76034 Federal Register / Vol. 69, No. 243 / Monday, December 20, 2004 / Notices 

1OMB Control Number 1505–AA87 currently 

covers the information collection addressed in this 

notice. FinCEN intends to ask OMB to re-assign the 

control number in this collection to the 1506 series 

consistent with other rules issued under Title II of 

the Bank Secrecy Act.

Management and Budget (‘‘OMB’’). Prior 

to submission of the extension request, 

FinCEN is soliciting comment on those 

information collections 31 CFR 103.177.

DATES: Written comments should be 

received on or before February 18, 2005.

ADDRESSES: You may submit comments, 

identified by 1505–AA87, by any of the 

following methods: 

• Federal e-rulemaking portal: http://

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail: regcomments@fincen.

treas.gov. Include RIN 1505–AA87 in 

the subject line of the message. 

• Mail: FinCEN, P.O. Box 39, Vienna, 

VA 22183. Include RIN 1505–AA87 in 

the body of the text. 

Instructions: It is preferable for 

comments to be submitted by electronic 

mail because paper mail in the 

Washington, DC, area may be delayed. 

Please submit comments by one method 

only. All submissions received must 

include the agency name and the 

Regulatory Information Number (RIN) 

for this rulemaking. All comments 

received will be posted without change 

to http://www.fincen.gov, including any 

personal information provided. 

Comments may be inspected at FinCEN 

between 10 a.m. and 4 p.m., in the 

FinCEN reading room in Washington, 

DC. Persons wishing to inspect the 

comments submitted must request an 

appointment by telephoning (202) 354–

6400 (not a toll-free number).

FOR FURTHER INFORMATION CONTACT:

Office of Regulatory Programs, FinCEN, 

(202) 354–6400; and Office of Chief 

Counsel, FinCEN, at (703) 905–3590 

(not toll-free numbers).

SUPPLEMENTARY INFORMATION: The Bank 

Secrecy Act (‘‘BSA’’), Titles I and II of 

Public Law 91–508, as amended, 

codified at 12 U.S.C. 1829(b), 12 U.S.C. 

1951–1959, and 31 U.S.C. et seq., 

authorizes the Secretary of the Treasury, 

inter alia, to issue regulations requiring 

records and reports that are determined 

to have a high degree of usefulness in 

criminal, tax and regulatory matters. 

Title III of the USA PATRIOT Act of 

2001, Pub. L. 107–56, included certain 

amendments to the anti-money 

laundering provisions of Title II of the 

BSA, 31 U.S.C. 5311 et seq., which are 

intended to aid in the prevention, 

detection and prosecution of 

international money laundering and 

terrorist financing. Regulations 

implementing Title II of the BSA appear 

at 31 CFR part 103. The authority of the 

Secretary of the Treasury to administer 

Title II of the BSA has been delegated 

to the Director of FinCEN. 

The information collected and 

retained under the regulation addressed 

in this notice assist federal, state, and 

local law enforcement as well as 

regulatory authorities in the 

identification, investigation and 

prosecution of money laundering and 

other matters. In accordance with the 

requirements of the Paperwork 

Reduction Act of 1995, 44 U.S.C. 

3506(c)(2)(A), and its implementing 

regulations, the following information is 

presented concerning the information 

collection below.1

Title: Correspondent Accounts for 

Foreign Shell Banks; Recordkeeping and 

Termination of Correspondent Accounts 

for Foreign Banks (31 CFR 103.177). 

OMB Number: 1505–AA87. 

Abstract: Covered financial 

institutions are prohibited from 

maintaining correspondent accounts for 

foreign shell banks (31 CFR 

103.177(a)(1)). Covered financial 

institutions that maintain correspondent 

accounts for foreign banks must 

maintain records of owner(s) of the 

foreign bank and the names and address 

of a person residing in the United States 

who is authorized to accept service of 

legal process for the foreign bank. (31 

CFR 103.177(a)(2)). Covered financial 

institutions may satisfy these 

requirements by using the sample 

certification and re-certification forms 

contained in Appendices A and B of 

this regulation. Records of documents 

relied upon by a financial institution for 

purposes of this regulation must be 

maintained for at least five years after 

the date that the financial institution no 

longer maintains a correspondent 

account for such foreign bank (31 CFR 

103.177(e)).

Current Action: There is no change to 

the existing regulations. 

Type of Review: Extension of a 

currently approved collection notice. 

Affected Public: Businesses or for 

profit institutions, and non-profit 

institutions. 

Burden: The estimated average annual 

reporting burden associated with 

Appendix A is 20 hours per respondent; 

the estimated average annual reporting 

burden associated with Appendix B is 5 

hours per respondent; and the estimated 

average recordkeeping burden 

associated with section 103.177(e) is 9 

hours per recordkeeper. 

The following paragraph applies to 

the collection of information addressed 

in this notice. An agency may not 

conduct or sponsor, and a person is not 

required to respond to, a collection of 

information unless the collection of 

information displays a valid OMB 

control number. Records required to be 

retained under the BSA must be 

retained for five years. Generally, 

information collected pursuant to the 

BSA is confidential, but may be shared 

as provided by law with regulatory and 

law enforcement authorities. 

Request for Comments: Comments 

submitted in response to this notice will 

be summarized and/or included in the 

request for OMB approval. All 

comments will become a matter of 

public record. Comments are invited on: 

(a) Whether the collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information shall have practical utility; 

(b) the accuracy of the agency’s estimate 

of the burden of the collection of 

information; (c) ways to enhance the 

quality, utility, and clarity of the 

information to be collected; (d) ways to 

minimize the burden of the collection of 

information 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.

William J. Fox, 

Director.

[FR Doc. 04–27747 Filed 12–17–04; 8:45 am] 

BILLING CODE 4810–02–P

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the 

Currency 

[Docket No. 04–25] 

FEDERAL RESERVE SYSTEM 

[Docket No. OP–1218] 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

DEPARTMENT OF THE TREASURY 

Office of Thrift Supervision 

[No. 2004–57] 

Shared National Credit Data Collection 

Modernization

AGENCIES: Office of the Comptroller of 

the Currency, Treasury (OCC); Board of 

Governors of the Federal Reserve 

System (Board), the Federal Deposit 

Insurance Corporation (FDIC); and the 

Office of Thrift Supervision (OTS) as an 

assisting agency.

ACTION: Notice for public comment.

Federal Register / Vol. 69, No. 243 / Monday, December 20, 2004 / Notices 76035

SUMMARY: The Federal Banking 

Agencies (Board, FDIC, OCC, and OTS, 

collectively referred to as ‘‘the 

Agencies’’) are seeking comment on 

proposed changes to the examination 

data collected in support of the Shared 

National Credit Program (Program). The 

Agencies propose to standardize and 

expand the data collection to improve 

the efficiency and effectiveness of 

Shared National Credit (SNC) 

examinations. By standardizing and 

expanding the collection of data, the 

Agencies will be able to use advanced 

credit risk analytics that will be 

beneficial to the reporting banks and the 

Agencies. The proposed changes are 

warranted based on the increasing 

sophistication of banks’ risk 

management practices and the 

complexity of credit markets. Going 

forward, the Program also plans to take 

advantage of current information 

technologies. The Agencies plan to 

implement the changes beginning with 

the 2007 SNC examinations, employing 

data as of December 31, 2006.

DATES: Comments must be submitted on 

or before February 15, 2005.

ADDRESSES: Because the Agencies will 

jointly review all of the comments 

submitted, interested parties may send 

comments to any one of the Agencies 

without the need to send comments (or 

copies) to all of the Agencies. Postal 

service in the Washington, DC area and 

at the Agencies is subject to delay, so 

please consider submitting your 

comments by e-mail or fax. Commenters 

are encouraged to use the title ‘‘SNC 

Program Modernization’’ to facilitate the 

organization and distribution of 

comments among the Agencies. 

Interested parties may submit comments 

to: 

OCC: You should include OCC and 

Docket Number 04–25 in your comment. 

You may submit comments by any of 

the following methods: 

• Federal eRulemaking Portal: http://

www.regulations.gov. Follow the 

instructions for submitting comments. 

• OCC Web site: http://

www.occ.treas.gov. Click on ‘‘Contact 

the OCC,’’ scroll down and click on 

‘‘Comments on Proposed Regulations.’’

• E-mail address: 

regs.comments@occ.treas.gov.

• Fax: (202) 874–4448. 

• Mail: Office of the Comptroller of 

the Currency, 250 E Street, SW., Mail 

Stop 1–5, Washington, DC 20219. 

• Hand Delivery/Courier: 250 E 

Street, SW., Attn: Public Information 

Room, Mail Stop 1–5, Washington, DC 

20219. 

Instructions: All submissions received 

must include the agency name (OCC) 

and docket number or Regulatory 

Information Number (RIN) for this 

notice of proposed rulemaking. In 

general, OCC will enter all comments 

received into the docket without 

change, including any business or 

personal information that you provide. 

You may review comments and other 

related materials by any of the following 

methods: 

• Viewing Comments Personally: You 

may personally inspect and photocopy 

comments at the OCC’s Public 

Information Room, 250 E Street, SW., 

Washington, DC. You can make an 

appointment to inspect comments by 

calling (202) 874–5043. 

• Viewing Comments Electronically:

You may request e-mail or CD-ROM 

copies of comments that the OCC has 

received by contacting the OCC’s Public 

Information Room at 

regs.comments@occ.treas.gov.

• Docket: You may also request 

available background documents and 

project summaries using the methods 

described above.

Board: You may submit comments, 

identified by Docket No. OP–1218 by 

any of the following methods: 

• Agency Web site: http://

www.federalreserve.gov. Follow the 

instructions for submitting comments at 

http://www.federalreserve.gov/

generalinfo/foia/ProposedRegs.cfm.

• Federal eRulemaking Portal: http://

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail: 

regs.comments@federalreserve.gov.

Include the docket number in the 

subject line of the message. 

• Fax: (202) 452–3819 or (202) 452–

3102. 

• Mail: Jennifer J. Johnson, Secretary, 

Board of Governors of the Federal 

Reserve System, 20th Street and 

Constitution Avenue, NW., Washington, 

DC 20551. 

All public comments are available 

from the Board’s Web site at http://

www.federalreserve.gov/generalinfo/

foia/ProposedRegs.cfm as submitted, 

except as necessary for technical 

reasons. Accordingly, your comments 

will not be edited to remove any 

identifying or contact information. 

Public comments may also be viewed in 

electronic or paper form in Room MP–

500 of the Board’s Martin Building (20th 

and C Streets, NW.) between 9 a.m. and 

5 p.m. on weekdays. 

FDIC: You may submit comments by 

any of the following methods: 

• Agency Web site: http://

www.FDIC.gov/regulations/laws/

federal/propose.html.Follow the 

instructions for submitting comments. 

• E-mail: comments@FDIC.gov.

• Mail: Robert E. Feldman, Executive 

Secretary, Attention: Comments/Legal 

ESS, Federal Deposit Insurance 

Corporation, 550 17th Street, NW., 

Washington, DC 20429. 

• Hand Delivered/Courier: The guard 

station at the rear of the 550 17th Street 

Building (located on F Street), on 

business days between 7 a.m. and 5 p.m. 

• Public Inspection: Comments may 

be inspected and photocopied in the 

FDIC Public Information Center, Room 

100, 801 17th Street, NW., Washington, 

DC, between 9 a.m. and 4:30 p.m. on 

business days. 

Instructions: Comments received will 

be posted without change to http://

www.FDIC.gov/regulations/laws/

federal/propose.html, including any 

personal information provided. 

OTS: You may submit comments, 

identified by No. 2004–57, by any of the 

following methods: 

• Federal eRulemaking Portal: http://

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail address: 

regs.comments@ots.treas.gov. Please 

include No. 2004–57 in the subject line 

of the message and include your name 

and telephone number in the message. 

• Fax: (202) 906–6518. 

• Mail: Regulation Comments, Chief 

Counsel’s Office, Office of Thrift 

Supervision, 1700 G Street, NW., 

Washington, DC 20552, Attention: No. 

2004–57. 

• Hand Delivery/Courier: Guard’s 

Desk, East Lobby Entrance, 1700 G 

Street, NW., from 9 a.m. to 4 p.m. on 

business days, Attention: Regulation 

Comments, Chief Counsel’s Office, 

Attention: No. 2004–57. 

Instructions: All submissions received 

must include the agency name and No. 

2004–57 for this request for comment.

All comments received will be posted 

without change to the OTS Internet Site 

at http://www.ots.treas.gov/

pagehtml.cfm?catNumber=67&an=1,

including any personal information 

provided. 

Docket: For access to the docket to 

read background documents or 

comments received, go to http://

www.ots.treas.gov/

pagehtml.cfm?catNumber=67&an=1.

In addition, you may inspect 

comments at the Public Reading Room, 

1700 G Street, NW., by appointment. To 

make an appointment for access, call 

(202) 906–5922, send an e-mail to 

public.info@ots.treas.gov, or send a 

facsimile transmission to (202) 906–

7755. (Prior notice identifying the 

materials you will be requesting will 

assist us in serving you.) We schedule 

appointments on business days between 

10 a.m. and 4 p.m. In most cases, 

76036 Federal Register / Vol. 69, No. 243 / Monday, December 20, 2004 / Notices 

1The borrower receives funds from the lender by 

initiating a facility under the credit agreement. 

Essentially a loan, a facility might consist of a 

revolving, term, or other type of loan. 2Benchmarking references a standardized 

problem or test that serves as a basis for evaluation 

or comparison.

3See Risk-Based Capital Guidelines; 

Implementation of New Basel Capital Accord, 68 FR 

45900 (Aug. 4, 2003).

appointments will be available the next 

business day following the date we 

receive a request.

FOR FURTHER INFORMATION CONTACT: 

OCC: MaryAnn Nash, Counsel, 

Legislative and Regulatory Affairs 

Division (202) 874–5753; or Louise 

Francis, National Bank Examiner, Large 

Bank Supervision, (202) 874–1306; or 

Kevin Satterfield, Public Reference 

Room Assistant, Communications 

Division, 202–874–4700. 

Board: Elaine Boutilier, Managing 

Senior Counsel, or Alye Foster, Senior 

Counsel, (202) 452–5289; or John T. 

Colwell, Senior Project Manager, 

Division of Bank Supervision and 

Regulation, (202) 728–5885. For users of 

Telecommunications Device for the Deaf 

(‘‘TDD’’) only, contact (202) 263–4869. 

FDIC: William R. Baxter, Chief, Large 

Bank Section, Division of Supervision 

and Consumer Protection, (202) 898–

8514 or wbaxter@fdic.gov; Cecilia L. 

Barry, Senior Financial Analyst, Large 

Bank Section, Division of Supervision 

and Consumer Protection, (202) 898–

3506 or cbarry@fdic.gov; Rodney D. Ray, 

Counsel, Legal Division, (202) 898–3556 

or rray@fdic.gov; or Leneta G. Gregorie, 

Counsel, Legal Division, (202) 898–3719 

or lgregorie@fdic.gov.

OTS: David W. Tate, Manager, 

Examination Quality Review, (202) 906–

5717.

SUPPLEMENTARY INFORMATION:

I. Introduction 

The SNC Program is a cooperative 

initiative through which the Agencies 

examine and supervise shared national 

credits. A shared national credit is a 

lending commitment of $20 million or 

more that is held by three or more 

regulated lenders. 

For the reasons explained in the 

discussion that follows, the Agencies 

have determined that their 

administration of the SNC Program 

could be improved, and the quality of 

the feedback we provide to banks in the 

SNC Program enhanced, by creating a 

single, shared SNC database and by 

standardizing and expanding the set of 

data we collect from certain banks that 

currently report data pursuant to the 

Program. Accordingly, this notice 

describes the changes to the reporting 

system that the Agencies contemplate 

and identifies the new data elements 

that the Agencies propose to collect. 

The proposed data elements are 

included in a chart appended to the 

notice. Immediately preceding the chart, 

the Agencies present a series of 

questions designed to elicit comment on 

the expanded program. Commenters’

responses will help refine our thinking 

about the ultimate design of the 

expanded data collection process. 

Toward that end, the questions focus on 

the feasibility of providing the 

expanded information and on the effects 

and consequences of including 

particular new elements in the SNC 

reporting system. Commenters also are 

invited to suggest alternatives where 

appropriate. 

Concurrently with this notice, the 

Board is publishing a separate Request 

for Information (RFI) to gather 

information from prospective 

contractors pertaining to system 

integration services to develop a 

common system solution for supporting 

the SNC Program. 

Following our evaluation of the 

comments received in response to this 

notice and the RFI, the Agencies expect 

to develop a more detailed description 

of the new data collection process and 

to publish that description for 

additional comment. At that time, the 

Agencies will also solicit comment on 

burden estimates pursuant to the 

Paperwork Reduction Act. We 

anticipate that final changes to the SNC 

data collection process will be 

implemented through an interagency 

statement or similar issuance. 

II. Background 

The SNC Program has been an 

effective supervisory tool for over 

twenty-five years. In 2004, it covered 

approximately 7,500 facilities 1 to nearly 

5,000 borrowers and represented 

committed exposure in excess of $1.5 

trillion. The current objectives are to:

• Provide uniformity in approach and 

credit rating determinations, 

• Gain efficiencies in risk analysis, 

• Provide timely results to the 

reporting banks and Agencies, and 

• Gather and analyze reporting bank 

and industry credit data. 

Advancements in credit risk 

management and information 

technology have created an opportunity 

to improve the Agencies’ ability to 

achieve these objectives going forward. 

In that regard, the Agencies propose to: 

• Standardize the SNC data 

collection system so that all Agencies 

collect the same data using the same 

data definitions,

• Expand SNC data collected from 

the banks that agent a significant 

volume of SNCs,

• Apply advanced credit risk 

analytics and benchmarking 2

techniques to common SNC borrowers, 

facilities, and reporting bank portfolios, 

and

• Provide reporting banks with 

feedback on their commonly held SNC 

portfolios across those metrics.

The creation of a shared SNC database 

will improve the efficiency and 

accuracy of data submission by the 

reporting banks. Currently, the Federal 

Reserve and the OCC maintain separate 

SNC databases with slightly different 

data collection processes (the OCC also 

processes SNC data for the FDIC and 

OTS). A shared database and a common 

set of data definitions will allow for 

increased use of electronic data 

collection and will make the collection, 

reconciliation, and maintenance of SNC 

data more effective. 

By expanding the data collected from 

the banks that agent a significant 

volume of SNCs, the Agencies will be 

able to develop and share useful credit 

risk information with them. Over time 

and as credit risk management 

techniques continue to evolve, reporting 

banks will want additional feedback 

from their primary Federal regulator on 

how their SNC portfolios compare with 

their peers. SNC benchmarking 

information will provide a unique 

reference point because comparable 

peer ratios on the internal credit risk 

estimates are currently not available. 

III. Proposed Enhancements 

The Agencies intend to standardize 

the SNC data collected from the 

reporting banks that serve as agent for 

at least 100 SNC facilities and have been 

identified as likely mandatory or opt-in 

Basel II banks 3 (i.e., ‘‘Expanded 

Reporters’’). Banks that do not meet this 

criterion, but are able to provide the 

credit risk management data outlined in 

this proposal, could also voluntarily 

choose to participate as Expanded 

Reporters. All other reporting banks 

(i.e., ‘‘Basic Reporters’’) would continue 

to submit data similar to the existing 

SNC reporting requirements. The 

Agencies also propose to clarify the data 

definitions and standardize the 

submission format to reduce ambiguity 

and automate the data collection 

process for those banks that are able to 

submit data electronically.

III.A. Basic Reporters 

• Basic Reporters should see few 

changes outside of improved software 

and feedback reports from the Agencies. 

• Basic Reporters would continue to 

provide data annually prior to the SNC 

Federal Register / Vol. 69, No. 243 / Monday, December 20, 2004 / Notices 76037

examination period only on SNC 

facilities they agent. 

• The data elements provided by 

Basic Reporters in the existing SNC 

Program would remain substantially 

unchanged. However, they would be 

subject to a common set of detailed 

definitions (e.g., five or six digit NAICS 

codes would be required rather than the 

four (FRB) or five (OCC, FDIC, and OTS) 

that are currently requested). 

• The Agencies would provide userfriendly software to the Basic Reporters 

to electronically transmit data. 

• The Agencies would distribute 

identifiers (IDs) for borrowers and 

facilities agented by Basic Reporters (see 

the section on Regulatory IDs). 

• A Basic Reporter would have the 

option to become an Expanded Reporter 

and receive benchmark comparisons as 

well.

III.B. Expanded Reporters 

The following points highlight the 

primary changes that would affect 

Expanded Reporters. 

• Expanded Reporters would report 

data on a quarterly basis instead of 

annually. Quarterly data submission 

will allow each Agency to provide more 

frequent feedback on the risk 

characteristics of SNC portfolios to the 

Expanded Reporters. 

• Data would be collected on all 

Program borrowers and facilities (i.e., 

agented and participated facilities) held 

by the Expanded Reporters. 

• Expanded Reporters would report 

additional data elements. 

The tables in Appendix I and II list 

the set of data elements required by the 

proposed changes to the Program. 

III.C Regulatory IDs 

Collecting and matching expanded 

data on the commonly held SNCs from 

agent reporting banks and participant 

reporting banks presents challenges. To 

ensure borrowers and facilities are 

uniformly identified, common 

identifiers (i.e., Regulatory IDs) will 

need to be assigned. The Agencies are 

requesting assistance in the design, 

implementation, and administration of 

the Regulatory ID system. 

The Agencies propose to create 

Regulatory IDs that the Expanded 

Reporters would distribute to 

participant reporting banks. The 

Regulatory IDs would accompany the 

data elements with each data 

submission by all Expanded Reporters 

that participate in the facility. Agencies 

would assign Regulatory IDs to current 

SNC borrowers and credits and provide 

those IDs to Expanded Reporters as they 

transition to the new system. Going 

forward, Expanded Reporters would 

request Regulatory IDs, as needed, on a 

post-origination basis. 

The Agencies intend to distribute 

Regulatory IDs to Basic Reporters on an 

annual basis, following their annual 

data collection. The Agencies have not 

determined how an Expanded Reporter 

would provide data on facilities agented 

by Basic Reporters. 

IV. Technology and Data Exchange 

The Agencies propose to provide all 

reporting banks with a common set of 

detailed data element definitions that 

specify data quality standards as well as 

provide data validation and edit checks 

as part of the collection process. In 

addition, the new technologies will 

support seamless and secure electronic 

data exchanges between reporting banks 

and the Agencies. The Agencies also 

plan to use technologies for enhanced 

electronic reporting and feedback to 

reporting banks. Technologies and 

techniques to collect and distribute SNC 

data and reports are currently under 

investigation and include XML and 

XBRL taxonomies. The Agencies intend 

to implement an efficient data 

transmission process for each 

organization (i.e., holding company 

level and all subsidiaries and affiliates) 

that prefers to submit and receive data 

centrally. Results could be mailed to 

one location, and data would be broken 

down by legal entity. These 

enhancements should improve the 

quality of information and the efficiency 

of the program. 

V. Benefits of the Proposed 

Enhancements 

The benefits of the proposed 

enhancements discussed in this notice 

would be significant to both reporting 

banks and the Agencies. The ability to 

quantify and compare institutional risk 

across the same syndicated exposure or 

portfolio of commonly held exposures 

(i.e., ‘‘benchmark’’) is one important 

benefit of the proposed changes. With 

improved data, the Agencies will be 

able to benchmark the quality of broadly 

held credits in the banking industry and 

in individual reporting bank portfolios, 

and assist in the evaluation of credit risk 

metrics across commonly held 

portfolios of risk. Where appropriate, 

supervisors will be able to provide peer 

information on such items as capital 

intensity (i.e., capital per dollar of 

exposure), weighted average Probability 

of Default (PD), weighted average Loss 

Given Default (LGD), and many other 

metrics on a reporting bank’s total SNC 

portfolio (or by industry) versus peer 

basis. Analysis and benchmark 

comparisons may prompt examinations 

by the Agencies, particularly when 

reporting banks begin identifying 

emerging risks that other reporting 

banks have not. This information could 

also alert both the Agencies and 

reporting bank management to emerging 

trends or other pertinent factors. 

Feedback relating to the range of risk 

metrics (e.g., PDs, LGDs, and Exposures 

at Default) assigned by peer reporting 

banks to various industry sector 

exposures could help reporting banks 

evaluate and improve their internal risk 

systems. Such information could also 

improve the Agencies’ understanding of 

internal risk assessment methodologies. 

Examples of this feedback might 

include: 

• Feedback grouped by risk grade 

categories that would show median PDs, 

LGDs, or EADs for various industry 

segments.

• Borrower to borrower comparisons 

that would show a reporting bank how 

its PDs compared to the range of scores 

assigned to the same borrower by other 

banks. 

• Credit comparisons, possibly 

grouped by facility type, size, industry, 

collateral, etc. that would help reporting 

banks compare their EAD and LGD 

values to the range of scores assigned by 

other banks to the same exposures. 

• Accumulated actual credit loss 

measured over time, which could prove 

to be a valuable source of empirical 

information relating to LGD estimates. 

The Agencies realize that there are 

various methods used to evaluate risk. 

Consequently, multiple conclusions 

could be drawn from the same 

information, yet still arrive at a sound 

and consistent risk assessment. 

As supervisors and reporting banks 

gain experience with benchmarking and 

other data, the Agencies anticipate that 

the SNC on-site examination process 

will become more efficient. In the past, 

the Program has relied heavily upon 

examination of individual credit 

transactions. Going forward, examiners 

would continue to examine credits; 

however, they could focus their on-site 

examination on credits where portfolio 

analysis, market data and risk metrics 

indicate an increased risk or 

concentration. Moreover, with the 

expanded examination data, examiners 

should have a better understanding of a 

reporting bank’s credit portfolio and 

macro credit trends. 

VI. Conclusion 

The benefits of the proposed changes 

to the Program discussed in this notice 

support the Agencies’ goals to improve 

the data collection system, the 

efficiency and effectiveness of SNC 

examinations, and to provide the ability 

to perform and share advanced risk 

76038 Federal Register / Vol. 69, No. 243 / Monday, December 20, 2004 / Notices 

analytics on the data. The effective 

implementation of a portfolio approach 

to credit risk is dependent on a timely 

and reliable flow of useful and relevant 

data in conjunction with benchmarking 

commonly held exposures and riskfocused examinations. These changes 

call for the reporting banks and 

Agencies to share more credit risk 

information than in the past. The 

ultimate goal of the proposed changes is 

to create a streamlined, risk-focused 

Program that recognizes and takes 

advantage of the significant advances in 

bank risk management practices, 

leverages current technology, and 

enables the production of meaningful 

credit risk information for the Agencies 

and reporting banks. 

The questions in the next section 

address specific aspects of the proposal 

as well as request feedback on obstacles 

that the Agencies may not have 

anticipated. 

The Agencies intend to use feedback 

from this preliminary proposal to 

develop a more detailed notice for 

comment prior to any final 

implementation of the proposed 

changes. This more detailed notice will, 

to the extent necessary, formally 

propose a new data collection and 

request comment on burden estimates. 

VII. Questions 

Feasibility of Reporting Banks Providing 

the Data and Establishing Which 

Reporting Banks Would Provide That 

Data 

1. To perform benchmark analysis and 

provide meaningful feedback to the 

reporting banks, what data elements 

should the Agencies add, delete, or 

change from the Expanded Reporter list? 

2. What are the effects on Expanded 

Reporters of providing data on credit 

participations? 

a. Are there data elements that 

reporting banks would not be able to 

compile electronically without manual 

intervention? 

b. Are there equivalent data elements 

that would be easier to provide? 

3. For Basic Reporters, the Agencies 

anticipate that the effects of the 

proposal will be minimal. What effects, 

if any, do reporting banks see from the 

proposed changes? 

a. The main change for Basic 

Reporters is improved data software. 

Are there changes to the current 

software that would be particularly 

helpful? 

b. Which, if any, additional data items 

would be useful for the Agencies to 

collect, either to improve their 

understanding of the underlying 

transactions or to provide better 

feedback to the reporting banks? 

c. What, if any, effects would the use 

of a common set of detailed definitions 

have on Basic Reporters? Are there other 

alternatives that could achieve the goals 

of reducing ambiguity and automating 

the data collection process? 

4. Are the criteria ‘‘agents 100 or more 

facilities and is a mandatory or opt-in 

Basel II bank’’ reasonable to separate 

Expanded Reporters from Basic 

Reporters? If not, please provide an 

alternative. 

5. Since more banks are using credit 

derivatives to manage their exposures, 

should the Program begin to collect data 

on credit derivatives in order to provide 

benchmarking feedback? Should the 

data files include credit derivative 

positions used to manage portfolio risk, 

along with the same risk metrics used 

for loans and other credit exposures? 

Assignment and Maintenance of Unique 

Facility and Borrower Identifiers 

6. Are there obstacles to the Agencies’

proposal to assign, distribute, and 

maintain Regulatory IDs and, if so, what 

are they? 

a. Should the Agencies distribute 

Regulatory IDs directly to participants 

instead of relying on the Expanded 

Reporter Agent banks to do so? 

b. Should Basic Reporters also 

distribute Regulatory IDs to their 

participants? Are credit participations 

held by Basic Reporters’ numerous 

enough to provide useful, relevant 

feedback? 

c. Are there existing or planned 

commercial systems that might help 

uniquely identify facilities and 

borrowers in place of the process 

proposed here? 

d. Would quarterly batch submission 

and Regulatory ID feedback for 

Expanded Reporters be preferable or 

would those banks prefer to request the 

Regulatory IDs throughout the year as 

deals are completed? 

7. Which technologies would best 

support the reporting banks in 

requesting Regulatory IDs? 

Feasibility of Data Exchange, Data 

Definitions, and Selecting Data 

Exchange Technologies 

8. For both Basic and Expanded 

Reporters, the Agencies propose to 

define standard data requirements to 

support the secure file exchanges, and 

utilize web-based data exchanges, such 

as XML and XBRL taxonomies and 

related secure technologies, to exchange 

SNC examination data. 

a. Is there an alternative to XML and 

XBRL taxonomies and related secure 

technologies to collect SNC examination 

data that would be superior? 

b. Would it be feasible to extend 

existing data exchange technologies, 

conduits, and processes, such as those 

used for the FFIEC Call Reporting, to 

collect SNC data? 

9. Do reporting banks store sufficient 

information in their databases to 

electronically identify a SNC according 

to the current criteria—$20 million or 

more with three or more lenders 

regulated by the Agencies? 

a. Would reporting banks need a 

resource to determine if the Agencies 

regulate a lender?

b. Would other criteria help reporting 

banks identify SNCs and submit data 

electronically? 

c. Would a larger data feed to the 

Agencies, which the Agencies would 

then screen for SNC criteria and then 

extract SNC facilities, be easier for 

reporting banks to administer? 

Additional Issues Related to the 

Delivery of Reports and Data to 

Reporting Banks 

10. Assuming that the proposed list of 

data elements is adopted, how could 

that data be best presented to provide 

value to Basic and Expanded Reporters 

(i.e., what views would be most 

advantageous)? 

a. Alternatively, should the Agencies 

simply provide raw data tables to 

support bank-generated reports? 

b. Will your reporting bank be able to 

receive the feedback data and reports 

electronically by the proposed 2007 

implementation date? 

11. Are there any unintended 

consequences that might arise from the 

use of this comparative information? 

Additional Questions 

12. The Agencies currently ask 

reporting banks to provide the name, 

city, and state for SNC borrowers. This 

has often not been enough information 

to clearly identify borrowers in the SNC 

database. The Agencies are looking for 

additional data that reporting banks 

might provide to help identify their 

borrowers more clearly (e.g., stock 

tickers, taxpayer identification numbers, 

CUSIP numbers, MKMV’s PIDs, etc). 

a. Which of these additional data 

elements would be most useful for this 

project? 

b. What are the minimum data 

required to clearly identify borrowers 

and facilities? 

c. Which, if any, of these items do 

reporting banks store electronically? 

d. Is the proposal to require 

submission of at least one of these items 

reasonable? 

13. Over the past two decades, some 

of the industry’s largest losses involved 

credits extended to groups of related 

borrowers. 

Federal Register / Vol. 69, No. 243 / Monday, December 20, 2004 / Notices 76039

a. How are reporting banks identifying 

groups of related borrowers in their own 

systems? 

b. What data could participating 

reporting banks provide to help identify 

related borrowers in SNC credits? 

c. Could reporting banks 

electronically transmit data on 

guarantors for credits, sponsors, or other 

related and relevant parties? 

14. Could the reporting banks provide 

entries tracking the resolution of credits 

over time, such as amounts charged off 

or sales of assets since the last data 

submission? 

15. The data submission software 

currently in use (OSCAR and SNC 

Reporting Application) does not easily 

support aggregated reporting of SNC 

information for all of a reporting bank’s 

related entities. Should the Agencies 

design software to permit aggregate, 

single-point, reporting of SNC data for a 

reporting bank? Should electronic data 

file submission also allow this type of 

reporting?

Appendix I

DATA ELEMENTS FOR EXPANDED REPORTERS

Data element (‘‘N’’ denotes data that is not collected in the current program) Comments A / P* (Agent /

participant) 

Name and address of Borrower and Agent Bank ... Full, legal name as it appears in the corporate charter, and State, ZIP, 

and country.

AP 

Name and address of the Review Bank, if any ...... A ‘‘review’’ bank is designated in two situations: by the agent when it 

wishes to identify a location other than its headquarters for examination 

of the credit files by Agency supervisors, or by the supervisors when the 

agent is a non-regulated bank and the supervisors wish to examine the 

transaction. In the latter case, the supervisors will designate one of the 

regulated participant banks as the ‘‘review’’ bank.

A 

RegIDs of the Borrower and Agent Bank ............... The Regulatory IDs (‘‘RegIDs’’) of the Borrower and the Agent bank are 

currently referred to as the borrower’s and agent bank’s ‘‘RSSD#’’. This 

document proposes to expand the use of ‘‘RegIDs’’ to facilitate linkage 

of agent bank and participant bank information, and the RSSD system 

may, or may not, be used in the future for this purpose.

AP 

RegID of the Review Bank, if any ........................... The ‘‘RegID’’ of the Review Bank is currently referred to as the review 

bank’s ‘‘RSSD#.’’ The RSSD system may, or may not, be used in the 

future for this purpose.

A 

Industry Code (NAICS) ........................................... 2002 North American Industrial Classification System (NAICS) code number reflecting the borrower’s business activity. Note that although this 

data element is currently provided, this document proposed to increase 

the number of digits required to five or six (from four required by the 

FRB and five requested by the OCC/FDIC/OTS), which is consistent 

with the industry code requirements for filers of Form FR Y–10.

A 

Parent Identification (N) .......................................... Name, Address, and Industry information for Parent Organization. If the 

reporting bank does not store the legal parent, or better yet the ultimate 

parent company in a multi-tier structure, then reporting banks would 

provide the name that they use to aggregate related exposures.

AP 

Reporting bank’s internal Facility ID ....................... Reporting bank’s internal facility number. Helps examiners identify facilities in bank records.AP 

RegID of the Facility ................................................ The ‘‘RegID’’ of the facility is currently referred to as the ‘‘Credit Number’’

and is assigned by the Agencies. The ‘‘Credit Number’’ identifier would 

be replaced by the proposed ‘‘RegID’’ system, which would facilitate 

linkage of agent bank and participant bank information.

AP 

Facility Origination Date .......................................... Date the facility originated. Permits analysis of facilities by ‘‘vintage’’ to 

identify underwriting trends.

A 

Most Recent Renewal Date .................................... Currently provided by FRB reporting banks only. Date the facility was last 

renewed or reviewed to confirm the risk rating.

A 

Facility Maturity Date ............................................... Date by which all utilizations must be repaid (i.e., not the latest drawdown 

date, but the date by which all drawings must be repaid).

A 

Facility Committed Exposure .................................. Total facility availability legally committed to the borrower as of the date of 

the data submission. Includes the total facility amount, not just the portion retained by the agent reporting bank (if any)—the agent bank’s portion of the total exposure would be reported in ‘‘Participant bank Share 

of Committed Exposure’’ below.

A 

Facility Utilized Exposure ........................................ Total utilized amount, including off-balance sheet instruments (e.g., LCs), 

as of the date of the data submission. Includes the total facility utilization, not just the portion retained by the agent bank (if any)— the agent 

bank’s portion of the total utilization is a new data element that would 

be reported in ‘‘Participant bank Share of Utilized Exposure’’ below.

A 

Borrower Risk Rating (N) ........................................ Risk rating assigned to the borrower ............................................................ AP 

Borrower PD—Probability of Default (Reg) (N) ...... PD used for regulatory capital purposes (after any guarantor effect) .......... AP 

Facility EAD—Exposure at Default (Reg) (N) ......... EAD used for regulatory capital purposes .................................................... AP 

Facility LGD—Loss Given Default (Reg) (N) .......... LGD used for regulatory capital purposes (after any guarantor effect) ........ AP 

Facility EL—Expected Loss (Reg) (N) .................... EL using the PD, EAD, and LGD for regulatory capital purposes (after any 

guarantor impact).

AP 

Facility Capital (Reg) (N) ......................................... Regulatory capital applicable to the facility (after any guarantor effect) ...... AP 

Guarantor Name and stand alone PD, and guaranty amount (N).To be submitted only if the guarantor’s attributes are modifying the standalone characteristics of the borrower’s PD or facility LGD. The parameter that was mitigated (i.e., PD or LGD) will also be provided.AP 

76040 Federal Register / Vol. 69, No. 243 / Monday, December 20, 2004 / Notices 

DATA ELEMENTS FOR EXPANDED REPORTERS—Continued

Data element (‘‘N’’ denotes data that is not collected in the current program) Comments A / P* (Agent /

participant) 

At least one of the following (N): Taxpayer ID# 

(TIN), CUSIP (borrower), Stock Ticker, MKMV’s 

‘‘PID’’, LPC’s Loan ID# (LIN).

A corroborating variable to identify the borrower in the event of ambiguity 

in the other data elements.

AP 

Participant bank Share of Utilized Exposure .......... In the current Program, the agent bank submits the committed exposure 

for each participant bank. As a new data element, the Agent bank 

would also be asked to provide the utilized exposure for each participant bank. Additionally, each participant bank would be asked to submit 

its utilized exposure, which would be linked to the data provided by the 

agent bank using the proposed RegID# system.

AP 

Cumulative Facility Charge offs (N) ........................ Supports reconciliation and analysis of risk exposures over time ................ AP 

Facility collateral type (e.g., A/R, Equip) (N) .......... Supports LGD analysis ................................................................................. A 

# Days Principal or Interest Past Due (N) .............. Distress indicator/nonaccrual trigger ............................................................. A 

Reportable SNC Flag (N) ........................................ Identifies the current quarter as that in which a borrower no longer qualifies as a SNC, and notifies users that the facility will not appear in future data submissions.A 

Participant bank names and addresses .................. In the current Program, the agent reporting bank submits the full, legal 

name of each participant bank, and its State, Zip, and country, and 

would continue to do so under this proposal. Each participant bank 

would also provide its name and address (in addition to other data elements as noted), which would be used to supplement linkage of agent 

bank and participant bank information through the new RegID system.

AP 

RegID of each Participant bank .............................. The ‘‘RegID’’ of a participant bank is currently referred to as the participant bank’s ‘‘RSSD’’#. Currently the agent bank submits the RegID 

(RSSD#) of each participant bank, and would continue to do so under 

this proposal. Each participant bank would also provide its RegID# (in 

addition to other data elements as noted), which would be used to link 

agent bank and participant bank information. If the agent bank is also a 

participant bank, it would use the same RegID to report both its agency 

and its participation.

AP 

Participant bank Share of Committed Exposure ..... In the current Program, the agent bank submits the committed exposure 

for each participant bank. Additionally, each participant bank would be 

asked to submit its committed exposure, which would be linked to the 

data provided by the agent bank using the proposed RegID system.

AP 

Facility Type ............................................................ Generic description of the facility (e.g., revolver, term) ................................ A 

Facility Purpose ....................................................... Generic description of purpose (e.g., purchase equipment, provide operating funds).A 

Facility Risk Rating .................................................. Facility rating using the reporting bank’s risk rating system ......................... AP 

% Pass .................................................................... % of committed exposure rated Pass (i.e., translation of the reporting 

bank’s risk rating into the regulatory risk rating system). Under the current Program, this is reported by the agent bank and covers the entire 

facility amount (‘‘Facility Committed Exposure’’) using the agent bank’s 

credit evaluation. Under this proposal, each participant bank (including 

the agent bank) would report the ‘‘% Pass’’ but only for their ‘‘Participant bank Share of Committed Exposure’’ (see above).

AP 

% Special Mention .................................................. % of committed exposure rated Special Mention—see ‘‘% Pass’’ above for 

a more detailed explanation of expected reporting.

AP 

% Substandard ........................................................ % of committed exposure rated Substandard—see ‘‘% Pass’’ above for a 

more detailed explanation of expected reporting.

AP 

% Doubtful ............................................................... % of committed exposure rated Doubtful—see ‘‘% Pass’’ above for a more 

detailed explanation of expected reporting.

AP 

% Loss ..................................................................... % of committed exposure rated Loss—see ‘‘% Pass’’ above for a more 

detailed explanation of expected reporting.

AP 

Nonaccrual Indicator ............................................... Yes / No .......................................................................................................... AP 

Nonaccrual Date ...................................................... First day for which interest was no longer accrued as income .................... AP 

Internal Watch Indicator .......................................... Currently provided only by FRB reporting banks. On the bank’s watch 

list—Yes / No.

AP 

Name of Responsible Account Officer .................... Account officer that examiners could contact to discuss the credit ............. A 

Phone Number of Responsible Account Officer ..... Account officer’s external phone number ..................................................... A 

Department Handling Account ................................ Currently provided only by OCC reporting banks. Name of the business

unit that is responsible for monitoring the borrower’s performance and 

credit quality.

A 

* Data to be provided for Agented (A) and/or Participated (P) facilities. Readers should also note that, for purposes of this document, an agent 

reporting bank is also a participant reporting bank if the agent reporting bank retains credit exposure.

Appendix II

Federal Register / Vol. 69, No. 243 / Monday, December 20, 2004 / Notices 76041

DATA ELEMENTS FOR BASIC REPORTERS

Data element (‘‘N’’ denotes data that is not collected in the current program) Comments 

Name and address of Borrower and Agent reporting bank.Full, legal name as it appears in the corporate charter, and State, ZIP, and country. 

Name and address of the Review Bank, if any Normally the same as the agent bank, a ‘‘review’’ bank differs from the agent bank in two situations: when the agent bank wishes to identify a location other than its headquarters for examination of the credit files by Agencies, or by the Agencies when the agent bank is a nonregulated bank and the Agencies wish to examine the transaction. In the latter case, the 

Agencies will designate one of the regulated participant banks as the ‘‘review’’ bank. 

RegID of the Borrower and the Agent Bank ...... The ‘‘RegIDs’’ of the Borrower and the Agent bank are currently referred to as the borrower’s 

and the agent bank’s ‘‘RSSD#.’’ This document proposed to expand the use of ‘‘RegIDs’’ to 

facilitate linkage of agent bank and participant bank information, and the RSSD system may, 

or may not, be used in the future for this purpose. 

RegID of the Review Bank, if any ...................... The ‘‘RegID’’ of the Review Bank is currently referred to as the review bank’s ‘‘RSSD#.’’ The 

RSSD system may, or may not, be used in the future for this purpose. 

Industry Code ..................................................... 2002 North American Industrial Classification System (NAICS) code number reflecting the borrower’s business activity. Note that although this data element is currently provided, this 

document proposed to increase the number of digits required to five or six (from four required by the FRB and five requested by the OCC/FDIC/OTS), which is consistent with the 

industry code requirements for filers of Form FR Y–10. 

Bank’s internal Facility ID ................................... Bank’s internal facility number. Helps examiners identify facilities in bank records. 

Facility Origination Date ..................................... Date the facility originated. Permits analysis of facilities by ‘‘vintage’’ to identify underwriting 

trends. 

Most Recent Renewal Date ................................ Currently provided by FRB banks only. Date the facility was last renewed or reviewed to confirm the risk rating. 

Facility Maturity Date .......................................... Date by which all utilizations must be repaid (i.e., not the latest drawdown date, but the date 

by which all drawings must be repaid). 

Facility Committed Exposure .............................. Total facility availability legally committed to the borrower as of the date of the data submission. Includes the total facility amount, not just the portion retained by the agent bank (if 

any). 

Facility Utilized Exposure ................................... Total utilized amount, including off-balance sheet instruments (e.g., LCs), as of the date of the 

data submission. Includes the total facility utilization, not just the portion retained by the 

agent bank (if any). 

# Days Principal or Interest Past Due (N) .......... Distress indicator/nonaccrual trigger. 

Participant bank Names and Addresses ............ The agent bank submits the full, legal name of each participant bank, and its State, Zip, and 

Country. 

Participant Bank’s Share of Committed Exposure.The agent bank submits the committed exposure for each participant bank. 

Facility Type ........................................................ Generic description of the facility (e.g., revolver, term). 

Facility Purpose .................................................. Generic description of purpose (e.g., purchase equipment, provide operating funds). 

Facility Risk Rating ............................................. Facility rating using the reporting bank’s risk rating system. 

% Pass ................................................................ % of committed exposure rated Pass (i.e., translation of the bank’s risk rating into the regulatory risk rating system). 

% Special Mention .............................................. % of committed exposure rated Special Mention (i.e., translation of the bank’s risk rating into 

the regulatory risk rating system). 

% Substandard ................................................... % of committed exposure rated Substandard (i.e., translation of the bank’s risk rating into the 

regulatory risk rating system). 

% Doubtful .......................................................... % of committed exposure rated Doubtful (i.e., translation of the bank’s risk rating into the regulatory risk rating system). 

% Loss ................................................................ % of committed exposure rated Loss (i.e., translation of the bank’s risk rating into the regulatory risk rating system). 

Nonaccrual Indicator ........................................... Yes / No 

Nonaccrual Date ................................................. First day for which interest was no longer accrued as income. 

Internal Watch Indicator ...................................... Currently provided only by FRB reporting banks. On the reporting bank’s watch list—Yes / No. 

Name of Responsible Account Officer ............... Account officer name. 

Phone Number of Responsible Account Officer Account officer’s external phone number. 

Department Handling Account ............................ Currently provided only by OCC reporting banks. Name of the business unit that is responsible 

for monitoring the borrower’s performance and credit quality. 

Dated: December 14, 2004. 

Julie L. Williams, 

Acting Comptroller of the Currency.

By order of the Board of Governors of the 

Federal Reserve System, December 14, 2004. 

Jennifer J. Johnson, 

Secretary of the Board.

Dated at Washington, DC, the 7th day of 

December, 2004.

By order of the Federal Deposit Insurance 

Corporation. 

Robert E. Feldman, 

Executive Secretary.

Dated: December 9, 2004.

By the Office of Thrift Supervision. 

James E. Gilleran, 

Director.

[FR Doc. 04–27752 Filed 12–17–04; 8:45 am] 

BILLING CODE 4810–33– 6210–01– 6714–01– 6720–01–P