[Federal Register Volume 88, Number 187 (Thursday, September 28, 2023)]
[Notices]
[Pages 66933-66939]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-21132]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

FEDERAL RESERVE SYSTEM

FEDERAL DEPOSIT INSURANCE CORPORATION


Proposed Agency Information Collection Activities; Comment 
Request

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

ACTION: Joint notice and request for comment.

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SUMMARY: In accordance with the requirements of the Paperwork Reduction 
Act of 1995 (PRA), the OCC, the Board, and the FDIC (the agencies) may 
not conduct or sponsor, and the respondent is not required to respond 
to, an information collection unless it displays a currently valid 
Office of Management and Budget (OMB) control number. The Federal 
Financial Institutions Examination Council (FFIEC), of which the 
agencies are members, has approved the agencies' publication for public 
comment of a proposal to revise and extend for three years the 
Consolidated Reports of Condition and Income (Call Reports) (FFIEC 031, 
FFIEC 041, and FFIEC 051), which are currently approved collections of 
information. The FFIEC has also approved the Board's publication for 
public comment, on behalf of the agencies, of a proposal to revise and 
extend for three years the Report of Assets and Liabilities of U.S. 
Branches and Agencies of Foreign Banks (FFIEC 002), and the Report of 
Assets and Liabilities of a Non-U.S. Branch that is Managed or 
Controlled by a U.S. Branch or Agency of a Foreign (Non-U.S.) Bank 
(FFIEC 002S), which are also currently approved collections of 
information. The agencies are requesting comment on proposed revisions 
related to the Financial Accounting Standards Board's (FASB) Accounting 
Standards Update (ASU) 2022-02, ``Financial Instruments--Credit Losses 
(Topic 326): Troubled Debt Restructurings and Vintage Disclosures'' 
(ASU 2022-02); reporting of past due loans; and reporting of internet 
website addresses of depository institution trade names. The revisions 
are proposed to take effect with the March 31, 2024, report date.

DATES: Comments must be submitted on or before November 27, 2023.

ADDRESSES: Interested parties are invited to submit written comments to 
any or all of the agencies. All comments will be shared among the 
agencies.
    OCC: You may submit comments, by any of the following methods:
    <bullet> Email: <a href="/cdn-cgi/l/email-protection#d3a3a1b2babdb5bc93bcb0b0fda7a1b6b2a0fdb4bca5"><span class="__cf_email__" data-cfemail="522220333b3c343d123d31317c26203733217c353d24">[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. 
Hover over the ``Information Collection Review'' drop

[[Page 66934]]

down menu and select ``Information Collection Review.'' 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 
and FFIEC 002 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#b3c1d6d4c09dd0dcdeded6ddc7c0f3d5d6d7d6c1d2dfc1d6c0d6c1c5d69dd4dcc5"><span class="__cf_email__" data-cfemail="bfcddad8cc91dcd0d2d2dad1cbccffd9dadbdacdded3cddaccdacdc9da91d8d0c9">[email protected]</span></a>. Include ``Call 
Report and FFIEC 002 Revisions'' in the subject line of the message.
    <bullet> Fax: (202) 395-6974.
    <bullet> Mail: Ann E. Misback, Secretary, Board of Governors of the 
Federal Reserve System, 20th Street and Constitution Avenue NW, 
Washington, DC 20551.
    All public comments are available on the Board's website at 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 
and FFIEC 002 Revisions,'' by any of the following methods:
    <bullet> Agency website: https://www.fdic.gov/resources/regulations/federal-register-publications/. Follow the instructions for 
submitting comments on the FDIC's website.
    <bullet> Email: <a href="/cdn-cgi/l/email-protection#dcbfb3b1b1b9b2a8af9c9a98959ff2bbb3aa"><span class="__cf_email__" data-cfemail="b3d0dcdeded6ddc7c0f3f5f7faf09dd4dcc5">[email protected]</span></a>. Include ``Call Report and FFIEC 
002 Revisions'' in the subject line of the message.
    <bullet> Mail: Manuel E. Cabeza, Counsel, Attn: Comments, Room MB-
3128, Federal Deposit Insurance Corporation, 550 17th Street NW, 
Washington, DC 20429.
    <bullet> Hand Delivery: Comments may be hand delivered to the guard 
station at the rear of the 550 17th Street NW building (located on F 
Street NW) on business days between 7 a.m. and 5 p.m.
    <bullet> Public Inspection: All comments received, including any 
personal information provided, will be posted without change to https://www.fdic.gov/resources/regulations/federal-register-publications/. 
Commenters should submit only information that the commenter wishes to 
make available publicly. The FDIC may review, redact, or refrain from 
posting all or any portion of any comment that it may deem to be 
inappropriate for publication, such as irrelevant or obscene material. 
The FDIC may post only a single representative example of identical or 
substantially identical comments, and in such cases will generally 
identify the number of identical or substantially identical comments 
represented by the posted example. All comments that have been 
redacted, as well as those that have not been posted, that contain 
comments on the merits of this document will be retained in the public 
comment file and will be considered as required under all applicable 
laws. All comments may be accessible under the Freedom of Information 
Act.
    Additionally, commenters may send a copy of their comments to the 
OMB desk officer for the agencies by mail to the Office of Information 
and Regulatory Affairs, U.S. Office of Management and Budget, New 
Executive Office Building, Room 10235, 725 17th Street NW, Washington, 
DC 20503; by fax to (202) 395-6974; or by email to 
<a href="/cdn-cgi/l/email-protection#6a0503180b35191f08070319190305042a050708440f051a440d051c"><span class="__cf_email__" data-cfemail="3f50564d5e604c4a5d52564c4c5650517f50525d115a504f11585049">[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. If you are deaf, hard of hearing, or have a speech 
disability, please dial 7-1-1 to access telecommunications relay 
services.
    Board: Nuha Elmaghrabi, Federal Reserve Board Clearance Officer, 
(202) 452-3884, Office of the Chief Data Officer, Board of Governors of 
the Federal Reserve System, 20th and C Streets NW, Washington, DC 
20551. Telecommunications Device for the Deaf (TDD) users may call 
(202) 263-4869.
    FDIC: Manuel E. Cabeza, Counsel, (202) 898-3767, Legal Division, 
Federal Deposit Insurance Corporation, 550 17th Street NW, Washington, 
DC 20429.

SUPPLEMENTARY INFORMATION:

I. Affected Reports

    The proposed changes discussed below affect the Call Reports and 
the FFIEC 002.

A. Call Report

    The agencies propose to extend for three years, with revision, 
their information collections associated with the FFIEC 031, FFIEC 041, 
and FFIEC 051 Call Reports.
    Report Title: Consolidated Reports of Condition and Income (Call 
Report).
    Form Number: FFIEC 031 (Consolidated Reports of Condition and 
Income for a Bank with Domestic and Foreign Offices), FFIEC 041 
(Consolidated Reports of Condition and Income for a Bank with Domestic 
Offices Only), and FFIEC 051 (Consolidated Reports of Condition and 
Income for a Bank with Domestic Offices Only and Total Assets Less Than 
$5 Billion).
    Frequency of Response: Quarterly.
    Affected Public: Business or other for-profit.
    Type of Review: Revision and extension of currently approved 
collections.
    OCC:
    OMB Control No.: 1557-0081.
    Estimated Number of Respondents: 1,015 national banks and federal 
savings associations.
    Estimated Average Burden per Response: 40.76 burden hours per 
quarter to file.
    Estimated Total Annual Burden: 165,486 burden hours to file.
    Board:
    OMB Control No.: 7100-0036.
    Estimated Number of Respondents: 699 state member banks.
    Estimated Average Burden per Response: 44.21 burden hours per 
quarter to file.
    Estimated Total Annual Burden: 123,611 burden hours to file.
    FDIC:
    OMB Control No.: 3064-0052.
    Estimated Number of Respondents: 2,990 insured state nonmember 
banks and state savings associations.
    Estimated Average Burden per Response: 38.95 burden hours per 
quarter to file.
    Estimated Total Annual Burden: 465,842 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 
84.53 (FFIEC 031), 54.60 (FFIEC 041), and 34.52 (FFIEC 051). The

[[Page 66935]]

changes to the Call Report forms and instructions proposed in this 
notice would result in an estimated increase in burden hours per 
quarter for the FFIEC 051 of 0.12 hours. This increase in burden 
results from the proposed change in frequency for Schedule RC-M, 
Memoranda, items 8.a. through 8.c, as discussed in Section II. C, 
below. The proposed revisions and clarifications in this notice are not 
anticipated to change the estimated burden for the FFIEC 031 and the 
FFIEC 041. The estimated burden per response for the quarterly filings 
of the Call Report is an average that varies by agency because of 
differences in the composition of the institutions under each agency's 
supervision (e.g., size distribution of institutions, types of 
activities in which they are engaged, and existence of foreign 
offices).
    Type of Review: Extension and revision of currently approved 
collections. In addition to the proposed revisions discussed below, 
Call Reports are periodically updated to clarify instructional guidance 
and correct grammatical and typographical errors on the forms and 
instructions, which are published on the FFIEC website.\1\ These non-
substantive updates may also be commented upon.
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    \1\ www.ffiec.gov/forms031.htm; www.ffiec.gov/forms041.htm; 
www.ffiec.gov/forms051.htm.
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Legal Basis and Need for Collections
    The Call Report information collections are mandatory: 12 U.S.C. 
161 (national banks), 12 U.S.C. 324 (state member banks), 12 U.S.C. 
1817 (insured state nonmember commercial and savings banks), and 12 
U.S.C. 1464 (federal and state savings associations). At present, 
except for selected data items and text, these information collections 
are not given confidential treatment.
    Banks and savings associations submit Call Report data to the 
agencies each quarter for the agencies' use in monitoring the 
condition, performance, and risk profile of individual institutions and 
the industry as a whole. Call Report data serve a regulatory or public 
policy purpose by assisting the agencies in fulfilling their shared 
missions of ensuring the safety and soundness of financial institutions 
and the financial system and protecting consumer financial rights, as 
well as agency-specific missions affecting federal and state-chartered 
institutions, such as conducting monetary policy, ensuring financial 
stability, and administering federal deposit insurance. Call Reports 
are the source of the most current statistical data available for 
identifying areas of focus for on-site and off-site examinations. Among 
other purposes, the agencies use Call Report data in evaluating 
institutions' corporate applications, including interstate merger and 
acquisition applications for which the agencies are required by law to 
determine whether the resulting institution would control more than 10 
percent of the total amount of deposits of insured depository 
institutions in the United States. Call Report data also are used to 
calculate the risk-based assessments for insured depository 
institutions.

B. FFIEC 002 and 002S

    The Board proposes to extend for three years, with revision, the 
FFIEC 002 and FFIEC 002S reports.
    Report Titles: Report of Assets and Liabilities of U.S. Branches 
and Agencies of Foreign Banks; Report of Assets and Liabilities of a 
Non-U.S. Branch that is Managed or Controlled by a U.S. Branch or 
Agency of a Foreign (Non-U.S.) Bank.
    Form Numbers: FFIEC 002; FFIEC 002S.
    OMB Control Number: 7100-0032.
    Frequency of Response: Quarterly.
    Affected Public: Business or other for-profit.
    Respondents: All state-chartered or federally-licensed U.S. 
branches and agencies of foreign banking organizations, and all non-
U.S. branches managed or controlled by a U.S. branch or agency of a 
foreign banking organization.
    Estimated Number of Respondents: FFIEC 002--183; FFIEC 002S--18.
    Estimated Average Burden per Response: FFIEC 002--24.67 hours; 
FFIEC 002S--6.0 hours.
    Estimated Total Annual Burden: FFIEC 002--18,058 hours; FFIEC 
002S--432 hours.
    Type of Review: Extension and revision of currently approved 
collections.
    The proposed revisions to the FFIEC 002 instructions in this notice 
would not have a material impact on the existing burden estimates.
Legal Basis and Need for Collection
    On a quarterly basis, all U.S. branches and agencies of foreign 
banks are required to file the FFIEC 002, which is a detailed report of 
condition with a variety of supporting schedules. This information is 
used to fulfill the supervisory and regulatory requirements of the 
International Banking Act of 1978. The data also are used to augment 
the bank credit, loan, and deposit information needed for monetary 
policy and other public policy purposes. In addition, FFIEC 002 data 
are used to calculate the risk-based assessments for FDIC-insured U.S. 
branches of foreign banks. The FFIEC 002S is a supplement to the FFIEC 
002 that collects information on assets and liabilities of any non-U.S. 
branch that is managed or controlled by a U.S. branch or agency of the 
foreign bank. A non-U.S. branch is managed or controlled by a U.S. 
branch or agency if a majority of the responsibility for business 
decisions, including but not limited to decisions with regard to 
lending or asset management or funding or liability management, or the 
responsibility for recordkeeping in respect of assets or liabilities 
for that foreign branch resides at the U.S. branch or agency. A 
separate FFIEC 002S must be completed for each managed or controlled 
non-U.S. branch. The FFIEC 002S must be filed quarterly along with the 
U.S. branch or agency's FFIEC 002.
    These information collections are mandatory (12 U.S.C. 1817(a)(1) 
and (3), 3102(b), and 3105(c)(2)). Except for select sensitive items, 
the FFIEC 002 is not given confidential treatment; the FFIEC 002S is 
given confidential treatment (5 U.S.C. 552(b)(4) and (8)). The data 
from both reports are used for (1) monitoring deposit and credit 
transactions of U.S. residents; (2) monitoring the impact of policy 
changes; (3) analyzing structural issues concerning foreign bank 
activity in U.S. markets; (4) understanding flows of banking funds and 
indebtedness of developing countries in connection with data collected 
by the International Monetary Fund and the Bank for International 
Settlements that are used in economic analysis; and (5) assisting in 
the supervision of U.S. offices of foreign banks. The Federal Reserve 
System collects and processes these reports on behalf of all three 
agencies.

II. Current Actions

A. ASU 2022-02, ``Financial Instruments--Credit Losses (Topic 326): 
Troubled Debt Restructurings and Vintage Disclosures''

1. Background
    On March 31, 2022, the FASB issued ASU 2022-02 which eliminates the 
troubled debt restructuring (TDR) recognition and measurement guidance 
for entities that have adopted ASU 2016-13, ``Financial Instruments--
Credit Losses (Topic 326): Measurement of Credit Losses on Financial 
Instruments'' (ASU 2016-13). Instead of identifying and accounting for 
TDRs separately from other loan modifications, all loans modified from 
the beginning of the fiscal year in which

[[Page 66936]]

the new standard is adopted by an institution would be accounted for in 
accordance with ASC Section 310-20-35, Receivables--Nonrefundable Fees 
and Other Costs--Subsequent Measurement, as amended by ASU 2022-02. In 
addition, the new standard enhances financial statement disclosure 
requirements for certain loan modifications to borrowers experiencing 
financial difficulty. These disclosures include quantitative 
information about the modifications and their performance and 
qualitative information regarding how initial modifications and 
subsequent performance of such modifications impact the allowance for 
credit losses.
    Upon adoption of ASU 2022-02, an institution would have the option 
to use a modified retrospective transition method to account for those 
TDRs that existed as of the last day of the fiscal year preceding the 
fiscal year in which the standard was implemented. For these TDRs, an 
institution would recognize a cumulative-effect adjustment to the 
beginning balance of retained earnings as of the first day of the 
fiscal year resulting from the adoption of ASU 2022-02. Institutions 
that opt to apply ASU 2022-02 prospectively would continue applying the 
TDR guidance to the existing TDR loans for allowance for credit losses 
purposes until the loans are paid in full or otherwise settled, sold, 
charged-off, or subsequently modified.
    Regardless of the transition method applied to existing TDRs, 
institutions would apply ASU 2022-02 to all modifications made from the 
beginning of the fiscal year of adoption and in subsequent reporting 
periods. Institutions would only include loans that were modified to 
borrowers experiencing financial difficulty from the beginning of the 
fiscal year of adoption and in subsequent periods in their disclosures 
for financial statement purposes. TDRs or modifications made prior to 
the beginning of the fiscal year of adoption would not be included in 
these enhanced disclosures in the period of adoption or in any 
subsequent periods.
    Additionally, per ASU 2022-02, an institution would not be required 
to use a discounted cash flow (DCF) approach to measure the allowance 
for credit loss on the modified loans. However, if an institution 
chooses to use a DCF approach, it would be required to use the post-
modification effective interest rate to discount expected cash flows. 
Modified loans for which repayment is expected to be provided 
substantially through the operation or sale of the collateral when the 
borrower is experiencing financial difficulty would still be considered 
to be collateral dependent. For regulatory reporting purposes, the 
allowance for credit losses for a collateral dependent loan would 
continue to be measured using the fair value of collateral (less cost 
to sell, when appropriate), regardless of whether foreclosure is 
probable.
    ASU 2022-02 is effective for all institutions that have adopted ASU 
2016-13 for fiscal years beginning after December 15, 2022, including 
interim reporting periods within those fiscal years. For all other 
institutions, the effective date for ASU 2022-02 would be the same as 
the effective date for ASU 2016-13.
2. Proposed Changes
    In response to ASU 2022-02, the agencies are proposing revisions to 
the Call Report forms and instructions. In general, these revisions 
would align the data collected in the Call Report forms and 
instructions with the definition of loan modifications to borrowers 
experiencing financial difficulty that is used in U.S. generally 
accepted accounting principles (GAAP). The banking agencies are 
proposing to replace, as appropriate, references to ``troubled debt 
restructurings'' with ``modifications to borrowers experiencing 
financial difficulty'' in the Call Report forms and instructions, and 
to update the Glossary to reflect the change in accounting for 
modifications to borrowers experiencing financial difficulty.
    These changes are intended to provide data needed to monitor banks' 
safety and soundness and for FDIC deposit insurance assessment 
purposes. The proposed revisions would assist the agencies in gaining a 
better understanding of banks' credit exposures. Specifically, the loan 
modifications to borrowers experiencing financial difficulty reported 
in Call Report Schedule RC-C, Part I, Loans and Leases, Memorandum item 
1, and Schedule RC-N, Past Due and Nonaccrual Loans, Leases, and Other 
Assets, Memorandum item 1 would enable the agencies to better 
understand the level of loan modification activity at institutions and 
the categories of loans involved in this activity. The agencies would 
benefit from continued reliable data outside of on-site examinations to 
assess modification activity, particularly given current increased 
risks related to commercial real estate loans and commercial and 
industrial loans. In addition, the proposed changes are needed to 
calculate deposit insurance assessments for large or highly complex 
institutions as defined in FDIC regulations.\2\
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    \2\ On October 18, 2022, the FDIC Board adopted a final rule to 
incorporate ASU 2022-02, available at: https://www.fdic.gov/news/board-matters/2022/2022-10-18-notice-sum-b-fr.pdf, in the risk-based 
deposit insurance assessment system applicable to all large and 
highly complex insured depository institutions as defined in the 
FDIC's assessment regulations. See 12 CFR 327.8(f), (g) and 12 CFR 
327.16(b).
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    Institutions that have fiscal years beginning in the fourth quarter 
of 2023, and choose not to early adopt the standard, will not apply the 
standard in the Call Report and/or the FFIEC 002 until the December 31, 
2023, report date. The proposed revisions to specific data items 
resulting from the elimination of the TDR recognition and measurement 
guidance would be reflected in the forms as of the March 31, 2024, 
report date, as outlined in the following descriptions of the proposed 
changes to the affected Call Report and FFIEC 002 schedules.
    Through December 31, 2023, the quarterly Supplemental Instructions 
for the Call Report will include guidance for institutions that have 
adopted ASU 2022-02 on reporting the data items related to loan 
modifications to borrowers experiencing financial difficulty.
3. Specific Revisions to the Call Reports
Schedule RC-C and Schedule RC-N
    Upon adoption of ASU 2022-02, institutions would continue to report 
detail on loan modifications to borrowers experiencing financial 
difficulty in Call Report Schedule RC-C, Part I, Loans and Leases, 
Memorandum item 1, and Schedule RC-N, Past Due and Nonaccrual Loans, 
Leases, and Other Assets, Memorandum item 1. However, the modifications 
reported in these Memoranda items would need to meet the definition of 
``loan modifications to borrowers experiencing financial difficulty'' 
as described in ASU 2022-02, rather than the GAAP definition related to 
``troubled debt restructurings.'' Loan modifications to borrowers 
experiencing financial difficulty include financing receivables that 
had been modified in the form of principal forgiveness, an interest 
rate reduction, an other-than-insignificant payment delay, or a term 
extension (or a combination thereof). The Call Report forms and 
instructions would be updated to include in the item descriptions and 
instructions references to ``loan modifications to borrowers 
experiencing financial difficulty'' and remove references to the TDR 
framework.

[[Page 66937]]

    The Call Report provides the agencies with data to be used in 
monitoring the condition, performance, and risk profile of individual 
institutions and the industry as a whole. This data serves a regulatory 
or public policy purpose by assisting the agencies in fulfilling their 
shared missions of ensuring the safety and soundness of supervised 
financial institutions and the stability of the financial system 
utilizing statistical data for identifying areas of focus for both on-
site and off-site supervision. The information needed for these 
purposes at times may differ from information required by GAAP as 
accounting standards are not specifically tailored to the needs of the 
financial institution regulators.
    ASU 2022-02 requires financial statement disclosures on loan 
modifications to borrowers experiencing financial difficulty made 
``within the previous 12 months preceding the payment default when the 
debtor was experiencing financial difficulty at the time of the 
modification.'' \3\ However, as evidenced by the modifications made 
during the COVID-19 pandemic in 2020, 2021, and 2022, it may take 
longer than 12 months following the modification to assess whether 
loans are performing in accordance with their modified terms and if the 
borrower is no longer experiencing financial difficulty. Reporting 
modifications on the Call Report for a period greater than 12 months 
would increase the reporting period beyond that required by the 
financial statement disclosure requirements in ASU 2022-02. However, 
the ability to monitor modifications made by institutions to borrowers 
experiencing financial difficulty provides useful supervisory 
information on the borrower's continued performance or lack thereof on 
the modified loan. Due to these factors, the agencies are proposing to 
require reporting of these modifications for a minimum period of 12 
months and until an institution performs a current, well documented 
credit evaluation to support that the borrower is no longer 
experiencing financial difficulty, unless the loan is paid off, 
charged-off, sold, or otherwise settled. Performing a current, well 
documented credit evaluation to support that the borrower is no longer 
experiencing financial difficulty is consistent with the Interagency 
Guidelines Establishing Standards for Safety and Soundness issued by 
the Board, FDIC, and OCC,\4\ which articulate safety and soundness 
standards for supervised financial institutions to establish and 
maintain prudent credit underwriting practices and maintain systems to 
identify distressed assets and manage deterioration in those assets.
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    \3\ See ASC 310-10-50-44.
    \4\ 12 CFR part 30, appendix A (OCC); 12 CFR part 208 Appendix 
D-1 (Board); and 12 CFR part 364 appendix A (FDIC).
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    The agencies invite comment on this proposal and are particularly 
interested in understanding any operational challenges and the nature 
of any loan systems changes necessary to accommodate the Call Report 
collection of data on loan modifications to borrowers experiencing 
financial difficulty for a minimum period of 12 months and until an 
institution performs a current, well documented credit evaluation to 
support that the borrower is no longer experiencing financial 
difficulty, unless the loan is paid off, charged-off, sold, or 
otherwise settled.
    Question 1: What additional factors, if any, should the agencies 
consider when determining the length of time that a loan modification 
to a borrower experiencing financial difficulty must be reported in 
Schedule RC-C and RC-N memoranda items?
    Question 2: What are the advantages or disadvantages of reporting 
loan modifications for a period longer than 12 months as required for 
financial statement disclosures for applicable institutions under ASU 
2022-02?
Schedule RC-M
    Upon adoption of ASU 2022-02, institutions would continue to report 
detail on other real estate owned in Schedule RC-M, Memoranda, item 3. 
However, instructional references to ASC Subtopic 310-40, Receivables-
Troubled Debt Restructurings by Creditors (ASC Subtopic 310-40) would 
be updated to ASC Subtopic 310-20, Receivables-Nonrefundable Fees and 
Other Costs (ASC Subtopic 310-20). The Call Report instructions would 
be updated to include the updated codification references.
Schedule RC-O
    Upon adoption of ASU 2022-02, institutions that meet the FDIC's 
definition of large institutions or highly complex institutions for 
deposit insurance assessment purposes would continue to report loans 
that have been modified to borrowers experiencing financial difficulty 
in Call Report Schedule RC-O, Other Data for Deposit Insurance 
Assessments, renamed Memorandum item 16, ``Portion of loan 
modifications to borrowers experiencing financial difficulty that are 
in compliance with their modified terms and are guaranteed or insured 
by the U.S. government (including the FDIC) (included in Schedule RC-C, 
Part I, Memorandum item 1).'' However, the modifications reported in 
this Memorandum item would be those that are guaranteed or insured by 
the U.S. government (including the FDIC) and meet the definition of 
``loan modifications to borrowers experiencing financial difficulty,'' 
rather than the definition related to ``loans restructured in troubled 
debt restructurings.'' Both the FFIEC 031 and FFIEC 041 Call Report 
forms and instructions would be updated to include in the item 
descriptions and instructions references to ``loan modification to 
borrowers experiencing financial difficulty'' as described in ASU 2022-
02 and remove references to the TDR framework.
Glossary
    Effective March 31, 2024, to address the elimination of the TDR 
recognition and measurement guidance in ASU 2022-02, the agencies 
propose to revise or eliminate, as appropriate, the following Glossary 
entries to provide additional information for those institutions that 
have adopted ASU 2022-02 and to remove redundant entries: (1) 
``Allowance for Credit Losses,'' (2) ``Foreclosed Assets,'' (3) ``Loan 
Fees,'' (4) ``Nonaccrual Status,'' (5) ``Renegotiated Troubled Debt,'' 
(6) ``Troubled Debt Restructurings,'' (7) ``Loan Impairment,'' and (8) 
``Purchased Credit-Impaired Loans and Debt Securities.'' Additionally, 
a new entry for ``Loan Modifications to Borrowers Experiencing 
Financial Difficulty'' would be included in the Glossary.
4. Revisions to the FFIEC 002
    The Board's proposed revisions to the FFIEC 002 are intended to 
align with similar changes proposed to the Call Report and discussed in 
the prior section.
Schedule N
    Upon adoption of ASU 2022-02, institutions would continue to report 
detail on loan modifications to borrowers experiencing financial 
difficulty in FFIEC 002 Schedule N, Past Due, Nonaccrual, and 
Restructured Loans, Columns C and D. The modifications reported in 
these columns would meet the definition of ``modifications to borrowers 
experiencing financial difficulty'' as described in ASU 2022-02, rather 
than the definition related to ``troubled debt restructurings.'' The 
FFIEC 002 instructions would be updated to include references to 
``modifications to borrowers experiencing financial

[[Page 66938]]

difficulty'' and remove references to the TDR framework.
    The agencies are proposing to align the time period for reporting 
applicable items on Schedule N with the Call Report Memorandum items 
described above.

B. Past Due Definition

    The definition used to report loans as ``past due'' is provided in 
the General Instructions to Schedule RC-N, Past Due and Nonaccrual 
Loans, Leases, and Other Assets. The agencies have become aware of 
questions regarding the classification of loans as past due, 
particularly when a past-due loan is in the process of being extended 
or refinanced.\5\ To address these questions and improve the 
consistency of past due reporting across institutions, the agencies are 
proposing three changes to the Schedule RC-N general instructions that 
define ``past due''. First, the proposed revisions clarify that 
reporting institutions must report as past due any loans that the 
reporting institution is in the process of restructuring if the 
restructuring process has not concluded (i.e., the restructuring has 
not been executed or become effective). Second, the proposed revisions 
would clarify that a loan or other asset should be reported as past due 
when either an interest payment or principal payment is due and unpaid 
for 30 days or longer. Third, the proposed revisions would restructure 
the definition to clarify the general rules for reporting past due 
loans, the exceptions to those general rules, and nonexclusive examples 
of reporting past due loans or other assets consistent with those 
instructions.
---------------------------------------------------------------------------

    \5\ See, e.g., United States v. Harra, 985 F.3d 196 (3d Cir. 
2021).
---------------------------------------------------------------------------

    Question 3: What, if any, other clarifications to the definition of 
``past due'' should the agencies consider that would improve usability 
by institutions and comparability across the institutions?
    Question 4: While the agencies do not intend that these proposed 
changes would materially alter the way institutions currently assess 
and report past due loans, do institutions view any burden associated 
with implementing these proposed changes?

C. Depository Institution Trade Names and Deposit Accepting URLs

    Schedule RC-M, Memoranda, items 8.a. through 8.c. request 
information on institutions' websites and trade names, particularly 
those used to solicit deposits. The agencies added these items to 
enable the FDIC to effectively serve as an information resource for 
depositors and the public seeking to identify the insured status of a 
physical branch office or internet website that uses a trade name 
rather than the legal name of the insured institution. However, the 
FDIC has observed some institutions reporting internet websites or 
trade names of non-bank entities, including third parties that accept 
or solicit deposits from the public on behalf of the FDIC-insured 
depository institution. As a result, the FDIC cannot effectively use 
this information to assist bank customers and the public in determining 
the insured status of an institution which is using a website or trade 
name to solicit deposits.
    In order to improve the effectiveness and usability of reporting 
these items, the agencies are proposing to clarify the instructions for 
items 8.a through 8.c. For item 8.a, ``Uniform Resource Locator (URL) 
of the reporting institution's primary internet website (home page), if 
any'' the agencies would clarify that institutions would not report 
URLs of affiliates that are not insured depository institutions. For 
item 8.b, ``URLs of all other public-facing internet websites that the 
reporting institution uses to accept or solicit deposits from the 
public, if any'' the agencies would revise the instructions to clarify 
that an FDIC-insured depository institution would only reports URLs of 
public-facing internet websites operated by the reporting FDIC-insured 
depository institution. The agencies would also clarify the 
instructions to indicate that an FDIC-insured depository institution 
would not report internet websites of any non-bank entity, including 
any third parties that accept or solicit deposits from the public on 
behalf of the reporting FDIC-insured depository institution. These 
third parties, which would not be reported in this item, would include 
any person or entity other than the insured institution that is acting 
as fiduciary in the placement of deposit funds into an FDIC-insured 
depository institution as described under 12 CFR 330.5 and 330.7 that 
is commonly referred to as ``pass-through'' deposit insurance coverage. 
For item 8.c, ``Trade names other than the reporting institution's 
legal title used to identify one or more of the institution's physical 
offices at which deposits are accepted or solicited from the public, if 
any'' the agencies would clarify the instructions to exclude reporting 
of any non-bank affiliates or subsidiaries regardless of whether these 
entities solicit deposits.
    In addition, the agencies are proposing to increase the frequency 
of reporting of these items on the FFIEC 051 from semi-annually to 
quarterly. Currently, items 8.a through 8.c are completed on a 
quarterly basis by institutions filing the FFIEC 031 and FFIEC 041 Call 
Report form and semi-annually by those institutions filing the FFIEC 
051 Call Report form. Quarterly reporting by the FFIEC 051 filers would 
provide more current information to assist the FDIC with identifying 
the insured status of institutions using the websites or trade names to 
solicit deposits.
    Question 5: The current instructions for item 8 request information 
regarding websites ``operated by'' an FDIC-insured depository 
institution. Does the phrase ``operated by'' capture the appropriate 
population of URLs used by FDIC-insured depository institutions or 
would an alternate phrase such as ``owned by'' be more appropriate?
    Question 6: Would these proposed instruction revisions clearly 
distinguish reporting deposit accepting activities of the institution 
under its own websites and trade names while excluding URLs used by 
third parties that facilitate pass-through insurance?
    Question 7: What additional burden, if any, would result from FFIEC 
051 filers reporting items 8.a through 8.c on a quarterly basis?

III. Timing

    The proposed revisions to the Call Reports and the FFIEC 002 would 
take effect beginning with the March 31, 2024, report date. The 
agencies invite comment on any difficulties that institutions would 
expect to encounter in implementing the systems changes necessary to 
accommodate the proposed revisions to the Call Reports and FFIEC 002 
consistent with this effective date.

IV. Request for Comment

    Public comment is requested on all aspects of this joint notice 
including the questions that were provided in the earlier sections. In 
addition to the questions included above, comment is specifically 
invited on:
    (a) Whether the proposed revisions to the collections of 
information that are the subject of this notice are necessary for the 
proper performance of the 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,

[[Page 66939]]

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.

    Dated at Washington, DC, on August 29, 2023.
Theodore J. Dowd,
Deputy Chief Counsel, Office of the Comptroller of the Currency.
Michele Taylor Fennell,
Deputy Associate Secretary of the Board. Board of Governors of the 
Federal Reserve System.
James P. Sheesley,
Assistant Executive Secretary. Federal Deposit Insurance Corporation.
[FR Doc. 2023-21132 Filed 9-27-23; 8:45 am]
BILLING CODE 4810-33-P; 6210-01-P; 6714-01-P


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