68068 Federal Register / Vol. 69, No. 225 / Tuesday, November 23, 2004 / Rules and Regulations 

to any clearly identified Federal 

candidates; or 

(B) One or more clearly identified 

non-Federal candidates and also refer to 

candidates of a particular party or 

associated with a particular issue, but 

do not refer to any clearly identified 

Federal candidates; 

(iii) Public communications that refer 

to one or more clearly identified Federal 

candidates, regardless of whether there 

is reference to a political party, but do 

not refer to any clearly identified nonFederal candidates; and

(iv) Public communications that refer 

to a political party, and refer to one or 

more clearly identified non-Federal 

candidates, but do not refer to any 

clearly identified Federal candidates. 

(c) Method for allocating 

administrative expenses, costs of 

generic voter drives, and certain public 

communications. Nonconnected 

committees and separate segregated 

funds shall pay their administrative 

expenses, costs of generic voter drives, 

and costs of public communications that 

refer to any political party, as described 

in paragraphs (b)(1)(i), (b)(1)(iii) or 

(b)(1)(iv) of this section, with at least 50 

percent Federal funds, as defined in 11 

CFR 300.2(g).

* * * * *

(f) Payments for public 

communications and voter drives that 

refer to one or more clearly identified 

Federal or non-Federal candidates.

Nonconnected committees and separate 

segregated funds shall pay for the costs 

of all public communications that refer 

to one or more clearly identified 

candidates, and voter drives that refer to 

one or more clearly identified 

candidates, as described in paragraphs 

(b)(2)(i) and (b)(2)(ii) of this section, as 

follows: 

(1) The following shall be paid 100 

percent from the Federal account of the 

nonconnected committee or separate 

segregated fund: 

(i) Public communications that refer 

to one or more clearly identified Federal 

candidates, regardless of whether there 

is reference to a political party, but do 

not refer to any clearly identified nonFederal candidates, as described in 

paragraph (b)(2)(iii) of this section; and 

(ii) Voter drives described in 

paragraph (b)(2)(i) of this section. 

(2) The following may be paid 100 

percent from the non-Federal account of 

the nonconnected committee or separate 

segregated fund: 

(i) Public communications that refer 

to a political party and one or more 

clearly identified non-Federal 

candidates, but do not refer to any 

clearly identified Federal candidates, as 

described in paragraph (b)(2)(iv) of this 

section; and 

(ii) Voter drives described in 

paragraph (b)(2)(ii) of this section. 

(3) Notwithstanding 11 CFR 

106.1(a)(i), public communications and 

voter drives that refer to one or more 

clearly identified Federal candidates 

and one or more clearly identified nonFederal candidates, regardless of 

whether there is a reference to a 

political party, including those that are 

expenditures, independent expenditures 

or in-kind contributions, shall be 

allocated as follows: 

(i) Public communications and voter 

drives, other than phone banks, shall be 

allocated based on the proportion of 

space or time devoted to each clearly 

identified Federal candidate as 

compared to the total space or time 

devoted to all clearly identified 

candidates, or 

(ii) Public communications and voter 

drives that are conducted through 

phone banks shall be allocated based on 

the number of questions or statements 

devoted to each clearly identified 

Federal candidate as compared to the 

total number of questions or statements 

devoted to all clearly identified 

candidates.

Dated: November 18, 2004. 

Bradley A. Smith, 

Chairman, Federal Election Commission.

[FR Doc. 04–25946 Filed 11–22–04; 8:45 am] 

BILLING CODE 6715–01–P

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

12 CFR Part 327 

RIN 3064–AC84 

Deposit Insurance Assessments—

Certified Statements

AGENCY: Federal Deposit Insurance 

Corporation.

ACTION: Final rule.

SUMMARY: The Federal Deposit 

Insurance Corporation (FDIC) is 

modernizing and simplifying its deposit 

insurance assessment regulations 

governing certified statements, to 

provide regulatory burden relief to 

insured depository institutions. Under 

the final rule, insured institutions will 

obtain their certified statements on the 

Internet via the FDIC’s transaction-based 

e-business Web site, FDICconnect. 

Correct certified statements will no 

longer be signed by insured institutions 

or returned to the FDIC, and the 

semiannual certified statement process 

will be synchronized with the quarterly 

invoice process. Two quarterly certified 

statement invoices will comprise the 

semiannual certified statement and 

reflect the semiannual assessment 

amount. If an insured institution agrees 

with its quarterly certified statement 

invoice, it will simply pay the assessed 

amount and retain the invoice in its 

own files. If it disagrees with the 

quarterly certified statement invoice, it 

will either amend its report of condition 

or similar report (to correct data errors) 

or amend its quarterly certified 

statement invoice (to correct calculation 

errors). The FDIC will automatically 

treat either as the insured institution’s 

request for revision of its assessment 

computation, eliminating the 

requirement of a separate filing. In 

addition, the FDIC will provide e-mail 

notification each quarter to let 

depository institutions know when their 

quarterly certified statement invoices 

are available on FDICconnect. An 

institution that lacks Internet access will 

be able request from the FDIC a one-year 

renewable exemption from the use of 

FDICconnect, during which it will 

continue to receive quarterly certified 

statement invoices by mail. With these 

amendments, the time and effort 

required to comply with the certified 

statement process will be reduced, a 

result of the FDIC’s ongoing program 

under the Economic Growth and 

Regulatory Paperwork Reduction Act 

(EGRPRA) to provide regulatory burden 

relief to insured depository institutions.

DATES: This final rule will become 

effective on March 1, 2005.

FOR FURTHER INFORMATION CONTACT:

Steve Wagoner, Senior Assessment 

Specialist, Division of Finance, (202) 

416–7152; Linda A. Abood, Supervisory 

IT Specialist, Division of Information 

Resources Management, (703) 516–1202; 

or Christopher Bellotto, Counsel, Legal 

Division, (202) 898–3801, Federal 

Deposit Insurance Corporation, 550 17th 

Street, NW., Washington, DC 20429.

SUPPLEMENTARY INFORMATION: 

I. Background 

On June 8, 2004, the FDIC published 

in the Federal Register, for a 60-day 

comment period, a notice of proposed 

rulemaking with request for comment 

on the proposed amendments to section 

327.2, the certified statement regulation. 

(69 FR 31922). The comment period 

closed on August 9, 2004. The FDIC 

received 22 comment letters, one from 

a trade organization (Independent 

Community Bankers of America) and 21 

from depository institutions. Seventeen 

of the commenters generally supported 

the proposal and the remaining five 

generally opposed, although in varying 

Federal Register / Vol. 69, No. 225 / Tuesday, November 23, 2004 / Rules and Regulations 68069

1The June 30 Call Report/TFR data is not 

available electronically until after the July 31 

payment date; similarly, the December 31 Call 

Report/TFR data is not available electronically until 

after the January 31 payment date.

2The ‘‘invoice’’ is the first quarterly installment 

sent each semiannual period; the ‘‘certified 

statement’’ is the invoice for the second quarterly 

installment.

3Collection has been and will continue to be 

accomplished via Automated Clearing House (ACH) 

direct debit of the account designated by the 

institution for that purpose. Like the invoice and 

certified statement (which were mailed about two 

weeks prior to the ACH payment/settlement date), 

quarterly certified statement invoices will be made 

available on FDICconnect approximately two weeks 

prior to the ACH payment/settlement date. The 

FDIC also collects Financing Corporation (FICO) 

assessments pursuant to the same statutory 

requirements that govern FDIC deposit insurance 

assessments. The FICO rate is based on the deposit 

data reflected on the invoice and certified 

statements. Under the final rule, the FICO rate will 

be based on the deposit data reflected on the two 

quarterly certified statement invoices made 

available each semiannual period. To ensure timely 

collection of adequate funds for FICO, institutions 

will continue to pay the original amount due; any 

appropriate adjustments, plus interest, will be part 

of a subsequent quarterly assessment collection.

degrees. Eleven commenters addressed 

the question of e-mail notice, all of them 

favoring the courtesy notification 

suggested by the FDIC. An alternative 

form of delivery for institutions without 

Internet access was requested by four 

commenters. The following is a 

discussion of the amendments to section 

327.2 and the comments received. 

Under section 7(c) of the Federal 

Deposit Insurance Act (FDI Act or Act) 

(12 U.S.C. 1817(c)) insured depository 

institutions are required to file a 

certified statement with the FDIC for 

each semiannual deposit insurance 

assessment period, containing such 

information as the FDIC ‘‘may require 

for determining the institution’s 

semiannual assessment.’’ 12 U.S.C. 

1817(c)(1)(A). The FDI Act also provides 

that the certified statement ‘‘shall * * * 

be in such form and set forth such 

supporting information as the Board of 

Directors shall prescribe * * *’’ 12 

U.S.C. 1817(c)(1)(B)(i). In this way, the 

Act vests in the FDIC discretion to 

prescribe the information contained in, 

as well as the form of, semiannual 

certified statements. As a result of the 

FDIC’s exercise of this discretion over a 

period of years, the certified statement 

process has evolved in response to 

advances in collection procedures and 

data processing technology. 

Prior to 1995, the FDIC mailed a blank 

certified statement form to every 

insured depository institution every 

semiannual period. Each institution was 

required to transcribe manually on this 

form the deposit data culled from its 

two prior Call Reports/Thrift Financial 

Reports (TFRs) and to calculate its 

assessment payment. The assessment 

was paid for the entire semiannual 

period one month after the beginning of 

the semiannual period (i.e., January 31 

and July 31). An officer of the 

institution was required to certify the 

accuracy of that information by signing 

the form, which was then returned to 

the FDIC along with the institution’s 

check for the assessment amount. Under 

this system almost all of the certified 

statements were returned to the FDIC 

each semiannual period, but about 10 

percent of the certified statements 

received contained mistakes, due in part 

to simple transpositions of figures and 

mathematical errors that required 

correction and revision. 

The FDIC revised the process for 

collecting deposit insurance 

assessments—adopting the system of 

quarterly payments in 1994 and 

implementing it in March of 1995. 59 

FR 67153 (Dec. 29, 1994). As part of this 

changeover to the automated invoicing 

and collection system, the FDIC 

assumed responsibility for ‘‘filling out’’

the certified statement and calculating 

each institution’s deposit insurance 

assessment. The information used by 

the FDIC in completing certified 

statements is derived from institutions’

Call Reports/TFRs, and is stored by the 

FDIC electronically. Because the June 

and December Call Report/TFR data was 

not available electronically until after 

the next semiannual payment date,1 the 

FDIC instituted the practice of collecting 

semiannual assessments in two 

quarterly installments to facilitate FDIC 

preparation of assessment forms for 

insured institutions.

Accordingly, since 1995, the 

semiannual assessment has been 

collected in two quarterly installments; 

the sum of these installments equals an 

institution’s semiannual assessment. 

Each quarterly installment is based on 

deposit data contained in one of the two 

quarterly Call Reports/TFRs submitted 

by the institution during the previous 

semiannual period. Under section 

7(a)(3) of the FDI Act (12 U.S.C. 

1817(a)(3)), reports of condition must 

contain a declaration by an officer of the 

institution, and a signed attestation by 

two other institution officers, that the 

information set forth is true and correct. 

The FDIC computes the amount of 

each quarterly installment by retrieving 

the relevant electronic data from the 

Call Report/TFR for each institution. 

Under the present system, the FDIC 

sends each insured institution an 

invoice for the first semiannual 

installment, and, three months later, a 

certified statement for the second 

installment. The invoice and the 

certified statement 2 are each mailed 

about two weeks prior to the actual 

collection of each respective 

installment.3

The invoice and the certified 

statement differ in two essential 

respects. The invoice contains the data, 

assessment computation, and amount 

due for the first installment of the 

semiannual period only. The certified 

statement, however, contains more than 

just the data, assessment computation, 

and amount due for the second 

installment of the semiannual period. It 

also restates the first installment 

information and combines the two sets 

of information into a semiannual 

presentation. In addition, the second 

installment invoice—the certified 

statement—contains a signature block. 

Institutions are required to sign and 

return the certified statement to the 

FDIC, while the first installment invoice 

was subject to neither requirement.

Under the present process, if an 

institution agrees with the information 

on the first installment invoice, it takes 

no action other than to fund the 

designated assessment account 

sufficiently to allow the direct debit of 

the account. At most institutions, an 

officer reviews the first installment 

invoice before authorizing payment by 

comparing the deposit data on the 

invoice to the amounts reported by the 

institution on its corresponding Call 

Report/TAR, reconciling any 

adjustments from prior assessment 

periods as noted on the back of the 

invoice, verifying the rate multiplier 

used and the ACH account information, 

and spot checking mathematical 

calculations. If the institution disagrees 

with the information on the first 

installment invoice, the institution is 

required by regulation (12 CFR 

327.3(h)), to file a request for revision of 

its assessment computation if it wished 

to change its assessment payment, 

which in practice was usually done to 

obtain a refund. 

If an institution agrees with the 

second installment invoice (the certified 

statement), in addition to ensuring that 

the designated account is adequately 

funded and payment is authorized, an 

officer of the institution is required to 

certify the accuracy of the statement and 

return it to the FDIC. Generally, this 

process involves checking the restated 

first invoice data again, as well as 

checking the data for the second half of 

the semiannual period. The institution 

has to return its certified statement 

(usually by mail) signed by an officer, 

not later than the second quarterly 

payment date of the semiannual period 

(i.e., certified statements must be 

returned by March 30 for the January–

68070 Federal Register / Vol. 69, No. 225 / Tuesday, November 23, 2004 / Rules and Regulations 

4An institution’s assessment for the first 

semiannual period of each year (January 1 through 

June 30) is calculated on the deposits reported on 

the previous September and December Call Report/

TFR. The first installment (due January 2) is based 

on the September deposits and the second 

installment (due March 30) is based on the 

December deposits. The assessment for the second 

semiannual period (July 1 through December 31) is 

calculated on the deposits reported on the previous 

March and June Call Report/TFR. The first 

installment (due June 30) is based on the March 

deposits, and the second installment (due 

September 30) is based on the June Deposits. See

12 CFR 327.3.

June semiannual period and by 

September 30 for the July–December 

semiannual period).4 If the institution 

disagrees with the certified statement, 

the institution has to annotate changes 

on the statement, certify by signing, and 

return the form to the FDIC. As with the 

first installment, the institution is also 

required under section 327.3(h) to file a 

request for revision of its assessment 

computation if it wishes to change its 

assessment payment, which in practice 

is usually done to obtain a refund.

Under the automated invoicing and 

collection system, over a period of 

years, the certified statement has 

evolved from a semiannual form used 

by insured institutions to report their 

deposit data and calculate their 

assessment payments, into a form 

designed to confirm the accuracy of 

information previously provided by the 

institution (via Call Reports/TFRs) and 

the accuracy of the FDIC’s assessment 

calculations based on that information. 

The existing certified statement 

process imposes significant and 

unnecessary burdens on insured 

institutions and the FDIC. The FDIC 

mails out over 9,000 first installment 

invoices and an equal number of 

certified statements each semiannual 

period. Institution officials must review 

and accept the first installment 

assessment calculation twice: once in 

reviewing the first installment invoice 

and then a second time, when reviewing 

the certified statement. Institutions 

return their certified statements to the 

FDIC, even if no discrepancies are 

found, a process prone to recurrent 

errors. For example, some institutions 

return the wrong form (the first 

installment invoice rather than the 

certified statement), or the certified 

statement is lost in transit. Further, the 

FDIC does not receive approximately 

1,000 certified statements each 

semiannual period, necessitating 

significant follow-up efforts by FDIC 

staff through letters and telephone calls, 

which in turn imposes significant 

burdens on the insured institutions that 

must respond. 

In addition, institutions filing 

corrected certified statements or 

invoices are required under section 

327.3(h) to file a separate request for 

revision of that payment with the FDIC 

within 60 days from the date of the 

quarterly assessment invoice. The 

request for revision sets in motion the 

process of FDIC review of the validity of 

the certified statement amendment, the 

accuracy of the corresponding 

assessment payment, and the potential 

for a refund or additional charges based 

on the FDIC’s determination. 

Finally, the return of certified 

statements to the FDIC was important 

when institutions themselves filled out 

the certified statement and computed 

the assessment owed to the FDIC. Since 

1995, however, the information used to 

complete the certified statement is 

drawn from Call Reports/TFRs 

previously attested to by officers of the 

insured depository institutions and 

stored electronically by the FDIC. In 

effect, the information on the certified 

statements that institutions are required 

to certify and return is already certified 

and transmitted to the FDIC when the 

Call Reports/TFRs are filed. Unlike the 

certified statement, however, 

institutions are not required to return 

the completed Call Report/TFR 

signature and attestation page to the 

appropriate Federal banking agency. 

Instead, the attestation page is signed 

and attached to the hard-copy record of 

the completed Call Report/TFR, which 

the institution retains in its own files. 

For these reasons, return of certified 

statements to the FDIC has been 

identified under the FDIC’s ongoing 

EGRPRA program as an outdated, 

redundant, and burdensome process, 

both for the industry and for the FDIC. 

II. The Final Rule 

Under the final rule, the two quarterly 

assessment invoices issued during a 

semiannual period will each be a 

component of the required semiannual 

certified statement. The two quarterly 

certified statement invoices combined 

will reflect an institution’s total 

assessment payment for each 

semiannual period, just as the invoice 

and certified statement do now. The 

FDIC, however, will no longer mail out 

paper copies of certified statement 

invoices to insured institutions. Instead, 

insured institutions will access their 

quarterly certified statement invoices 

each quarter via the FDIC’s transactionbased e-business website, FDICconnect.

In addition, Notices of Assessment Risk 

Classification, formerly mailed with the 

first quarterly invoice each semiannual 

period (see 12 CFR 327.4(a)), will be 

provided with the first quarterly 

certified statement invoice each 

semiannual period on FDICconnect.

FDICconnect access to quarterly 

certified statement invoices was 

expressly supported by a majority (12) 

of the commenters. One bank stated its 

desire to ‘‘eliminate as many paper 

processes as possible.’’ Another 

appreciated ‘‘the regulatory effort under 

the Economic Recovery and Regulatory 

Paperwork Reduction Act (EGRPRA) to 

reduce our filing and compliance 

burdens.’’ A third pronounced Internet 

access to quarterly certified statement 

invoices ‘‘an excellent move.’’ Others 

expressed ‘‘favor’’ for the proposal, saw 

‘‘no problem’’ with it, agreed in 

principle with the FDIC’s goal, and were 

‘‘supportive’’ of the amendments. This 

group of twelve commenters included 

institutions of various sizes, plus the 

Independent Community Bankers of 

America. 

In addition, two other institutions 

supported the amendments by 

inference, asking for e-mail notification 

of the availability of the quarterly 

certified statement invoices on 

FDICconnect. A third did not have 

Internet access yet and inquired about 

alternative notice; a fourth favored the 

proposal albeit incorrectly describing 

FDICconnect as receipt of quarterly 

certified statement invoices ‘‘via email’’; and one other commenter 

opposed downloading of the quarterly 

certified statement invoices, for security 

reasons, but favored e-mailing them. 

Overall, 17 of the 22 comment letters 

were generally supportive of the change 

to FDICconnect.

Five of the comment letters expressed 

an overall negative opinion, but in 

varying degrees. The five negative 

comments were based largely on 

opposition to the requirement that 

institutions retrieve their invoices 

electronically through FDICconnect.

However, none of these comments 

opposed the concepts of quarterly 

certified statement invoices, eliminating 

return of correct quarterly certified 

statement invoices to the FDIC, or 

treating amendments as automatic 

requests for review of the corresponding 

assessment payments. One commenter 

favored the prior system of mailed 

certified statements, arguing that it was 

uncomplicated and required only a pen 

and a 37 cent stamp. Another objected 

that the FDIC should not ‘‘force’’

institutions to access their own 

quarterly certified statement invoices on 

FDICconnect. A third observed: ‘‘It 

would be just as efficient, if not more 

efficient, to e-mail the certification to a 

bank’s president with a 2nd copy to be 

e-mailed to the individual responsible 

for compiling the Call Reports.’’ Two 

commenters, however, based their 

opposition on the fear that institutions 

Federal Register / Vol. 69, No. 225 / Tuesday, November 23, 2004 / Rules and Regulations 68071

5Accessing quarterly certified statement invoices 

via FDICconnect is consistent with the provisions 

of the Government Paperwork Elimination Act, 

under which agencies offer on-line alternatives to 

paper-based processes.

6Access to FDICconnect as provided under the 

final rule requires that each institution register an 

employee (or employees) as FDICconnect

Designated Coordinator(s). The Designated 

Coordinator(s) will then be able to access the 

quarterly certified statement invoice or grant access 

for that purpose to other individuals.

7The quarterly certified statement invoice will 

also remain accessible on FDICconnect for that 

same five-year period.

would forget to download the invoice 

every quarter. One of these complained 

that electronic retrieval ‘‘Makes it really 

easy to overlook, the receiving of the 

assessment prompts us to reply.’’ The 

other urged that ‘‘Your proposal adds 

another level of burden on the banks by 

way of them having one more thing they 

have to remember to do, without the 

benefit of receiving a notice, statement 

or bill.’’ The FDIC’s courtesy e-mail 

notification of quarterly certified 

statement invoice availability each 

quarter may substantially relieve these 

two commenters’ concerns. 

The FDIC believes that the benefits of 

Internet access to quarterly certified 

statements inure to insured institutions 

and the FDIC. FDICconnect access to 

quarterly certified statement invoices is 

another step toward providing business 

processes between insured institutions 

and the FDIC electronically. With the 

advent of electronic business practices, 

the effort and expense inherent in 

mailing out and returning over 9,000 

paper certified statement invoices each 

quarter can be eliminated. Further, most 

insured institutions already have 

Internet service and regard access to 

quarterly certified statements as another 

favorable step in the direction of 

increasing electronic business practices. 

As one bank noted ‘‘We have already 

researched FDICconnect and plan to 

sign up.’’ A bank CFO was ‘‘pleased that 

the FDIC continues to progress towards 

providing regulatory burden relief to 

insured depository institutions under 

the EGRPRA. I believe that these 

changes * * * will reduce time and 

effort by my institution and others 

required to comply with the assessment 

and certified statement process.’’ 5

Two of the commenters requested that 

quarterly certified statement invoices be 

e-mailed to institutions rather than 

downloaded from FDICconnect. The 

FDIC, however, believes that the 

security infrastructure built into 

FDICconnect makes retrieval by insured 

institutions superior to e-mailing 

invoices directly to institutions. For this 

reason, the FDIC has determined that 

FDICconnect is the better approach to 

electronic dissemination of insured 

institutions’ quarterly certified 

statement invoices.6 In addition, 

quarterly certified statement invoices 

will be provided as PDF files, as one 

commenter requested, a secure format 

less vulnerable to manipulation.

Eleven comment letters specifically 

requested that the FDIC remind 

institutions each quarter to download 

the invoices and pay the assessment 

amounts. Several of the comments 

supporting the amendments specifically 

requested that the FDIC include a 

notification element in the final rule. 

One commenter (a small bank—assets 

less than $100 million) suggested that 

‘‘an e-mail be sent to [the] registered 

recipient for each bank. It should be 

sent when the assessments are available 

on the FDICconnect site.’’ A mediumsize thrift ($500 million assets) urged: 

‘‘e-mail notification is the first thing I 

thought of when I began reading the 

proposed changes. Thus, I find the 

considered e-mail notification desirable 

and would be most appreciative of such 

a service.’’ Another commenter, a very 

large institution (assets greater than $10 

billion) said: ‘‘Notification would serve 

as a reminder, making daily searches 

around notice time unnecessary. It 

would also ensure timely payments of 

assessment amounts.’’ The Independent 

Community Bankers of America also 

advocated for e-mail notification: ‘‘Such 

email notification would ensure that 

banks do not neglect to check their 

certified statements online or overlook 

funding their account in a timely 

manner for the FDIC’s direct debit.’’

The FDIC agrees that it would be 

beneficial to remind institutions to 

retrieve their assessment invoices each 

quarter. The final rule states that the 

FDIC will send e-mail notification to all 

individuals at insured institutions who 

have FDICconnect access to quarterly 

certified statement invoices each quarter 

when the invoices are available to 

download (no less that 15 days prior to 

the ACH payment date). In addition, the 

final rule also provides that the FDIC 

may communicate with insured 

institutions by e-mail regarding 

quarterly certified statement invoices 

and other assessment-related matters as 

well. 

Four commenters requested that the 

FDIC provide an alternative invoice 

delivery method. One commenter 

indicated that it would be a burden for 

institutions to get Internet access and 

maintain the hardware necessary to 

retrieve invoices electronically. Another 

commenter—a small thrift (assets less 

than $100 million)—observed: ‘‘As we 

do not have internet access, we are 

concerned whether these proposals will 

include some sort of alternative method 

to obtain our assessments and invoices.’’

In addition, the Independent 

Community Bankers of America 

commented that ‘‘some banks may not 

have ready access to the Internet’’ and 

urged the FDIC to offer an alternative 

delivery method for those banks, 

suggesting either fax or mail. The FDIC 

recognizes that some institutions may 

not yet have Internet access. 

Accordingly, the final rule includes a 

process for institutions without Internet 

access to request a renewable exemption 

for up to one year, during which they 

will continue to receive their quarterly 

certified statement invoices through the 

mail. Any quarterly certified statement 

invoice mailed to an insured institution 

will be treated in all respects as if it had 

been downloaded from FDICconnect.

Under this provision, exemptions may 

be requested in writing from the Chief 

of the Assessments Section, FDIC 

Division of Finance. 

Once institutions have obtained their 

quarterly certified statement invoices 

via FDICconnect, return of those 

statements to the FDIC—if the 

institution believes the invoice is 

correct—will no longer be required. If 

an institution agrees with its quarterly 

certified statement invoice, an officer of 

the institution will simply retain it in 

the institution’s files for the five-year 

record retention period established in 

the FDI Act. See 12 U.S.C. 1817(b)(5).7

Because the data used to complete the 

quarterly certified statement invoice has 

been previously attested to on the 

institution’s Call Report/TFR, signing 

the quarterly certified statement invoice 

will no longer be required. Instead, the 

institution will simply pay the 

assessment indicated on the quarterly 

certified statement invoice—by funding 

its designated account and permitting 

the FDIC’s direct debit—and the invoice 

data will be deemed certified by the 

institution in conformity with both the 

final rule and the FDI Act.

If an institution disagrees with the 

Call Report/TFR data used to compute 

the assessment amount listed on a 

quarterly certified statement invoice, the 

institution will simply amend its Call 

Report/TFR data (as it has in the past), 

return it to the FDIC, and the FDIC will 

automatically treat the amendment as a 

request for revision of assessment 

computation under 12 CFR 327.3(h). 

Similarly, if an institution disagrees 

with the calculation of the assessment 

amount (with no change required to Call 

Report/TFR data), the institution will 

simply annotate the quarterly certified 

statement invoice with the correct 

information, certify its accuracy by 

68072 Federal Register / Vol. 69, No. 225 / Tuesday, November 23, 2004 / Rules and Regulations 

8The requirements for filing a request for review 

of an institution’s assessment risk classification 

under 12 CFR 327.4(d) are unaffected by this 

change.

signing, and return it to the FDIC within 

the specified timeframe. The FDIC will 

automatically treat the amended invoice 

as a request for revision of assessment 

computation under section 327.3(h). In 

either case, no separately filed request 

for revision will be needed.8 In the 

event of an assessment dispute, the 

FDIC can request from an insured 

institution the quarterly certified 

statement invoice retained in the 

institution’s files.

Under the final rule, quarterly 

certified statement invoices from prior 

semiannual periods will still be subject 

to change should an institution discover 

errors and seek to amend its Call 

Report/TFR. The FDIC considers such 

requests for assessment changes for the 

full five-year statute of limitations 

period for assessments. Institutions, 

however, must in every case ensure that 

the debit to the institution’s designated 

ACH account is adequately funded and 

authorized. 

The final rule provides several 

benefits to the industry and the FDIC. 

By accessing FDICconnect, institutions 

will obtain their assessment invoice 

data more quickly, more reliably, and at 

less cost to the FDIC. Lowered costs to 

the FDIC will ultimately benefit 

financial institutions because the FDIC 

is funded by assessments from the 

industry. The official(s) delegated with 

the responsibility for an institution’s 

FDIC assessments will retrieve quarterly 

certified statement invoices at his or her 

convenience 24 hours a day (allowing 

limited downtime for maintenance 

during off hours) without mail or 

internal routing delays. Institutions may 

facilitate internal distribution by 

authorizing more than one person to 

access FDICconnect. Signing and 

returning correct quarterly certified 

statement invoices will be eliminated. 

Because each quarterly certified 

statement invoice is a component of the 

institution’s semiannual certified 

statement, the payment and certification 

processes become synchronized, and the 

confusion caused by the prior 

requirement that institutions return 

every other invoice will be eliminated. 

In addition, insured institutions’ officers 

will benefit from fewer steps in their 

review process. Under the prior system, 

institutions were required to review 

their first invoice data twice—once on 

the first invoice and again when it was 

reiterated on the certified statement. 

This needless repetition will be 

eliminated, reducing the regulatory 

burden imposed by the certified 

statement process. Finally, the 

amendment will simplify and 

streamline the FDIC’s review process for 

assessment payment changes; when an 

amended quarterly certified statement 

invoice is returned to the FDIC, a 

separately filed request for revision of 

assessment computation will not be 

required. 

III. Effective Date 

The final rule will become effective 

on March 1, 2005. Quarterly certified 

statement invoices for the quarter 

beginning April 1, 2005, will be 

available on FDICconnect on or about 

March 15, 2005. The delayed effective 

date will allow time for insured 

institutions that have not already 

registered with FDICconnect to do so. 

IV. Paperwork Reduction Act 

This final rule results in a reduction 

in burden for a collection of information 

entitled ‘‘Certified Statement for Semiannual Deposit Insurance Assessment,’’

subject to the Paperwork Reduction Act 

of 1995 (PRA), 44 U.S.C. 3501 et seq. No 

person is required to respond to, nor 

shall any person be subject to a penalty 

for a failure to comply with, a collection 

of information subject to the 

requirements of the PRA, unless that 

collection of information displays a 

currently valid Office of Management 

and Budget (OMB) control number. The 

FDIC solicited public comment on the 

change in burden for the information 

collection in accordance with 44 U.S.C. 

3506(c)(2)(B). No comments were 

received. The FDIC also submitted the 

change in burden resulting from this 

final rule to OMB for review in 

accordance with 44 U.S.C. 3507(d). The 

OMB has approved the change in 

burden to the collection of information 

under control number 3064–0057. 

V. Regulatory Flexibility Act 

Pursuant to 5 U.S.C. 605(b) the FDIC 

certifies that the final rule will not have 

a significant economic impact on a 

substantial number of small businesses 

within the meaning of the Regulatory 

Flexibility Act (5 U.S.C. 601 et seq.). 

The final rule affects all insured 

depository institutions (there are 

approximately 9,700 at present). Of the 

total number of insured institutions, 

approximately 60% are small business 

entities (assets of $150 million or less). 

The final rule slightly reduces the 

regulatory burden (from an estimated 30 

minutes per response to an estimated 20 

minutes per response) imposed by the 

certified statement process, and 

therefore does not have a significant 

economic impact on any insured 

depository institution.

The final rule changes the manner in 

which insured institutions file certified 

statements. Under the final rule, 

institutions will access their quarterly 

certified statement invoices via the 

FDIC’s e-business Web site, 

FDICconnect, rather than by mail. No 

significant burden is anticipated in this 

requirement because the FDIC believes 

that very few institutions do not already 

have Internet access or cannot readily 

obtain it (the final rule provides for an 

exemption for up to one year). Return of 

correct invoices is eliminated. An 

insured institution reviews each 

quarterly certified statement invoice 

only once, unlike the prior system. Only 

quarterly certified statement invoices 

that the institution believes are not 

correct are returned to the FDIC, 

amended to show corrections. The FDIC 

will treat amended certified statement 

invoices as requests for review, 

eliminating the need for institutions to 

make a separate filing under 12 CFR 

327.3(h). The final rule requires that 

institutions retain a copy of the 

quarterly certified statement invoice for 

their records, but no significant burden 

is anticipated in this requirement 

because insured institutions already 

retain copies of their certified 

statements and invoices. Access to 

quarterly certified statement invoices 

via FDICconnect will be more secure 

than the mail, will eliminate much 

internal routing of statements within 

institutions, will permit 24-hour access 

to quarterly certified statement invoices 

(with minimal maintenance downtime), 

and will eliminate significant FDIC 

tracking and processing. In short, the 

final rule will reduce the regulatory 

burden on insured institutions. 

VI. The Treasury and General 

Government Appropriations Act, 

1999—Assessment of Federal 

Regulations and Policies on Families 

The FDIC has determined that the 

final rule will not affect family wellbeing within the meaning of section 654 

of the Treasury and General 

Government Appropriations Act, 

enacted as part of the Omnibus 

Consolidated and Emergency 

Supplemental Appropriations Act of 

1999 (Public Law 105–277, 112 Stat. 

2681). 

VII. Plain Language Requirement 

Section 722 of the Gramm-LeachBliley Act (GLBA), 15 U.S.C. 6801 et 

seq., requires banking agencies to use 

plain language in all proposed and final 

rules published after January 1, 2000. 

The proposed rule requested comments 

Federal Register / Vol. 69, No. 225 / Tuesday, November 23, 2004 / Rules and Regulations 68073

on how the rule might be changed to 

reflect the requirements of GLBA. No 

GLBA comments were received. 

VIII. Small Business Regulatory 

Enforcement Fairness Act 

The Office of Management and Budget 

has determined that the final rule is not 

a ‘‘major rule’’ within the meaning of 

the relevant sections of the Small 

Business Regulatory Enforcement 

Fairness Act of 1996 (SBREFA) (5 U.S.C. 

801 et seq.). As required by SBREFA, 

the FDIC will file the appropriate 

reports with Congress and the General 

Accounting Office so that the final rule 

may be reviewed.

List of Subjects in 12 CFR Part 327

Assessments, Bank deposit insurance, 

Banks, Banking, Financing Corporation, 

Freedom of information, Hearing and 

appeal procedures, Record retention, 

Reporting and record keeping 

requirements, Savings associations.

■ For the reasons stated in the preamble, 

the Board of Directors of the Federal 

Deposit Insurance Corporation hereby 

amends part 327 of Title 12 of the Code 

of Federal Regulations as follows:

PART 327—ASSESSMENTS

■ 1. The authority citation for part 327 

continues to read as follows:

Authority: 12 U.S.C. 1441, 1441b, 1813, 

1815, 1817–1819; Pub. L. 104–208, 110 Stat. 

3009–479 (12 U.S.C. 1821).

■ 2. Section 327.2 of subpart A is revised 

to read as follows:

§ 327.2 Certified statements. 

(a) Required. (1) Each insured 

depository institution shall file and 

certify its semiannual certified 

statement in the manner and form set 

forth in this section. 

(2) The semiannual certified 

statement shall be comprised of the two 

quarterly assessment invoices issued 

during each semiannual period as 

prescribed in § 327.3(c) and (d). The two 

quarterly certified statement invoices 

combined shall reflect the institution’s 

semiannual assessment base, assessment 

computation, and semiannual 

assessment amount. 

(3) Any rule applicable to the certified 

statement shall apply to each quarterly 

certified statement invoice. 

(b) Availability and access. (1) The 

Corporation shall make available to each 

insured depository institution via the 

FDIC’s e-business website FDICconnect

two quarterly certified statement 

invoices during each semiannual 

period. 

(2) Insured depository institutions 

shall access their quarterly certified 

statement invoices via FDICconnect, 

unless the FDIC provides notice to 

insured depository institutions of a 

successor system. In the event of a 

contingency, the FDIC may employ an 

alternative means of delivering the 

quarterly certified statement invoices. A 

quarterly certified statement invoice 

delivered by any alternative means will 

be treated as if it had been downloaded 

from FDICconnect. 

(3) Institutions that do not have 

Internet access may request a renewable 

one-year exemption from the 

requirement that quarterly certified 

statement invoices be accessed through 

FDICconnect. Any exemption request 

must be submitted in writing to the 

Chief of the Assessments Section. 

(4) Each quarter, the FDIC will 

provide courtesy e-mail notification to 

insured depository institutions 

indicating that new quarterly certified 

statement invoices are available and 

may be accessed on FDICconnect. Email notification will be sent to all 

individuals with FDICconnect access to 

quarterly certified statement invoices.

(5) E-mail notification may be used by 

the FDIC to communicate with insured 

depository institutions regarding 

quarterly certified statement invoices 

and other assessment-related matters. 

(c) Review by institution. The 

president of each insured depository 

institution, or such other officer as the 

institution’s president or board of 

directors or trustees may designate, 

shall review the information shown on 

each quarterly certified statement 

invoice. 

(d) Retention by institution. If the 

appropriate officer of the insured 

depository institution agrees that to the 

best of his or her knowledge and belief 

the information shown on the quarterly 

certified statement invoice is true, 

correct and complete and in accordance 

with the Federal Deposit Insurance Act 

and the regulations issued under it, the 

institution shall pay the amount 

specified on the invoice and shall retain 

the quarterly certified statement invoice 

in the institution’s files for five years as 

specified in section 7(b)(5) of the 

Federal Deposit Insurance Act. 

(e) Amendment by institution. If the 

appropriate officer of the insured 

depository institution determines that to 

the best of his or her knowledge and 

belief the information shown on the 

quarterly certified statement invoice is 

not true, correct and complete and in 

accordance with the Federal Deposit 

Insurance Act and the regulations 

issued under it, the institution shall pay 

the amount specified on the invoice, 

and may: 

(1) Amend its Report of Condition, or 

other similar report, to correct any data 

believed to be inaccurate on the 

quarterly certified statement invoice; 

amendments to such reports timely filed 

under section 7(g) of the Federal Deposit 

Insurance Act but not permitted to be 

made by an institution’s primary 

Federal regulator may be filed with the 

FDIC for consideration in determining 

deposit insurance assessments; or 

(2) Amend and sign its quarterly 

certified statement invoice to correct a 

calculation believed to be inaccurate 

and return it to the FDIC by the 

quarterly payment date for that invoice 

as specified in § 327.3(c) and (d). 

(f) Certification. Data used by the 

Corporation to complete the quarterly 

certified statement invoice has been 

previously attested to by the institution 

in its Reports of Condition, or other 

similar reports, filed with the 

institution’s primary Federal regulator. 

When an insured institution pays the 

amount shown on the quarterly certified 

statement invoice and does not correct 

that invoice as provided in paragraph (e) 

of this section, the information on that 

invoice shall be deemed true, correct, 

complete, and certified for purposes of 

paragraph (a) of this section and section 

7(c) of the Federal Deposit Insurance 

Act. 

(g) Requests for revision of assessment 

computation. (1) The timely filing of an 

amended Report of Condition or other 

similar report, or an amended quarterly 

certified statement invoice, that will 

result in a change to deposit insurance 

assessments owed or paid by an insured 

depository institution shall be treated as 

a timely filed request for revision of 

computation of quarterly assessment 

payment under § 327.3(h). 

(2) The rate multiplier shown on the 

quarterly certified statement invoice 

shall be amended only if it is 

inconsistent with the assessment risk 

classification assigned to the institution 

in writing by the Corporation for the 

current semiannual period pursuant to 

§ 327.4(a). Agreement with the rate 

multiplier shall not be deemed to 

constitute agreement with the 

assessment risk classification assigned.

By order of the Board of Directors.

Dated in Washington, DC, this 15th day of 

November, 2004.

Federal Deposit Insurance Corporation. 

Robert E. Feldman, 

Executive Secretary.

[FR Doc. 04–25804 Filed 11–22–04; 8:45 am] 

BILLING CODE 6714–01–P