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Federal Register / Vol. 76, No. 51 / Wednesday, March 16, 2011 / Notices
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
FEDERAL RESERVE SYSTEM
FEDERAL DEPOSIT INSURANCE
CORPORATION
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
Proposed Agency Information
Collection Activities; Comment
Request
AGENCY: Office of the Comptroller of the
Currency (OCC), Treasury; Board of
Governors of the Federal Reserve
System (Board); Federal Deposit
Insurance Corporation (FDIC); and
Office of Thrift Supervision (OTS),
Treasury.
ACTION: Joint notice and request for
comment.
SUMMARY: In accordance with the
requirements of the Paperwork
Reduction Act (PRA) of 1995 (44 U.S.C.
chapter 35), the OCC, the Board, the
FDIC, and the OTS (the ‘‘agencies’’) may
not conduct or sponsor, and the
respondent is not required to respond
to, an information collection unless it
displays a currently valid Office of
Management and Budget (OMB) control
number. The Federal Financial
Institutions Examination Council
(FFIEC), of which the agencies are
members, has approved the agencies’
publication for public comment of a
proposal to revise the Consolidated
Reports of Condition and Income (Call
Report) for banks, the Thrift Financial
Report (TFR) for savings associations,
the Report of Assets and Liabilities of
U.S. Branches and Agencies of Foreign
Banks (FFIEC 002), and the Report of
Assets and Liabilities of a Non-U.S.
Branch that is Managed or Controlled by
a U.S. Branch or Agency of a Foreign
(Non-U.S.) Bank (FFIEC 002S), all of
which are currently approved
collections of information, effective as
of the June 30, 2011, report date. 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
rrently approved
collections of information, effective as
of the June 30, 2011, report date. 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 May 16, 2011.
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 2–3, Attention:
1557–0081, 250 E Street, SW.,
Washington, DC 20219. In addition,
comments may be sent by fax to (202)
874–5274, or by electronic mail to
regs.comments@occ.treas.gov. You may
personally inspect and photocopy
comments at the OCC, 250 E 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) 874–4700. 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.
Board: You may submit comments,
which should refer to ‘‘Consolidated
Reports of Condition and Income (FFIEC
031 and 041)’’ or ‘‘Report of Assets and
Liabilities of U.S. Branches and
Agencies of Foreign Banks (FFIEC 002)
and Report of Assets and Liabilities of
a Non-U.S. Branch that is Managed or
Controlled by a U.S. Branch or Agency
of a Foreign (Non-U.S.) Bank (FFIEC
002S),’’ by any of the following methods:
• Agency Web Site: http://
www.federalreserve.gov. Follow the
instructions for submitting comments
on the http://www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm
Foreign Banks (FFIEC 002)
and Report of Assets and Liabilities of
a Non-U.S. Branch that is Managed or
Controlled by a U.S. Branch or Agency
of a Foreign (Non-U.S.) Bank (FFIEC
002S),’’ by any of the following methods:
• Agency Web Site: http://
www.federalreserve.gov. Follow the
instructions for submitting comments
on the http://www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm.
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• E-mail:
regs.comments@federalreserve.gov.
Include reporting form number in the
subject line of the message.
• FAX: (202) 452–3819 or (202) 452–
3102.
• Mail: Jennifer J. Johnson, Secretary,
Board of Governors of the Federal
Reserve System, 20th Street and
Constitution Avenue, NW., Washington,
DC 20551.
All public comments are available
from the Board’s Web site at http://
www.federalreserve.gov/generalinfo/
foia/ProposedRegs.cfm as submitted,
unless modified for technical reasons.
Accordingly, your comments will not be
edited to remove any identifying or
contact information. Public comments
may also be viewed electronically or in
paper in Room MP–500 of the Board’s
Martin Building (20th and C Streets,
NW.,) between 9 a.m. and 5 p.m. on
weekdays.
FDIC: You may submit comments,
which should refer to ‘‘Consolidated
Reports of Condition and Income, 3064–
0052,’’ by any of the following methods:
• 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.
• E-mail: comments@FDIC.gov.
Include ‘‘Consolidated Reports of
Condition and Income, 3064–0052’’ in
the subject line of the message.
• Mail: Gary A. Kuiper, (202) 898–
3877, Counsel, Attn: Comments, Room
F–1086, Federal Deposit Insurance
Corporation, 550 17th Street, NW.,
Washington, DC 20429
ulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• E-mail: comments@FDIC.gov.
Include ‘‘Consolidated Reports of
Condition and Income, 3064–0052’’ in
the subject line of the message.
• Mail: Gary A. Kuiper, (202) 898–
3877, Counsel, Attn: Comments, Room
F–1086, 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.
Comments may be inspected at the FDIC
Public Information Center, Room E–
1002, 3501 Fairfax Drive, Arlington, VA
22226, between 9 a.m. and 5 p.m. on
business days.
OTS: You may submit comments,
identified by ‘‘1550–0023 (TFR:
Schedule DI Revisions),’’ by any of the
following methods:
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• E-mail address:
infocollection.comments@ots.treas.gov.
Please include ‘‘1550–0023 (TFR:
Schedule DI Revisions)’’ in the subject
line of the message and include your
name and telephone number in the
message.
• Fax: (202) 906–6518.
• Mail: Information Collection
Comments, Chief Counsel’s Office,
Office of Thrift Supervision, 1700 G
Street, NW., Washington, DC 20552,
Attention: ‘‘1550–0023 (TFR: Schedule
DI Revisions).’’
• Hand Delivery/Courier: Guard’s
Desk, East Lobby Entrance, 1700 G
Street, NW., from 9 a.m. to 4 p.m
f the message and include your
name and telephone number in the
message.
• Fax: (202) 906–6518.
• Mail: Information Collection
Comments, Chief Counsel’s Office,
Office of Thrift Supervision, 1700 G
Street, NW., Washington, DC 20552,
Attention: ‘‘1550–0023 (TFR: Schedule
DI Revisions).’’
• Hand Delivery/Courier: Guard’s
Desk, East Lobby Entrance, 1700 G
Street, NW., from 9 a.m. to 4 p.m. on
business days, Attention: Information
Collection Comments, Chief Counsel’s
Office, Attention: ‘‘1550–0023 (TFR:
Schedule DI Revisions).’’
Instructions: All submissions received
must include the agency name and OMB
Control Number for this information
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Federal Register / Vol. 76, No. 51 / Wednesday, March 16, 2011 / Notices
collection. All comments received will
be posted without change to the OTS
Internet Site at http://www.ots.treas.gov/
pagehtml.cfm?catNumber=67&an=1,
including any personal information
provided.
Docket: For access to the docket to
read background documents or
comments received, go to http://
www.ots.treas.gov/
pagehtml.cfm?catNumber=67&an=1. In
addition, you may inspect comments at
the Public Reading Room, 1700 G Street,
NW., by appointment. To make an
appointment for access, call (202) 906–
5922, send an e-mail to
public.info@ots.treas.gov, or send a
facsimile transmission to (202) 906–
7755. (Prior notice identifying the
materials you will be requesting will
assist us in serving you.) We schedule
appointments on business days between
10 a.m. and 4 p.m. In most cases,
appointments will be available the next
business day following the date we
receive a request.
Additionally, commenters may send a
copy of their comments to the OMB
desk officer for the agencies by mail to
the Office of Information and Regulatory
Affairs, U.S
be requesting will
assist us in serving you.) We schedule
appointments on business days between
10 a.m. and 4 p.m. In most cases,
appointments will be available the next
business day following the date we
receive a request.
Additionally, commenters may send a
copy of their comments to the OMB
desk officer for the agencies by mail to
the Office of Information and Regulatory
Affairs, U.S. Office of Management and
Budget, New Executive Office Building,
Room 10235, 725 17th Street, NW.,
Washington, DC 20503, or by fax to
(202) 395–6974.
FOR FURTHER INFORMATION CONTACT: For
further information about the revisions
discussed in this notice, please contact
any of the agency clearance officers
whose names appear below. In addition,
copies of the Call Report, FFIEC 002,
and FFIEC 002S forms can be obtained
at the FFIEC’s Web site (http://
www.ffiec.gov/ffiec_report_forms.htm).
Copies of the TFR can be obtained from
the OTS’s Web site (http://
www.ots.treas.gov/
main.cfm?catNumber=2&catParent=0).
OCC: Mary Gottlieb, OCC Clearance
Officer, (202) 874–5090, Legislative and
Regulatory Activities Division, Office of
the Comptroller of the Currency, 250 E
Street, SW., Washington, DC 20219.
Board: Cynthia Ayouch, Acting
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.
OTS: Ira L. Mills, OTS Clearance
Officer, at Ira.Mills@ots.treas.gov, (202)
906–6531, or facsimile number (202)
906–6518, Regulations and Legislation
Division, Chief Counsel’s Office, Office
of Thrift Supervision, 1700 G Street,
NW., Washington, DC 20552
A. Kuiper, Counsel, (202)
898–3877, Legal Division, Federal
Deposit Insurance Corporation, 550 17th
Street, NW., Washington, DC 20429.
OTS: Ira L. Mills, OTS Clearance
Officer, at Ira.Mills@ots.treas.gov, (202)
906–6531, or facsimile number (202)
906–6518, Regulations and Legislation
Division, Chief Counsel’s Office, Office
of Thrift Supervision, 1700 G Street,
NW., Washington, DC 20552.
SUPPLEMENTARY INFORMATION: The
agencies are proposing to revise the Call
Report, the TFR, the FFIEC 002, and the
FFIEC 002S, which are currently
approved collections of information.
1. Report Title: Consolidated Reports
of Condition and Income (Call Report).
Form Number: Call Report: FFIEC 031
(for banks with domestic and foreign
offices) and FFIEC 041 (for banks with
domestic offices only).
Frequency of Response: Quarterly.
Affected Public: Business or other for-
profit.
OCC
OMB Number: 1557–0081.
Estimated Number of Respondents:
1,440 national banks.
Estimated Time per Response: 53.24
burden hours.
Estimated Total Annual Burden:
306,662 burden hours.
Board
OMB Number: 7100–0036.
Estimated Number of Respondents:
826 State member banks.
Estimated Time per Response: 55.32
burden hours.
Estimated Total Annual Burden:
182,777 burden hours.
FDIC
OMB Number: 3064–0052.
Estimated Number of Respondents:
4,687 insured State nonmember banks.
Estimated Time per Response: 40.44
burden hours.
Estimated Total Annual Burden:
758,169 burden hours.
The estimated time per response for
the Call Report is an average that varies
by agency because of differences in the
composition of the institutions under
each agency’s supervision (e.g., size
distribution of institutions, types of
activities in which they are engaged,
and existence of foreign offices). The
average reporting burden for the Call
Report is estimated to range from 17 to
665 hours per quarter, depending on an
individual institution’s circumstances.
2. Report Title: Thrift Financial
Report (TFR)
sition of the institutions under
each agency’s supervision (e.g., size
distribution of institutions, types of
activities in which they are engaged,
and existence of foreign offices). The
average reporting burden for the Call
Report is estimated to range from 17 to
665 hours per quarter, depending on an
individual institution’s circumstances.
2. Report Title: Thrift Financial
Report (TFR).
Form Number: OTS 1313 (for savings
associations).
Frequency of Response: Quarterly;
Annually.
Affected Public: Business or other for-
profit.
OTS
OMB Number: 1550–0023.
Estimated Number of Respondents:
731 savings associations.
Estimated Time per Response: 60.3
hours average for quarterly schedules
and 2.0 hours average for schedules
required only annually plus
recordkeeping of an average of one hour
per quarter.
Estimated Total Annual Burden:
183,943 burden hours.
3. Report Titles: Report of Assets and
Liabilities of U.S. Branches and
Agencies of Foreign Banks; Report of
Assets and Liabilities of a Non-U.S.
Branch that is Managed or Controlled by
a U.S. Branch or Agency of a Foreign
(Non-U.S.) Bank.
Form Numbers: FFIEC 002; FFIEC
002S.
Board
OMB Number: 7100–0032.
Frequency of Response: Quarterly.
Affected Public: U.S. branches and
agencies of foreign banks.
Estimated Number of Respondents:
FFIEC 002—236; FFIEC 002S—57.
Estimated Time per Response: FFIEC
002—25.43 hours; FFIEC 002S—6
hours.
Estimated Total Annual Burden:
FFIEC 002—24,003 hours; FFIEC 002S—
1,368 hours.
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), 12 U.S.C. 1464 (for savings
associations), and 12 U.S.C. 3105(c)(2),
1817(a), and 3102(b) (for U.S. branches
and agencies of foreign banks). Except
for selected data items, the Call Report,
the TFR, and the FFIEC 002 are not
given confidential treatment
(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), 12 U.S.C. 1464 (for savings
associations), and 12 U.S.C. 3105(c)(2),
1817(a), and 3102(b) (for U.S. branches
and agencies of foreign banks). Except
for selected data items, the Call Report,
the TFR, and the FFIEC 002 are not
given confidential treatment. The FFIEC
002S is given confidential treatment [5
U.S.C. 552(b)(4)].
Abstracts
Call Report and TFR: Institutions
submit Call Report and TFR data to the
agencies each quarter for the agencies’
use in monitoring the condition,
performance, and risk profile of
individual institutions and the industry
as a whole. Call Report and TFR data
provide the most current statistical data
available for evaluating institutions’
corporate applications, identifying areas
of focus for both on-site and off-site
examinations, and monetary and other
public policy purposes. The agencies
use Call Report and TFR data in
evaluating interstate merger and
acquisition applications to determine, as
required by law, whether the resulting
institution would control more than ten
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1 76 FR 10672, February 25, 2011.
percent of the total amount of deposits
of insured depository institutions in the
United States. Call Report and TFR data
also are used to calculate all
institutions’ deposit insurance and
Financing Corporation assessments,
national banks’ semiannual assessment
fees, and the OTS’s assessments on
savings associations.
FFIEC 002 and FFIEC 002S: On a
quarterly basis, all U.S. branches and
agencies of foreign banks are required to
file the FFIEC 002, which is a detailed
report of condition with a variety of
supporting schedules
alculate all
institutions’ deposit insurance and
Financing Corporation assessments,
national banks’ semiannual assessment
fees, and the OTS’s assessments on
savings associations.
FFIEC 002 and FFIEC 002S: On a
quarterly basis, all U.S. branches and
agencies of foreign banks are required to
file the FFIEC 002, which is a detailed
report of condition with a variety of
supporting schedules. This information
is used to fulfill the supervisory and
regulatory requirements of the
International Banking Act of 1978. The
data also are used to augment the bank
credit, loan, and deposit information
needed for monetary policy and other
public policy purposes. The FFIEC 002S
is a supplement to the FFIEC 002 that
collects information on assets and
liabilities of any non-U.S. branch that is
managed or controlled by a U.S. branch
or agency of the foreign bank. Managed
or controlled means that a majority of
the responsibility for business decisions
(including, but not limited to, decisions
with regard to lending or asset
management or funding or liability
management) or the responsibility for
recordkeeping in respect of assets or
liabilities for that foreign branch resides
at the U.S. branch or agency. A separate
FFIEC 002S must be completed for each
managed or controlled non-U.S. branch.
The FFIEC 002S must be filed quarterly
along with the U.S. branch or agency’s
FFIEC 002. The data from both reports
are used for: (1) Monitoring deposit and
credit transactions of U.S. residents; (2)
monitoring the impact of policy
changes; (3) analyzing structural issues
concerning foreign bank activity in U.S.
markets; (4) understanding flows of
banking funds and indebtedness of
developing countries in connection with
data collected by the International
Monetary Fund and the Bank for
International Settlements that are used
in economic analysis; and (5) assisting
in the supervision of U.S. offices of
foreign banks
changes; (3) analyzing structural issues
concerning foreign bank activity in U.S.
markets; (4) understanding flows of
banking funds and indebtedness of
developing countries in connection with
data collected by the International
Monetary Fund and the Bank for
International Settlements that are used
in economic analysis; and (5) assisting
in the supervision of U.S. offices of
foreign banks. The Federal Reserve
System collects and processes these
reports on behalf of the OCC, the Board,
and the FDIC.
Current Actions
I. Deposit Insurance Assessment Base
In recent years, the FDIC has charged
insured depository institutions (IDIs) an
amount for deposit insurance equal to
the deposit insurance assessment base
times a risk-based assessment rate.
Under this assessment system, which is
set forth in part 327 of the FDIC’s
regulations (12 CFR part 327), the
assessment base has been domestic
deposits minus a few allowable
exclusions, such as pass-through reserve
balances. At present, an IDI reports its
assessment base on a quarter-end basis
in its regulatory report (Call Report,
TFR, or FFIEC 002 report, as
appropriate). However, the assessment
base is reported on a daily average basis
by larger institutions (that is, those with
$1 billion or more in total assets),
institutions insured by the FDIC after
March 31, 2007, and other IDIs that elect
to do so.
The FDIC calculates an initial base
assessment rate (IBAR) for each IDI
based on CAMELS ratings, a number of
inputs derived from data the IDI reports
in its regulatory report, and, for large
institutions that have long-term debt
issuer ratings, from these ratings. Under
the existing assessment system, an IDI’s
total base assessment rate can vary from
the IBAR as the result of three possible
adjustments: the unsecured debt
adjustment, the secured liability
adjustment, and the brokered deposit
adjustment.
The Dodd-Frank Wall Street Reform
and Consumer Protection Act (the
Dodd-Frank Act) (Pub. L
ave long-term debt
issuer ratings, from these ratings. Under
the existing assessment system, an IDI’s
total base assessment rate can vary from
the IBAR as the result of three possible
adjustments: the unsecured debt
adjustment, the secured liability
adjustment, and the brokered deposit
adjustment.
The Dodd-Frank Wall Street Reform
and Consumer Protection Act (the
Dodd-Frank Act) (Pub. L. 111–203, July
21, 2010) requires the FDIC to amend its
regulations to redefine the assessment
base used for calculating deposit
insurance assessments. Specifically,
section 331(b) of the Dodd-Frank Act (to
be codified at 12 U.S.C. 1817(nt)) directs
the FDIC:
[T]o define the term ‘assessment base’ with
respect to an insured depository institution
* * * as an amount equal to
(1) The average consolidated total assets of
the insured depository institution during the
assessment period; minus
(2) The sum of —
(A) the average tangible equity of the
insured depository institution during the
assessment period; and
(B) In the case of an insured depository
institution that is a custodial bank (as
defined by the Corporation, based on factors
including the percentage of total revenues
generated by custodial businesses and the
level of assets under custody) or a banker’s
bank (as that term is used in * * * (12 U.S.C.
24)), an amount that the Corporation
determines is necessary to establish
assessments consistent with the definition
under section 7(b)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1817(b)(1) for a
custodial bank or a banker’s bank
e of total revenues
generated by custodial businesses and the
level of assets under custody) or a banker’s
bank (as that term is used in * * * (12 U.S.C.
24)), an amount that the Corporation
determines is necessary to establish
assessments consistent with the definition
under section 7(b)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1817(b)(1) for a
custodial bank or a banker’s bank.
On February 7, 2011, the FDIC Board
of Directors adopted a final rule that
implements the requirements of section
331(b) of the Dodd-Frank Act by
amending part 327 of the FDIC’s
regulations to redefine the assessment
base used for calculating deposit
insurance assessments effective April 1,
2011.1 In general, the FDIC’s final rule
requires that all IDIs report average
consolidated total assets in conformance
with existing Call Report calculation
requirements, except that institutions
with assets of $1 billion or more and all
newly insured depository institutions
must report this average based on daily
balances during the calendar quarter.
Institutions with less than $1 billion in
assets may report average consolidated
total assets based on weekly balances
during the calendar quarter, unless they
choose to report daily averages.
However, once an institution begins to
report using daily averages, it must
continue to do so.
In the case of an IDI that is the parent
company of other IDIs, the FDIC’s final
rule requires that the parent IDI report
its daily or weekly average consolidated
total assets without consolidating its IDI
subsidiaries into the calculations. For
IDIs with consolidated subsidiaries that
are not IDIs, the FDIC’s final rule
provides that these subsidiaries’ assets,
including those eliminated in
consolidation, must be calculated using
a daily or weekly averaging method,
corresponding to the daily or weekly
averaging requirement of the parent
institution
tal assets without consolidating its IDI
subsidiaries into the calculations. For
IDIs with consolidated subsidiaries that
are not IDIs, the FDIC’s final rule
provides that these subsidiaries’ assets,
including those eliminated in
consolidation, must be calculated using
a daily or weekly averaging method,
corresponding to the daily or weekly
averaging requirement of the parent
institution. Call Report instructions in
effect for the quarter for which data are
being reported will govern the
calculation of the average amount of
subsidiaries’ assets, including those
eliminated in consolidation. Current
Call Report instructions state that, for
purposes of consolidation, the date of
the financial statements of a subsidiary
should, to the extent practicable, match
the date of the parent institution’s
financial statements, but in no case
differ by more than one quarter.
However, under the FDIC’s final rule,
once an institution reports the average
amount of subsidiaries’ assets, including
those eliminated in consolidation, using
concurrent data, the institution must do
so for all subsequent quarters.
The FDIC’s final rule uses Tier 1
capital as the measure for tangible
equity. In general, the final rule requires
institutions with assets of $1 billion or
more and all newly insured institutions
to report the average of the current
quarter’s month-end balances of Tier 1
capital, but allows an institution with
less than $1 billion in average
consolidated total assets to report the
end-of-quarter amount of Tier 1 capital
as its average tangible equity. An
institution with less than $1 billion in
average consolidated total assets may
elect permanently to report average
tangible equity capital using the current
quarter’s month-end balances.
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Tier 1 capital
as its average tangible equity. An
institution with less than $1 billion in
average consolidated total assets may
elect permanently to report average
tangible equity capital using the current
quarter’s month-end balances.
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2 In the Call Report, items 4, 5, and 6 in Schedule
RC–O—Other Data for Deposit Insurance and FICO
Assessments; in the TFR, line items DI540, DI550,
and DI560 in Schedule DI—Consolidated Deposit
Information; and in the FFIEC 002 report, items 4,
5, and 6 in Schedule O—Other Data for Deposit
Insurance Assessments.
Under the FDIC’s final rule, an IDI
with one or more IDI subsidiaries must
report average tangible equity (or end-
of-quarter tangible equity, as
appropriate) without consolidating its
IDI subsidiaries into the calculations.
An IDI that reports average tangible
equity using a monthly averaging
method and has subsidiaries that are not
IDIs must use monthly average data for
the subsidiaries. The monthly average
data for these subsidiaries, however,
may be calculated using data for the
current quarter or the prior quarter
consistent with the method used for
these subsidiaries’ data when reporting
average consolidated total assets.
For a banker’s bank, the final rule
provides for the deduction of certain
assets from its assessment base, as
permitted by the Dodd-Frank Act,
provided the bank conducts at least 50
percent of its business with entities
other than its parent holding company
or entities other than those controlled
directly or indirectly by its parent
holding company. For a qualifying
banker’s bank, this deduction equals the
sum of its average balances due from
Federal Reserve Banks plus its average
Federal funds sold
itted by the Dodd-Frank Act,
provided the bank conducts at least 50
percent of its business with entities
other than its parent holding company
or entities other than those controlled
directly or indirectly by its parent
holding company. For a qualifying
banker’s bank, this deduction equals the
sum of its average balances due from
Federal Reserve Banks plus its average
Federal funds sold. However, the
amount of this deduction cannot exceed
the sum of the banker’s bank’s average
deposits due to commercial banks and
other depository institutions in the
United States plus its average Federal
funds purchased. These averages would
be calculated on a daily or weekly basis
consistent with the banker’s bank’s
calculation of its average consolidated
total assets.
The FDIC’s final rule defines a
custodial bank as an IDI that had
‘‘fiduciary and custody and safekeeping
assets’’ of at least $50 billion as of the
end of the previous calendar year or
gross fiduciary and related services
income of at least 50 percent of its total
revenue (interest income plus
noninterest income) during the previous
calendar year. Consistent with the
Dodd-Frank Act, the final rule provides
for the deduction of the daily or weekly
average amount of certain low-risk
assets from the assessment base of
custodial banks. These assets are the
portion of a custodial bank’s cash and
balances due from depository
institutions, held-to-maturity securities,
available-for-sale securities, Federal
funds sold, and securities purchased
under agreements to resell that have a
risk weighting for risk-based capital
purposes of zero percent, regardless of
maturity, plus 50 percent of the portion
of these same five types of assets that
have a risk weighting of 20 percent,
regardless of maturity
om depository
institutions, held-to-maturity securities,
available-for-sale securities, Federal
funds sold, and securities purchased
under agreements to resell that have a
risk weighting for risk-based capital
purposes of zero percent, regardless of
maturity, plus 50 percent of the portion
of these same five types of assets that
have a risk weighting of 20 percent,
regardless of maturity. However, the
amount of the deduction of these low-
risk assets is limited to the daily or
weekly average amount of the custodial
bank’s deposit liabilities classified as
transaction accounts and identified by
the custodial bank as being directly
linked to a fiduciary, custody, or
safekeeping account.
As previously mentioned, the FDIC’s
existing assessment system incorporates
adjustments to the assessment rate
schedule for types of funding that pose
heightened risk to the Deposit Insurance
Fund (DIF) or help offset risk to the DIF.
Because the magnitude of these
adjustments has been calibrated to a
domestic deposit assessment base, the
FDIC’s final rule recalibrates the
unsecured debt and brokered deposit
adjustments and eliminates the secured
liability adjustment. The final rule also
adds a depository institution debt
adjustment. These changes should more
accurately reflect the risk that these
funding mechanisms pose to the DIF.
Specifically, the FDIC’s final rule
changes the assessment rate reduction
for long-term unsecured liabilities so the
effect of the assessment system on an
institution’s cost of borrowing using
long-term unsecured debt will remain
unchanged. The final rule also changes
the cap on the unsecured debt
adjustment from 5 basis points to the
lesser of 5 basis points or 50 percent of
an institution’s IBAR to ensure that no
institution’s assessment rate is zero or
close to zero
term unsecured liabilities so the
effect of the assessment system on an
institution’s cost of borrowing using
long-term unsecured debt will remain
unchanged. The final rule also changes
the cap on the unsecured debt
adjustment from 5 basis points to the
lesser of 5 basis points or 50 percent of
an institution’s IBAR to ensure that no
institution’s assessment rate is zero or
close to zero. In addition, the final rule
removes qualified Tier 1 capital from
the definition of long-term unsecured
liabilities for small institutions because
Tier 1 capital is already deducted from
the assessment base as redefined by the
Dodd-Frank Act. The final rule also
eliminates debt that is redeemable
within one year of the reporting date
from qualifying as long-term because
such a redemption option negates the
benefit to the DIF of long-term debt.
The FDIC’s final rule also creates a
new Depository Institution Debt
Adjustment that would apply a 50 basis
point charge to every dollar of long-term
unsecured debt (in excess of 3 percent
of an institution’s Tier 1 capital) held by
an IDI that was issued by another IDI.
This adjustment is intended to offset the
benefit received by institutions that
issue long-term, unsecured liabilities
when those liabilities are held by other
IDIs because the risk of this debt
remains in the banking system.
The FDIC’s final rule retains the
brokered deposit adjustment of 25 basis
points times the ratio of brokered
deposits in excess of 10 percent of
domestic deposits, but the adjustment
has been recalibrated to the new
assessment base. For small institutions,
the adjustment would continue to apply
only to institutions in Risk Categories II,
III, and IV. For large institutions, the
final rule provides an exemption from
the adjustment for institutions that are
well-capitalized and have a composite
CAMELS rating of 1 or 2. The final rule
maintains the 10 basis points cap on the
brokered deposit adjustment
assessment base. For small institutions,
the adjustment would continue to apply
only to institutions in Risk Categories II,
III, and IV. For large institutions, the
final rule provides an exemption from
the adjustment for institutions that are
well-capitalized and have a composite
CAMELS rating of 1 or 2. The final rule
maintains the 10 basis points cap on the
brokered deposit adjustment.
Proposed Regulatory Reporting Changes
for the New Assessment Base
The implementation of the new
assessment base will require the
agencies to collect some information
from IDIs that is not currently collected
on the Call Report, the TFR, or the
FFIEC 002 report. These reporting
changes would take effect as of the June
30, 2011, report date, which is the first
quarter-end report date after the April 1,
2011, effective date of the FDIC’s final
rule. However, the burden of requiring
these new data items will be partly
offset by deleting some assessment data
items currently collected from these
regulatory reports. More specifically, the
agencies are proposing to delete the
existing data items for the total daily
averages of deposit liabilities before
exclusions, allowable exclusions, and
foreign deposits.2
Under the FDIC’s final rule, with
certain exceptions, the assessment base
for an IDI is defined as the IDI’s average
consolidated total assets during the
assessment period minus the IDI’s
average tangible equity during the
assessment period. The exceptions
pertain to banker’s banks, custodial
banks, and insured U.S. branches of
foreign banks. However, the starting
point for the measurement of the
assessment base for banker’s banks and
custodial banks is average consolidated
total assets minus average tangible
equity. As discussed above, average
consolidated total assets must be
reported on a daily average basis by
institutions with $1 billion or more in
total assets, all newly insured
institutions, and institutions with less
than $1 billion in total assets that elect
to do so
he
assessment base for banker’s banks and
custodial banks is average consolidated
total assets minus average tangible
equity. As discussed above, average
consolidated total assets must be
reported on a daily average basis by
institutions with $1 billion or more in
total assets, all newly insured
institutions, and institutions with less
than $1 billion in total assets that elect
to do so. Institutions with less than $1
billion in total assets (that are not newly
insured) that do not elect to report on
a daily average basis must report
average consolidated total assets on a
weekly average basis.
Under the FDIC’s final rule, average
consolidated total assets is defined in
accordance with the instructions for
item 9 of Call Report Schedule RC–K—
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3 The instructions for Call Report Schedule RC–
K, item 9, further provide that, ‘‘to the extent that
net deferred tax assets included in the bank’s total
assets, if any, include the deferred tax effects of any
unrealized holding gains and losses on available-
for-sale debt securities, these deferred tax effects
may be excluded from the determination of the
quarterly average for total assets. If these deferred
tax effects are excluded, this treatment must be
followed consistently over time.’’
4 Under the final rule, section 327.5(a)(3)(ii) of the
FDIC’s regulations states that ‘‘[i]nvestments in
insured depository institution subsidiaries should
be included in total assets using the equity method
of accounting’’ rather than on a consolidated basis
terly average for total assets. If these deferred
tax effects are excluded, this treatment must be
followed consistently over time.’’
4 Under the final rule, section 327.5(a)(3)(ii) of the
FDIC’s regulations states that ‘‘[i]nvestments in
insured depository institution subsidiaries should
be included in total assets using the equity method
of accounting’’ rather than on a consolidated basis.
5 Under the final rule, section 327.5(a)(1)(iii) of
the FDIC’s regulations states that ‘‘[t]he average
calculation of the assets of the surviving or resulting
institution in a merger or consolidation shall
include the assets of all the merged or consolidated
institutions for the days in the quarter prior to the
merger or consolidation, whether reported by the
daily or weekly method.’’
6 In addition, savings associations are permitted
to use of month-end averaging as an alternative to
daily or weekly averaging when reporting average
total assets in line item SI870.
7 For banks with financial subsidiaries, Tier 1
capital is the amount reported in Schedule RC–R,
item 11, less the adjustment for investments in
financial subsidiaries reported in Schedule RC–R,
item 28.a.
8 Under the final rule, section 327.5(a)(3)(ii) of the
FDIC’s regulations states that such institutions
should report tangible equity ‘‘without
consolidating their insured depository institution
subsidiaries into the calculations. Investments in
insured depository institution subsidiaries should
be included in total assets using the equity method
of accounting.’’
9 Under the final rule, section 327.5(a)(2)(iii) of
the FDIC’s regulations states that ‘‘[f]or the surviving
institution in a merger or consolidation, Tier 1
capital shall be calculated as if the merger occurred
on the first day of the quarter in which the merger
or consolidation occurred.’’
10 Banker’s banks that have funds from
government capital infusion programs (such as
TARP and the Small Business Lending Fund), and
stock owned by the FDIC as a result of bank
tates that ‘‘[f]or the surviving
institution in a merger or consolidation, Tier 1
capital shall be calculated as if the merger occurred
on the first day of the quarter in which the merger
or consolidation occurred.’’
10 Banker’s banks that have funds from
government capital infusion programs (such as
TARP and the Small Business Lending Fund), and
stock owned by the FDIC as a result of bank
failures, as well as non-bank-owned stock resulting
from equity compensation programs, are not
excluded from the definition of a banker’s bank.
Quarterly Averages. These instructions
provide that the average should be
calculated using the institution’s total
assets, as defined for Call Report
balance sheet (Schedule RC) purposes,
except that the institution’s calculation
should incorporate all debt securities
(not held for trading) at amortized cost,
equity securities with readily
determinable fair values at the lower of
cost or fair value, and equity securities
without readily determinable fair values
at historical cost.3 However, the final
rule requires certain additional
adjustments to the Schedule RC–K
method of calculating average
consolidated total assets for IDIs with
consolidated insured depository
subsidiaries 4 and for IDIs involved in
mergers and consolidations during the
quarter.5
Thus, to provide the FDIC with the
amount of average consolidated total
assets measured in accordance with the
FDIC’s assessment regulations, the
agencies are proposing to add an item
for this average to Call Report Schedule
RC–O and TFR Schedule DI along with
an item in which the institution would
report whether it has measured the
average using the daily or weekly
averaging method. For most banks, the
additional adjustments identified in the
preceding paragraph will not be
applicable
with the
FDIC’s assessment regulations, the
agencies are proposing to add an item
for this average to Call Report Schedule
RC–O and TFR Schedule DI along with
an item in which the institution would
report whether it has measured the
average using the daily or weekly
averaging method. For most banks, the
additional adjustments identified in the
preceding paragraph will not be
applicable. Therefore, if these banks
measure average total assets for
Schedule RC–K purposes using the
same averaging method (daily or
weekly) they are required to use for the
proposed new Schedule RC–O item,
they will be able to carry the average
total assets figure reported in Schedule
RC–K over to Schedule RC–O. In
contrast, for purposes of reporting
average total assets in line item SI870 of
TFR Schedule SI—Supplemental
Information, savings associations do not
measure debt and equity securities in
the same manner as banks.6 Thus,
savings associations would not be able
to carry the average total assets figure
currently reported in Schedule SI to the
proposed new Schedule DI item.
Under the FDIC’s final rule, tangible
equity is defined as Tier 1 capital. Banks
currently report the amount of their Tier
1 capital as of quarter-end in item 11 of
Call Report Schedule RC–R—Regulatory
Capital.7 Savings associations currently
report the amount of their Tier 1 capital
as of quarter-end in line item CCR20 of
TFR Schedule CCR—Consolidated
Capital Requirement. Because the
FDIC’s final rule reduces average
consolidated total assets by average
tangible equity, the agencies are
proposing to add a new item to Call
Report Schedule RC–O and TFR
Schedule DI for average Tier 1 capital.
In accordance with the FDIC’s final rule,
average Tier 1 capital must be reported
on a monthly average basis by
institutions with $1 billion or more in
total assets, all newly insured
institutions, and institutions with less
than $1 billion in total assets that elect
to do so
ies are
proposing to add a new item to Call
Report Schedule RC–O and TFR
Schedule DI for average Tier 1 capital.
In accordance with the FDIC’s final rule,
average Tier 1 capital must be reported
on a monthly average basis by
institutions with $1 billion or more in
total assets, all newly insured
institutions, and institutions with less
than $1 billion in total assets that elect
to do so. Monthly average Tier 1 capital
is computed by adding Tier 1 capital as
of each month-end during the quarter
and dividing by three. Institutions with
less than $1 billion in total assets (that
are not newly insured) that do not elect
to report on a monthly average basis
will report their quarter-end Tier 1
capital (from Schedule RC–R or
Schedule CCR, as appropriate) as their
‘‘average’’ Tier 1 capital. As with average
consolidated total assets, IDIs with
consolidated insured depository
subsidiaries 8 and IDIs involved in
mergers and consolidations during the
quarter 9 must make certain additional
adjustments when reporting average
Tier 1 capital.
The agencies also are proposing to
add comparable new items for average
consolidated total assets, the averaging
method used for assets, and average
tangible equity to Schedule O of the
FFIEC 002 report for insured U.S.
branches of foreign banks. In accordance
with the FDIC’s final rule, average
consolidated total assets for an insured
branch would be calculated using the
total assets of the branch (including net
due from related depository
institutions), as defined for purposes of
Schedule RAL—Assets and Liabilities of
the FFIEC 002 report, but with debt and
equity securities measured in the same
manner as in Call Report Schedule RC–
K. In addition, insured branches would
calculate average consolidated total
assets using a daily or weekly averaging
method, as appropriate, based on the
same asset size criteria that apply to
other IDIs
s), as defined for purposes of
Schedule RAL—Assets and Liabilities of
the FFIEC 002 report, but with debt and
equity securities measured in the same
manner as in Call Report Schedule RC–
K. In addition, insured branches would
calculate average consolidated total
assets using a daily or weekly averaging
method, as appropriate, based on the
same asset size criteria that apply to
other IDIs. Tangible equity for an
insured branch would be calculated on
a monthly average or quarter-end basis,
according to the branch’s size, and
would be defined as eligible assets
(determined in accordance with section
347.210 of the FDIC’s regulations) less
the book value of liabilities (exclusive of
liabilities due to the foreign bank’s head
office, other branches, agencies, offices,
or wholly owned subsidiaries).
As discussed above, the FDIC’s final
rule permits an institution that is a
qualifying banker’s bank to deduct
certain assets from its assessment base
up to a specified limit. To be a
qualifying banker’s bank, an institution
must meet the definition of this term in
12 U.S.C. 24 and conduct at least 50
percent of its business with entities
other than its parent holding company
or entities other than those controlled
either directly or indirectly by its parent
holding company.10 Accordingly, the
agencies propose to add a yes/no
question to Call Report Schedule RC–O
and TFR Schedule DI that would ask
whether the reporting institution meets
both the statutory definition of a
banker’s bank and the business conduct
test. If the institution answers in the
affirmative (i.e., that it is a qualifying
banker’s bank), the institution would
then report the data needed by the FDIC
to determine the amount to be deducted
from its assessment base in two
proposed new items
chedule DI that would ask
whether the reporting institution meets
both the statutory definition of a
banker’s bank and the business conduct
test. If the institution answers in the
affirmative (i.e., that it is a qualifying
banker’s bank), the institution would
then report the data needed by the FDIC
to determine the amount to be deducted
from its assessment base in two
proposed new items. More specifically,
a qualifying banker’s bank would use
the same averaging method it used to
calculate average consolidated total
assets, i.e., daily or weekly, to report the
average amounts of (1) its banker’s bank
deductions, which is the sum of the
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11 In Call Report Schedule RC–T—Fiduciary and
Related Services Income, the sum of item 10,
columns A and B, plus item 11, column B. In TFR
Schedule FS—Fiduciary and Related Services, the
sum of line items FS20, FS21, and FS280.
12 In the Call Report, income from fiduciary
activities is reported in Schedule RI—Income
Statement, item 5.a, and total revenue is the sum
of two Schedule RI items: item 1.h, ‘‘Total interest
income,’’ and item 5.m, ‘‘Total noninterest income.’’
In the TFR, income from fiduciary activities is
reported in Schedule FS, line item FS30, and total
revenue is the sum of two line items in Schedule
SO—Consolidated Statement of Operations: line
item SO11, Total ‘‘Interest income,’’ and line item
SO42, Total ‘‘Noninterest income.’’
13 As defined in Federal Reserve Regulation D, a
‘‘transaction account’’ is defined in general as a
deposit or account from which the depositor or
account holder is permitted to make transfers or
withdrawals by negotiable or transferable
instruments, payment orders of withdrawal,
telephone transfers, or other similar devices for the
purpose of making payments or tran
‘Noninterest income.’’
13 As defined in Federal Reserve Regulation D, a
‘‘transaction account’’ is defined in general as a
deposit or account from which the depositor or
account holder is permitted to make transfers or
withdrawals by negotiable or transferable
instruments, payment orders of withdrawal,
telephone transfers, or other similar devices for the
purpose of making payments or transfers to third
persons or others or from which the depositor may
make third party payments at an automated teller
machine, a remote service unit, or another
electronic device, including by debit card. For
purposes of the proposed new transaction account
item, custodial banks with deposits in foreign
offices would include foreign office deposit
liabilities with the characteristics of a transaction
account that are linked to fiduciary, custody, and
safekeeping accounts.
14 In the Call Report, the types of assets that are
custodial bank low-risk assets are included, as of
quarter-end, in items 34 through 37, columns C
(zero percent risk weight) and D (20 percent risk
weight), of Schedule RC–R—Regulatory Capital. In
the TFR, the types of assets that are custodial bank
low-risk assets are included, as of quarter-end, in
line items CCR400, CCR405, CCR409, and CCR415
(zero percent risk weight) and in line items CCR430,
CCR435, CCR440, CCR445, and CCR450 (20 percent
risk weight) of Schedule CCR—Consolidated
Capital Requirement.
15 In the Call Report, Schedule RC–O, items 7.a
and 8.a, respectively. In the TFR, Schedule DI, line
items DI645 and DI655, respectively.
16 As defined in the FDIC’s final rule, a credit
card bank is an IDI for which credit card receivables
plus securitized receivables exceed 50 percent of
assets plus securitized receivables.
17 Under both the FDIC’s final rule and the FDIC’s
existing assessment regulations, an insured U.S.
branch of a foreign bank is a ‘‘small institution’’
regardless of its total assets
I655, respectively.
16 As defined in the FDIC’s final rule, a credit
card bank is an IDI for which credit card receivables
plus securitized receivables exceed 50 percent of
assets plus securitized receivables.
17 Under both the FDIC’s final rule and the FDIC’s
existing assessment regulations, an insured U.S.
branch of a foreign bank is a ‘‘small institution’’
regardless of its total assets.
18 See sections 327.8(f), (g), and (s) of the FDIC’s
regulations for the full definitions of the terms
‘‘large institution,’’ ‘‘highly complex institution,’’
and ‘‘processing bank or trust company,’’
respectively. Insured U.S. branches of foreign banks
are excluded from these categories of institutions.
averages of its balances due from the
Federal Reserve and its Federal funds
sold, and (2) its banker’s bank deduction
limit, which is the sum of the averages
of its deposit balances due to
commercial banks and other depository
institutions in the United States and its
Federal funds purchased.
Also as mentioned above, an
institution that is a custodial bank is
permitted to deduct certain average low-
risk assets from its assessment base up
to a specified limit. As defined in the
FDIC’s final rule, a custodial bank is an
IDI with previous calendar year-end
‘‘fiduciary and custody and safekeeping
assets’’ of at least $50 billion 11 or
previous calendar year income from
fiduciary activities of at least 50 percent
of its previous calendar year revenue.12
Accordingly, as has been proposed for
banker’s banks, the agencies propose to
add a yes/no question to Call Report
Schedule RC–O and TFR Schedule DI
that would ask whether the reporting
institution meets the definition of a
custodial bank. If the institution
answers in the affirmative (i.e., that it is
a qualifying custodial bank), the
institution would then report the data
necessary for the FDIC to determine the
amount to be deducted from its
assessment base in two proposed new
items
to Call Report
Schedule RC–O and TFR Schedule DI
that would ask whether the reporting
institution meets the definition of a
custodial bank. If the institution
answers in the affirmative (i.e., that it is
a qualifying custodial bank), the
institution would then report the data
necessary for the FDIC to determine the
amount to be deducted from its
assessment base in two proposed new
items. In this regard, custodial banks
would report the average amount of (1)
qualifying low-risk assets and (2)
transaction account deposit liabilities
linked to a fiduciary, custody, or
safekeeping account.13 A custodial bank
would compute these averages using the
same averaging method it used to
calculate average consolidated total
assets, i.e., daily or weekly. Qualifying
low-risk assets are the portion of the
custodial bank’s cash and balances due
from depository institutions, held-to-
maturity securities, available-for-sale
securities, Federal funds sold, and
securities purchased under agreements
to resell (as defined in Call Report
Schedule RC—Balance Sheet, items 1,
2.a, 2.b, 3.a, and 3.b, respectively) that
have a zero percent risk weight for risk-
based capital purposes plus 50 percent
of the portion of these same five types
of assets that have a 20 percent risk
weight.14
As an input to the new Depository
Institution Debt adjustment created in
the FDIC’s final rule, the agencies
propose to add an item to Call Report
Schedule RC–O, TFR Schedule DI, and
FFIEC 002 report Schedule O in which
IDIs would report the amount of their
holdings of long-term unsecured debt
issued by other IDIs (as reported on the
balance sheet). Debt would be
considered long-term if it has a
remaining maturity of at least one year,
except if the holder has the option to
redeem the debt within the next 12
months. Unsecured debt includes senior
unsecured liabilities and subordinated
debt
e O in which
IDIs would report the amount of their
holdings of long-term unsecured debt
issued by other IDIs (as reported on the
balance sheet). Debt would be
considered long-term if it has a
remaining maturity of at least one year,
except if the holder has the option to
redeem the debt within the next 12
months. Unsecured debt includes senior
unsecured liabilities and subordinated
debt. Senior unsecured liabilities are
unsecured liabilities that are reportable
as ‘‘Other borrowings’’ by the issuing IDI
on its quarterly regulatory report,
excluding any such liabilities that the
FDIC has guaranteed under the
Temporary Liquidity Guarantee Program
(12 CFR part 370). Subordinated debt
includes subordinated notes and
debentures and limited-life preferred
stock.
Finally, the agencies are proposing to
make an instructional change to two
existing Call Report and TFR items that
are used to determine the unsecured
debt adjustment. For the data items for
‘‘Unsecured ‘Other borrowings’ ’’ and
‘‘Subordinated notes and debentures’’
with a remaining maturity of one year
or less,15 the instructions would be
revised to include debt instruments for
which the holder has the option to
redeem the debt within one year of the
report date.
II. Risk-Based Assessment System for
Large Insured Depository Institutions
The FDIC’s final rule amends the
assessment system applicable to large
IDIs to better capture risk at the time the
institution assumes the risk, better
differentiate risk among large IDIs
during periods of good economic and
banking conditions based on how they
would fare during periods of stress or
economic downturns, and better take
into account the losses that the FDIC
may incur if a large IDI fails.
Under the FDIC’s final rule,
assessment rates for large IDIs will be
calculated using a scorecard that
combines CAMELS ratings and certain
forward-looking financial measures to
assess the risk a large institution poses
to the DIF
ed on how they
would fare during periods of stress or
economic downturns, and better take
into account the losses that the FDIC
may incur if a large IDI fails.
Under the FDIC’s final rule,
assessment rates for large IDIs will be
calculated using a scorecard that
combines CAMELS ratings and certain
forward-looking financial measures to
assess the risk a large institution poses
to the DIF. One scorecard will apply to
most large institutions and another to
institutions that are structurally and
operationally complex or pose unique
challenges and risk in the case of failure
(highly complex institutions). In general
terms, a large institution is an IDI with
total assets of $10 billion or more
whereas a highly complex institution is
an IDI (other than a credit card bank 16)
with total assets of $50 billion or more
that is controlled by a U.S. holding
company that has total assets of $500
billion or more or an IDI that is a
processing bank or trust company.17 A
processing bank or trust company
generally is an IDI with total assets of
$10 billion or more; total fiduciary
assets of $500 billion or more; and total
non-lending interest income, fiduciary
revenues (which must not be zero), and
investment banking fees for the last
three years in excess of 50 percent of
total revenues.18
The scorecard for large institutions
(other than highly complex institutions)
produces two scores—a performance
score and a loss severity score—that are
converted into a total score. The
performance score measures a large
institution’s financial performance and
its ability to withstand stress. The loss
severity score measures the relative
magnitude of potential losses to the
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ore—that are
converted into a total score. The
performance score measures a large
institution’s financial performance and
its ability to withstand stress. The loss
severity score measures the relative
magnitude of potential losses to the
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19 It is not necessary to add the data items for
highly complex institutions to the TFR because no
savings associations are expected to meet the
definition of a highly complex institution. If a
savings association were to become a highly
complex institution before its proposed conversion
from filing TFRs to filing Call Reports effective
March 31, 2012 (see 76 FR 7082, February 8, 2011),
the FDIC would collect the necessary data directly
from the savings association.
FDIC in the event of a large institution’s
failure.
The performance score for large
institutions is a weighted average of the
scores for three components: (1)
Weighted average CAMELS rating score;
(2) ability to withstand asset-related
stress score; and (3) ability to withstand
funding-related stress score. The score
for the ability to withstand asset-related
stress is a weighted average of the scores
for four measures:
• Tier 1 leverage ratio;
• Concentration measure (the greater
of the higher-risk assets to the sum of
Tier 1 capital and reserves score or the
growth-adjusted portfolio
concentrations score);
• The ratio of core earnings to average
quarter-end total assets; and
• Credit quality measure (the greater
of the criticized and classified items to
the sum of Tier 1 capital and reserves
score or the underperforming assets to
the sum of Tier 1 capital and reserves
score)
risk assets to the sum of
Tier 1 capital and reserves score or the
growth-adjusted portfolio
concentrations score);
• The ratio of core earnings to average
quarter-end total assets; and
• Credit quality measure (the greater
of the criticized and classified items to
the sum of Tier 1 capital and reserves
score or the underperforming assets to
the sum of Tier 1 capital and reserves
score).
The score for the ability to withstand
funding-related stress is the weighted
average of the scores for two measures
that are most relevant to assessing a
large institution’s ability to withstand
such stress:
• A core deposits-to-total liabilities
ratio; and
• A balance sheet liquidity ratio,
which measures the amount of highly
liquid assets needed to cover potential
cash outflows in the event of stress.
The loss severity score for large
institutions is based on a loss severity
measure that estimates the relative
magnitude of potential losses to the
FDIC in the event of a large institution’s
failure. The loss severity measure
applies a standardized set of
assumptions (based on recent failures)
regarding liability runoffs and the
recovery value of asset categories to
calculate possible losses to the FDIC.
Asset loss rate assumptions are based on
estimates of recovery values for IDIs that
failed or came close to failure. Run-off
assumptions are based on the actual
experience of IDIs that either failed or
came close to failure from 2007 through
2009.
For highly complex institutions, there
is a different scorecard with measures
tailored to the risks these institutions
pose. However, the structure and much
of the scorecard for a highly complex
institution are similar to the scorecard
for other large institutions. Like the
scorecard for other large institutions, the
scorecard for highly complex
institutions contains a performance
score and a loss severity score. These
scores are converted into a total score
sures
tailored to the risks these institutions
pose. However, the structure and much
of the scorecard for a highly complex
institution are similar to the scorecard
for other large institutions. Like the
scorecard for other large institutions, the
scorecard for highly complex
institutions contains a performance
score and a loss severity score. These
scores are converted into a total score.
The loss severity score for highly
complex institutions is calculated the
same way as the loss severity score for
other large institutions.
The performance score for highly
complex institutions is the weighted
average of the scores for the same three
components as for large institutions: (1)
Weighted average CAMELS rating score;
(2) ability to withstand asset-related
stress score; and (3) ability to withstand
funding-related stress score. However,
the measures contained in the latter two
components for highly complex
institutions differ from those for large
institutions.
The score for the ability to withstand
asset-related stress is a weighted average
of the scores for four measures:
• Tier 1 leverage ratio;
• Concentration measure (the greatest
of the higher-risk assets to the sum of
Tier 1 capital and reserves score, the top
20 counterparty exposure to the sum of
Tier 1 capital and reserves score, or the
largest counterparty exposure to the
sum of Tier 1 capital and reserves
score);
• The ratio of core earnings to average
quarter-end total assets; and
• Credit quality measure (the greater
of the criticized and classified items to
the sum of Tier 1 capital and reserves
score or the underperforming assets to
the sum of Tier 1 capital and reserves
score) and market risk measure (the
weighted average of the four-quarter
trading revenue volatility to Tier 1
capital score, the market risk capital to
Tier 1 capital score, and the level 3
trading assets to Tier 1 capital score)
r
of the criticized and classified items to
the sum of Tier 1 capital and reserves
score or the underperforming assets to
the sum of Tier 1 capital and reserves
score) and market risk measure (the
weighted average of the four-quarter
trading revenue volatility to Tier 1
capital score, the market risk capital to
Tier 1 capital score, and the level 3
trading assets to Tier 1 capital score).
The score for the ability to withstand
funding-related stress is the weighted
average of the scores for three measures,
the first two of which are also contained
in the scorecard for large institutions:
• A core deposits-to-total liabilities
ratio;
• A balance sheet liquidity ratio; and
• An average short-term funding to
average total assets ratio.
The method for calculating the total
score for large institutions and highly
complex institutions is the same. Once
the performance and loss severity scores
are calculated for a large or highly
complex institution, these scores are
converted to a total score. Each
institution’s total score is calculated by
multiplying its performance score by a
loss severity factor derived from its loss
severity score. The total score is then
used to determine the IBAR for each
large institution and highly complex
institution.
For complete details on the scorecards
for large institutions and highly
complex institutions, including the
measures used in the calculation of
performance scores and loss severity
scores, see the FDIC’s final rule
by a
loss severity factor derived from its loss
severity score. The total score is then
used to determine the IBAR for each
large institution and highly complex
institution.
For complete details on the scorecards
for large institutions and highly
complex institutions, including the
measures used in the calculation of
performance scores and loss severity
scores, see the FDIC’s final rule.
Proposed Regulatory Reporting Changes
for the Revised Risk-Based Assessment
System for Large Institutions and Highly
Complex Institutions
Most of the data used as inputs to the
scorecard measures for large institutions
and highly complex institutions are
available from the Call Reports and
TFRs filed quarterly by these
institutions, but the data items needed
to compute four scorecard measures—
higher-risk assets, top 20 counterparty
exposures, the largest counterparty
exposure, and criticized/classified
items—are not. With the revised risk-
based assessment system for these
institutions under the FDIC’s final rule
taking effect in the second quarter of
2011, the agencies are proposing that
the new data items described below for
large institutions be added to the Call
Report and the TFR effective June 30,
2011, and that the new data items
described below for highly complex
institutions be added to the Call Report
as of that same date.19 In addition,
certain other data items that will be
used in the scorecards for large
institutions are not currently reported in
the TFR by savings associations. The
agencies are proposing to add these data
items to the TFR as of June 30, 2011,
and they would be reported by savings
associations that are large institutions or
report $10 billion or more in total assets
as of that or a subsequent quarter-end
date. Currently, there are about 110 IDIs
with $10 billion or more in total assets
that would be affected by some or all of
these additional reporting requirements,
of which 20 are savings associations
TFR as of June 30, 2011,
and they would be reported by savings
associations that are large institutions or
report $10 billion or more in total assets
as of that or a subsequent quarter-end
date. Currently, there are about 110 IDIs
with $10 billion or more in total assets
that would be affected by some or all of
these additional reporting requirements,
of which 20 are savings associations.
The proposed new data items that
would be completed by large
institutions and highly complex
institutions are first discussed below
(sections A through G below), followed
by a discussion of those proposed data
items that would be completed only by
highly complex institutions (sections H
and I below). The proposed data items
for criticized and classified items,
nontraditional mortgage loans, subprime
consumer loans, leveraged loans, top 20
counterparty exposures, and largest
counterparty exposure are currently
gathered for the FDIC’s use through
examination processes at large
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20 Loss items would include any items graded
Loss that have not yet been written off against the
allowance for loan and leases losses (or another
valuation allowance) or charged directly to
earnings, as appropriate.
institutions and are treated as
confidential examination information.
The agencies are now proposing to
obtain these data items directly from
each large or highly complex institution
in its regular quarterly regulatory report
(Call Report or TFR) and use the
reported data as inputs to scorecard
measures. Because the agencies would
continue to regard these items as
examination information, the
information would continue to be
accorded confidential treatment when
collected via the Call Report and TFR
ese data items directly from
each large or highly complex institution
in its regular quarterly regulatory report
(Call Report or TFR) and use the
reported data as inputs to scorecard
measures. Because the agencies would
continue to regard these items as
examination information, the
information would continue to be
accorded confidential treatment when
collected via the Call Report and TFR.
Finally, publicly available data items
currently collected in the Call Report
that are proposed for addition to the
TFR as new (publicly available) data
items applicable to large institutions are
discussed (section J below).
A. Criticized and Classified Items—
Separate data items would be added to
the Call Report for the amount of items
designated Special Mention,
Substandard, Doubtful, and Loss.20
These four data items would be
completed by large institutions and
highly complex institutions and would
cover both on- and off-balance sheet
items that are criticized and classified.
These data items are now collected on
a confidential basis from all savings
associations on the TFR in Schedule
VA—Consolidated Valuation
Allowances and Related Data in line
items VA960, VA965, VA970, and
VA975.
According to Appendix A of the
FDIC’s final rule:
Criticized and classified items include
items an institution or its primary Federal
regulator have graded ‘‘Special Mention’’ or
worse and include retail items under
Uniform Retail Classification Guidelines,
securities, funded and unfunded loans, other
real estate owned (ORE), other assets, and
marked-to-market counterparty positions,
less credit valuation adjustments.2 Criticized
and classified items exclude loans and
securities in trading books, and the amount
recoverable from the U.S. government, its
agencies, or government-sponsored agencies,
under guarantee or insurance provisions.
2 A marked-to-market counterparty
position is equal to the sum of the net
marked-to-market derivative exposures for
each counterparty
less credit valuation adjustments.2 Criticized
and classified items exclude loans and
securities in trading books, and the amount
recoverable from the U.S. government, its
agencies, or government-sponsored agencies,
under guarantee or insurance provisions.
2 A marked-to-market counterparty
position is equal to the sum of the net
marked-to-market derivative exposures for
each counterparty. The net marked-to-market
derivative exposure equals the sum of all
positive marked-to-market exposures net of
legally enforceable netting provisions and net
of all collateral held under a legally
enforceable CSA plus any exposure where
excess collateral has been posted to the
counterparty. For purposes of the Criticized
and Classified Items/Tier 1 Capital and
Reserves definition a marked-to-market
counterparty position less any credit
valuation adjustment can never be less than
zero.
Saving associations that are large
institutions or highly complex
institutions would complete existing
line items VA960, VA965, VA970, and
VA975 in accordance with the
preceding Appendix A guidance rather
than the existing TFR instructions for
these four line items. All other savings
associations would continue to follow
the existing TFR instructions for these
four line items.
B. Nontraditional Mortgage Loans—
One item would be added to the Call
Report and the TFR for the balance
sheet amount of nontraditional 1–4
family residential mortgage loans,
including certain securitizations of such
mortgages. The item would be
completed by large institutions and
highly complex institutions
uld continue to follow
the existing TFR instructions for these
four line items.
B. Nontraditional Mortgage Loans—
One item would be added to the Call
Report and the TFR for the balance
sheet amount of nontraditional 1–4
family residential mortgage loans,
including certain securitizations of such
mortgages. The item would be
completed by large institutions and
highly complex institutions. As
described in Appendix C of the FDIC’s
final rule, nontraditional mortgage loans
include all:
residential loan products that allow the
borrower to defer repayment of principal or
interest and includes all interest-only
products, teaser rate mortgages, and negative
amortizing mortgages, with the exception of
home equity lines of credit (HELOCs) or
reverse mortgages.8, 9, 10
For purposes of the higher-risk
concentration ratio, nontraditional mortgage
loans include securitizations where more
than 50 percent of the assets backing the
securitization meet one or more of the
preceding criteria for nontraditional mortgage
loans, with the exception of those securities
classified as trading book.
8 For purposes of this rule making, a teaser-
rate mortgage loan is defined as a mortgage
with a discounted initial rate where the
lender offers a lower rate and lower
payments for part of the mortgage term.
9 http://www.fdic.gov/regulations/laws/
federal/2006/06noticeFINAL.html.
10 A mortgage loan is no longer considered
a nontraditional mortgage once the teaser rate
has expired. An interest only loan is no
longer considered nontraditional once the
loan begins to amortize.
The amount to be reported for
nontraditional mortgage loans would
include purchased credit impaired loans
as defined in Financial Accounting
Standards Board Accounting Standards
Codification Subtopic 310–30,
Receivables—Loans and Debt Securities
Acquired with Deteriorated Credit
Quality (formerly AICPA Statement of
Position 03–3, ‘‘Accounting for Certain
Loans or Debt Securities Acquired in a
Transfer’’)
eported for
nontraditional mortgage loans would
include purchased credit impaired loans
as defined in Financial Accounting
Standards Board Accounting Standards
Codification Subtopic 310–30,
Receivables—Loans and Debt Securities
Acquired with Deteriorated Credit
Quality (formerly AICPA Statement of
Position 03–3, ‘‘Accounting for Certain
Loans or Debt Securities Acquired in a
Transfer’’). The amount to be reported
would exclude amounts recoverable on
nontraditional mortgage loans from the
U.S. government, its agencies, or
government-sponsored agencies, under
guarantee or insurance provisions.
C. Subprime Consumer Loans—One
item would be added to the Call Report
and the TFR for the balance sheet
amount of subprime consumer loans.
The item would be completed by large
institutions and highly complex
institutions. According to Appendix C
of the FDIC’s final rule, subprime loans
include:
loans made to borrowers that display one or
more of the following credit risk
characteristics (excluding subprime loans
that are previously included as
nontraditional mortgage loans) at origination
or upon refinancing, whichever is more
recent.
• Two or more 30-day delinquencies in the
last 12 months, or one or more 60-day
delinquencies in the last 24 months;
• Judgment, foreclosure, repossession, or
charge-off in the prior 24 months;
• Bankruptcy in the last 5 years; or
• Debt service-to-income ratio of 50
percent or greater, or otherwise limited
ability to cover family living expenses after
deducting total monthly debt-service
requirements from monthly income.11
Subprime loans also include loans
identified by an insured depository
institution as subprime loans based upon
similar borrower characteristics and
securitizations where more than 50 percent
of assets backing the securitization meet one
or more of the preceding criteria for subprime
loans, excluding those securities classified as
trading book
t-service
requirements from monthly income.11
Subprime loans also include loans
identified by an insured depository
institution as subprime loans based upon
similar borrower characteristics and
securitizations where more than 50 percent
of assets backing the securitization meet one
or more of the preceding criteria for subprime
loans, excluding those securities classified as
trading book.
11 http://www.fdic.gov/news/news/press/
2001/pr0901a.html; however, the definition
in the text above excludes any reference to
FICO or other credit bureau scores.
As with nontraditional mortgages, the
amount to be reported for subprime
loans would include purchased credit
impaired loans, but would exclude
amounts recoverable on subprime loans
from the U.S. government, its agencies,
or government-sponsored agencies,
under guarantee or insurance
provisions.
D. Leveraged Loans—One item would
be added to the Call Report and the TFR
for the amount of leveraged loans. The
item would be completed by large
institutions and highly complex
institutions. As described in Appendix
C of the FDIC’s final rule, leveraged
loans include:
(1) All commercial loans (funded and
unfunded) with an original amount greater
than $1 million that meet any one of the
conditions below at either origination or
renewal, except real estate loans; (2)
securities issued by commercial borrowers
that meet any one of the conditions below at
either origination or renewal, except
securities classified as trading book; and (3)
securitizations that are more than 50 percent
collateralized by assets that meet any one of
the conditions below at either origination or
renewal, except securities classified as
trading book.4, 5
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ities classified as trading book; and (3)
securitizations that are more than 50 percent
collateralized by assets that meet any one of
the conditions below at either origination or
renewal, except securities classified as
trading book.4, 5
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21 For the Call Report, see 76 FR 5253, January 28,
2011. For the TFR, see 76 FR 6191, February 3,
2011.
22 See footnote 21.
• Loans or securities where borrower’s
total or senior debt to trailing twelve-month
EBITDA 6 (i.e. operating leverage ratio) is
greater than 4 or 3 times, respectively. For
purposes of this calculation, the only
permitted EBITDA adjustments are those
adjustments specifically permitted for that
borrower in its credit agreement; or
• Loans or securities that are designated as
highly leveraged transactions (HLT) by
syndication agent.7
4 The following guidelines should be used
to determine the ‘‘original amount’’ of a loan:
(1) For loans drawn down under lines of
credit or loan commitments, the ‘‘original
amount’’ of the loan is the size of the line of
credit or loan commitment when the line of
credit or loan commitment was most recently
approved, extended, or renewed prior to the
report date. However, if the amount currently
outstanding as of the report date exceeds this
size, the ‘‘original amount’’ is the amount
currently outstanding on the report date.
(2) For loan participations and
syndications, the ‘‘original amount’’ of the
loan participation or syndication is the entire
amount of the credit originated by the lead
lender.
extended, or renewed prior to the
report date. However, if the amount currently
outstanding as of the report date exceeds this
size, the ‘‘original amount’’ is the amount
currently outstanding on the report date.
(2) For loan participations and
syndications, the ‘‘original amount’’ of the
loan participation or syndication is the entire
amount of the credit originated by the lead
lender.
(3) For all other loans, the ‘‘original
amount’’ is the total amount of the loan at
origination or the amount currently
outstanding as of the report date, whichever
is larger.
5 Leveraged loans criteria are consistent
with guidance issued by the Office of the
Comptroller of the Currency in its
Comptroller’s Handbook, http://
www.occ.gov/static/publications/handbook/
LeveragedLending.pdf, but do not include all
of the criteria in the handbook.
6 Earnings before interest, taxes,
depreciation, and amortization.
7 http://www.fdic.gov/news/news/press/
2001/pr2801.html.
Institutions would report the balance
sheet amount of leveraged loans that
have been funded. Unfunded amounts
include the unused portions of
irrevocable and revocable commitments
to make or purchase leveraged loans.
The amount to be reported for leveraged
loans would include purchased credit
impaired loans, but would exclude
amounts recoverable on leveraged loans
from the U.S. government, its agencies,
or government-sponsored agencies,
under guarantee or insurance
provisions.
E. Loans Wholly or Partially
Guaranteed by the U.S
rrevocable and revocable commitments
to make or purchase leveraged loans.
The amount to be reported for leveraged
loans would include purchased credit
impaired loans, but would exclude
amounts recoverable on leveraged loans
from the U.S. government, its agencies,
or government-sponsored agencies,
under guarantee or insurance
provisions.
E. Loans Wholly or Partially
Guaranteed by the U.S. Government—
As the first step in the calculation of the
growth-adjusted portfolio concentration
measure for large institutions,
concentration levels are determined for
each of seven loan portfolio categories:
• Construction and land development
loans secured by real estate (including
land loans);
• Other commercial real estate loans
(including loans secured by multifamily
and nonfarm nonresidential properties);
• First lien 1–4 family residential
mortgages (including non-agency
residential mortgage-backed securities);
• Closed-end junior lien 1–4 family
residential mortgages and home equity
lines of credit;
• Commercial and industrial loans;
• Credit card loans; and
• Other consumer loans.
The concentration calculations
include purchased credit impaired
loans, but exclude amounts recoverable
from the U.S. government, including its
agencies and its sponsored agencies,
under guarantee or insurance
provisions. In addition, for both large
institutions and highly complex
institutions, one of the components of
the higher risk assets concentration
measure is the amount of funded and
unfunded construction and land
development loans secured by real
estate (including land loans).
The agencies separately have
proposed to collect the amount of
funded loans in each of these categories
that is covered by loss-sharing
agreements with the FDIC effective
March 31, 2011.21 However, the
agencies do not collect data on the
portion of funded and unfunded loans
that are wholly or partially guaranteed
or insured by the U.S
loans secured by real
estate (including land loans).
The agencies separately have
proposed to collect the amount of
funded loans in each of these categories
that is covered by loss-sharing
agreements with the FDIC effective
March 31, 2011.21 However, the
agencies do not collect data on the
portion of funded and unfunded loans
that are wholly or partially guaranteed
or insured by the U.S. government when
the guarantor or insurer is not the FDIC,
nor do they collect data on the portion
of unfunded construction and land
development loan commitments
covered by FDIC loss-sharing
agreements. Therefore, the agencies are
proposing to add items to the Call
Report and TFR for each of the seven
loan categories mentioned above in
which large institutions would report
the portion of the balance sheet amount
of funded loans that is guaranteed or
insured by the U.S. government,
including its agencies and its
government-sponsored agencies, other
than by the FDIC under loss-sharing
agreements. In addition, for the higher
risk assets concentration measure, the
new item for funded U.S. government-
guaranteed or -insured construction and
land development loans would be
completed by highly complex
institutions. An additional proposed
new item for the portion of unfunded
construction and land development loan
commitments that is guaranteed or
insured by the U.S. government,
including by the FDIC, would be
completed by large institutions and
highly complex institutions.
Examples of loans to be included in
the proposed new items include those
guaranteed by the Small Business
Administration and insured by the
Federal Housing Administration.
Institutions would exclude loans
guaranteed or insured by State or local
governments, State or local government
agencies, foreign (non-U.S.)
governments, and private agencies or
organizations as well as loans
collateralized by securities issued by the
U.S. government, including its agencies
and its government-sponsored agencies.
F
ation and insured by the
Federal Housing Administration.
Institutions would exclude loans
guaranteed or insured by State or local
governments, State or local government
agencies, foreign (non-U.S.)
governments, and private agencies or
organizations as well as loans
collateralized by securities issued by the
U.S. government, including its agencies
and its government-sponsored agencies.
F. Other Real Estate Owned Wholly or
Partially Guaranteed by the U.S.
Government—When calculating the
underperforming assets ratio for large
institutions and highly complex
institutions, the amount of other real
estate owned (ORE) that is recoverable
from the U.S. government, including its
agencies and its sponsored agencies,
under guarantee or insurance provisions
is excluded from the overall amount of
ORE as reported on the balance sheet.
The agencies separately have proposed
to collect data on the portion of ORE
that is covered by loss-sharing
agreements with the FDIC effective
March 31, 2011.22 Institutions currently
report certain other information on ORE
that is protected in whole or in part by
a U.S. government guarantee or
insurance in the Call Report and TFR.
However, the amount of ORE
recoverable from the U.S. government,
other than through FDIC loss-sharing
agreements, cannot be determined from
these existing Call Report and TFR data
items. Therefore, the agencies are
proposing to add an item to the Call
Report and the TFR in which large
institutions and highly complex
institutions would report the amount of
ORE that is recoverable from the U.S.
government, including its agencies and
its sponsored agencies, under guarantee
or insurance provisions, excluding any
ORE covered under FDIC loss-sharing
agreements. Institutions would also
exclude ORE protected under guarantee
or insurance provisions by State or local
governments, State or local government
agencies, foreign (non-U.S.)
governments, and private agencies or
organizations.
G
vernment, including its agencies and
its sponsored agencies, under guarantee
or insurance provisions, excluding any
ORE covered under FDIC loss-sharing
agreements. Institutions would also
exclude ORE protected under guarantee
or insurance provisions by State or local
governments, State or local government
agencies, foreign (non-U.S.)
governments, and private agencies or
organizations.
G. Core Deposit Ratio—One item
would be added to the Call Report and
TFR to support the calculation of the
core deposits/total liabilities ratio.
Appendix A of the FDIC’s final rule
states that that this ratio equals ‘‘[t]otal
domestic deposits excluding brokered
deposits and uninsured non-brokered
time deposits divided by total
liabilities.’’ Large institutions and highly
complex institutions would complete a
new item for the amount of their
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nonbrokered time deposits of more than
$250,000. The agencies currently collect
the other components of this ratio in the
Call Report and the TFR.
H. Top 20 Counterparty Exposures—
An item would be added to the Call
Report for the total amount of the
institution’s 20 largest counterparty
exposures, which would be completed
only by highly complex institutions
day, March 16, 2011 / Notices
nonbrokered time deposits of more than
$250,000. The agencies currently collect
the other components of this ratio in the
Call Report and the TFR.
H. Top 20 Counterparty Exposures—
An item would be added to the Call
Report for the total amount of the
institution’s 20 largest counterparty
exposures, which would be completed
only by highly complex institutions.
According to Appendix A of the FDIC’s
final rule:
Counterparty exposure is equal to the sum
of Exposure at Default (EAD) associated with
derivatives trading and Securities Financing
Transactions (SFTs) and the gross lending
exposure (including all unfunded
commitments) for each counterparty or
borrower at the consolidated entity level [of
the counterparty].1
1 EAD and SFTs are defined and described
in the compilation issued by the Basel
Committee on Banking Supervision in its
June 2006 document, ‘‘International
Convergence of Capital Measurement and
Capital Standards.’’ The definitions are
described in detail in Annex 4 of the
document. Any updates to the Basel II capital
treatment of counterparty credit risk would
be implemented as they are adopted. http://
www.bis.org/publ/bcbs128.pdf.
I. Largest Counterparty Exposure—An
item would be added to the Call Report
for the amount of the institution’s
largest counterparty exposure, which
would be completed only by highly
complex institutions. The counterparty
exposure would be measured as
described above for the top 20
counterparty exposures.
J. Items for Addition to the TFR—As
previously mentioned, certain data
items used in the scorecards for large
institutions are not currently reported in
the TFR by savings associations, but are
reported in the Call Report.
In particular, trading assets are only
reported as a supplemental item on the
TFR (line item SI375 in Schedule SI)
and trading liabilities are not reported at
all
es.
J. Items for Addition to the TFR—As
previously mentioned, certain data
items used in the scorecards for large
institutions are not currently reported in
the TFR by savings associations, but are
reported in the Call Report.
In particular, trading assets are only
reported as a supplemental item on the
TFR (line item SI375 in Schedule SI)
and trading liabilities are not reported at
all. Thus, when evaluating the
composition of the balance sheet in TFR
Schedule SC—Consolidated Statement
of Condition, the asset and liability
categories presented in the schedule
combine amounts held for trading with
amounts held for purposes other than
trading. In contrast, the Call Report
balance sheet (Schedule RC) includes
separate line items for trading assets and
trading liabilities, and banks that
reported average trading assets of $2
million or more in any of the four
preceding calendar quarters must
complete a separate trading schedule
(Schedule RC–D) that provides detailed
information on the composition of
trading assets and liabilities.
To calculate the loss severity measure
and the balance sheet liquidity ratio in
accordance with the FDIC’s final rule for
savings associations that are large
institutions, the agencies are proposing
that savings associations that are
defined as large institutions or report
$10 billion or more in total assets in
their June 30, 2011, or a subsequent TFR
would provide data on the fair value of
trading assets and liabilities included in
various balance sheet asset and liability
categories reported in TFR Schedule SC.
Asset categories for which the amount
of trading assets included in the
category would be reported are:
• ‘‘Other Interest-Earning Deposits’’
(line item SC118);
• ‘‘Federal Funds Sold and Securities
Purchased Under Agreements to Resell’’
(line item SC125);
• ‘‘U.S
trading assets and liabilities included in
various balance sheet asset and liability
categories reported in TFR Schedule SC.
Asset categories for which the amount
of trading assets included in the
category would be reported are:
• ‘‘Other Interest-Earning Deposits’’
(line item SC118);
• ‘‘Federal Funds Sold and Securities
Purchased Under Agreements to Resell’’
(line item SC125);
• ‘‘U.S. Government, Agency, and
Sponsored Enterprise Securities’’ (line
item SC130);
• ‘‘Equity Securities Carried at Fair
Value’’ (line item SC140);
• ‘‘State and Municipal Obligations’’
(line item SC180);
• ‘‘Securities Backed by Nonmortgage
Loans’’ (line item SC182);
• ‘‘Other Investment Securities’’ (line
item SC185);
• ‘‘Other Pass-Through’’ mortgage-
backed securities (line item SC215);
• ‘‘Other’’ mortgage-backed securities
(line item SC222);
• Mortgage-backed securities other
than the preceding two categories (line
items SC210, 217, and 219);
• ‘‘Construction Loans’’ (line items
SC230, SC235, and SC240);
• ‘‘Revolving, Open-End Loans’’ on 1–
4 family residential properties (line item
SC251);
• Loans ‘‘Secured by First Liens’’ on
1–4 family residential properties (line
item SC254);
• Loans ‘‘Secured by Junior Liens’’ on
1–4 family residential properties (line
item SC255);
• Real estate loans on ‘‘Multifamily (5
or More) Dwelling Units’’ (line item SC
256);
• Real estate loans on ‘‘Nonresidential
Property (Except Land)’’ (line item
SC260) (with loans secured by nonfarm
nonresidential properties and loans
secured by farmland reported
separately);
• Loans secured by ‘‘Land’’ (line item
SC265);
• ‘‘Commercial Loans’’ (line item
SC32);
• ‘‘Credit Cards’’ (line item SC328);
• Other ‘‘Consumer Loans’’ (line items
SC310, SC316, SC320, SC323, SC326,
and SC330);
• ‘‘Other’’ equity investments not
carried at fair value (line item SC540);
• ‘‘Interest-Only Strip Receivables
and Certain Other Instruments’’ (line
item SC665); and
• ‘‘Other Assets’’ (line item SC689)
(line item
SC265);
• ‘‘Commercial Loans’’ (line item
SC32);
• ‘‘Credit Cards’’ (line item SC328);
• Other ‘‘Consumer Loans’’ (line items
SC310, SC316, SC320, SC323, SC326,
and SC330);
• ‘‘Other’’ equity investments not
carried at fair value (line item SC540);
• ‘‘Interest-Only Strip Receivables
and Certain Other Instruments’’ (line
item SC665); and
• ‘‘Other Assets’’ (line item SC689).
Liability categories for which the
amount of trading liabilities included in
the category would be reported are:
• Federal funds purchased (line items
DI630 and DI635);
• ‘‘Securities sold under agreements
to repurchase’’ (line item DI641);
• ‘‘Mortgage Collateralized Securities
Issued: CMOs (including REMICs)’’ (line
item SC740);
• ‘‘Other Borrowings’’ (line item
SC760); and
• ‘‘Other Liabilities and Deferred
Income’’ (line item SC796).
Other data items the agencies are
proposing to collect in the TFR from
savings associations that are large
institutions or report $10 billion or more
in total assets in their June 30, 2011, or
a subsequent TFR include:
• Amortized cost and fair value of
‘‘U.S. Government, Agency, and
Sponsored Enterprise Securities’’ (line
item SC130), with these two amounts
reported separately for held-to-maturity
and available-for-sale securities;
• Real estate loans secured by
farmland (not held for trading) included
in loans secured by ‘‘Nonresidential
Property’’ (line item SC260);
• Loans to finance agricultural
production and other loans to farmers
(not held for trading) included in
‘‘Secured’’ and ‘‘Unsecured’’ commercial
loans (line items SC300 and SC303);
• ‘‘Advances from Federal Home Loan
Bank’’ with a remaining maturity of one
year or less (included in line item
SC720);
• ‘‘Mortgage Collateralized Securities
Issued: CMOs (including REMICs)’’ with
a remaining maturity of one year or less
(included in line item SC740);
• ‘‘Other Borrowings’’ with a
remaining maturity of one year or less
(included in line item SC760);
• Commitments to fund commerc
es from Federal Home Loan
Bank’’ with a remaining maturity of one
year or less (included in line item
SC720);
• ‘‘Mortgage Collateralized Securities
Issued: CMOs (including REMICs)’’ with
a remaining maturity of one year or less
(included in line item SC740);
• ‘‘Other Borrowings’’ with a
remaining maturity of one year or less
(included in line item SC760);
• Commitments to fund commercial
real estate, construction, and land
development loans secured by real
estate (included in line items CC105,
CC290, and CC300), with amounts
reported separately for (1) 1–4 family
residential construction loan
commitments and (2) commercial real
estate, other construction loan, and land
development loan commitments; and
• Deposits in foreign offices, Edge
and Agreements subsidiaries, and
International Banking Facilities
(included in line item SC71).
As mentioned above, these proposed
changes to the TFR would revise the
reporting requirements for savings
associations that are large institutions
by adding data items for information not
currently collected in the TFR that
banks already report in the Call Report.
This proposal is consistent with the
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23 76 FR 7082, February 8, 2011.
24 76 FR 7085, February 8, 2011.
agencies’ separate proposal to require all
savings associations currently filing the
TFR to convert to filing the Call Report
beginning with the reporting period
ending on March 31, 2012.23 As stated
in the agencies’ TFR-to-Call Report
conversion proposal, ‘‘[t]o help reduce
the burden with converting reports, the
[conversion] proposal would: 1
y 8, 2011.
24 76 FR 7085, February 8, 2011.
agencies’ separate proposal to require all
savings associations currently filing the
TFR to convert to filing the Call Report
beginning with the reporting period
ending on March 31, 2012.23 As stated
in the agencies’ TFR-to-Call Report
conversion proposal, ‘‘[t]o help reduce
the burden with converting reports, the
[conversion] proposal would: 1. Curtail
all proposed changes to the TFR for
2011 that would increase the differences
between the TFR and the Call Report.’’ 24
Although the proposed changes to the
TFR discussed above in this section J of
the notice are intended to achieve
consistency with the Call Report for
savings associations that are large
institutions, adding these new data
items to the TFR in June 2011 has the
effect of partially accelerating the
conversion to the Call Report by large
savings associations. This June 2011
effective date is three quarters sooner
than the large savings associations
would otherwise be required to report
this information in the Call Report upon
their proposed conversion from the TFR
in March 2012.
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: March 7, 2011.
Michele Meyer,
Assistant Director, Legislative and Regulatory
Activities Division, Office of the Comptroller
of the Currency.
Jennifer J. Johnson,
Secretary of the Board.
Dated at Washington, DC, this 10th day of
March, 2011.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
Dated: March 10, 2011.
Ira L. Mills,
Paperwork Clearance Officer, Office of Chief
Counsel, Office of Thrift Supervision.
[FR Doc. 2011–6046 Filed 3–15–11; 8:45 am]
BILLING CODE 6714–01–P; 6210–01–P; 6720–01–P;
4810–33–P
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This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.