31146 Federal Register / Vol. 83, No. 128 / Tuesday, July 3, 2018 / Notices 

7The international GSIB assessment reporting 

instructions for year-end 2017 are available at 

www.bis.org/bcbs/gsib/reporting_instructions.htm. 

8Even if the argument regarding the APA were 

not moot, the Board would not have violated the 

APA if it decided to implement the proposed 

revisions to Schedule B, items 5(a) and 11(a), and 

Schedule D, item 1. The proposed revisions to the 

FR Y–15 constitute an interpretive rule or general 

statement of policy, and therefore may be adopted 

without the publication of a general notice of 

proposed rulemaking in the Federal Register. Even 

if such publication were necessary to adopt the 

proposed revisions, this requirement was satisfied 

because the proposal was published for comment in 

the Federal Register for a 60-day comment period. 

After receiving initial feedback on the proposal, the 

comment period was extended for 30 days to solicit 

additional feedback. Moreover, redlined forms, 

instructions, and an OMB supporting statement 

were made available on the Board’s public website. 

The materials afforded commenters the opportunity 

to provide specific feedback regarding the exact 

changes being proposed. Indeed, commenters 

provided significant feedback based on the 

proposal. 

9Any changes to these reporting forms would 

have to be proposed in a future Federal Register 

notice with a 60-day comment period, as required 

by the Paperwork Reduction Act (PRA). 

commenters argued that the proposed 

changes could result in the GSIB 

surcharge of several firms increasing, 

which, in turn, could lead these firms to 

increase clearing costs for derivative 

end-users. 

After considering the comments, the 

Board is not adopting its proposal with 

respect to reporting derivatives under 

the agency model on Schedule B in 

order to allow additional time to 

consider how to cover such activity in 

the context of interconnectedness. The 

Board will continue to consider whether 

agency clearing should be incorporated 

into the interconnectedness measures or 

elsewhere. 

Other Comments Received 

No comments were received regarding 

the inclusion of Mexican pesos in total 

payments activity or the addition of 

securities brokers to the definition of 

financial institution. Accordingly, the 

Board is adopting revisions to the FR Y– 

15 reporting form and instructions to 

include Mexican pesos in total 

payments activity on Schedule C and 

remove it from the Memorandum items, 

and to add securities brokers to the 

definition of financial institutions in the 

instructions for Schedule B. These 

changes are effective for the June 30, 

2018, reporting date. 

Several commenters stated that the 

proposed changes to the reporting of 

OTC derivatives in Schedule D would 

make the FR Y–15 inconsistent with the 

Basel Committee GSIB assessment 

reporting instructions.7 In addition, 

certain commenters stated that the 

proposed revisions to Schedule B, items 

5(a) and 11(a), and Schedule D, item 1, 

were inconsistent with the 

Administrative Procedure Act (APA). 

The Board is not adopting these 

proposed changes, making these 

arguments moot.8

One commenter noted that the 

definition of ‘‘financial institution’’ in 

the FR Y–15 is different from other 

regulatory reports and recommended 

aligning the varying definitions. In 

response, the Board acknowledges that 

its regulations and reporting sometimes 

use differing definitions for similar 

concepts and that this may require firms 

to track differences among the 

definitions. Firms should review the 

definition of ‘‘financial institution’’ in 

the instructions of the form on which 

they are reporting and should not look 

to similar definitions in other forms as 

dispositive for appropriate reporting on 

the FR Y–15. 

A commenter also asked for 

clarification about whether securities 

financing transactions follow the 

regulatory capital rule definition of 

repo-style transactions. As described in 

the General Instructions of Schedule A, 

several items involve securities 

financing transactions (i.e., repo-style 

transactions), which are transactions 

such as repurchase agreements, reverse 

repurchase agreements, and securities 

lending and borrowing, where the value 

of the transactions depends on the 

market valuations and the transactions 

are often subject to margin agreements. 

For purposes of reporting on the FR Y– 

15, the intent is that securities financing 

transactions are synonymous with repostyle transactions under the regulatory 

capital rule. In a future update of the FR 

Y–15, the Board will work to replace the 

term ‘‘securities financing transactions’’ 

with ‘‘repo-style transactions’’ to better 

align the FR Y–15 language with the 

regulatory capital rule. 

In addition, a commenter asked for 

clarification regarding potential 

inconsistencies between similar items 

that are reported on different reporting 

forms. In particular, the commenter 

noted that the instructions for the FR Y– 

15, FFIEC 101 (Regulatory Capital 

Reporting for Institutions Subject to the 

Advanced Capital Adequacy 

Framework), and FR Y–14Q (Capital 

Assessments and Stress Testing) do not 

consistently allow for a reduction in fair 

value of sold credit protection. The 

Board will conduct a coordinated effort 

with the other banking agencies on 

changes to the FFIEC 101 and the FR Y– 

14 to ensure that the instructions 

appropriately clarify how any 

adjustments for sold credit protection 

should be reported.9

Further, a commenter asked for 

clarification regarding the reporting of 

holdings of equity investments in 

unconsolidated investment funds 

sponsored or administered by the 

respondent. Specifically, the commenter 

wanted to know whether such 

investments would be reported as equity 

securities in Schedule B, item 3(e). Per 

the general instructions for Schedule B, 

item 3, firms must include ‘‘securities 

issued by equity-accounted associates 

(i.e., associated companies and affiliates 

accounted for under the equity method 

of accounting) and special purpose 

entities (SPEs) that are not part of the 

consolidated entity for regulatory 

purposes.’’ Therefore, such equity 

investments would be included in item 

3(e). 

A commenter also requested 

clarification on how collateral may 

reduce the exposure reported in the FR 

Y–15, Schedule B, items 5(a) and 11(a). 

For item 5(a), in cases where a 

qualifying master netting agreement is 

in place, a reporting bank may reduce 

its value of derivative assets by 

subtracting the net collateral position 

from the underlying obligation. In 

circumstances where the net collateral 

exceeds the payment obligation, the 

bank should report a fair value of zero 

for the netting set. Similarly, for item 

11(a), in cases where a qualifying master 

netting agreement is in place, a 

reporting bank may reduce its value of 

derivative liabilities exposure by 

subtracting the net collateral position 

from the underlying obligation. In 

circumstances where the net collateral 

exceeds the payment obligation owed to 

the counterparty, the bank should report 

a fair value of zero for the netting set. 

Board of Governors of the Federal Reserve 

System, June 28, 2018. 

Michele Taylor Fennell, 

Assistant Secretary of the Board. 

[FR Doc. 2018–14304 Filed 7–2–18; 8:45 am] 

BILLING CODE 6210–01–P 

FEDERAL RESERVE SYSTEM 

Proposed Agency Information 

Collection Activities; Comment 

Request 

AGENCY: Board of Governors of the 

Federal Reserve System. 

ACTION: Notice, request for comment. 

SUMMARY: The Board of Governors of the 

Federal Reserve System (Board) invites 

comment on a proposal to extend for 

three years, without revision, the 

Interagency Guidance on Managing 

Compliance and Reputation Risks for 


sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 83, No. 128 / Tuesday, July 3, 2018 / Notices 31147 

1See 12 U.S.C. 1715z–20; 24 CFR part 206. 

2The Federal Reserve, the Federal Deposit 

Insurance Corporation, the National Credit Union 

Administration, the Office of the Comptroller of the 

Currency, and the Office of Thrift Supervision. 

3 75 FR 50801. 

Reverse Mortgage Products (FR 4029; 

OMB No. 7100–0330). 

DATES: Comments must be submitted on 

or before September 4, 2018. 

ADDRESSES: You may submit comments, 

identified by FR 4029, by any of the 

following methods: 

• Agency Website: http://www.federal

reserve.gov. Follow the instructions for 

submitting comments at http://

www.federalreserve.gov/apps/foia/ 

proposedregs.aspx. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Email: regs.comments@

federalreserve.gov. Include OMB 

number in the subject line of the 

message. 

• Fax: (202) 452–3819 or (202) 452– 

3102. 

• 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 

from the Board’s website at http://

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. Public comments 

may also be viewed electronically or in 

paper form in Room 3515, 1801 K Street 

(between 18th and 19th Streets NW) 

Washington, DC 20006 between 9:00 

a.m. and 5:00 p.m. on weekdays. For 

security reasons, the Board requires that 

visitors make an appointment to inspect 

comments. You may do so by calling 

(202) 452–3684. 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. 

Additionally, commenters may send a 

copy of their comments to the OMB 

Desk Officer—Shagufta Ahmed—Office 

of Information and Regulatory Affairs, 

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: A 

copy of the PRA OMB submission, 

including the proposed reporting form 

and instructions, supporting statement, 

and other documentation will be placed 

into OMB’s public docket files, once 

approved. These documents will also be 

made available on the Federal Reserve 

Board’s public website at: http://

www.federalreserve.gov/apps/ 

reportforms/review.aspx or may be 

requested from the agency clearance 

officer, whose name appears below. 

Federal Reserve Board Clearance 

Officer—Nuha Elmaghrabi—Office of 

the Chief Data Officer, Board of 

Governors of the Federal Reserve 

System, Washington, DC 20551 (202) 

452–3829. Telecommunications Device 

for the Deaf (TDD) users may contact 

(202) 263–4869, Board of Governors of 

the Federal Reserve System, 

Washington, DC 20551. 

SUPPLEMENTARY INFORMATION: On June 

15, 1984, the Office of Management and 

Budget (OMB) delegated to the Board 

authority under the Paperwork 

Reduction Act (PRA) to approve of and 

assign OMB control numbers to 

collection of information requests and 

requirements conducted or sponsored 

by the Board. In exercising this 

delegated authority, the Board is 

directed to take every reasonable step to 

solicit comment. In determining 

whether to approve a collection of 

information, the Board will consider all 

comments received from the public and 

other agencies. 

Request for Comment on Information 

Collection Proposal 

The Board invites public comment on 

the following information collection, 

which is being reviewed under 

authority delegated by the OMB under 

the PRA. Comments are invited on the 

following: 

a. Whether the proposed collection of 

information is necessary for the proper 

performance of the Federal Reserve’s 

functions, including whether the 

information has practical utility; 

b. The accuracy of the Federal 

Reserve’s estimate of the burden of the 

proposed information collection, 

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 collection on respondents, 

including through the use of automated 

collection techniques or other forms of 

information technology; and 

e. Estimates of capital or startup costs 

and costs of operation, maintenance, 

and purchase of services to provide 

information. 

At the end of the comment period, the 

comments and recommendations 

received will be analyzed to determine 

the extent to which the Federal Reserve 

should modify the proposal prior to 

giving final approval. 

Proposal to approve under OMB 

delegated authority the extension for 

three years, without revision, of the 

following report: 

Report title: Interagency Guidance on 

Managing Compliance and Reputation 

Risks for Reverse Mortgage Products. 

Agency form number: FR 4029. 

OMB control number: 7100–0330. 

Frequency: Annual. 

Respondents: State member banks 

that originate proprietary reverse 

mortgages. 

Estimated number of respondents: 

Implementation of policies and 

procedures, 1 respondent; and Review 

and maintenance of policies and 

procedures, 15 respondents. 

Estimated average hours per response: 

Implementation of policies and 

procedures, 40 hours; and Review and 

maintenance of policies and procedures, 

8 hours. 

Estimated annual burden hours: 

Implementation of policies and 

procedures, 40 hours; and Review and 

maintenance of policies and procedures, 

120 hours. 

General description of report: Reverse 

mortgages are home-secured loans 

typically offered to elderly consumers. 

Financial institutions currently provide 

two types of reverse mortgage products: 

the lenders’ own proprietary reverse 

mortgage products and reverse 

mortgages insured by the U.S. 

Department of Housing and Urban 

Development’s Federal Housing 

Administration (FHA). Reverse 

mortgage loans insured by the FHA are 

made pursuant to the guidelines and 

rules established by HUD’s Home Equity 

Conversion Mortgage (HECM) program.1

HECM loans and proprietary reverse 

mortgages are also subject to consumer 

financial protection laws and 

regulations, e.g., the regulations that 

implement laws such as the Real Estate 

Settlement Procedures Act (RESPA) and 

the Truth in Lending Act (TILA). 

In August 2010, the Federal Financial 

Institutions Examination Council 

(FFIEC), on behalf of its member 

agencies,2 published a Federal Register 

notice adopting supervisory guidance 

titled ‘‘Reverse Mortgage Products: 

Guidance for Managing Compliance and 

Reputation Risks.’’ 3 The guidance is 

designed to help financial institutions 

with risk management and assist 

financial institutions’ efforts to ensure 

that their reverse mortgage lending 

practices adequately address consumer 

compliance and reputation risks. 

The reverse mortgage guidance 

discusses the reporting, recordkeeping, 

and disclosures required by federal laws 


sradovich on DSK3GMQ082PROD with NOTICES
31148 Federal Register / Vol. 83, No. 128 / Tuesday, July 3, 2018 / Notices 

1 12 U.S.C. 1852(a)(2), (b). 

2This number reflects the average of the financial 

sector liabilities figure for the year ending 

December 31, 2016 ($20,079,196,276,000) and the 

year ending December 31, 2017 

($20,487,047,614,000). 

3A financial company may request to use an 

accounting standard or method of estimation other 

than GAAP if it does not calculate its total 

consolidated assets or liabilities under GAAP for 

any regulatory purpose (including compliance with 

applicable securities laws). 12 CFR 251.3(e). In 

previous years, the Board received and approved 

requests from eleven financial companies to use an 

accounting standard or method of estimation other 

than GAAP to calculate liabilities. Ten of the 

companies are insurance companies that report 

financial information under Statutory Accounting 

Principles (‘‘SAP’’), and one is a foreign company 

that controls a U.S. industrial loan company that 

reports financial information under International 

Financial Reporting Standards (‘‘IFRS’’). For the 

insurance companies, the Board approved a method 

of estimation that was based on line items from 

SAP-based reports, with adjustments to reflect 

certain differences in accounting treatment between 

GAAP and SAP. For the foreign company, the Board 

approved the use of IFRS. These companies 

continue to use the previously approved methods. 

The Board did not receive any new requests this 

year. 

and regulations and also discusses 

consumer disclosures that financial 

institutions typically provide as a 

standard business practice. Certain 

portions of the guidance are 

‘‘information collections’’ subject to the 

PRA’s requirements. 

Legal authorization and 

confidentiality: The information 

collection is authorized pursuant to 

section 11 of the Federal Reserve Act, 12 

U.S.C. 248 (state member banks); 

sections 25 and 25A of the Federal 

Reserve Act, 12 U.S.C. 625 (Edge and 

Agreement corporations); section 5 of 

the Bank Holding Company Act of 1956, 

12 U.S.C. 1844 (bank holding companies 

and, in conjunction with section 8 of the 

International Banking Act, 12 U.S.C. 

3106, foreign banking organizations); 

section 7(c) of the International Banking 

Act of 1978, 12 U.S.C. 3105(c) (branches 

and agencies of foreign banks); and 

section 10 of the Home Owners’ Loan 

Act, 12 U.S.C. 1467a, (savings and loan 

holding companies). This guidance is 

voluntary. 

Because the documentation required 

by the guidance is maintained by each 

institution, the Freedom of Information 

Act (FOIA) would only be implicated if 

the Federal Reserve’s examiners 

retained a copy of this information as 

part of an examination or as part of its 

supervision of a financial institution. 

However, records obtained as a part of 

an examination or supervision of a 

financial institution are exempt from 

disclosure under FOIA exemption (b)(8) 

(5 U.S.C. 552(b)(8)). In addition, the 

information may also be kept 

confidential under exemption 4 of the 

FOIA which protects commercial or 

financial information obtained from a 

person that is privileged or confidential 

(5 U.S.C. 552(b)(4)). 

Board of Governors of the Federal Reserve 

System, June 28, 2018. 

Michele Taylor Fennell, 

Assistant Secretary of the Board. 

[FR Doc. 2018–14303 Filed 7–2–18; 8:45 am] 

BILLING CODE 6210–01–P 

FEDERAL RESERVE SYSTEM 

[Docket No. OP–1612] 

Announcement of Financial Sector 

Liabilities 

Section 622 of the Dodd-Frank Wall 

Street Reform and Consumer Protection 

Act, implemented by the Board’s 

Regulation XX, prohibits a merger or 

acquisition that would result in a 

financial company that controls more 

than 10 percent of the aggregate 

consolidated liabilities of all financial 

companies (‘‘aggregate financial sector 

liabilities’’). Specifically, an insured 

depository institution, a bank holding 

company, a savings and loan holding 

company, a foreign banking 

organization, any other company that 

controls an insured depository 

institution, and a nonbank financial 

company designated by the Financial 

Stability Oversight Council (each, a 

‘‘financial company’’) is prohibited from 

merging or consolidating with, 

acquiring all or substantially all of the 

assets of, or acquiring control of, 

another company if the resulting 

company’s consolidated liabilities 

would exceed 10 percent of the 

aggregate financial sector liabilities.1

Pursuant to Regulation XX, the 

Federal Reserve will publish the 

aggregate financial sector liabilities by 

July 1 of each year. Aggregate financial 

sector liabilities equals the average of 

the year-end financial sector liabilities 

figure (as of December 31) of each of the 

preceding two calendar years. 

FOR FURTHER INFORMATION CONTACT: 

Sean Healey, Supervisory Financial 

Analyst, (202) 912–4611; Matthew 

Suntag, Counsel, (202) 452–3694; for the 

hearing impaired, TTY (202) 263–4869. 

Aggregate Financial Sector Liabilities 

Aggregate financial sector liabilities is 

equal to $20,283,121,945,000.2 This 

measure is in effect from July 1, 2018 

through June 30, 2019. 

Calculation Methodology 

Aggregate financial sector liabilities 

equals the average of the year-end 

financial sector liabilities figure (as of 

December 31) of each of the preceding 

two calendar years. The year-end 

financial sector liabilities figure equals 

the sum of the total consolidated 

liabilities of all top-tier U.S. financial 

companies and the U.S. liabilities of all 

top-tier foreign financial companies, 

calculated using the applicable 

methodology for each financial 

company, as set forth in Regulation XX 

and summarized below. 

Consolidated liabilities of a U.S. 

financial company that was subject to 

consolidated risk-based capital rules as 

of December 31 of the year being 

measured, equal the difference between 

its risk-weighted assets (as adjusted 

upward to reflect amounts that are 

deducted from regulatory capital 

elements pursuant to the Federal 

banking agencies’ risk-based capital 

rules) and total regulatory capital, as 

calculated under the applicable riskbased capital rules. Companies in this 

category include (with certain 

exceptions listed below) bank holding 

companies, savings and loan holding 

companies, and insured depository 

institutions. The Federal Reserve used 

information collected on the 

Consolidated Financial Statements for 

Holding Companies (FR Y–9C) and the 

Bank Consolidated Reports of Condition 

and Income (Call Report) to calculate 

liabilities of these institutions. 

Consolidated liabilities of a U.S. 

financial company not subject to 

consolidated risk-based capital rules as 

of December 31 of the year being 

measured, equal liabilities calculated in 

accordance with applicable accounting 

standards. Companies in this category 

include nonbank financial companies 

supervised by the Board, bank holding 

companies and savings and loan 

holding companies subject to the 

Federal Reserve’s Small Bank Holding 

Company Policy Statement, savings and 

loan holding companies substantially 

engaged in insurance underwriting or 

commercial activities, and U.S. 

companies that control insured 

depository institutions but are not bank 

holding companies or savings and loan 

holding companies. ‘‘Applicable 

accounting standards’’ is defined as 

GAAP, or such other accounting 

standard or method of estimation that 

the Board determines is appropriate.3

The Federal Reserve used information 

collected on the FR Y–9C, the Parent 

Company Only Financial Statements for 

Small Holding Companies (FR Y–9SP), 

and the Financial Company Report of 

Consolidated Liabilities (FR XX–1) to 

calculate liabilities of these institutions. 

Section 622 provides that the U.S. 

liabilities of a ‘‘foreign financial 

company’’ equal the risk-weighted 


sradovich on DSK3GMQ082PROD with NOTICES