[Federal Register Volume 85, Number 244 (Friday, December 18, 2020)]
[Notices]
[Pages 82580-82583]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-27847]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

FEDERAL RESERVE SYSTEM

FEDERAL DEPOSIT INSURANCE CORPORATION


Proposed Agency Information Collection Activities; Comment 
Request

AGENCY: Office of the Comptroller of the Currency (OCC), Treasury; 
Board of Governors of the Federal Reserve System (Board); and Federal 
Deposit Insurance Corporation (FDIC).

ACTION: Joint notice and request for comment.

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SUMMARY: In accordance with the requirements of the Paperwork Reduction 
Act of 1995 (PRA), the OCC, the Board, and the FDIC (the agencies) may 
not conduct or sponsor, and the respondent is not required to respond 
to, an information collection unless it displays a currently valid 
Office of Management and Budget (OMB) control number. The Federal 
Financial Institutions Examination Council (FFIEC), of which the 
agencies are members, has approved the agencies' publication for public 
comment of a proposal to revise and extend the Consolidated Reports of 
Condition and Income (Call Reports) (FFIEC 031, FFIEC 041, and FFIEC 
051), which are currently approved collections of information. The 
agencies are requesting comment on a change to the Call Report forms 
and instructions (FFIEC 031 and FFIEC 041 only) to implement the FDIC's 
proposed amendments to the deposit insurance assessment system 
applicable to all large insured depository institutions (IDIs), 
including highly complex IDIs, to address the temporary deposit 
insurance assessment effects resulting from certain optional regulatory 
capital transition provisions relating to the implementation of the 
current expected credit losses (CECL) methodology. The change to the 
Call Reports would enable the FDIC to remove the double counting of a 
specified portion of the CECL transitional amount or the modified CECL 
transitional amount, as applicable (collectively, the CECL transitional 
amounts), in certain financial measures that are calculated using the 
sum of Tier 1 capital and reserves and that are used to determine 
assessment rates for large and highly complex IDIs.

DATES: Comments must be submitted on or before February 16, 2021.

ADDRESSES: Interested parties are invited to submit written comments to 
any or all of the agencies. All comments, which should refer to the 
``Call Report Deposit Insurance Assessment-Related Revisions,'' will be 
shared among the agencies.
    OCC: You may submit comments, which should refer to ``Call Report 
Deposit Insurance Assessment-Related Revisions,'' by any of the 
following methods:
    <bullet> Email: <a href="/cdn-cgi/l/email-protection#265654474f4840496649454508525443475508414950"><span class="__cf_email__" data-cfemail="94e4e6f5fdfaf2fbd4fbf7f7bae0e6f1f5e7baf3fbe2">[email protected]</span></a>.
    <bullet> Mail: Chief Counsel's Office, Office of the Comptroller of 
the Currency, Attention: 1557-0081, 400 7th Street SW, Suite 3E-218, 
Washington, DC 20219.
    <bullet> Hand Delivery/Courier: 400 7th Street SW, suite 3E-218, 
Washington, DC 20219.
    Instructions: You must include ``OCC'' as the agency name and 
``1557-0081'' in your comment. In general, the OCC will publish 
comments on www.reginfo.gov without change, including any business or 
personal information provided, such as name and address information, 
email addresses, or phone numbers. Comments received, including 
attachments and other supporting materials, are part of the public 
record and subject to public disclosure. Do not include any information 
in your comment or supporting materials that you consider confidential 
or inappropriate for public disclosure.
    You may review comments and other related materials that pertain to 
this information collection beginning on the date of publication of the 
second notice for this collection by the following method:
    <bullet> Viewing Comments Electronically: Go to www.reginfo.gov. 
Click on the ``Information Collection Review'' tab. Underneath the 
``Currently under Review'' section heading, from the drop-down menu 
select ``Department of Treasury'' and then click ``submit.'' This 
information collection can be located by searching by OMB control 
number ``1557-0081.'' Upon finding the appropriate information 
collection, click on the related ``ICR Reference Number.'' On the next 
screen, select ``View Supporting Statement and Other Documents'' and 
then click on the link to any comment listed at the bottom of the 
screen.
    <bullet> For assistance in navigating www.reginfo.gov, please 
contact the Regulatory Information Service Center at (202) 482-7340.
    Board: You may submit comments, which should refer to ``Call Report 
Deposit Insurance Assessment-Related Revisions,'' by any of the 
following methods:
    <bullet> Agency website: http://www.federalreserve.gov. Follow the 
instructions for submitting comments at: http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
    <bullet> Email: <a href="/cdn-cgi/l/email-protection#31435456421f525e5c5c545f4542715754555443505d435442544347541f565e47"><span class="__cf_email__" data-cfemail="82f0e7e5f1ace1edefefe7ecf6f1c2e4e7e6e7f0e3eef0e7f1e7f0f4e7ace5edf4">[email protected]</span></a>. Include ``Call 
Report Deposit Insurance Assessment-Related Revisions'' in the subject 
line of the message.
    <bullet> Fax: (202) 395-6974.
    <bullet> Mail: Ann E. Misback, Secretary, Board of Governors of the 
Federal Reserve System, 20th Street and Constitution Avenue NW, 
Washington, DC 20551.
    All public comments are available on the Board's website at https://www.federalreserve.gov/apps/foia/proposedregs.aspx as submitted, 
unless modified for technical reasons. Accordingly, your comments will 
not be edited to remove any identifying or contact information.
    FDIC: You may submit comments, which should refer to ``Call Report 
Deposit Insurance Assessment-Related Revisions,'' by any of the 
following methods:
    <bullet> Agency website: https://www.fdic.gov/regulations/laws/federal/. Follow the instructions for submitting comments on the FDIC's 
website.
    <bullet> Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> Email: <a href="/cdn-cgi/l/email-protection#b3d0dcdeded6ddc7c0f3f5f7faf09dd4dcc5"><span class="__cf_email__" data-cfemail="b1d2dedcdcd4dfc5c2f1f7f5f8f29fd6dec7">[email protected]</span></a>. Include ``Call Report Deposit 
Insurance Assessment-Related Revisions'' in the subject line of the 
message.
    <bullet> Mail: Manuel E. Cabeza, Counsel, Attn: Comments, Room MB-
3128, Federal Deposit Insurance Corporation, 550 17th Street NW, 
Washington, DC 20429.
    <bullet> Hand Delivery: Comments may be hand delivered to the guard 
station at the rear of the 550 17th Street Building

[[Page 82581]]

(located on F Street) on business days between 7:00 a.m. and 5:00 p.m.
    <bullet> Public Inspection: All comments received will be posted 
without change to https://www.fdic.gov/regulations/laws/federal/ 
including any personal information provided. Paper copies of public 
comments may be requested from the FDIC Public Information Center by 
telephone at (877) 275-3342 or (703) 562-2200.
    Additionally, commenters may send a copy of their comments to the 
OMB desk officer for the agencies by mail to the Office of Information 
and Regulatory Affairs, U.S. Office of Management and Budget, New 
Executive Office Building, Room 10235, 725 17th Street NW, Washington, 
DC 20503; by fax to (202) 395-6974; or by email to 
<a href="/cdn-cgi/l/email-protection#1877716a79476b6d7a75716b6b7177765877757a367d7768367f776e"><span class="__cf_email__" data-cfemail="5a3533283b05292f38373329293335341a353738743f352a743d352c">[email protected]</span></a>.

FOR FURTHER INFORMATION CONTACT: For further information about the 
proposed revisions to the information collections discussed in this 
notice, please contact any of the agency staff whose names appear 
below. In addition, copies of the report forms for the Call Reports can 
be obtained at the FFIEC's website (https://www.ffiec.gov/ffiec_report_forms.htm).
    OCC: Kevin Korzeniewski, Counsel, Chief Counsel's Office, (202) 
649-5490.
    Board: Nuha Elmaghrabi, Federal Reserve Board Clearance Officer, 
(202) 452-3884, Office of the Chief Data Officer, Board of Governors of 
the Federal Reserve System, 20th and C Streets NW, Washington, DC 
20551. Telecommunications Device for the Deaf (TDD) users may call 
(202) 263-4869.
    FDIC: Manuel E. Cabeza, Counsel, (202) 898-3767, Legal Division, 
Federal Deposit Insurance Corporation, 550 17th Street NW, Washington, 
DC 20429.

SUPPLEMENTARY INFORMATION:

I. Report Summary

    The agencies propose to extend for three years, with revision, 
their information collections associated with the FFIEC 031, FFIEC 041, 
and FFIEC 051 Call Reports.
    Report Title: Consolidated Reports of Condition and Income (Call 
Report).
    Form Number: FFIEC 031 (Consolidated Reports of Condition and 
Income for a Bank with Domestic and Foreign Offices), FFIEC 041 
(Consolidated Reports of Condition and Income for a Bank with Domestic 
Offices Only), and FFIEC 051 (Consolidated Reports of Condition and 
Income for a Bank with Domestic Offices Only and Total Assets Less Than 
$5 Billion).
    Frequency of Response: Quarterly.
    Affected Public: Business or other for-profit.
    Type of Review: Revision and extension of currently approved 
collections.

OCC

    OMB Control No.: 1557-0081.
    Estimated Number of Respondents: 1,111 national banks and federal 
savings
    associations.
    Estimated Average Burden per Response: 41.92 burden hours per 
quarter to file.
    Estimated Total Annual Burden: 186,292 burden hours to file.

Board

    OMB Control No.: 7100-0036.
    Estimated Number of Respondents: 739 state member banks.
    Estimated Average Burden per Response: 45.40 burden hours per 
quarter to file.
    Estimated Total Annual Burden: 134,202 burden hours to file.

FDIC

    OMB Control No.: 3064-0052.
    Estimated Number of Respondents: 3,263 insured state nonmember 
banksand state savings associations.
    Estimated Average Burden per Response: 39.96 burden hours per 
quarter to file.
    Estimated Total Annual Burden: 521,558 burden hours to file.
    The estimated average burden hours collectively reflect the 
estimates for the FFIEC 031, the FFIEC 041, and the FFIEC 051 reports 
for each agency. When the estimates are calculated by type of report 
across the agencies, the estimated average burden hours per quarter are 
85.85 (FFIEC 031), 55.20 (FFIEC 041), and 35.27 (FFIEC 051). The change 
to the FFIEC 031 and FFIEC 041 Call Report forms and instructions 
proposed in this notice would not have a material impact on the 
existing burden estimates. This notice does not propose any changes to 
the FFIEC 051. The estimated burden per response for the quarterly 
filings of the Call Report is an average that varies by agency because 
of differences in the composition of the institutions under each 
agency's supervision (e.g., size distribution of institutions, types of 
activities in which they are engaged, and existence of foreign 
offices).
    Type of Review: Extension and revision of currently approved 
collections.

Legal Basis and Need for Collections

    The Call Report information collections are mandatory: 12 U.S.C. 
161 (national banks), 12 U.S.C. 324 (state member banks), 12 U.S.C. 
1817 (insured state nonmember commercial and savings banks), and 12 
U.S.C. 1464 (federal and state savings associations). At present, 
except for selected data items and text, these information collections 
are not given confidential treatment.
    Banks and savings associations submit Call Report data to the 
agencies each quarter for the agencies' use in monitoring the 
condition, performance, and risk profile of individual institutions and 
the industry as a whole. Call Report data serve a regulatory or public 
policy purpose by assisting the agencies in fulfilling their shared 
missions of ensuring the safety and soundness of financial institutions 
and the financial system and protecting consumer financial rights, as 
well as agency-specific missions affecting national and state-chartered 
institutions, such as conducting monetary policy, ensuring financial 
stability, and administering federal deposit insurance. Call Reports 
are the source of the most current statistical data available for 
identifying areas of focus for on-site and off-site examinations. Among 
other purposes, the agencies use Call Report data in evaluating 
institutions' corporate applications, including interstate merger and 
acquisition applications for which the agencies are required by law to 
determine whether the resulting institution would control more than 10 
percent of the total amount of deposits of insured depository 
institutions in the United States. Call Report data also are used to 
calculate institutions' deposit insurance assessments and national 
banks' and federal savings associations' semiannual assessment fees.

II. Current Action

A. Background

    Upon adoption of the CECL methodology, an institution will record a 
one-time adjustment to its credit loss allowances as of the beginning 
of its fiscal year of adoption equal to the difference, if any, between 
the amount of credit loss allowances required under the incurred loss 
methodology and the amount of credit loss allowances required under 
CECL. An institution's implementation of CECL will affect its retained 
earnings, deferred tax assets, credit loss allowances, and, as a 
result, its regulatory capital ratios.
    In recognition of the potential for the implementation of CECL to 
affect regulatory capital ratios, on February 14, 2019, the agencies 
issued a final rule that revised certain regulations, including the 
agencies' regulatory

[[Page 82582]]

capital regulations (capital rule),\1\ to account for the 
aforementioned changes to credit loss accounting under U.S. generally 
accepted accounting principles (GAAP), including CECL (2019 CECL 
rule).\2\ The 2019 CECL rule includes a transition provision that 
allows institutions to phase in over a three-year period the day-one 
adverse effects of CECL on their regulatory capital ratios.
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    \1\ 12 CFR part 3 (OCC); 12 CFR part 217 (Board); 12 CFR part 
324 (FDIC).
    \2\ 84 FR 4222 (Feb. 14, 2019).
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    As part of the efforts to address the disruption of economic 
activity in the United States caused by the spread of the coronavirus 
disease 2019 (COVID-19), on March 31, 2020, the agencies adopted a 
second CECL transition provision through an interim final rule.\3\ The 
agencies subsequently adopted a final rule (2020 CECL rule) on 
September 30, 2020, that is consistent with the interim final rule, 
with some clarifications and adjustments related to the calculation of 
the transition and the eligibility criteria for using the 2020 CECL 
transition provision.\4\ The 2020 CECL rule provides that only 
institutions that adopt CECL for a fiscal year that begins during the 
2020 calendar year, have the option to delay for up to two years an 
estimate of CECL's effect on regulatory capital, followed by a three-
year transition period (i.e., a five-year transition period in total). 
The 2020 CECL rule does not replace the three-year transition provision 
in the 2019 CECL rule, which remains available to any institution at 
the time that it adopts CECL.\5\
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    \3\ 85 FR 17723 (Mar. 31, 2020).
    \4\ See 85 FR 61577 (Sept. 30, 2020).
    \5\ See 85 FR 61578 (Sept. 30, 2020).
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    Certain financial measures that are used to determine assessment 
rates for large and highly complex institutions \6\ are calculated 
using both Tier 1 capital and reserves. For institutions that elect 
either the three-year transition provision contained in the 2019 CECL 
rule or the five-year transition provision contained in the 2020 CECL 
rule, the amount of Tier 1 capital reported in Call Report Schedule RC-
R, Part I, item 26, includes (due to adjustments to the amount of 
retained earnings reported on the Call Report balance sheet) the 
applicable portion of the CECL transitional amount (or the modified 
CECL transitional amount). For deposit insurance assessment purposes, 
reserves are calculated using the amount of the allowance for loan and 
lease losses reported in Call Report Schedule RC, item 4.c. For all 
institutions that have adopted CECL, Schedule RC, item 4.c, reflects 
the allowance for credit losses on loans and leases. The issue of 
double counting arises in certain financial measures used to determine 
assessment rates for large and highly complex institutions that are 
calculated using both Tier 1 capital and reserves because the allowance 
for credit losses on loans and leases is included during the transition 
period in both reserves and, as a portion of the CECL or modified CECL 
transitional amount, Tier 1 capital.
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    \6\ See 12 CFR 327.8 and 12 CFR 327.16(f).
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    For institutions that elect either the three-year transition 
provision contained in the 2019 CECL rule or the five-year transition 
provision contained in the 2020 CECL rule, the CECL transitional 
amounts, as defined in the regulatory capital rules,\7\ additionally 
include the effect on retained earnings, net of tax effect, of 
establishing allowances for credit losses in accordance with the CECL 
methodology on held-to-maturity (HTM) debt securities, other financial 
assets measured at amortized cost, and off-balance sheet credit 
exposures as of the beginning of the fiscal year of adoption. The 
applicable portions of the CECL transitional amounts attributable to 
allowances for credit losses on HTM debt securities, other financial 
assets measured at amortized cost, and off-balance sheet credit 
exposures are included in Tier 1 capital only and are not double 
counted with reserves for deposit insurance assessment purposes.
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    \7\ See 12 CFR 3.301 (OCC); 12 CFR 217.301 (Board); 12 CFR 
324.301 (FDIC).
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    To address the temporary deposit insurance assessment effects 
resulting from certain optional regulatory capital transition 
provisions under the 2019 and 2020 CECL rules, the FDIC proposed 
amendments to the deposit insurance assessment system applicable to all 
large and highly complex IDIs on December 7, 2020.\8\ Under these 
proposed amendments to the assessment system, the FDIC would remove the 
double counting of the applicable portion of the CECL transitional 
amounts that is added to retained earnings for regulatory capital 
purposes and is attributable to the allowance for credit losses on 
loans and leases held for investment in certain financial measures that 
are calculated using the sum of Tier 1 capital and reserves, and also 
from the loss severity measure, which are used to determine assessment 
rates for large and highly complex institutions.
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    \8\ 85 FR 78794 (Dec. 7, 2020).
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B. Proposed New Memorandum Item To Remove Double Counting

    In calculating certain financial measures used in the scorecards 
for determining deposit insurance assessment rates for large and highly 
complex institutions, the FDIC has proposed to remove a portion of the 
CECL transitional amounts added to retained earnings for regulatory 
capital purposes under the transitions provided for under the 2019 or 
2020 CECL rules. Specifically, in certain measures used in the 
scorecard approach for determining assessment rates for large and 
highly complex institutions, the applicable portion of the CECL 
transitional amount (or modified CECL transitional amount) that is 
added to retained earnings for regulatory capital purposes and is 
attributable to the allowance for credit losses on loans and leases 
held for investment would be removed under the FDIC's proposal. 
However, large and highly complex institutions that have elected a CECL 
transition provision do not currently report these specific portions of 
the CECL transitional amounts in the Call Report. Thus, implementing 
the FDIC's proposed amendments to the risk-based deposit insurance 
assessment system applicable to large and highly complex institutions 
requires a new, temporary memorandum item and corresponding changes to 
the FFIEC 031 and FFIEC 041 versions of the Call Report forms and 
instructions.
    In this regard, the CECL effective dates assigned by the Financial 
Accounting Standards Board's Accounting Standards Update (ASU) No. 
2016-13, Financial Instruments--Credit Losses, Topic 326, Measurement 
of Credit Losses on Financial Instruments (ASU 2016-13) as most 
recently amended by ASU No. 2019-10, the optional temporary relief from 
complying with CECL afforded by the CARES Act, and the transitions 
under the 2019 CECL rule and 2020 CECL rule provide that, at present, 
all institutions will have completely reflected in regulatory capital 
the day-one effects of CECL (plus, if applicable, an estimate of CECL's 
effect on regulatory capital, relative to the incurred loss 
methodology's effect on regulatory capital, during the first two years 
of CECL adoption) by December 31, 2026. As a result, the reporting 
change for large and highly complex institutions would be required only 
while the temporary relief under the 2019 and 2020 CECL rules is 
reflected in institutions' Call Reports. The agencies would remove the 
proposed new Call Report item when all large and highly

[[Page 82583]]

complex institutions are no longer using a CECL transition.
    Specifically, the agencies propose to add a new Memorandum item 5 
to Schedule RC-O, Other Data for Deposit Insurance Assessments, in the 
FFIEC 031 and the FFIEC 041 Call Reports, only in order to quantify the 
applicable portions of the CECL transitional amounts added to retained 
earnings for regulatory capital purposes and attributable to the 
allowance for credit losses on loans and leases held for investment. 
The removal of this portion of the CECL transitional amounts is needed 
because, for large and highly complex institutions that have adopted 
CECL, the measure of reserves used in the scorecard is limited to the 
allowance for credit losses on loans and leases.
    To adjust the calculations of certain financial measures used to 
determine deposit insurance assessment rates for large and highly 
complex institutions, the FDIC would remove the amount reported in the 
new Schedule RC-O Memorandum item from scorecard measures that are 
calculated using the sum of Tier 1 capital and reserves and also from 
the loss severity measure in the scorecards.

C. Timing

    Beginning with the June 30, 2021, Call Report, Schedule RC-O, 
Memorandum item 5, ``Applicable portion of the CECL transitional amount 
or modified CECL transitional amount that has been added to retained 
earnings for regulatory capital purposes as of the report date and is 
attributable to loans and leases held for investment,'' would be 
completed only by large and highly complex institutions that have 
adopted ASU 2016-13 and reported having a CECL transition election in 
effect as of the quarter-end report date.
    The specific wording of the caption for the proposed new Schedule 
RC-O Memorandum item discussed in this proposal and the numbering of 
this Memorandum item should be regarded as preliminary.

III. Request for Comment

    Public comment is requested on all aspects of this joint notice. 
Comment is specifically invited on:
    (a) Whether the proposed revisions to the collections of 
information that are the subject of this notice are necessary for the 
proper performance of the agencies' functions, including whether the 
information has practical utility;
    (b) The accuracy of the agencies' estimates of the burden of the 
information collections as they are proposed to be revised, including 
the validity of the methodology and assumptions used;
    (c) Ways to enhance the quality, utility, and clarity of the 
information to be collected;
    (d) Ways to minimize the burden of information collections on 
respondents, including through the use of automated collection 
techniques or other forms of information technology; and
    (e) Estimates of capital or start-up costs and costs of operation, 
maintenance, and purchase of services to provide information.
    Comments submitted in response to this joint notice will be shared 
among the agencies.

Bao Nguyen,
Principal Deputy Chief Counsel,Office of the Comptroller of the 
Currency.Board of Governors of the Federal Reserve System.
Michele Taylor Fennell,
Deputy Associate Secretary of the Board.
    Dated at Washington, DC, on or about December 14, 2020.
    Federal Deposit Insurance Corporation.
James P. Sheesley,
Assistant Executive Secretary.
[FR Doc. 2020-27847 Filed 12-17-20; 8:45 am]
BILLING CODE 4810-33-P; 6210-01-P; 6714-01-P


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