[Federal Register Volume 74, Number 159 (Wednesday, August 19, 2009)]
[Notices]
[Pages 41973-41981]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-19911]



[[Page 41973]]

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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

AGENCIES: 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 (44 U.S.C. chapter 35), 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 extend, with revision, 
the Consolidated Reports of Condition and Income (Call Report), which 
are currently approved collections of information. At the end of the 
comment period, the comments and recommendations received will be 
analyzed to determine the extent to which the FFIEC and the agencies 
should modify the proposed revisions prior to giving final approval. 
The agencies will then submit the revisions to OMB for review and 
approval.

DATES: Comments must be submitted on or before October 19, 2009.

ADDRESSES: Interested parties are invited to submit written comments to 
any or all of the agencies. All comments, which should refer to the OMB 
control number(s), will be shared among the agencies.
    OCC: You should direct all written comments to: Communications 
Division, Office of the Comptroller of the Currency, Public Information 
Room, Mailstop 2-3, Attention: 1557-0081, 250 E Street, SW., 
Washington, DC 20219. In addition, comments may be sent by fax to (202) 
874-5274, or by electronic mail to <a href="/cdn-cgi/l/email-protection#1c6e797b6f327f7371717972686f5c737f7f32686e797d6f327b736a"><span class="__cf_email__" data-cfemail="3a485f5d4914595557575f544e497a555959144e485f5b49145d554c">[email protected]</span></a>. You may 
personally inspect and photocopy comments at the OCC, 250 E Street, 
SW., Washington, DC 20219. For security reasons, the OCC requires that 
visitors make an appointment to inspect comments. You may do so by 
calling (202) 874-4700. Upon arrival, visitors will be required to 
present valid government-issued photo identification and to submit to 
security screening in order to inspect and photocopy comments.
    Board: You may submit comments, which should refer to 
``Consolidated Reports of Condition and Income, 7100-0036,'' by any of 
the following methods:
    <bullet> Agency Web site: http://www.federalreserve.gov. Follow the 
instructions for submitting comments on the http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> E-mail: <a href="/cdn-cgi/l/email-protection#e496818397ca878b8989818a9097a48281808196858896819781969281ca838b92"><span class="__cf_email__" data-cfemail="54263133277a373b3939313a20271432313031263538263127312622317a333b22">[email protected]</span></a>. Include the OMB 
control number in the subject line of the message.
    <bullet> Fax: 202-452-3819 or 202-452-3102.
    <bullet> Mail: Jennifer J. Johnson, Secretary, Board of Governors 
of the Federal Reserve System, 20th Street and Constitution Avenue, 
NW., Washington, DC 20551.

All public comments are available from the Board's Web site at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, 
unless modified for technical reasons. Accordingly, your comments will 
not be edited to remove any identifying or contact information. Public 
comments may also be viewed electronically or in paper in Room MP-500 
of the Board's Martin Building (20th and C Streets, NW.) between 9 a.m. 
and 5 p.m. on weekdays.
    FDIC: You may submit comments, which should refer to ``Consolidated 
Reports of Condition and Income, 3064-0052,'' by any of the following 
methods:
    <bullet> Agency Web site: http://www.fdic.gov/regulations/laws/federal/propose.html. Follow the instructions for submitting comments 
on the FDIC Web site.
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> E-mail: <a href="/cdn-cgi/l/email-protection#f99a9694949c978d8ab9bfbdb0bad79e968f"><span class="__cf_email__" data-cfemail="0a696567676f647e794a4c4e4349246d657c">[email protected]</span></a>. Include ``Consolidated Reports 
of Condition and Income, 3064-0052'' in the subject line of the 
message.
    <bullet> Mail: Herbert J. Messite (202-898-6834), Counsel, Attn: 
Comments, Room F-1052, 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 (located on F 
Street) on business days between 7 a.m. and 5 p.m.
    Public Inspection: All comments received will be posted without 
change to http://www.fdic.gov/regulations/laws/federal/propose.html 
including any personal information provided. Comments may be inspected 
at the FDIC Public Information Center, Room E-1002, 3501 Fairfax Drive, 
Arlington, VA 22226, between 9 a.m. and 5 p.m. on business days.
    Additionally, commenters may send a copy of their comments to the 
OMB desk officer for the agencies by mail to the Office of Information 
and Regulatory Affairs, U.S. Office of Management and Budget, New 
Executive Office Building, Room 10235, 725 17th Street, NW., 
Washington, DC 20503, or by fax to (202) 395-6974.

FOR FURTHER INFORMATION CONTACT: For further information about the 
revisions discussed in this notice, please contact any of the agency 
clearance officers whose names appear below. In addition, copies of the 
Call Report forms can be obtained at the FFIEC's Web site (http://www.ffiec.gov/ffiec_report_forms.htm).
    OCC: Mary Gottlieb, OCC Clearance Officer, (202) 874-5090, 
Legislative and Regulatory Activities Division, Office of the 
Comptroller of the Currency, 250 E Street, SW., Washington, DC 20219.
    Board: Michelle Shore, Federal Reserve Board Clearance Officer, 
(202) 452-3829, Division of Research and Statistics, Board of Governors 
of the Federal Reserve System, 20th and C Streets, NW., Washington, DC 
20551. Telecommunications Device for the Deaf (TDD) users may call 
(202) 263-4869.
    FDIC: Herbert J. Messite, Counsel, (202) 898-6834, Legal Division, 
Federal Deposit Insurance Corporation, 550 17th Street, NW., 
Washington, DC 20429.

SUPPLEMENTARY INFORMATION: The agencies are proposing to revise and 
extend for three years the Call Report, which is currently an approved 
collection of information for each agency.
    Report Title: Consolidated Reports of Condition and Income (Call 
Report).
    Form Number: Call Report: FFIEC 031 (for banks with domestic and 
foreign offices) and FFIEC 041 (for banks with domestic offices only).
    Frequency of Response: Quarterly.
    Affected Public: Business or other for-profit.

OCC

    OMB Number: 1557-0081.
    Estimated Number of Respondents: 1,569 national banks.

[[Page 41974]]

    Estimated Time per Response: 49.33 burden hours.
    Estimated Total Annual Burden: 309,595 burden hours.

Board

    OMB Number: 7100-0036.
    Estimated Number of Respondents: 861 state member banks.
    Estimated Time per Response: 55.08 burden hours.
    Estimated Total Annual Burden: 189,696 burden hours.

FDIC

    OMB Number: 3064-0052.
    Estimated Number of Respondents: 5,032 insured state nonmember 
banks.
    Estimated Time per Response: 39.15 burden hours.
    Estimated Total Annual Burden: 788,011 burden hours.
    The estimated time per response for the Call Report is an average 
that varies by agency because of differences in the composition of the 
institutions under each agency's supervision (e.g., size distribution 
of institutions, types of activities in which they are engaged, and 
existence of foreign offices). The average reporting burden for the 
Call Report is estimated to range from 16 to 655 hours per quarter, 
depending on an individual institution's circumstances.

General Description of Reports

    These information collections are mandatory: 12 U.S.C. 161 (for 
national banks), 12 U.S.C. 324 (for state member banks), and 12 U.S.C. 
1817 (for insured state nonmember commercial and savings banks). At 
present, except for selected data items, these information collections 
are not given confidential treatment.

Abstract

    Institutions 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 provide the most current statistical data available 
for evaluating institutions' corporate applications, for identifying 
areas of focus for both on-site and off-site examinations, and for 
monetary and other public policy purposes. The agencies use Call Report 
data in evaluating interstate merger and acquisition applications to 
determine, as required by law, whether the resulting institution would 
control more than ten percent of the total amount of deposits of 
insured depository institutions in the United States. Call Report data 
are also used to calculate institutions' deposit insurance and 
Financing Corporation assessments and national banks' semiannual 
assessment fees.

Current Actions

I. Overview

    The agencies are proposing to implement certain changes to the Call 
Report requirements in 2010 that are intended to provide data needed 
for reasons of safety and soundness or other public purposes. These 
proposed revisions respond, for example, to a change in accounting 
standards, a temporary increase in the deposit insurance limit, and 
credit availability concerns.
    The proposed Call Report changes that are the subject of this 
proposal would take effect as of March 31, 2010, unless otherwise 
indicated. These revisions, which are discussed in detail in Sections 
II.A. through J. of this notice, include:
    <bullet> New items identifying total other-than-temporary 
impairment losses on debt securities, the portion of the total 
recognized in other comprehensive income, and the net losses recognized 
in earnings, consistent with the presentation requirements of a recent 
accounting standard;
    <bullet> Clarification of the instructions for reporting unused 
commitments;
    <bullet> Breakdowns of the existing items for unused credit card 
lines and other unused commitments, with the former breakdown required 
only for certain institutions, and a related breakdown of the existing 
item for other loans;
    <bullet> New items pertaining to reverse mortgages that would be 
collected annually as of December 31;
    <bullet> A breakdown of the existing item for time deposits of 
$100,000 or more (in domestic offices);
    <bullet> Revisions of existing items for brokered deposits;
    <bullet> New items for the interest expense and quarterly averages 
for fully insured brokered time deposits and other brokered time 
deposits;
    <bullet> A change in the reporting frequency for small business and 
small farm lending data from annually to quarterly;
    <bullet> A change in the reporting frequency for the number of 
certain deposit accounts from annually to quarterly; and
    <bullet> The elimination of the item for internal allocations of 
income and expense from the schedule for income from foreign offices.
    The agencies seek to establish reporting thresholds for the 
collection of Call Report information where practicable to limit the 
reporting burden imposed on banking institutions. In establishing such 
thresholds, the agencies weigh the characteristics of the institutions 
involved in the activity that would be subject to the reporting 
requirements, the number of institutions affected by the reporting 
requirements, the type of information being collected, how that 
information will be used by the agencies, and banks' costs associated 
with gathering and reporting the requested information. The agencies 
solicit comments from banking institutions related to the proposals 
described in this notice. Are there appropriate reporting thresholds 
for specific proposed changes that will enable the agencies to collect 
meaningful information without creating undue burden for institutions? 
Please provide specific feedback regarding the amount of burden created 
by the proposed amendments as well as suggestions for thresholds that 
would reduce this burden without compromising the usefulness of the 
data.
    For the March 31 and December 31, 2010 report dates, banks may 
provide reasonable estimates for any new or revised Call Report item 
initially required to be reported as of that date for which the 
requested information is not readily available. The specific wording of 
the captions for the new or revised Call Report data items discussed in 
this proposal and the numbering of these data items should be regarded 
as preliminary.
    Type of Review: Revision and extension of currently approved 
collections.

II. Discussion of Proposed Call Report Revisions

A. Other-Than-Temporary Impairment Losses on Debt Securities
    On April 9, 2009, the Financial Accounting Standards Board (FASB) 
issued FASB Staff Position (FSP) No. 115-2 and 124-2, Recognition and 
Presentation of Other-Than-Temporary Impairments (FSP FAS 115-2).\1\ 
This FSP amended the other-than-temporary impairment guidance in other 
accounting standards that applies to investments in debt securities. 
Under FSP FAS 115-2, if a bank intends to sell a debt security or it is 
more likely than not that it will be required to sell the debt security 
before recovery of its amortized cost basis, an other-than-temporary 
impairment has occurred and the entire difference between the 
security's amortized cost basis and its fair value at the balance sheet 
date must be recognized in earnings. FSP FAS

[[Page 41975]]

115-2 also provides that if the present value of cash flows expected to 
be collected on a debt security is less than its amortized cost basis, 
a credit loss exists. In this situation, if a bank does not intend to 
sell the security and it is not more likely than not that the bank will 
be required to sell the debt security before recovery of its amortized 
cost basis less any current-period credit loss, an other-than-temporary 
impairment has occurred. The amount of the total other-than-temporary 
impairment related to the credit loss must be recognized in earnings, 
but the amount of the total impairment related to other factors must be 
recognized in other comprehensive income, net of applicable taxes.
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    \1\ Under the FASB Accounting Standards Codification 
<SUP>TM</SUP>, see Topic 320, Investments--Debt and Equity 
Securities.
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    For other-than-temporary impairment losses on held-to-maturity and 
available-for-sale debt securities, banks report the amount of the 
other-than-temporary impairment losses that must be recognized in 
earnings in items 6.a and 6.b of the Call Report income statement 
(Schedule RI), respectively. Other-than-temporary impairment losses 
that are to be recognized in other comprehensive income, net of 
applicable taxes, are reported in Schedule RI-A, Changes in Bank Equity 
Capital, item 10, ``Other comprehensive income.'' However, because 
items 6.a and 6.b of Schedule RI also include other amounts such as 
gains (losses) on sales of held-to-maturity and available-for-sale 
securities, the agencies currently are not able to determine the effect 
on the net income of banks, individually and in the aggregate, of 
other-than-temporary impairment losses that must be recognized in 
earnings. Similarly, because item 10 of Schedule RI-A includes all of 
the other components of a bank's other comprehensive income, the 
agencies cannot identify the portion of other comprehensive income 
attributable to other-than-temporary impairment losses for banks 
individually and in the aggregate.
    According to FSP FAS 115-2, in a period in which a bank determines 
that a debt security's decline in fair value below its amortized cost 
basis is other than temporary, the bank must present the total other-
than-temporary impairment loss in the income statement with an offset 
for the amount of the total loss that is recognized in other 
comprehensive income. This new presentation provides additional 
information about the amounts that a bank does not expect to collect 
related to its investments in debt securities held for purposes other 
than trading. Therefore, to enhance the agencies' ability to evaluate 
the factors affecting bank earnings, the agencies propose to add three 
Memorandum items to the Call Report income statement that would mirror 
the presentation requirements of FSP FAS 115-2. In these new Memorandum 
items, banks would report total other-than-temporary impairment losses 
on debt securities for the calendar year-to-date reporting period, the 
portion of these losses recognized in other comprehensive income, and 
the net losses recognized in earnings
B. Clarification of the Instructions for Reporting Unused Commitments
    Banks report unused commitments in item 1 of Schedule RC-L, 
Derivatives and Off-Balance Sheet Items. The instructions for this item 
identify various arrangements that should be reported as unused 
commitments, including but not limited to commitments for which the 
bank has charged a commitment fee or other consideration, commitments 
that are legally binding, loan proceeds that the bank is obligated to 
advance, commitments to issue a commitment, and revolving underwriting 
facilities. However, the agencies have found that some banks have not 
reported commitments that they have entered into until they have signed 
the loan agreement for the financing that they have committed to 
provide. Although the agencies consider these arrangements to be 
commitments to issue a commitment and, therefore, within the scope of 
the existing instructions for reporting commitments in Schedule RC-L, 
they believe that these instructions may not be sufficiently clear. 
Therefore, the agencies originally proposed to revise the instructions 
for Schedule RC-L, item 1, ``Unused commitments,'' as one of the 
proposed Call Report changes for implementation as of March 31, 
2009.\2\ More specifically, with respect to commitments to issue a 
commitment at some point in the future, the agencies proposed to add 
language to the instructions for this item explicitly stating that such 
commitments include those that have been entered into even though the 
related loan agreement has not yet been signed.
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    \2\ 73 FR 54811, September 23, 2008.
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    In response to the agencies' request for comment on Call Report 
revisions for 2009, three commenters specifically addressed the 
proposed instructional clarification pertaining to unused commitments. 
One commenter agreed that clarification is needed, but recommended that 
commitments to issue a commitment in the future, including those 
entered into even though the related loan agreement has not yet been 
signed, should be removed from the list of types of arrangements that 
the instructions would direct banks to report as unused commitments. A 
second commenter expressed concern about reporting ``commitments that 
contain a relatively high level of uncertainty until a loan agreement 
has been signed or the loan has been funded with a first advance'' and 
the reliability of data on such commitments. The third commenter stated 
that because some banks do not have systems for tracking such 
arrangements, the instructions should in effect permit banks to exclude 
commitment letters with an expiration date of 90 days or less. Finally, 
the first commenter also recommended that the instructions for 
reporting unused commitments should state that amounts conveyed or 
participated to others that the conveying or participating bank is not 
obligated to fund should not be reported as unused commitments by the 
conveying or participating bank.
    After evaluating these comments, the agencies have refined their 
approach to identifying commitments to issue a commitment in a manner 
that is intended to address the commenters' concerns by focusing on a 
point in the commitment process when the agencies believe that banks' 
systems should be tracking their commitments. Thus, the instructions 
would state that commitments to issue a commitment at some point in the 
future are those where the bank has extended terms and the borrower has 
accepted the offered terms, even though the related loan agreement has 
not yet been signed. In addition, the agencies agree with the 
commenter's recommendation concerning commitments that have been 
conveyed or participated to others and are proposing to modify the 
instructions accordingly.
    The proposed revised instructions for Schedule RC-L, item 1, would 
read as follows:
    Report in the appropriate subitem the unused portions of 
commitments. Unused commitments are to be reported gross, i.e., include 
in the appropriate subitem the unused amount of commitments acquired 
from and conveyed or participated to others. However, exclude 
commitments conveyed or participated to others that the bank is not 
legally obligated to fund even if the party to whom the commitment has 
been conveyed or participated fails to perform in accordance with the 
terms of the commitment.
    For purposes of this item, commitments include:

[[Page 41976]]

    (1) Commitments to make or purchase extensions of credit in the 
form of loans or participations in loans, lease financing receivables, 
or similar transactions.
    (2) Commitments for which the bank has charged a commitment fee or 
other consideration.
    (3) Commitments that are legally binding.
    (4) Loan proceeds that the bank is obligated to advance, such as:
    (a) Loan draws;
    (b) Construction progress payments; and
    (c) Seasonal or living advances to farmers under prearranged lines 
of credit.
    (5) Rotating, revolving, and open-end credit arrangements, 
including, but not limited to, retail credit card lines and home equity 
lines of credit.
    (6) Commitments to issue a commitment at some point in the future, 
where the bank has extended terms and the borrower has accepted the 
offered terms, even though the related loan agreement has not yet been 
signed.
    (7) Overdraft protection on depositors' accounts offered under a 
program where the bank advises account holders of the available amount 
of overdraft protection, for example, when accounts are opened or on 
depositors' account statements or ATM receipts.
    (8) The bank's own takedown in securities underwriting 
transactions.
    (9) Revolving underwriting facilities (RUFs), note issuance 
facilities (NIFs), and other similar arrangements, which are facilities 
under which a borrower can issue on a revolving basis short-term paper 
in its own name, but for which the underwriting banks have a legally 
binding commitment either to purchase any notes the borrower is unable 
to sell by the rollover date or to advance funds to the borrower.
    Exclude forward contracts and other commitments that meet the 
definition of a derivative and must be accounted for in accordance with 
FASB Statement No. 133, which should be reported in Schedule RC-L, item 
12. Include the amount (not the fair value) of the unused portions of 
loan commitments that do not meet the definition of a derivative that 
the bank has elected to report at fair value under a fair value option. 
Also include forward contracts that do not meet the definition of a 
derivative. The unused portions of commitments are to be reported in 
the appropriate subitem regardless of whether they contain ``material 
adverse change'' clauses or other provisions that are intended to 
relieve the issuer of its funding obligations under certain conditions 
and regardless of whether they are unconditionally cancelable at any 
time.
    In the case of commitments for syndicated loans, report only the 
bank's proportional share of the commitment.
    For purposes of reporting the unused portions of revolving asset-
based lending commitments, the commitment is defined as the amount a 
bank is obligated to fund--as of the report date--based on the 
contractually agreed upon terms. In the case of revolving asset-based 
lending, the unused portions of such commitments should be measured as 
the difference between (a) the lesser of the contractual borrowing base 
(i.e., eligible collateral times the advance rate) or the note 
commitment limit, and (b) the sum of outstanding loans and letters of 
credit under the commitment. The note commitment limit is the overall 
maximum loan amount beyond which the bank will not advance funds 
regardless of the amount of collateral posted. This definition of 
``commitment'' is applicable only to revolving asset-based lending, 
which is a specialized form of secured lending in which a borrower uses 
current assets (e.g., accounts receivable and inventory) as collateral 
for a loan. The loan is structured so that the amount of credit is 
limited by the value of the collateral.
C. Additional Categories of Unused Commitments and Loans
    The extent to which banks are reducing the supply of credit during 
the current financial crisis has been of great interest to the agencies 
and to Congress. Also, bank lending plays a central role in any 
economic recovery and the agencies need data to better determine when 
credit conditions have eased. One way to measure the supply of credit 
is to analyze the change in total lending commitments by banks, 
considering both the amount of loans outstanding and the volume of 
unused credit lines. These data are also needed for safety and 
soundness purposes because draws on commitments during periods when 
banks face significant funding pressures, such as during the fall of 
2008, can place significant and unexpected demands on the liquidity and 
capital positions of banks. Therefore, the agencies propose breaking 
out in further detail two categories of unused commitments on Schedule 
RC-L, Derivatives and Off-Balance Sheet Items. The agencies also 
propose to break out in further detail one new loan category on 
Schedule RC-C, part I, Loans and Leases. These new data items would 
improve the agencies' ability to obtain timely and accurate readings on 
the supply of credit available to households and businesses. These data 
would also be useful in determining the effectiveness of the 
government's economic stabilization programs.
    Unused commitments associated with credit card lines are reported 
in Schedule RC-L, item 1.b. This data item is not sufficiently 
meaningful for monitoring the supply of credit because it mixes 
consumer credit card lines with credit card lines for businesses and 
other entities. As a result of this aggregation, it is not possible to 
fully monitor credit available specifically to households. Furthermore, 
bank supervisors would benefit from the split, because the usage 
patterns, profitability, and evolution of credit quality through the 
business cycle are likely to differ for consumer credit cards and 
business credit cards. Therefore, the agencies propose to split 
Schedule RC-L, item 1.b, into unused consumer credit card lines and 
other unused credit card lines. This breakout would be reported by 
institutions with either $300 million or more in total assets or $300 
million or more in unused credit card commitments. Draws from these 
credit lines that have not been sold are already reported on Schedule 
RC-C, part I. For example, banks must report draws on credit cards 
issued to nonfarm nonfinancial businesses as commercial and industrial 
(C&I) loans in Schedule RC-C, part I, item 4, and draws on personal 
credit cards as consumer loans in Schedule RC-C, part I, item 6.a.
    Schedule RC-L, item 1.e, aggregates all other unused commitments, 
and includes unused commitments to fund C&I loans (other than credit 
card lines to commercial and industrial enterprises, which are reported 
in item 1.b, and commitments to fund commercial real estate, 
construction, and land development loans not secured by real estate, 
which are reported in item 1.c.(2)). Separating these C&I lending 
commitments from the other commitments included in other unused 
commitments would considerably improve the agencies' ability to analyze 
business credit conditions. A very large percentage of banks responding 
to the Federal Reserve's Senior Loan Officer Opinion Survey on Bank 
Lending Practices (FR 2018; OMB No. 7100-0058) reported having 
tightened lending policies for C&I loans and credit lines during 2008; 
however, C&I loans on banks' balance sheets expanded through the end of 
October 2008, reportedly as a result of substantial draws on existing 
credit lines. In contrast, other unused commitments reported on the 
Call Report contracted, but without the proposed breakouts of such 
commitments, it was not possible to

[[Page 41977]]

know how total business borrowing capacity had changed. The FR 2018 
data are qualitative rather than quantitative and are collected only 
from a sample of institutions up to six times per year. Having the 
additional unused commitment data reported separately on the Call 
Report, along with the proposed changes to Schedule RC-C described 
below, would have indicated more clearly whether there was a widespread 
restriction in new credit available to businesses.
    Therefore, the agencies propose to split Schedule RC-L, item 1.e, 
into three categories: Unused commitments to fund commercial and 
industrial loans (which would include only commitments not reported in 
Schedule RC-L, items 1.b and 1.c.(2), for loans that, when funded, 
would be reported in Schedule RC-C, item 4), unused commitments to fund 
loans to financial institutions (defined to include depository 
institutions and nondepository financial institutions, i.e., real 
estate investment trusts, mortgage companies, holding companies of 
other depository institutions, insurance companies, finance companies, 
mortgage finance companies, factors and other financial intermediaries, 
short-term business credit institutions, personal finance companies, 
investment banks, the bank's own trust department, other domestic and 
foreign financial intermediaries, and Small Business Investment 
Companies), and all other unused commitments. With respect to Schedule 
RC-C, part I, the agencies also propose to revise item 9, ``Other 
loans,'' by breaking out a new category for loans to nondepository 
financial institutions (as defined above). Banks already report data on 
loans to depository institutions in Schedule RC-C, part I, item 2.
    Lending by nondepository financial institutions was a key 
characteristic of the recent credit cycle and many such institutions 
failed; however, little information existed on the exposure of the 
banking system to those firms as this information was obscured by the 
current structure of the Call Report's loan schedule. The proposed 
addition of separate items for unused commitments to financial 
institutions and loans to nondepository financial institutions, 
together with the existing data on loans to depository institutions, 
will allow supervisors and other interested parties to more closely 
monitor the exposure of individual banks to financial institutions and 
to assess the impact that changes in the credit availability to this 
sector have on the economy.
D. Reverse Mortgage Data
    Reverse mortgages are complex loan products that leverage equity in 
homes to provide lump sum cash payments or lines of credit to 
borrowers. These products are typically marketed to senior citizens who 
own homes. The agencies are currently unable to effectively identify 
and monitor institutions that offer these products due to a lack of 
reverse mortgage data.
    The reverse mortgage market currently consists of two basic types 
of products: Proprietary products designed and originated by financial 
institutions and a federally-insured product known as a Home Equity 
Conversion Mortgage (HECM). Some reverse mortgages provide for a lump 
sum payment to the borrower at closing, with no ability for the 
borrower to receive additional funds under the mortgage at a later 
date. Other reverse mortgages are structured like home equity lines of 
credit in that they provide the borrower with additional funds after 
closing, either as fixed monthly payments, under a line of credit, or 
both. There are also reverse mortgages that provide a combination of a 
lump sum payment to the borrower at closing and additional payments to 
the borrower after the closing of the loan.
    The volume of reverse mortgage activity is expected to dramatically 
increase in the coming years as the U.S. population ages. A number of 
consumer protection related risks and safety and soundness related 
risks are associated with these products and the agencies need to 
collect information from banks involved in the reverse mortgage 
activities to monitor and mitigate those risks. For example, 
proprietary reverse mortgages structured as lines of credit, which are 
not insured by the federal government, expose borrowers to the risk 
that the lender will be unwilling or unable to meet its obligation to 
make payments due to the borrower. Additionally, in those circumstances 
in which housing prices are declining, there is the risk that the 
reverse mortgage loan balance may exceed the value of the underlying 
collateral value of the home.
    As stated above, access to data regarding loan volumes, dollar 
amounts outstanding, and the institutions offering reverse mortgages or 
participating in reverse mortgage activity is severely limited. The 
U.S. Department of Housing and Urban Development provides a monthly 
report for reverse mortgages endorsed for federal insurance, by fiscal 
year, for those loans that are part of the federally-sponsored HECM 
program. While this monthly report provides information such as average 
expected interest rates, average property values, average age of the 
borrower, and the number of active insured accounts, there is no 
aggregate monthly data nor is there institution-specific information 
that identifies the institutions participating in the program. For 
proprietary reverse mortgage loans, there is no known data on the 
volume of reverse mortgages, dollar amounts outstanding, or the 
institutions offering these products.
    The agencies propose that new items be added to the Call Report to 
collect reverse mortgage data on an annual basis beginning on December 
31, 2010. Collecting this information will provide the agencies the 
necessary information for policy development and the management of risk 
exposures posed by institutions' involvement with reverse mortgages. 
First, a new Memorandum item would be added to Schedule RC-C, part I, 
Loans and Leases, for ``Reverse mortgages outstanding that are held for 
investment.'' In this Memorandum item, banks would separately report 
the amount of HECM reverse mortgages and the amount of proprietary 
reverse mortgages that are held for investment and included in Schedule 
RC-C, part I, item 1.c, Loans ``Secured by 1-4 family residential 
properties.'' Additionally, new items would be added to Schedule RC-L, 
Derivatives and Off-Balance Sheet Items, to collect the amounts of 
``Unused commitments for HECM reverse mortgages outstanding that are 
held for investment'' and ``Unused commitments for proprietary reverse 
mortgages outstanding that are held for investment.'' Because these 
reverse mortgages have been structured in whole or in part like home 
equity lines of credit, the unused commitments associated with these 
mortgages are also reportable in existing item 1.a, ``Revolving, open-
end lines secured by 1-4 family residential properties,'' of Schedule 
RC-L. The proposed new unused commitment items would be subsets of item 
1.a.
    In many instances, institutions do not underwrite and fund reverse 
mortgages, but refer borrowers to other reverse mortgage lenders. These 
institutions receive a fee for referring customers to the reverse 
mortgage lender and they may be involved in (although their involvement 
may not be limited to) the following activities: Marketing the reverse 
mortgage loan product, providing information on or answering questions 
about the reverse mortgage loan, selling products in conjunction with 
reverse mortgages, and/or accepting an application for a reverse 
mortgage from the potential borrower. This model enables consumers to 
deal

[[Page 41978]]

first with their local institutions without the institutions having to 
build an entirely new lending function. It also provides an economy of 
scale for a specialized lender because they will not necessarily need a 
large physical branch network when they can partner with existing 
lenders. The banking agencies propose adding a new Memorandum item to 
Schedule RC-C, part I, to annually collect the estimated number of fee-
paid referrals during the year from each bank making referrals 
beginning on December 31, 2010. Banks would report separately the 
estimated number of fee-paid referrals for HECM reverse mortgages and 
proprietary reverse mortgages.
    The agencies request specific feedback from reporting institutions 
on their ability to provide fee-paid referral information for reverse 
mortgages. Do banks maintain the data necessary to provide an estimate 
of the number of fee paid referrals they have made during the year? 
Would it be less burdensome for banks to report an estimated number of 
fee-paid referrals for reverse mortgages that falls within specified 
ranges of numbers? Is there alternative information that the agencies 
could collect in order to better understand the extent of banks' 
reverse mortgage referral activities?
    Finally, many banks that originate reverse mortgages routinely sell 
their funded mortgages in the secondary market. As a result, these 
loans will not remain on the originating banks' balance sheets for long 
periods of time and, therefore, the proposed items for reverse 
mortgages outstanding that are held for investment will not capture the 
extent of banks' reverse mortgage activity when it involves the 
origination and sale of these loans. Thus, the agencies propose to add 
Memorandum items to Schedule RC-C, part I, in which banks would report 
the principal amount of reverse mortgages originated for sale that have 
been sold during the year. HECM and proprietary reverse mortgages sold 
would be reported separately. These items are distinct and separate 
from the items for the estimated number of referrals because the 
referring bank is not funding the loan, but is merely taking an 
application or conducting another service in order to refer the 
borrower to another institution that ultimately funds the reverse 
mortgage. The information on loans sold during the year also would be 
collected annually beginning on December 31, 2010.
E. Time Deposits of $100,000 or More
    On October 3, 2008, the Emergency Economic Stabilization Act of 
2008 temporarily raised the standard maximum deposit insurance amount 
(SMDIA) from $100,000 to $250,000 per depositor. Under this 
legislation, the SMDIA was to return to $100,000 after December 31, 
2009. However, on May 20, 2009, the Helping Families Save Their Homes 
Act extended this temporary increase in the SMDIA to $250,000 per 
depositor through December 31, 2013, after which the SMDIA is scheduled 
to return to $100,000.
    At present, banks report a two-way breakdown of their time deposits 
(in domestic offices) in Schedule RC-E, Deposit Liabilities, 
distinguishing between time deposits of less than $100,000 and time 
deposits of $100,000 or more. In response to the extension of the 
temporary increase in the limit on deposit insurance coverage, the 
agencies understand that time deposits with balances in excess of 
$100,000, but less than or equal to $250,000, have been growing and can 
be expected to increase further. However, given the existing Schedule 
RC-E reporting requirements, the agencies are unable to monitor growth 
in banks' time deposits with balances within the temporarily increased 
limit on deposit insurance coverage.
    Therefore, the agencies are proposing to replace Schedule RC-E, 
Memorandum item 2.c, ``Total time deposits of $100,000 or more,'' with 
a revised Memorandum item 2.c, ``Total time deposits of $100,000 
through $250,000,'' and a new Memorandum item 2.d, ``Total time 
deposits of more than $250,000.'' Existing Memorandum item 2.c.(1), 
``Individual Retirement Accounts (IRAs) and Keogh Plan accounts 
included in Memorandum item 2.c, `Total time deposits of $100,000 or 
more,' above,'' would be renumbered and recaptioned as Memorandum item 
2.e, ``Individual Retirement Accounts (IRAs) and Keogh Plan accounts of 
$100,000 or more included in Memorandum items 2.c and 2.d above,'' but 
the scope of this Memorandum item would not change.
F. Revisions of Brokered Deposit Items
    As mentioned in Section II.E. above, the SMDIA has been increased 
temporarily from $100,000 to $250,000 through year-end 2013. However, 
the data that banks currently report in the Call Report on fully 
insured brokered deposits in Schedule RC-E, Memorandum items 1.c.(1) 
and 1.c.(2), is based on the $100,000 insurance limit (except for 
brokered retirement deposit accounts for which the deposit insurance 
limit was already $250,000). Therefore, in response to the temporary 
increase in the SMDIA, the agencies are proposing to revise the 
reporting of fully insured brokered deposits in Schedule RC-E. 
Furthermore, given the linkage between the deposit insurance limits and 
the Memorandum items on fully insured brokered deposits in Schedule RC-
E, the scope of these items needs to be changed whenever deposit 
insurance limits change. To ensure that the scope of these Memorandum 
items, including the dollar amounts cited in the captions for these 
items, changes automatically as a function of the deposit insurance 
limit in effect on the report date, Memorandum item 1.c, ``Fully 
insured brokered deposits,'' would be footnoted to state that the 
specific dollar amounts used as the basis for reporting fully insured 
brokered deposits in Memorandum items 1.c.(1) and 1.c.(2) reflect the 
deposit insurance limits in effect on the report date. The instructions 
for Memorandum item 1.c would be similarly clarified.\3\
---------------------------------------------------------------------------

    \3\ The proposed linkage of the scope of the Memorandum items on 
fully insured brokered deposits in Schedule RC-E to the deposit 
insurance limits in effect on the report date is consistent with an 
existing linkage between the deposit insurance limits in effect on 
the report date and the Memorandum items in Schedule RC-O, Other 
Data for Deposit Insurance and FICO Assessments, on the amount and 
number of deposit accounts within the insurance limit and in excess 
of the insurance limit.
---------------------------------------------------------------------------

    In addition, consistent with the reporting of time deposits in 
other items of Schedule RC-E, brokered deposits would be reported based 
on their balances rather than the denominations in which they were 
issued.
    Accordingly, Memorandum items 1.c.(1) and 1.c.(2) of Schedule RC-E 
and their instructions would be revised as follows:
    <bullet> Memorandum item 1.c.(1), ``Brokered deposits of less than 
$100,000'': Report in this item brokered deposits with balances of less 
than $100,000. Also report in this item time deposits issued to deposit 
brokers in the form of large ($100,000 or more) certificates of deposit 
that have been participated out by the broker in shares with balances 
of less than $100,000. For brokered deposits that represent retirement 
deposit accounts (as defined in Schedule RC-O, Memorandum item 1) 
eligible for $250,000 in deposit insurance coverage, report such 
brokered deposits in this item only if their balances are less than 
$100,000.
    <bullet> Memorandum item 1.c.(2), ``Brokered deposits of $100,000 
through $250,000 and certain brokered retirement deposit accounts'': 
Report in this item brokered deposits (including brokered retirement 
deposit accounts) with balances of $100,000 through

[[Page 41979]]

$250,000. Also report in this item brokered deposits that represent 
retirement deposit accounts (as defined in Schedule RC-O, Memorandum 
item 1) eligible for $250,000 in deposit insurance coverage that have 
been issued by the bank in denominations of more than $250,000 that 
have been participated out by the broker in shares of $100,000 through 
exactly $250,000.
    The proposed revisions to Schedule RC-E, Memorandum items 1.c.(1) 
and 1.c.(2), that relate to the temporary increase in the SMDIA would 
remain in effect during this increase, after which the dollar amounts 
used as the basis for reporting fully insured brokered deposits in 
these items would revert to the amounts in effect prior to the 
temporary increase.
    The agencies are not proposing to revise the existing requirements 
for the reporting of maturity data on brokered deposits in Memorandum 
items 1.d.(1) and 1.d.(2) of Schedule RC-E.
G. Interest Expense on and Quarterly Averages for Brokered Deposits
    Under Section 29 of the Federal Deposit Insurance Act (12 U.S.C. 
1831f), an insured depository institution that is less than well 
capitalized generally may not pay a rate of interest that significantly 
exceeds the prevailing rate in the institution's ``normal market area'' 
and/or the prevailing rate in the ``market area'' from which the 
deposit is accepted. In the case of an adequately capitalized 
institution with a waiver to accept brokered deposits, the institution 
may not pay a rate of interest on brokered deposits accepted from 
outside the bank's ``normal market area'' that significantly exceeds 
the ``national rate'' as defined by the FDIC. On May 29, 2009, the 
FDIC's Board of Directors adopted a final rule making certain revisions 
to the interest rate restrictions under Section 337.6 of the FDIC's 
regulations. Under the final rule, the ``national rate'' is a simple 
average of rates paid by U.S. depository institutions as calculated by 
the FDIC.\4\ When evaluating compliance with the interest rate 
restrictions in Section 337.6 by an institution that is less than well 
capitalized, the FDIC generally will deem the national rate to be the 
prevailing rate in all market areas. The final rule is effective 
January 1, 2010.
---------------------------------------------------------------------------

    \4\ The FDIC publishes a weekly schedule of national rates and 
national interest-rate caps by maturity, which can be accessed at 
http://www.fdic.gov/regulations/resources/rates/.
---------------------------------------------------------------------------

    At present, the agencies are unable to evaluate the level and trend 
of the cost of brokered time deposits to institutions that have 
acquired such funds, nor can the agencies compare the cost of such 
deposits across institutions with brokered time deposits. Data on the 
cost of brokered deposits would also assist the agencies in evaluating 
the overall cost of institutions' time deposits, for which data have 
long been collected in the Call Report. Furthermore, many of the banks 
that have failed since the beginning of 2008 have relied extensively on 
brokered deposits to support their asset growth. Therefore, to enhance 
the agencies' ability to evaluate funding costs and the impact of 
brokered time deposits on these costs, the agencies are proposing to 
add two Memorandum items to both Schedule RC-K, Quarterly Averages, and 
Schedule RI, Income Statement. In these Memorandum items, banks would 
report the interest expense and quarterly averages for ``fully insured 
brokered time deposits'' and ``other brokered time deposits.'' The 
definition of ``fully insured brokered time deposits'' would be based 
on the definitions of ``fully insured brokered deposits'' and ``time 
deposits'' in Schedule RC-E, Deposit Liabilities. ``Other brokered time 
deposits'' would consist of all brokered time deposits that are not 
``fully insured brokered deposits.''
H. Change in Reporting Frequency for Loans to Small Businesses and 
Small Farms
    Section 122 of the Federal Deposit Insurance Corporation 
Improvement Act requires the banking agencies to collect from insured 
institutions annually the information the agencies ``may need to assess 
the availability of credit to small businesses and small farms.'' To 
implement these requirements, the banking agencies added Schedule RC-C, 
Part II--Loans to Small Businesses and Small Farms to the Call Report 
effective June 30, 1993. This schedule requests information on the 
number and amount currently outstanding of ``loans to small 
businesses'' and ``loans to small farms,'' as defined in the Call 
Report instructions, which all banks must report annually as of June 
30.
    With the United States now more than a year into a recession, the 
current administration ``firmly believes that economic recovery will be 
driven in large part by America's small businesses,'' but ``small 
business owners are finding it harder to get the credit necessary to 
stay in business.'' \5\ Because ``[c]redit is essential to economic 
recovery,'' Treasury Secretary Geithner stated on March 16, 2009, that 
``we need our nation's banks to go the extra mile in keeping credit 
lines in place on reasonable terms for viable businesses.'' \6\ 
Accordingly, Secretary Geithner asked the banking agencies ``to call 
for quarterly, as opposed to annual reporting of small business loans, 
so that we can carefully monitor the degree that credit is flowing to 
our nation's entrepreneurs and small business owners.'' \7\ In response 
to Secretary Geithner's request and to improve the agencies' own 
ability to assess the availability of credit to small businesses and 
small farms, the agencies propose to change the frequency with which 
banks must submit Call Report Schedule RC-C, Part II, from annually to 
quarterly beginning March 31, 2010. The agencies are not proposing to 
make any revisions to the information that banks are required to report 
on this schedule.
---------------------------------------------------------------------------

    \5\ http://www.financialstability.gov/roadtostability/smallbusinesscommunity.html.
    \6\ http://www.financialstability.gov/latest/tg58-remarks.html.
    \7\ Ibid.
---------------------------------------------------------------------------

I. Change in Reporting Frequency for the Number of Certain Deposit 
Accounts
    In Call Report Schedule RC-O--Other Data for Deposit Insurance and 
FICO Assessments, banks report the number of deposit accounts based on 
whether the amount of the account is within the deposit insurance limit 
or is in excess of this limit. Information is reported separately for 
retirement deposit accounts and all other deposit accounts. At present, 
for deposit accounts for which the amount of the account exceeds the 
deposit insurance limit, the number of accounts is reported quarterly 
(Schedule RC-O, Memorandum items 1.b.(2) and 1.d.(2)). However, for 
deposit accounts for which the amount of the account is within this 
limit, the number of accounts is reported annually as of June 30 
(Schedule RC-O, Memorandum items 1.a.(2) and 1.c.(2)).
    Data on the number of deposit accounts are used to estimate average 
deposit account balances and changes therein as well as insured and 
uninsured deposits. These data also assist the FDIC in its planning 
efforts as it seeks to resolve potential failures of insured 
institutions. As a consequence, the difference in reporting frequency 
for deposit accounts with balances within and in excess of the deposit 
insurance limit hinders the effectiveness of these analyses. Therefore, 
the agencies are proposing to require all of the existing Call Report 
items on the number of deposit accounts to be reported quarterly 
beginning March 31, 2010. The agencies note that savings associations 
already report the number of all deposit accounts quarterly in the

[[Page 41980]]

Thrift Financial Report (OMB No. 1550-0023). Thus, this proposed change 
in reporting frequency in the Call Report would conform the reporting 
requirements in this area for banks and savings associations.
J. Internal Income and Expense Allocations Applicable to Foreign 
Offices
    In Schedule RI-D, Income from Foreign Offices, banks are to report 
in item 11 their best estimate of all appropriate internal allocations 
of income and expense applicable to foreign offices, whether or not 
``booked'' that way in the bank's formal accounting records. This 
estimate includes, for example, allocations of income and expense in 
domestic offices applicable to foreign offices and allocations of 
income and expense in foreign offices applicable to domestic offices. A 
review of Schedule RI-D data indicates that few banks report any amount 
for these internal allocations and the usefulness of the amounts that 
are reported appears to be limited. Accordingly, the agencies propose 
to eliminate item 11, ``Internal allocations of income and expense 
applicable to foreign offices,'' from Schedule RI-D.

III. Other Matters

A. Effect of New Accounting Standards on Schedule RC-S, Servicing, 
Securitization, and Asset Sale Activities
    On June 12, 2009, the Financial Accounting Standards Board (FASB) 
issued Statements of Financial Accounting Standards Nos. 166 and 167, 
which revise the existing standards governing the accounting for 
financial asset transfers and the consolidation of variable interest 
entities.\8\ Statement No. 166 eliminates the concept of a ``qualifying 
special-purpose entity,'' changes the requirements for derecognizing 
financial assets, and requires additional disclosures. Statement No. 
167 changes how a company determines when an entity that is 
insufficiently capitalized or is not controlled through voting (or 
similar rights) should be consolidated. This consolidation 
determination is based on, among other things, an entity's purpose and 
design and a company's ability to direct the activities of the entity 
that most significantly impact the entity's economic performance.\9\ In 
general, the revised standards take effect January 1, 2010. The 
standards are expected to cause a substantial volume of assets in bank-
sponsored entities associated with securitization and structured 
finance activities to be brought onto bank balance sheets.
---------------------------------------------------------------------------

    \8\ Statement of Financial Accounting Standards No. 166, 
Accounting for Transfers of Financial Assets, amends Statement No. 
140, Accounting for Transfers and Servicing of Financial Assets and 
Extinguishments of Liabilities. Statement of Financial Accounting 
Standards No. 167, Amendments to FASB Interpretation No. 46(R), 
amends FASB Interpretation No. 46(R), Consolidation of Variable 
Interest Entities. In general, under the FASB Accounting Standards 
Codification\TM\, see Topics 860, Transfers and Servicing, and 810, 
Consolidation.
    \9\ FASB News Release, June 12, 2009, http://www.fasb.org/cs/ContentServer?c=FASBContent_C&pagename=FASB/FASBContent_C/NewsPage&cid=1176156240834&pf=true.
---------------------------------------------------------------------------

    The agencies currently collect data on banks' securitization and 
structured finance activities in Schedule RC-S, Servicing, 
Securitization, and Asset Sale Activities. The agencies will continue 
to collect Schedule RC-S after the effective date of Statements Nos. 
166 and 167 and banks should continue to complete this schedule in 
accordance with its existing instructions, taking into account the 
changes in accounting brought about by these two FASB statements. In 
this regard, items 1 through 8 of Schedule RC-S involve the reporting 
of information for securitizations that the reporting bank has 
accounted for as sales. Therefore, after the effective date of 
Statements Nos. 166 and 167, a bank should report information in items 
1 through 8 only for those securitizations for which the transferred 
assets qualify for sale accounting or are otherwise not carried as 
assets on the bank's consolidated balance sheet. Thus, if a 
securitization transaction that qualified for sale accounting prior to 
the effective date of Statements Nos. 166 and 167 must be brought back 
onto the reporting bank's consolidated balance sheet upon adoption of 
these statements, the bank would no longer report information about the 
securitization in items 1 through 8 of Schedule RC-S.
    Items 11 and 12 of Schedule RC-S are applicable to assets that the 
reporting bank has sold with recourse or other seller-provided credit 
enhancements, but has not securitized. In Memorandum item 1 of Schedule 
RC-S, a bank reports certain transfers of small business obligations 
with recourse that qualify for sale accounting. The scope of these 
items will continue to be limited to such sold financial assets after 
the effective date of Statements Nos. 166 and 167. In Memorandum item 2 
of Schedule RC-S, a bank currently reports the outstanding principal 
balance of loans and other financial assets that it services for others 
when the servicing has been purchased or when the assets have been 
originated or purchased and subsequently sold with servicing retained. 
Thus, after the effective date of Statements Nos. 166 and 167, a bank 
should report retained servicing for those assets or portions of assets 
reported as sold as well as purchased servicing in Memorandum item 2. 
Finally, Memorandum item 3 of Schedule RC-S collects data on asset-
backed commercial paper conduits regardless of whether the reporting 
bank must consolidate the conduit in accordance with FASB 
Interpretation No. 46(R). This will continue to be the case after the 
effective date of Statement No. 167, which amended this FASB 
interpretation.
    The agencies plan to evaluate the disclosure requirements in 
Statements Nos. 166 and 167 and the disclosure practices that develop 
in response to these requirements. This evaluation will assist the 
agencies in determining the need for revisions to Schedule RC-S that 
will improve their ability to assess the nature and scope of banks' 
involvement with securitization and structured finance activities, 
including those accounted for as sales and those accounted for as 
secured borrowings. Such revisions, which would not be implemented 
before March 2011, would be incorporated into a formal proposal that 
the agencies would publish with a request for comment in accordance 
with the requirements of the Paperwork Reduction Act of 1995.
    In addition, should new Call Report data items pertaining to 
securitization and structured finance transactions be necessary for 
regulatory capital calculation purposes after the effective date of 
Statements No. 166 and 167, a proposal to collect these data items 
would be incorporated into any notice of proposed rulemaking to amend 
the agencies regulatory capital standards that the agencies would 
publish for comment in the Federal Register.
B. Trading Assets That Are Past Due or in Nonaccrual Status
    In the proposed Call Report revisions for 2009, which were issued 
for comment on September 23, 2008,\10\ the agencies proposed to replace 
Schedule RC-N, Past Due and Nonaccrual Loans, Leases, and Other Assets, 
item 9, for ``Debt securities and other assets'' that are past due 30 
days or more or in nonaccrual status with two separate items: item 9.a, 
``Trading assets,'' and item 9.b, ``All other assets (including 
available-for-sale and held-to-maturity securities).'' The agencies 
also proposed to expand the scope of Schedule RC-D, Trading Assets and 
Liabilities, Memorandum item 3, ``Loans measured at fair value that are 
past due 90 days

[[Page 41981]]

or more,'' to include loans held for trading and measured at fair value 
that are in nonaccrual status. The agencies proposed to collect this 
information to improve their ability to assess the quality of assets 
held for trading purposes and generally enhance surveillance and 
examination planning efforts. One commenter on these proposed reporting 
changes questioned the meaningfulness of delinquency and nonaccrual 
data for trading assets because they are accounted for at fair value 
through earnings. After fully considering this commenter's views, the 
agencies have decided not to implement the proposed revisions to 
Schedule RC-N, item 9, and Schedule RC-D, Memorandum item 3. These 
items will remain in their current form.
---------------------------------------------------------------------------

    \10\ 73 FR 54807.
---------------------------------------------------------------------------

C. Unpaid Premiums on Certain Credit Derivatives
    The agencies' proposed Call Report revisions for 2009 also included 
the addition of new Memorandum items 3.a and 3.b to Schedule RC-R, 
Regulatory Capital, to collect the present value of unpaid premiums on 
credit derivatives for which the bank is the protection seller that are 
defined as covered positions under the agencies' market risk capital 
guidelines. This present value information was to be reported by 
remaining maturity and with a breakdown between investment grade and 
subinvestment grade for the rating of the underlying reference asset. 
One commenter on this proposed credit derivative data requested 
clarification of the impact of the reporting requirement on a bank's 
risk-based capital calculations. The agencies have reconsidered this 
proposed reporting change and have decided not to add these new 
Memorandum items to Schedule RC-R.

IV. Request for Comment

    Public comment is requested on all aspects of this joint notice. 
Comments are invited specifically on:
    (a) Whether the proposed revisions to the Call Report collections 
of information 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 and will be summarized or included in the agencies' 
requests for OMB approval. All comments will become a matter of public 
record.

    Dated: August 12, 2009.
Michele Meyer,
Assistant Director, Legislative and Regulatory Activities Division, 
Office of the Comptroller of the Currency.
    Board of Governors of the Federal Reserve System, August 13, 
2009.
Jennifer J. Johnson,
Secretary of the Board.
    Dated at Washington, DC, this 11th day of August 2009.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. E9-19911 Filed 8-18-09; 8:45 am]
BILLING CODE 4810-33-P; 6210-01-P; 6714-01-P


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