Notice2023-28473
Proposed Agency Information Collection Activities; Comment Request
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 27, 2023
Issuing agencies
Treasury DepartmentComptroller of the CurrencyFederal Reserve SystemFederal Deposit Insurance Corporation
Abstract
In accordance with the requirements of the Paperwork Reduction Act of 1995 (PRA), the OCC, the Board, and the FDIC (the agencies) may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The Federal Financial Institutions Examination Council (FFIEC), of which the agencies are members, has approved the agencies' publication for public comment of a proposal to revise and extend for three years the Consolidated Reports of Condition and Income (Call Reports) (FFIEC 031, FFIEC 041, and FFIEC 051), which are currently approved collections of information. The FFIEC has also approved the Board's publication for public comment, on behalf of the agencies, of a proposal to revise and extend for three years 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), which are also currently approved collections of information. The agencies are requesting comment on proposed revisions to the Call Report forms and instructions, and the FFIEC 002, as applicable, that include the revision and addition of certain new data items related to the reporting on loans to nondepository financial institutions (NDFIs) and other loans, guaranteed structured financial products, and proposed long-term debt requirements. In addition, the agencies are seeking comment on a proposal to adopt ongoing standards for electronic signatures to comply with the Call Report signature and attestation requirement. The revisions are proposed to take effect with the June 30, 2024, report date, except for those related to the proposed long-term debt requirements which would take effect for the first report date at or following the effective date of any final rule.
Full Text
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<title>Federal Register, Volume 88 Issue 247 (Wednesday, December 27, 2023)</title>
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[Federal Register Volume 88, Number 247 (Wednesday, December 27, 2023)]
[Notices]
[Pages 89489-89495]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-28473]
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DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
FEDERAL RESERVE SYSTEM
FEDERAL DEPOSIT INSURANCE CORPORATION
Proposed Agency Information Collection Activities; Comment
Request
AGENCY: Office of the Comptroller of the Currency (OCC), Treasury;
Board of Governors of the Federal Reserve System (Board); and Federal
Deposit Insurance Corporation (FDIC).
ACTION: Joint notice and request for comment.
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SUMMARY: In accordance with the requirements of the Paperwork Reduction
Act of 1995 (PRA), the OCC, the Board, and the FDIC (the agencies) may
not conduct or sponsor, and the respondent is not required to respond
to, an information collection unless it displays a currently valid
Office of Management and Budget (OMB) control number. The Federal
Financial Institutions Examination Council (FFIEC), of which the
agencies are members, has approved the agencies' publication for public
comment of a proposal to revise and extend for three years the
Consolidated Reports of Condition and Income (Call Reports) (FFIEC 031,
FFIEC 041, and FFIEC 051), which are currently approved collections of
information. The FFIEC has also approved the Board's publication for
public comment, on behalf of the agencies, of a proposal to revise and
extend for three years 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), which are also currently approved collections of
information. The agencies are requesting comment on proposed revisions
to the Call Report forms and instructions, and the FFIEC 002, as
applicable, that include the revision and addition of certain new data
items related to the reporting on loans to nondepository financial
institutions (NDFIs) and other loans, guaranteed structured financial
products, and proposed long-term debt requirements. In addition, the
agencies are seeking comment on a proposal to adopt ongoing standards
for electronic signatures to comply with the Call Report signature and
attestation requirement. The revisions are proposed to take effect with
the June 30, 2024, report date, except for those related to the
proposed long-term debt requirements which would take effect for the
first report date at or following the effective date of any final rule.
DATES: Comments must be submitted on or before February 26, 2024.
ADDRESSES: Interested parties are invited to submit written comments to
any or all of the agencies. All comments will be shared among the
agencies.
OCC: You may submit comments, which should refer to ``Call Report
and FFIEC 002 Revisions,'' by any of the following methods:
<bullet> Email: <a href="/cdn-cgi/l/email-protection#7b0b091a12151d143b141818550f091e1a08551c140d"><span class="__cf_email__" data-cfemail="8afaf8ebe3e4ece5cae5e9e9a4fef8efebf9a4ede5fc">[email protected]</span></a>.
<bullet> Mail: Chief Counsel's Office, Office of the Comptroller of
the Currency, Attention: 1557-0081, 400 7th Street SW, Suite 3E-218,
Washington, DC 20219.
<bullet> Hand Delivery/Courier: 400 7th Street SW, Suite 3E-218,
Washington, DC 20219.
<bullet> Fax: (571) 293-4835.
Instructions: You must include ``OCC'' as the agency name and
``1557-0081'' in your comment. In general, the OCC will publish
comments on <a href="http://www.reginfo.gov">www.reginfo.gov</a> without change, including any business or
personal information provided, such as name and address information,
email addresses, or phone numbers. Comments received, including
attachments and other supporting materials, are part of the public
record and subject to public disclosure. Do not include any information
in your comment or supporting materials that you consider confidential
or inappropriate for public disclosure.
You may review comments and other related materials that pertain to
this information collection beginning on the date of publication of the
second notice for this collection by the following method:
<bullet> Viewing Comments Electronically: Go to <a href="http://www.reginfo.gov">www.reginfo.gov</a>.
Hover over the ``Information Collection Review'' tab and click on
``Information Collection Review'' from the drop-down menu. From the
``Currently under Review'' drop-down menu, select ``Department of
Treasury'' and then click ``submit.'' This information collection can
be located by searching OMB control number ``1557-0081.'' Upon finding
the appropriate information collection, click on the related ``ICR
Reference Number.'' On the next screen, select ``View Supporting
Statement and Other Documents'' and then click on the link to any
comment listed at the bottom of the screen.
<bullet> For assistance in navigating <a href="http://www.reginfo.gov">www.reginfo.gov</a>, please
contact the Regulatory Information Service Center at (202) 482-7340.
Board: You may submit comments, which should refer to ``Call Report
and FFIEC 002 Revisions,'' by any of the following methods:
<bullet> Agency Website: <a href="http://www.federalreserve.gov">http://www.federalreserve.gov</a>. Follow the
instructions for submitting comments at: <a href="http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm">http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm</a>.
<bullet> Email: <a href="/cdn-cgi/l/email-protection#d9abbcbeaaf7bab6b4b4bcb7adaa99bfbcbdbcabb8b5abbcaabcabafbcf7beb6af"><span class="__cf_email__" data-cfemail="15677072663b767a7878707b61665573707170677479677066706763703b727a63">[email protected]</span></a>. Include ``Call
Report and FFIEC 002 Revisions'' in the subject line of the message.
<bullet> Fax: (202) 395-6974.
<bullet> Mail: Ann E. Misback, Secretary, Board of Governors of the
Federal Reserve System, 20th Street and Constitution Avenue NW,
Washington, DC 20551.
All public comments are available on the Board's website at <a href="https://www.federalreserve.gov/apps/foia/proposedregs.aspx">https://www.federalreserve.gov/apps/foia/proposedregs.aspx</a> as submitted,
unless modified for technical reasons.
[[Page 89490]]
Accordingly, your comments will not be edited to remove any identifying
or contact information.
FDIC: You may submit comments, which should refer to ``Call Report
and FFIEC 002 Revisions,'' by any of the following methods:
<bullet> Agency Website: <a href="https://www.fdic.gov/resources/regulations/federal-register-publications/">https://www.fdic.gov/resources/regulations/federal-register-publications/</a>. Follow the instructions for
submitting comments on the FDIC's website.
<bullet> Email: <a href="/cdn-cgi/l/email-protection#4e2d2123232b203a3d0e080a070d60292138"><span class="__cf_email__" data-cfemail="781b1715151d160c0b383e3c313b561f170e">[email protected]</span></a>. Include ``Call Report and FFIEC
002 Revisions'' in the subject line of the message.
<bullet> Mail: Manuel E. Cabeza, Counsel, Attn: Comments, Room MB-
3128, Federal Deposit Insurance Corporation, 550 17th Street NW,
Washington, DC 20429.
<bullet> Hand Delivery: Comments may be hand-delivered to the guard
station at the rear of the 550 17th Street NW building (located on F
Street NW) on business days between 7 a.m. and 5 p.m.
<bullet> Public Inspection: All comments received, including any
personal information provided, will be posted without change to <a href="https://www.fdic.gov/resources/regulations/federal-register-publications/">https://www.fdic.gov/resources/regulations/federal-register-publications/</a>.
Commenters should submit only information that the commenter wishes to
make available publicly. The FDIC may review, redact, or refrain from
posting all or any portion of any comment that it may deem to be
inappropriate for publication, such as irrelevant or obscene material.
The FDIC may post only a single representative example of identical or
substantially identical comments, and in such cases will generally
identify the number of identical or substantially identical comments
represented by the posted example. All comments that have been
redacted, as well as those that have not been posted, that contain
comments on the merits of this document will be retained in the public
comment file and will be considered as required under all applicable
laws. All comments may be accessible under the Freedom of Information
Act.
Additionally, commenters may send a copy of their comments to the
OMB desk officer for the agencies by mail to the Office of Information
and Regulatory Affairs, U.S. Office of Management and Budget, New
Executive Office Building, Room 10235, 725 17th Street NW, Washington,
DC 20503; by fax to (202) 395-6974; or by email to
<a href="/cdn-cgi/l/email-protection#0f60667d6e507c7a6d62667c7c6660614f60626d216a607f21686079"><span class="__cf_email__" data-cfemail="94fbfde6f5cbe7e1f6f9fde7e7fdfbfad4fbf9f6baf1fbe4baf3fbe2">[email protected]</span></a>.
FOR FURTHER INFORMATION CONTACT: For further information about the
proposed revisions to the information collections discussed in this
notice, please contact any of the agency staff whose names appear
below. In addition, copies of the report forms for the Call Reports and
the FFIEC 002 can be obtained at the FFIEC's website (<a href="https://www.ffiec.gov/ffiec_report_forms.htm">https://www.ffiec.gov/ffiec_report_forms.htm</a>).
OCC: Kevin Korzeniewski, Counsel, Chief Counsel's Office, (202)
649-5490. If you are deaf, hard of hearing, or have a speech
disability, please dial 7-1-1 to access telecommunications relay
services.
Board: Nuha Elmaghrabi, Federal Reserve Board Clearance Officer,
(202) 452-3884, Office of the Chief Data Officer, 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: Manuel E. Cabeza, Counsel, (202) 898-3767, Legal Division,
Federal Deposit Insurance Corporation, 550 17th Street NW, Washington,
DC 20429.
SUPPLEMENTARY INFORMATION:
I. Affected Reports
The proposed changes discussed below affect the Call Reports and
the FFIEC 002.
A. Call Report
The agencies propose to extend for three years, with revision,
their information collections associated with the FFIEC 031, FFIEC 041,
and FFIEC 051 Call Reports.
Report Title: Consolidated Reports of Condition and Income (Call
Report).
Form Number: FFIEC 031 (Consolidated Reports of Condition and
Income for a Bank with Domestic and Foreign Offices), FFIEC 041
(Consolidated Reports of Condition and Income for a Bank with Domestic
Offices Only), and FFIEC 051 (Consolidated Reports of Condition and
Income for a Bank with Domestic Offices Only and Total Assets Less Than
$5 Billion).
Frequency of Response: Quarterly.
Affected Public: Business or other for-profit.
Type of Review: Revision and extension of currently approved
collections.
OCC
OMB Control No.: 1557-0081.
Estimated Number of Respondents: 1,014 national banks and federal
savings associations.
Estimated Average Burden per Response: 40.85 burden hours per
quarter to file.
Estimated Total Annual Burden: 165,688 burden hours to file.
Board
OMB Control No.: 7100-0036.
Estimated Number of Respondents: 708 state member banks.
Estimated Average Burden per Response: 44.33 burden hours per
quarter to file.
Estimated Total Annual Burden: 125,543 burden hours to file.
FDIC
OMB Control No.: 3064-0052.
Estimated Number of Respondents: 2,975 insured state nonmember
banks and state savings associations.
Estimated Average Burden per Response: 38.94 burden hours per
quarter to file.
Estimated Total Annual Burden: 463,386 burden hours to file.
The estimated average burden hours collectively reflect the
estimates for the FFIEC 031, the FFIEC 041, and the FFIEC 051 reports
for each agency. When the estimates are calculated by type of report
across the agencies, the estimated average burden hours per quarter are
85.88 (FFIEC 031), 54.79 (FFIEC 041), and 34.49 (FFIEC 051). The
changes to the Call Report forms and instructions proposed in this
notice would result in an estimated increase in burden hours per
quarter for the FFIEC 031 of 1.35 hours, FFIEC 041 of 0.19 hours, and
FFIEC 051 of 0.08 hours. The estimated burden per response for the
quarterly filings of the Call Report is an average that varies by
agency because of differences in the composition of the institutions
under each agency's supervision (e.g., size distribution of
institutions, types of activities in which they are engaged, and
existence of foreign offices).
Type of Review: Extension and revision of currently approved
collections. In addition to the proposed revisions discussed below,
Call Reports are periodically updated to clarify instructional guidance
and correct grammatical and typographical errors on the forms and
instructions, which are published on the FFIEC website.\1\ These non-
substantive updates may also be commented upon.
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\1\ <a href="http://www.ffiec.gov/forms031.htm">www.ffiec.gov/forms031.htm</a>; <a href="http://www.ffiec.gov/forms041.htm">www.ffiec.gov/forms041.htm</a>;
<a href="http://www.ffiec.gov/forms051.htm">www.ffiec.gov/forms051.htm</a>.
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Legal Basis and Need for Collections
The Call Report information collections are mandatory: 12 U.S.C.
161 (national banks), 12 U.S.C. 324 (state member banks), 12 U.S.C.
1817 (insured state nonmember commercial and savings banks), and 12
U.S.C. 1464 (federal and state savings associations). At present,
except for selected data items and text, these information collections
are not given confidential treatment.
[[Page 89491]]
Banks and savings associations submit Call Report data to the
agencies each quarter for the agencies' use in monitoring the
condition, performance, and risk profile of individual institutions and
the industry as a whole. Call Report data serve a regulatory or public
policy purpose by assisting the agencies in fulfilling their shared
missions of ensuring the safety and soundness of financial institutions
and the financial system and protecting consumer financial rights, as
well as agency-specific missions affecting federal and state-chartered
institutions, such as conducting monetary policy, ensuring financial
stability, and administering federal deposit insurance. Call Reports
are the source of the most current statistical data available for
identifying areas of focus for on-site and off-site examinations. Among
other purposes, the agencies use Call Report data in evaluating
institutions' corporate applications, including interstate merger and
acquisition applications for which the agencies are required by law to
determine whether the resulting institution would control more than 10
percent of the total amount of deposits of insured depository
institutions in the United States. Call Report data also are used to
calculate the risk-based assessments for insured depository
institutions.
B. FFIEC 002 and 002S
The Board proposes to extend for three years, with revision, the
FFIEC 002 and FFIEC 002S reports.
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.
OMB Control Number: 7100-0032.
Frequency of Response: Quarterly.
Affected Public: Business or other for-profit.
Respondents: All state-chartered or federally-licensed U.S.
branches and agencies of foreign banking organizations, and all non-
U.S. branches managed or controlled by a U.S. branch or agency of a
foreign banking organization.
Estimated Number of Respondents: FFIEC 002--183; FFIEC 002S--18.
Estimated Average Burden per Response: FFIEC 002--24.67 hours;
FFIEC 002S--6.0 hours.
Estimated Total Annual Burden: FFIEC 002--18,058 hours; FFIEC
002S--432 hours.
Type of Review: Extension and revision of currently approved
collections.
The proposed revisions to the FFIEC 002 instructions in this notice
would not have a material impact on the existing burden estimates.
Legal Basis and Need for Collection
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. In addition, FFIEC 002 data
are used to calculate the risk-based assessments for FDIC-insured U.S.
branches of foreign banks. 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. A non-U.S. branch is managed or controlled by a U.S.
branch or agency if 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.
These information collections are mandatory (12 U.S.C. 1817(a)(1)
and (3), 3102(b), and 3105(c)(2)). Except for select sensitive items,
the FFIEC 002 is not given confidential treatment; the FFIEC 002S is
given confidential treatment (5 U.S.C. 552(b)(4) and (8)). 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. The Federal Reserve
System collects and processes these reports on behalf of all three
agencies.
II. Current Actions
A. Loans to Nondepository Financial Institutions
1. Background
Loans to NDFIs have increasingly played an essential role in the
financial system. NDFIs include a wide range of counterparties
including insurance companies, mortgage companies, private equity
funds, hedge funds, broker-dealers, real estate investment trusts
(REITs), marketplace lenders, special purpose entities, and other
financial vehicles. Currently, data on loans to NDFIs is collected on
Schedule RC-C, Part I, Loans and Leases, item 9.a. ``Loans to
nondepository financial institutions.''
Since this item was added in 2010, institutions have increased
direct lending exposure to NDFIs. In March 2010, loans to NDFIs
reported in this item totaled approximately $56 billion and represented
only 0.8 percent of gross loans reported by respondents. However, in
June 2023, the reported amount of loans to NDFIs increased
significantly to almost $786 billion and represented 6.4 percent of
respondents' total loan exposure. Notwithstanding this increase in NDFI
credit risk, current Call Report forms and instructions do not provide
granularity on specific NDFI exposure, such as direct and off-balance
sheet exposure, data on NDFI exposure in non-domestic offices, or NDFI
loan performance data (e.g., nonaccrual and past due status). Further,
the agencies have observed inconsistency in NDFI exposure reporting
among industry filers.
2. Call Report Proposed Revisions
The agencies are proposing to update the Call Report forms and
instructions to increase the granularity in reporting exposure to NDFIs
and to improve reporting consistency. These proposed revisions would
enhance the understanding of NDFI exposure, risks, and performance
trends. The revisions would group together loan exposures that exhibit
similar underlying risk characteristics while addressing the diversity
in practice on the reporting of these loans that exists today. In
addition, the proposed granular reporting would allow for more accurate
analysis of bank financial statements for applicable institutions and
performance metrics. These revisions and clarifications are proposed to
be effective as of the June 30, 2024, report date.
The specific proposed revisions and clarifications impacting the
three report forms are as follows:
[[Page 89492]]
Schedule RC-C, Part I, Loans and Leases
[ssquf] For all three Call Reports, to ensure consistent reporting
on loans to NDFIs, the instructions for item 9.a, ``Loans to
nondepository financial institutions'' would be updated to include
additional detail on the types of loans that should be reported in this
line item. In addition, the instructions would be revised to include in
the amounts reported in this item all loans to brokers and dealers in
securities and loans to investment firms and mutual funds. These loans
were previously included in item 9.b (FFIEC 051) or in item 9.b.(1)
(FFIEC 031 and FFIEC 041), as noted below.
[ssquf] On the FFIEC 051, item 9.b, ``Other loans,'' and on the
FFIEC 031 and FFIEC 041, item 9.b.(1), ``Loans for purchasing or
carrying securities (secured and unsecured),'' the instructions would
be revised to exclude from the amounts reported in this item all loans
to brokers and dealers in securities and loans to investment firms and
mutual funds. These loans would be reported under the new NDFI
definition in item 9.a, ``Loans to nondepository financial
institutions.''
[ssquf] On the FFIEC 051, item 9.b, ``Other loans,'' and on the
FFIEC 031 and FFIEC 041 reports, item 9.b.(1), ``Loans for purchasing
or carrying securities (secured and unsecured),'' the instructions
would also be revised to include in the amounts reported in this item
all margin loans, including securities-based loans and non-purpose
margin loans. In addition, this item description on the FFIEC 031 and
FFIEC 041 report forms would be revised to ``Loans for purchasing or
carrying securities, including margin loans.''
[ssquf] For the FFIEC 031 and FFIEC 041, Memorandum item 10
(currently ``not applicable'') would be renamed ``Loans to
nondepository financial institutions'' and would include the following
subitems, as defined in the instructions for Schedule RC-C, Part I,
item 9.a, to capture direct lending exposures to NDFIs: 10.a, ``Loans
to mortgage credit intermediaries;'' 10.b, ``Loans to business credit
intermediaries;'' 10.c, ``Loans to private equity funds;'' 10.d,
``Loans to consumer credit intermediaries;'' and 10.e, ``Other loans to
nondepository financial institutions.'' The sum of subitems 10.a
through 10.e would equal Schedule RC-C, Part I, item 9.a. These items
would only be collected from institutions with $10 billion or more in
total assets.
[ssquf] For the FFIEC 031 only, item 9, ``Loans to nondepository
financial institutions and other loans,'' additional subitems 9.a,
9.b.1, and 9.b.2 (Column A) would be added to collect data at the
consolidated bank level that would be in addition to the exposure
currently captured for those items in domestic offices only (Column B).
In addition, item 9, ``Loans to nondepository financial institutions
and other loans,'' column A, would no longer be reported as an
aggregate amount.
Schedule RC-L, ``Derivatives and Off-Balance Sheet Items''
[ssquf] For all three report forms, the subitems for item 1.e,
``Other unused commitments'' would be revised to include the collection
of data on both depository financial institutions and NDFIs.
Specifically, subitem 1.e.(2), ``Loans to financial institutions''
would be changed to ``Loans to depository financial institutions.''
Subitem 1.e.(3), would be renamed ``Loans to nondepository financial
institutions'' and would collect data on unused commitments for loans
to nondepository financial institutions. The existing subitem 1.e.(3),
``All other unused commitments,'' would be renumbered to item 1.e.(4).
[ssquf] For the FFIEC 031 and FFIEC 041, item 1.e.(3), ``Loans to
nondepository financial institutions,'' would include five subitems
with the same five categories as the new subitems listed for Schedule
RC-C, Part I, Memorandum item 10 above. The sum of these subitems
1.e.(3)(a) through 1.e.(3)(e) would equal the amount reported in
Schedule RC-L, item 1.e.(3). These items would only be collected from
institutions with $10 billion or more in total assets.
Schedule RC-N, ``Past Due and Nonaccrual Loans, Leases, and Other
Assets''
[ssquf] For the FFIEC 041 and the FFIEC 051, Memorandum item 9
would be renamed, ``Loans to nondepository financial institutions
included in Schedule RC-N, item 7'' and would capture past due and
nonaccrual information for NDFIs in columns A through C.
[ssquf] For the FFIEC 031 only, Memorandum item 9, would also be
renamed, ``Loans to nondepository financial institutions included in
Schedule RC-N, item 7'' to capture past due and nonaccrual information
for NDFIs. However, institutions would report amounts in Memorandum
item 9.a, ``To U.S. nondepository financial institutions'' and
Memorandum item 9.b, ``To foreign nondepository institutions'' in
columns A through C.
Question 1: Is the granularity of the proposed subcategories
appropriate or are there additional or fewer subcategories that should
be considered?
3. FFIEC 002 Proposed Revisions
The Board's proposed revisions to the FFIEC 002 are intended to
align with similar changes proposed to the Call Report, Schedule RC-C,
Part I, as applicable, and discussed in the prior section.
Schedule C, ``Loans''
[ssquf] The instructions for item 3, ``Loans to other financial
institutions'' would be updated to include additional detail on the
types of loans that should be reported in this line item. In addition,
the instructions would be revised to include all loans to brokers and
dealers in securities and loans to investment firms and mutual funds in
the amounts reported in this item. These loans were previously included
in item 7, below.
[ssquf] The instructions for item 7, ``Loans for purchasing or
carrying securities (secured and unsecured)'' would be revised to
exclude from the amounts reported in this item all loans to brokers and
dealers in securities and loans to investment firms and mutual funds.
These loans would be reported under the new NDFI definition in item 3,
``Loans to other financial institutions.''
[ssquf] The instructions for item 7, ``Loans for purchasing or
carrying securities (secured and unsecured)'' would also be revised to
include in the amounts reported in this item all margin loans,
including securities-based loans and non-purpose margin loans. In
addition, this item description on the report form would be revised to
``Loans for purchasing or carrying securities, including margin
loans.''
The Board is proposing to align the effective date for these
revisions on Schedule C of the FFIEC 002 with the revised Call Report
items, described above.
B. Reporting on Guaranteed Structured Financial Products
In February 2023, a proposal for revisions to the Call Reports \2\
included a question on the reporting of certain Federal Home Loan
Mortgage Corporation and similar securitization structures that have
government guarantees on Schedule RC-B, Securities. The agencies sought
comment on the reporting of these types of structured financial
products including those issued or guaranteed by U.S. government or
government sponsored agencies.
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\2\ 85 FR 10644 (February 21, 2023).
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The agencies received two comments on this topic. One comment
opposed
[[Page 89493]]
reporting these securities in Schedule RC-B, Securities, item 5.b,
noting that this item includes a broad range of structured financial
products, and there would be a lack of clarity on the amount reported
in this item that is guaranteed by a government or agency. The other
comment supported reporting these securities in item 5.b. However, the
commenter also noted the lack of transparency in this item regarding
the composition of reported structured financial products. The
commenter stated it would be appropriate for an additional breakdown to
be added to item 5.b to report the amount that is guaranteed by the
U.S. government or an agency. In the final 30-day notice published in
June 2023,\3\ the agencies indicated they would continue reviewing the
original clarification and the new item proposed by the commenter.
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\3\ 88 FR 38592 (June 13, 2023).
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After further review of the comment to collect data on the amounts
reported in item 5.b that are guaranteed by U.S. government agencies or
sponsored agencies, the agencies are proposing to add a new Memorandum
item 7, ``Guaranteed by U.S. Government agencies or sponsored agencies
included in Schedule RC-B, item 5.b'', columns A through D, on Schedule
RC-B. The proposed amounts in the new Memorandum item would collect the
total amortized cost and total fair value for held-to-maturity
securities and available-for-sale securities.
C. Long-Term Debt
On August 29, 2023, the federal bank regulatory agencies requested
comment on a proposal that would require large banks with total assets
of $100 billion or more to maintain a layer of long-term debt, which
would improve financial stability by increasing the resolvability and
resiliency of such institutions. This notice of proposed rulemaking
(NPR) was published in the Federal Register on September 19, 2023.\4\
This NPR would affect insured depository institutions (IDIs) that are
not consolidated subsidiaries of U.S. global systemically important
banks (G-SIBs) and that (i) have at least $100 billion in consolidated
assets or (ii) are affiliated with IDIs that have $100 billion in
consolidated assets (covered IDIs) that are required to have
outstanding a minimum amount of eligible long-term debt (LTD).
Generally, under the proposal, covered IDIs that are consolidated
subsidiaries of covered bank holding companies and savings and loan
holding companies would be required to issue the LTD.
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\4\ 88 FR 64524 (September 19, 2023).
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The agencies are proposing to revise Schedule RC-R, Part I,
Regulatory Capital Components and Ratios, for all three Call Reports by
adding the following new line items under the heading ``Long-Term Debt
(LTD).'' These new line items would be applicable only to IDIs subject
to the long-term debt requirement in the NPR:
[ssquf] 56.a, ``Effective date of LTD requirement;''
[ssquf] 56.b, ``Outstanding eligible LTD;''
[ssquf] 56.c, ``Outstanding eligible LTD with a remaining maturity
greater than or equal to one year and less than two years;''
[ssquf] 56.d, ``LTD total risk-weighted assets ratio;'' and
[ssquf] 56.e, ``LTD leverage ratio.''
Additionally, on the FFIEC 031 and FFIEC 041 forms only, the
agencies will add a sixth item, 56.f, ``LTD supplementary leverage
ratio.''
The agencies are proposing to add these new items to monitor
compliance by covered IDIs with the applicable proposed LTD
requirements. These items would be consistent with similar items
reported by holding companies on the Board's Consolidated Financial
Statements for Holding Companies (FR Y-9C), Schedule HC-R, Part I,
Regulatory Capital Components and Ratios. For example, item 56.b,
``Outstanding eligible LTD,'' on the Call Report would capture the same
long-term debt information as item 54, ``Outstanding eligible long-term
debt,'' on the FR Y-9C, except it would apply to covered IDIs instead
of holding companies. The proposed instructions for items 56.a through
56.f would correspond with the relevant items on the FR Y-9C as
proposed in the NPR that was published on September 19, 2023. Similar
to the FR Y-9C, the proposed effective date for the Call Report
revisions would align with the effective date of any final rule on LTD
requirements, and the reporting changes would take effect for the first
report date on or after that effective date.
D. Electronic Signatures
Background
Federal law requires that certain personnel and directors attest to
the accuracy of the data submitted in the bank's Call Report by
signature.\5\ In addition to being required by statute, review of the
Call Report in connection with signing the attestation supports
internal control over the bank's reporting. The Call Report
instructions permit a bank to satisfy the signature requirement by
obtaining physical signatures from the relevant parties attached to a
copy of the associated Call Report that is retained in the bank's
files.
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\5\ 12 U.S.C. 161(a) (national banks) and 1817(a)(3) (all
insured depository institutions).
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The onset of the COVID-19 pandemic in March 2020 and resulting bank
office closures presented challenges to complying with the physical
signature requirement. The agencies responded by permitting reasonable
alternative signature methods, including electronic signatures, to be
used for the duration of the pandemic.\6\
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\6\ Call Report Supplemental Instructions for March 2020,
available at: <a href="https://www.ffiec.gov/pdf/FFIEC_forms/FFIEC031_FFIEC041_FFIEC051_suppinst_202003.pdf">https://www.ffiec.gov/pdf/FFIEC_forms/FFIEC031_FFIEC041_FFIEC051_suppinst_202003.pdf</a>.
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The federal COVID-19 public health emergency declaration ended on
May 11, 2023. However, both the agencies and banks have benefitted from
the alternative to the use of physical signatures on each Call Report
submission. For the agencies, electronic documentation can provide a
stronger audit trail than a paper copy that can be misplaced or
altered. For banks, electronic signatures can reduce recordkeeping
burden associated with preparing for, collecting, and retaining
signatures. Therefore, the agencies are proposing to adopt ongoing
standards for electronic signatures to comply with the Call Report
signature and attestation requirement. Until the agencies finalize
these proposed standards, banks may continue following the alternate
standards provided in the quarterly Call Report Supplemental
Instructions. The agencies also will continue to permit physical
signatures for banks that choose not to use the electronic signature
alternative.
Proposed Framework
A valid electronic signature generally must meet the following
requirements: (1) The signer must use an acceptable electronic form of
signature; (2) The electronic form of signature must be executed or
adopted by a person with the intent to sign the electronic record; (3)
The electronic form of signature must be attached to \7\ or part of the
electronic record being signed; (4) There must be a means to identify,
verify, and authenticate a particular person as the signer; and (5)
There must be a means to preserve the integrity of the signed
record.\8\ The agencies are proposing the
[[Page 89494]]
electronic signature alternative for the Call Report signature purposes
consistent with these requirements and Federal law on electronic
signatures.\9\
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\7\ In this context, ``attached to'' means ``logically
associated with.''
\8\ See ``Use of Electronic Signatures in Federal Organization
Transactions,'' available at: <a href="https://assets.cio.gov/assets/files/resources/Use_of_ESignatures_in_Federal_Agency_Transactions_v1-0_20130125.pdf">https://assets.cio.gov/assets/files/resources/Use_of_ESignatures_in_Federal_Agency_Transactions_v1-0_20130125.pdf</a>.
\9\ See, e.g., Electronic Records and Signatures in Global and
National Commerce Act, Pub. L. 106-229; Government Paperwork
Elimination Act of 1998, Pub. L. 105-277.
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1. Form of Signature
The agencies are proposing to allow the following forms of
signature: an image of the signer's physical signature; or application
of an electronic signature, such as by clicking a box or entering a
personal identification number (PIN). These forms of signature are
widely available in current software products, are used by many banks
that permit electronic signatures on loans or other agreements with
customers and have been used by banks under the alternatives permitted
for the Call Report since March 2020. While other forms of signature
exist, such as biometric identification (e.g., voiceprint, fingerprint,
retinal scan), these would not be suitable for the Call Report given
cost, complexity, and associated privacy issues involved in recording
and maintaining signatures in these forms.
2. Intent to Sign
In order to be a valid electronic signature, the signature of the
appropriate bank officer or director must be applied by the officer or
director with the intent to sign and in the appropriate capacity. For
the Call Report, this means the appropriate bank officer (typically the
chief financial officer) or director intends to sign the Call Report as
the attestation that it is prepared in accordance with the instructions
and is true and correct, as stated on the signature page of the Call
Report. The bank officer's or director's intent and capacity must be
included as part of the electronic signature process by using an
electronic version of the relevant attestation text on the Call Report
signature page.
3. Association of Signature
A valid electronic signature must be made part of the record of the
document being signed, to confirm that the signature applies to and is
linked to the entire record. For Call Report purposes, this means the
signature must be associated with a complete version of the bank's Call
Report, including all applicable schedules, as the signer is attesting
to the correctness of the information in those schedules. This
association can be made by using a process that appends the signature
data to the record signed, or which establishes a database-type link
between the signature data and the record signed. An electronic
signature made on a cover page or the Call Report signature page,
without the Call Report schedules incorporated or attached, would not
satisfy this requirement.
To validate that the bank obtained the signatures prior to filing
the Call Report, the date of each electronic signature would need to be
included as part of the signature and attestation process and similarly
made part of the record. This could be accomplished in different ways,
for example, by the signer manually entering the date when signing,
which could be verified by system transaction logs, or by software
embedding the date as part of the form of signature or elsewhere within
the record.
4. Identification and Authentication of the Signer
A valid signature requires proving an association between the
signature and the person signing. For Call Report purposes, the
agencies would accept any reliable information technology system
identification and authentication method or process that associates
access to and execution of the electronic signature transaction with
the identity of the signer with a level of assurance sufficient to
protect against repudiation or adverse impact to the bank that would
result from a successful challenge to the execution of the electronic
signature. For example, requiring the bank officer or director to log
into the bank's network using unique multifactor credentials in order
to electronically sign the Call Report could identify and authenticate
the signer with sufficient assurance to protect against such risks.
Credentials used to access the signature transaction must be sufficient
for the protection of a bank's non-public or otherwise proprietary
information.
5. Integrity of Signed Record
The usability of a signed electronic record requires maintaining
the integrity of the electronic signature and associated record. A bank
would need to have sufficient data security and data integrity
practices to ensure that the Call Report with electronic signature is
safely stored, readily retrievable, and cannot be lost or altered.\10\
As with paper-based signatures, electronic signatures would not be
submitted to the Central Data Repository along with the Call Report
data, but the electronically signed Call Report would need to be
available to agency examiners upon request.
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\10\ These practices generally already exist within banks'
current information technology infrastructure for other bank records
and customer information.
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A Call Report with an electronic signature would be subject to the
same record retention period as a paper version of the Call Report, as
specified in the Call Report instructions, and may be deleted after the
relevant timeframe. Generally, this period is three years after the
report date, unless state law or a dispute with the FDIC requires a
longer retention period. A bank that uses electronic signatures for its
Call Reports would not be required to print or maintain a paper version
of the submitted Call Report, as the relevant electronic versions of
the Call Report and signatures would be stored in electronic form.
Question 2: Are the proposed requirements for Call Report
electronic signatures appropriate? What additional options should the
agencies consider allowing or disallowing?
Question 3: Does the proposed effective date provide sufficient
time for banks seeking to use electronic signatures to implement the
proposed standards?
Question 4: Should the agencies consider expanding the use of
electronic signatures to other FFIEC reports? If so, would the proposed
requirements for Call Report electronic signatures be appropriate for
those reports as well?
III. Timing
The proposed revisions to the Call Report forms and instructions,
and the FFIEC 002, as applicable, and adoption of ongoing standards for
electronic signatures to comply with the Call Report signature and
attestation requirement are proposed to become effective with the June
30, 2024, report date, except for those related to the proposed long-
term debt requirements which would take effect for the first report
date at or following the effective date of any final rule. The agencies
invite comment on any difficulties that institutions would expect to
encounter in implementing the systems changes necessary to accommodate
the proposed revisions to the Call Reports and the FFIEC 002, as
applicable, consistent with this effective date.
IV. Request for Comment
Public comment is requested on all aspects of this joint notice
including the questions that were provided in the earlier sections. In
addition to the questions included above, comment is specifically
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
[[Page 89495]]
agencies' functions, including whether the information has practical
utility;
(b) The accuracy of the agencies' estimates of the burden of the
information collections as they are proposed to be revised, including
the validity of the methodology and assumptions used;
(c) Ways to enhance the quality, utility, and clarity of the
information to be collected;
(d) Ways to minimize the burden of information collections on
respondents, including through the use of automated collection
techniques or other forms of information technology; and
(e) Estimates of capital or start-up costs and costs of operation,
maintenance, and purchase of services to provide information.
Comments submitted in response to this joint notice will be shared
among the agencies.
Patrick T. Tierney,
Assistant Director, Bank Advisory Office of the Comptroller of the
Currency.
Board of Governors of the Federal Reserve System.
Michele Taylor Fennell,
Deputy Associate Secretary of the Board.
Federal Deposit Insurance Corporation.
Dated at Washington, DC, on December 14, 2023.
James P. Sheesley,
Assistant Executive Secretary.
[FR Doc. 2023-28473 Filed 12-26-23; 8:45 am]
BILLING CODE 4810-33-P; BILLING CODE 6210-01-P; BILLING CODE 6714-01-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.