ ‘‘subprime consumer

loans,’’ and ‘‘leveraged loans and

securities’’ in Memorandum items 7, 8,

and 9 of Schedule RC–O are accorded

confidential treatment and not made

available to the public on an individual

institution basis because they are

regarded as examination information. In

this regard, until data on these higher-

risk assets began to be collected directly

in the Call Report, the FDIC looked to

the examination processes at large and

highly complex institutions as the

means for gathering these data and, as

a consequence, they have been treated

as confidential examination

information

institution basis because they are

regarded as examination information. In

this regard, until data on these higher-

risk assets began to be collected directly

in the Call Report, the FDIC looked to

the examination processes at large and

highly complex institutions as the

means for gathering these data and, as

a consequence, they have been treated

as confidential examination

information. Similarly, the proposed

addition to Schedule RC–O of tabular

data on consumer loans, by two-year PD

and product type, represents a further

extension of the collection of

confidential examination information,

which also will not be made available

to the public on an individual

institution basis.

In addition, over the past six quarters

as the FDIC has worked with the data

collected in Schedule RC–O and

elsewhere in the Call Report that serve

as inputs to the growth adjusted

portfolio concentration measure, the

higher-risk asset concentration measure,

and the loss severity measure used in

the scorecard calculations under the

large bank pricing rule, certain data gaps

have been identified in the data needed

to perform these calculations in the

manner intended under this rule.

Therefore, the agencies are proposing to

add a number of new Memorandum

items to Schedule RC–O and revise

several existing Memorandum items to

eliminate these data gaps. These

proposed changes to Schedule RC–O

would apply only to large and highly

complex institutions.

On the FFIEC 031 report form, which

is applicable to institutions with foreign

offices, Schedule RC–C, part I, item 1,

‘‘Loans secured by real estate,’’ does not

capture a breakdown of these loans for

the consolidated institution by the type

of loan and collateral. Such a

breakdown is collected for ‘‘Loans

secured by real estate’’ in domestic

offices

rge and highly

complex institutions.

On the FFIEC 031 report form, which

is applicable to institutions with foreign

offices, Schedule RC–C, part I, item 1,

‘‘Loans secured by real estate,’’ does not

capture a breakdown of these loans for

the consolidated institution by the type

of loan and collateral. Such a

breakdown is collected for ‘‘Loans

secured by real estate’’ in domestic

offices. As a consequence, because

‘‘Loans secured by real estate’’ in foreign

offices are not reported by type of loan

and collateral in Schedule RC–C, part I,

the loss severity measure in the large

bank pricing rule treats all foreign office

real estate loans as ‘‘Other loans’’ and

assigning a higher loss rate to these

‘‘Other loans’’ than would otherwise be

assigned to them based on their actual

type of loan and collateral. The absence

of these details on foreign office real

estate loans also affects the growth

adjusted portfolio concentration

measure and the higher-risk asset

concentration ratio. Similarly, within

Schedule RC–O on the FFIEC 031

report, existing Memorandum items 10.a

and 10.b capture data relating to

‘‘Commitments to fund construction,

land development, and other land loans

secured by real estate in domestic

offices’’ while Memorandum items 13.a

through 13.d collect data on the portion

of certain categories of funded loans

secured by real estate in domestic

offices that are guaranteed or insured by

the U.S. government. Because these

Memorandum items also overlook the

corresponding unfunded loan

commitments and funded loans in

foreign offices, the scorecard measures

that use these inputs lack the

information necessary to accurately

calculate the affected ratios. The

absence of detailed data on real estate

loans in foreign offices affects a

minority of the approximately 110 large

and highly complex institutions

these

Memorandum items also overlook the

corresponding unfunded loan

commitments and funded loans in

foreign offices, the scorecard measures

that use these inputs lack the

information necessary to accurately

calculate the affected ratios. The

absence of detailed data on real estate

loans in foreign offices affects a

minority of the approximately 110 large

and highly complex institutions.

To remedy this deficiency in the real

estate loan data reported by large and

highly complex institutions with foreign

offices, the agencies are proposing to

add new Memorandum items to the

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28 Memorandum item 13.a would continue to be

completed by large and highly complex institutions,

while Memorandum items 13.b through 13.g would

continue to be completed by large institutions only.

29 A parent holding company has control over a

depository institution if the company (A) the

company directly or indirectly or acting through

one or more other persons owns, controls, or has

power to vote 25 per centum or more of any class

of voting securities of the depository institution; (B)

the company controls in any manner the election

of a majority of the directors or trustees of the

depository institution; or (C) the Board determines,

after notice and opportunity for hearing, that the

company directly or indirectly exercises a

controlling influence over the management or

policies of the depository institution.

30 See http://www.treasury.gov/initiatives/fsoc/

studies-reports/Documents/Study%20on%20

Concentration%20Limits%20on%20Large%20

Firms%2001–17–11.pdf

ustees of the

depository institution; or (C) the Board determines,

after notice and opportunity for hearing, that the

company directly or indirectly exercises a

controlling influence over the management or

policies of the depository institution.

30 See http://www.treasury.gov/initiatives/fsoc/

studies-reports/Documents/Study%20on%20

Concentration%20Limits%20on%20Large%20

Firms%2001–17–11.pdf.

FFIEC 031 version of the Call Report

effective June 30, 2013, that would

provide for the reporting of a breakdown

of the consolidated institution’s ‘‘Loans

secured by real estate’’ into the same

nine types of loans and collateral as

those reported for domestic offices only

in Schedule RC–C, part I, items 1.a.(1)

through 1.e.(2). Additionally, the scope

of Memorandum items 10.a, 10.b, and

13.a through 13.d in Schedule RC–O

would be revised to cover the specified

unfunded commitments and funded

loans in both domestic and foreign

offices (i.e., for the consolidated bank).

The definitions of the individual asset

classes that make up the growth

adjusted portfolio concentration

measure and the higher-risk asset

concentration measure for large and

highly complex institutions exclude the

maximum amounts recoverable from the

U.S. government under guarantee or

insurance provisions, including FDIC

loss-sharing agreements. In

Memorandum items 13.a through 13.g of

Schedule RC–O, institutions report for

several categories of funded loans the

portion of these loans guaranteed or

insured by the U.S. government, but

they do not include the amount

protected by FDIC loss-sharing

agreements and, thus, do not precisely

mirror the definitions of the individual

measures that make up the higher-risk

asset concentration measure for large

and highly complex institutions. The

balance sheet amounts of loans covered

by loss-sharing agreements are currently

reported in items 13.a.(1) through

13.a.(5) of Schedule RC–M, Memoranda

ude the amount

protected by FDIC loss-sharing

agreements and, thus, do not precisely

mirror the definitions of the individual

measures that make up the higher-risk

asset concentration measure for large

and highly complex institutions. The

balance sheet amounts of loans covered

by loss-sharing agreements are currently

reported in items 13.a.(1) through

13.a.(5) of Schedule RC–M, Memoranda.

However, these items disclose only the

total amount of these loans and not the

portion of the loans that is protected by

loss-sharing agreements. Consequently,

for scorecard calculation purposes, the

FDIC has been assuming that 80 percent

of the loan amounts reported in

Schedule RC–M are covered by loss-

sharing agreements since most loss-

sharing agreements cover 80 percent of

the loan amounts. However, the actual

percentage of loss-share coverage for

some loss-share agreements differs.

Accordingly, the agencies are proposing

to revise existing Memorandum items

13.a through 13.g of Schedule RC–O so

that institutions include, rather than

exclude, the portion of specified loan

categories covered by FDIC loss-sharing

agreements.28

In addition, the growth adjusted

portfolio concentration measure, as

defined in the large bank pricing rule,

includes non-agency residential

mortgage-backed securities (reported in

items 4.a.(3) and 4.b.(3), columns A and

D, of Schedule RC–B, Securities),

excluding the portion guaranteed or

insured by the U.S. government (e.g.,

under FDIC loss-sharing agreements).

However, the amount of the U.S.

government-guaranteed or -insured

portion of such securities is not

currently collected in the Call Report.

To eliminate this data deficiency, the

agencies propose to add a new

Memorandum item 13.h to Schedule

RC–O to collect this missing

information on non-agency residential

mortgage-backed securities from large

institutions only. These proposed

revisions to Memorandum item 13

would take effect June 30, 2013.

E

nsured

portion of such securities is not

currently collected in the Call Report.

To eliminate this data deficiency, the

agencies propose to add a new

Memorandum item 13.h to Schedule

RC–O to collect this missing

information on non-agency residential

mortgage-backed securities from large

institutions only. These proposed

revisions to Memorandum item 13

would take effect June 30, 2013.

E. Total Liabilities of an Institution’s

Parent Depository Institution Holding

Company That Is Not a Bank or Savings

and Loan Holding Company

Section 622 of the Dodd-Frank Act

establishes a financial sector

concentration limit (‘‘Concentration

Limit’’) that generally prohibits a

financial company from merging or

consolidating with, acquiring all or

substantially all of the assets of, or

otherwise acquiring control of, another

company if the resulting company’s

consolidated liabilities would exceed 10

percent of the aggregate consolidated

liabilities of all financial companies.

The Concentration Limit was adopted as

a new section 14 to the Bank Holding

Company Act of 1956, as amended, to

be codified at 12 U.S.C. 1852.

The Concentration Limit applies to a

‘‘financial company,’’ which is defined

to include any company that controls an

insured depository institution—

including a commercial firm that

controls an industrial loan company or

a limited-purpose credit card bank—as

well as an insured depository institution

and a nonbank financial company

supervised by the Board.29 These firms

are subject to the Concentration Limit,

and their liabilities are included in the

denominator of the Concentration Limit

for purposes of determining whether

other financial companies are in

compliance with the limit.

‘‘Liabilities’’ for purposes of the

Concentration Limit are defined

differently for financial companies

domiciled in the United States than for

financial companies domiciled abroad

ject to the Concentration Limit,

and their liabilities are included in the

denominator of the Concentration Limit

for purposes of determining whether

other financial companies are in

compliance with the limit.

‘‘Liabilities’’ for purposes of the

Concentration Limit are defined

differently for financial companies

domiciled in the United States than for

financial companies domiciled abroad.

For U.S.-domiciled financial companies,

‘‘liabilities’’ include a firm’s total

consolidated liabilities on a worldwide

basis. For financial companies

domiciled abroad, ‘‘liabilities’’ include

the liabilities of the firm’s U.S.

operations.

The Financial Stability Oversight

Council (‘‘Council’’) is required to make

recommendations regarding any

modifications to the concentration limit

that the Council determines would more

effectively implement Section 622. The

Council recommended that, in

measuring the Concentration Limit, the

liabilities of a financial company (that is

not subject to consolidated risk-based

capital rules substantially similar to

those applicable to bank holding

companies) should be calculated

pursuant to U.S. generally accepted

accounting principles (GAAP) or other

appropriate accounting standards

applicable to such company. The

Council also recommended that the

Board calculate aggregate financial

sector liabilities using a two-year rolling

average and publicly report a final

calculation of the aggregate consolidated

liabilities of all financial companies as

of the end of the preceding calendar

year.30

At present, depository institution

holding companies that are not bank

holding companies or savings and loan

holding companies do not report

consolidated financial information to

the agencies

ilities using a two-year rolling

average and publicly report a final

calculation of the aggregate consolidated

liabilities of all financial companies as

of the end of the preceding calendar

year.30

At present, depository institution

holding companies that are not bank

holding companies or savings and loan

holding companies do not report

consolidated financial information to

the agencies. Because this information is

necessary to implement the

Concentration Limit, the agencies

propose to add a new item 17 to Call

Report Schedule RC–M, Memoranda, in

which a subsidiary depository

institution of a depository institution

holding company that is not a bank

holding company or savings and loan

holding company would be required to

report information on the liabilities of

the parent depository institution

holding company, as communicated by

the holding company to the institution.

This new item would not be applicable

to any other depository institutions.

Because the Board is required to report

a final calculation as of the end of each

calendar year, this proposed new

Schedule RC–M item would be

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completed for only the December report

beginning December 31, 2013.

Specifically, with respect to a

subsidiary depository institution of a

depository institution holding company

domiciled in the United States, the

institution would be required to report

total consolidated liabilities of the

parent depository institution holding

company under U.S. GAAP as of the

December 31 Call Report date, as

communicated to the institution by the

depository institution holding company

th respect to a

subsidiary depository institution of a

depository institution holding company

domiciled in the United States, the

institution would be required to report

total consolidated liabilities of the

parent depository institution holding

company under U.S. GAAP as of the

December 31 Call Report date, as

communicated to the institution by the

depository institution holding company.

With respect to a subsidiary institution

of a depository institution holding

company domiciled in a country other

than the United States, the institution

would be required to report the total

consolidated liabilities of the combined

U.S. operations of the depository

institution holding company as of the

December 31 Call Report date, as

communicated to the institution by the

parent. ‘‘Total consolidated liabilities of

the combined U.S. operations of the

depository institution holding

company’’ would mean the sum of the

total consolidated liabilities of each top-

tier U.S. subsidiary of the depository

institution holding company, as

determined under U.S. GAAP. A

subsidiary depository institution would

be permitted, but not required, to reduce

‘‘total consolidated liabilities of the

combined U.S. operations of the

depository institution holding

company’’ by amounts corresponding to

balances and transactions between U.S.

subsidiaries of the depository institution

holding company to the extent such

items would not already be eliminated

in consolidation.

The agencies recognize that it is not

customary to use the Call Report as the

vehicle for collecting data pertaining to

a company other than the reporting

depository institution, including entities

the institution consolidates

and transactions between U.S.

subsidiaries of the depository institution

holding company to the extent such

items would not already be eliminated

in consolidation.

The agencies recognize that it is not

customary to use the Call Report as the

vehicle for collecting data pertaining to

a company other than the reporting

depository institution, including entities

the institution consolidates.

Nevertheless, the agencies view the Call

Report as a more efficient conduit for

collecting a single annual data item for

the total consolidated liabilities of a

reporting institution’s parent depository

institution holding company that is not

a bank or savings and loan holding

company than the alternative of having

the Board initiate a new information

collection applicable to the limited

number of depository institution

holding companies that are not bank or

savings and loan holding companies for

the sole purpose of annually collecting

this single data item.

The agencies also acknowledge that,

when filing a Call Report, the reporting

institution’s chief financial officer (or

equivalent) must attest that the report

has been prepared in conformance with

the Call Report instructions and is true

and correct to the best of his or her

knowledge and belief. A specified

number of the reporting institution’s

directors must make a similar

attestation. Because a depository

institution controlled by a depository

institution holding company that is not

a bank or savings and loan holding

company would have to obtain the

amount of its parent depository

institution holding company’s total

consolidated liabilities from the parent

in order to report this amount in the

Call Report, the agencies would expect

an institution to use its best efforts to

obtain this information from its parent

depository institution holding company

and would accept a reasonable estimate

of the parent’s total consolidated

liabilities

ount of its parent depository

institution holding company’s total

consolidated liabilities from the parent

in order to report this amount in the

Call Report, the agencies would expect

an institution to use its best efforts to

obtain this information from its parent

depository institution holding company

and would accept a reasonable estimate

of the parent’s total consolidated

liabilities. In light of the Call Report

attestation requirement described above,

the agencies propose to exclude from

the scope of the attestations for the

institution’s chief financial officer (or

equivalent) and directors the amount of

the parent holding company’s total

consolidated liabilities reported in

Schedule RC–M, item 17. However, for

the limited number of depository

institutions to which item 17 will be

applicable, this item would be

accompanied by an attestation to be

signed by the depository institution’s

chief financial officer (or equivalent)

stating that item 17 has been prepared

in conformance with the Call Report

instructions. The instructions for

proposed Memorandum item 17 would

provide that a depository institution

could rely on a reasonable estimate of

the total consolidated liabilities of its

parent depository institution holding

company obtained on a best efforts

basis. The agencies request comment on

whether this approach addresses

potential attestation concerns that may

arise when an insured depository

institution must report the total

consolidated liabilities of its parent

depository institution holding company

that is not a bank or savings and loan

holding company in the institution’s

Call Report.

F

olding

company obtained on a best efforts

basis. The agencies request comment on

whether this approach addresses

potential attestation concerns that may

arise when an insured depository

institution must report the total

consolidated liabilities of its parent

depository institution holding company

that is not a bank or savings and loan

holding company in the institution’s

Call Report.

F. Revising the Scope of Schedule RI–A,

Item 11

The instructions for item 11, ‘‘Other

transactions with parent holding

company,’’ in Schedule RI–A, Changes

in Bank Equity Capital, currently advise

institutions to report the net aggregate

amount of transactions with the

institution’s parent holding company

that affect equity capital directly, other

than those transactions required to be

reported in other items of Schedule RI–

A (e.g., cash dividends, sales and

retirements of capital stock, and

treasury stock transactions). The

instructions for item 11 identify two

transactions to be reported in this item:

capital contributions other than those

for which stock has been issued to the

parent holding company and dividends

to the holding company in the form of

property rather than cash.

Although the scope of Schedule RI–A,

item 11, is limited to transactions with

an institution’s parent holding

company, the two types of transactions

identified in the instructions for this

item can be conducted with an

institution’s stockholders other than a

parent holding company. In this

situation, neither the instructions for

item 11 nor the instructions for any of

the other items in Schedule RI–A

explains where these capital

transactions with stockholders other

than a parent holding company should

be reported within the schedule.

In addition, an institution may from

time to time reduce its contributed

capital (i.e., surplus) without retiring

any of its stock through a return-of-

capital transaction in which cash is

distributed to the institution’s owners,

typically its parent holding company

re these capital

transactions with stockholders other

than a parent holding company should

be reported within the schedule.

In addition, an institution may from

time to time reduce its contributed

capital (i.e., surplus) without retiring

any of its stock through a return-of-

capital transaction in which cash is

distributed to the institution’s owners,

typically its parent holding company.

Such a return-of-capital transaction is

separate and distinct from a dividend

payment, which reduces retained

earnings and is reported in either item

8 or 9 of Schedule RI–A. At present, the

instructions for Schedule RI–A do not

explicitly identify the item within the

schedule in which return-of-capital

transactions should be reported. In this

regard, Schedule RI–A, item 5, ‘‘Sale,

conversion, acquisition, or retirement of

capital stock, net (excluding treasury

stock transactions),’’ includes the

redemption or retirement of perpetual

preferred stock or common stock

(including stock owned by a parent

holding company), but the instructions

for this item are silent regarding return-

of-capital transactions.

Accordingly, the agencies are

proposing to revise the scope of

Schedule RI–A, item 11, to include

capital contributions received from

stockholders other than an institution’s

parent holding company when stock is

not issued, property dividends

involving stockholders other than a

parent holding company, and return-of-

capital transactions with all

stockholders, including a parent holding

company. In addition to revising the

instructions for item 11, the caption for

this item also would be revised to read

‘‘Other transactions with stockholders

(including a parent holding company).’’

These proposed changes would take

effect June 30, 2013.

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ddition to revising the

instructions for item 11, the caption for

this item also would be revised to read

‘‘Other transactions with stockholders

(including a parent holding company).’’

These proposed changes would take

effect June 30, 2013.

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12154

Federal Register / Vol. 78, No. 35 / Thursday, February 21, 2013 / Notices

31 77 FR 9727.

32 Similarly, the FFIEC and the agencies have

completed their evaluation of proposed Schedule U,

Loan Origination Activity, on the Report of Assets

and Liabilities of U.S. Branches and Agencies of

Foreign Banks (FFIEC 002; OMB No. 7100–0032)

and have determined not to pursue implementation

of this proposed schedule on the FFIEC 002 report.

See 77 FR 14367, March 9, 2012.

33 The agencies also will continue to collect the

corresponding Memorandum items on the FFIEC

002 report.

III. Other Matters

On February 17, 2012, the agencies

announced that they were continuing to

evaluate a new proposed Call Report

Schedule RC–U, Loan Origination

Activity (in Domestic Offices), in light

of the comments received.31 The FFIEC

and the agencies have completed their

evaluation of Schedule RC–U and have

determined not to pursue

implementation of this proposed Call

Report schedule.32

Memorandum items 5.a and 5.b of

Call Report Schedule RC–O collect data

on the amount and number of

noninterest-bearing transaction accounts

of more than $250,000. In the 2010

initial and final PRA notices describing

this collection, the agencies stated that

this collection would cease after

December 31, 2012, unless Congress

extended a law allowing for unlimited

deposit insurance on these accounts

beyond that date. Congress did not

extend that law, and the temporary

unlimited deposit insurance for such

accounts ended on December 31, 2012

$250,000. In the 2010

initial and final PRA notices describing

this collection, the agencies stated that

this collection would cease after

December 31, 2012, unless Congress

extended a law allowing for unlimited

deposit insurance on these accounts

beyond that date. Congress did not

extend that law, and the temporary

unlimited deposit insurance for such

accounts ended on December 31, 2012.

However, there is considerable interest

across the agencies in monitoring the

behavior of these deposit accounts

following the change in insurance

coverage. Specifically, the agencies are

interested in tracking the movement of

these funds and accounts among

individual insured institutions and

within the depository institution system

as a whole. Accordingly, the agencies

will continue to collect these

Memorandum items in the March 31,

2013, Call Report and in future

reports.33 The agencies will review this

information and reconsider the

collection at such time as the number of

accounts and amount of deposits

stabilizes. The agencies request

comment on whether to continue

collecting this information, absent the

extension of the law providing deposit

insurance for these accounts.

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 collections of information that are

the subject of this notice 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

tion 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. All comments will become

a matter of public record.

Dated: February 4, 2013.

Michele Meyer,

Assistant Director, Legislative and Regulatory

Activities Division, Office of the Comptroller

of the Currency.

Board of Governors of the Federal Reserve

System, February 14, 2013.

Robert deV. Frierson,

Secretary of the Board.

Dated at Washington, DC, this 4th day of

February 2013.

Federal Deposit Insurance Corporation.

Robert E. Feldman,

Executive Secretary.

[FR Doc. 2013–04035 Filed 2–20–13; 8:45 am]

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

DEPARTMENT OF THE TREASURY

Internal Revenue Service

Proposed Collection; Comment

Request for Form 8453–S

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Notice and request for

comments.

SUMMARY: The Department of the

Treasury, as part of its continuing effort

to reduce paperwork and respondent

burden, invites the general public and

other Federal agencies to take this

opportunity to comment on proposed

and/or continuing information

collections, as required by the

Paperwork Reduction Act of 1995,

Public Law 104–13 (44 U.S.C.

3506(c)(2)(A)). Currently, the IRS is

soliciting comments concerning Form

8453–S, S Corporation Declaration and

Signature for Electronic Filing.

DATES: Written comments should be

received on or before April 22, 2013 to

be assured of consideration

omment on proposed

and/or continuing information

collections, as required by the

Paperwork Reduction Act of 1995,

Public Law 104–13 (44 U.S.C.

3506(c)(2)(A)). Currently, the IRS is

soliciting comments concerning Form

8453–S, S Corporation Declaration and

Signature for Electronic Filing.

DATES: Written comments should be

received on or before April 22, 2013 to

be assured of consideration.

ADDRESSES: Direct all written comments

to Yvette Lawrence, Internal Revenue

Service, Room 6129, 1111 Constitution

Avenue NW., Washington, DC 20224.

FOR FURTHER INFORMATION CONTACT:

Requests for additional information or

copies of the form and instructions

should be directed to Martha R. Brinson

at Internal Revenue Service, Room 6129,

1111 Constitution Avenue NW.,

Washington, DC 20224, or at (202) 622–

3869, or through the Internet at

Martha.R.Brinson@irs.gov.

SUPPLEMENTARY INFORMATION:

Title: S Corporation Declaration and

Signature for Electronic Filing.

OMB Number: 1545–1867.

Form Number: 8453–S.

Abstract: Form 8453–S is necessary to

enable the electronic filing of Form

1120S U.S. Income Tax Return for an S

Corporation. The form is created to meet

the stated Congressional policy that

paperless filing is the preferred and

most convenient means of filing Federal

tax and information returns.

Current Actions: There are no changes

being made to the form at this time.

Type of Review: Extension of a

currently approved collection.

Affected Public: Businesses or other

for-profit organizations.

Estimated Number of Respondents:

1,500.

Estimated Time per Respondent: 5

hours, 6 minute.

Estimated Total Annual Burden

Hours: 7,590.

The following paragraph applies to all

of the collections of information covered

by this notice:

An agency may not conduct or

sponsor, and a person is not required to

respond to, a collection of information

unless the collection of information

displays a valid OMB control number

dents:

1,500.

Estimated Time per Respondent: 5

hours, 6 minute.

Estimated Total Annual Burden

Hours: 7,590.

The following paragraph applies to all

of the collections of information covered

by this notice:

An agency may not conduct or

sponsor, and a person is not required to

respond to, a collection of information

unless the collection of information

displays a valid OMB control number.

Books or records relating to a collection

of information must be retained as long

as their contents may become material

in the administration of any internal

revenue law. Generally, tax returns and

tax return information are confidential,

as required by 26 U.S.C. 6103.

Request for Comments: Comments

submitted in response to this notice will

be summarized and/or included in the

request for OMB approval. All

comments will become a matter of

public record. Comments are invited on:

(a) Whether the collection of

information is necessary for the proper

performance of the functions of the

agency, including whether the

information shall have practical utility;

(b) the accuracy of the agency’s estimate

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