Federal Register / Vol. 60, No. 61 / Thursday, March 30, 1995 / Notices 16473

(7) Any appellant institution

dissatisfied with the decision of the

Reserve Bank President may, with the

consent of its board of directors of the

institution, or in the case of a U.S.

agency or branch of a foreign bank, the

senior management person(s)

responsible for the bank’s U.S.

operations, appeal that decision to the

appropriate Governor by filing a written

appeal with the Secretary of the Board

within 30 calendar days of receipt of the

Reserve Bank President’s written

decision. The appeal may be rejected for

lack of clarity or information. In such

case, the institution may refile the

appeal within 30 calendar days of

receipt of written notice of the rejection.

The appeal shall be decided, in writing,

by the appropriate Governor, who shall

consult with the director of the

appropriate division of the Board of

Governors, within 60 calendar days of

the filing of an informationally complete

appeal.

Safeguards Against Retaliation. Each

Reserve Bank shall establish appropriate

safeguards to protect appellants from

retaliation. The Board’s Ombudsman

will periodically contact institutions

after their appeals have been decided in

order to make certain that no retaliation

has occurred. In addition, institutions

who believe they have suffered

retaliation as the result of an appeal may

contact the Board’s Ombudsman.

Availability of Procedures. Each

Reserve Bank shall make these

guidelines and the Reserve Bank’s

process for selecting a review panel

available to each institution in its

district, any institution appealing a

material supervisory determination, and

any member of the public who requests

them.

Eligible Institutions. Any institution

about which the Federal Reserve makes

a material supervisory determination is

eligible for the appeal process. This

includes state member banks, bank

holding companies and their nonbank

subsidiaries, U.S. agencies and branches

of foreign banks, Edge and agreement

corporations, third party EDP servicers,

and other entities examined or

inspected by a Reserve Bank.

Material Supervisory Determination

Defined. Whether an appealed action

constitutes a ‘‘material supervisory

determination’’ eligible for the appeals

process shall be decided by the person

or persons hearing the appeal, and a

determination that the action is not

appealable under these guidelines may

be further appealed to the Reserve Bank

President or the appropriate oversight

Governor in the same manner as any

other adverse decision.

The term ‘‘material supervisory

determination’’ includes, but is not

limited to, material determinations

relating to examination or inspection

composite ratings, the adequacy of loan

loss reserves and significant loan

classifications. The term does not

include any supervisory determination

for which an independent right of

appeal exists. Such actions include

prompt corrective action directives

issued pursuant to section 38 of the

Federal Deposit Insurance Act, as

amended (the FDI Act), actions to

impose administrative enforcement

actions under the FDI Act and the Bank

Holding Company Act of 1956, as

amended (the BHC Act), capital

directives, and orders issued pursuant

to applications under the BHC Act.

Effect of Appeal on Material

Supervisory Determinations. A material

supervisory determination shall remain

in effect while under appeal and until

such time it is modified or overturned

through the appeals process. The appeal

of a material supervisory determination

does not prevent the Federal Reserve

from taking any supervisory or

enforcement action—formal or

informal—it deems appropriate to

discharge the Federal Reserve’s

supervisory responsibilities.

Savings Provision. Section 309

expressly provides that it shall not affect

the authority of the Board or any other

agency to take enforcement or

supervisory action against an

institution. In such cases, the rights of

appeal provided for in the statutes and

regulations concerning these actions

shall govern.

By order of the Board of Governors of the

Federal Reserve System, March 24, 1995.

Jennifer J. Johnson,

Deputy Secretary of the Board.

[FR Doc. 95–7795 Filed 3–29–95; 8:45 am]

BILLING CODE 6210–01–P

Agency Forms Under Review; Bank

Holding Company Reporting

Requirements

AGENCY: Board of Governors of the

Federal Reserve System

ACTION: Final Board approval of

revisions to bank holding company

reporting requirements.

SUMMARY: Notice is hereby given of the

final approval of proposed information

collections by the Board of Governors of

the Federal Reserve System (Board)

under OMB delegated authority, as per

5 C.F.R. 1320.9 (OMB Regulations on

Controlling Paperwork Burdens on the

Public). The Board has given final

approval to the revision of the

Consolidated Financial Statements for

Bank Holding Companies (FR Y-9C;

OMB No. 7100-0128); the extension,

with revision, of the Quarterly Financial

Statements of Nonbanking Subsidiaries

of Bank Holding Companies (FR Y-11Q;

OMB No. 7100-0244) and the Annual

Financial Statements of Nonbanking

Subsidiaries of Bank Holding

Companies (FR Y-11I; OMB No. 7100-

0244); and the elimination of the

Combined Financial Statements of

Nonbank Subsidiaries of Bank Holding

Companies, by Type of Nonbank

Subsidiary (FR Y-11AS; OMB No. 7100-

0244).

The proposal was granted initial

approval by the Board on December 16,

1994. Subsequently, the proposal was

published in the Federal Register with

a thirty day public comment period that

expired on January 26, 1995. Comment

letters on the proposal were received

from four bank holding companies. In

general, the comment letters on the

proposal were supportive of the changes

to the various reports. However, some

specific comments were not supportive.

These comments noted the increase in

burden from some aspects of the

proposal and suggested modifications to

the proposed revisions. The specific

comments on the proposed revisions to

the reports are addressed in the

discussion of each individual report

following later in this notice. After

reviewing the comments, the Board has

approved the proposed changes as

originally issued for comment. In

addition to those changes, the Board

also has approved two further changes

to the FR Y-9C—the elimination of two

line items from Schedule HC-F.

The reporting changes, summarized in

this notice, will be effective for the FR

Y-9C and the FR Y-11Q with the March

31, 1995 reporting date and effective for

the FR Y-11I and the FR Y-11AS for the

December 31, 1995 reporting date. The

FR Y-9C and the FR Y-11Q reports

effective for March 31, 1995 reporting

date are due to be filed May 15, 1995

and May 30, 1995, respectively.

BACKGROUND: Under the Bank Holding

Company Act of 1956, as amended, the

Board is responsible for the supervision

and regulation of all bank holding

companies. The FR Y-9 and FR Y-11

series of reports historically have been,

and continue to be, the primary source

of financial information on bank

holding companies and their

nonbanking activities between on-site

inspections. Financial information, as

well as ratios developed from the Y

series reports, are used to detect

emerging financial problems, to review

performance for pre-inspection analysis,

to evaluate bank holding company
16474 Federal Register / Vol. 60, No. 61 / Thursday, March 30, 1995 / Notices

mergers and acquisitions, and to analyze

a holding company’s overall financial

condition and performance as part of

the Federal Reserve System’s overall

analytical effort.

FOR FURTHER INFORMATION CONTACT:

Federal Reserve Board Clearance

Officer—Mary M. McLaughlin—

Division of Research and Statistics,

Board of Governors of the Federal

Reserve System, Washington, D.C.

20551 (202-452-3829)

OMB Desk Officer—Milo Sunderhauf—

Office of Information and Regulatory

Affairs, Office of Management and

Budget, New Executive Office

Building, Room 3208, Washington,

D.C. 20503 (202-395-7340)

Final approval under OMB delegated

authority of the revision of the following

report:

1. Report title: Consolidated Financial

Statements for Bank Holding

Companies.

Agency form number: FR Y-9C.

OMB Docket number: 7100-0128.

Frequency: Quarterly.

Reporters: Bank Holding Companies.

Annual reporting hours: 172,720.

Estimated average hours per response:

Range from 5 to 1,250 hours.

Number of respondents: 1,346.

Small businesses are affected.

General description of report: This

information collection is mandatory (12

U.S.C. 1844(b) and (c)). Confidential

treatment is not routinely given to the

data in these reports. However,

confidential treatment for the reporting

information, in whole or in part, can be

requested in accordance with the

instructions to the form.

The Board’s Legal Division has also

determined that on the FR Y-9C,

Schedule HC-H, Column A, requiring

information on ‘‘assets past due 30

through 89 days and still accruing’’ and

memoranda item 2 are confidential

pursuant to Section (b)(8) of the

Freedom of Information Act (5 U.S.C.

552(b)(8)).

Abstract: The FR Y-9C consolidated

financial statements are currently filed

by top-tier bank holding companies

with total consolidated assets of $150

million or more and by lower-tier bank

holding companies that have total

consolidated assets of $1 billion or

more. In addition, all multibank bank

holding companies with debt

outstanding to the general public or

engaged in certain nonbank activities,

regardless of size, must file the FR Y-9C.

The report includes a balance sheet,

income statement, and statement of

changes in equity capital with

supporting schedules providing

information on securities, loans, riskbased capital, deposits, interest

sensitivity, average balances, off-balance

sheet activities, past due loans, and loan

charge-offs and recoveries.

The Board has approved the revisions

to the FR Y-9C following public

comment. Most of the new items are

required to maintain consistency with

comparable items recently incorporated

into the commercial bank Reports of

Condition and Income (Call Report) by

the Federal Financial Institutions

Examination Council (FFIEC).

Public Comments: Three bank holding

companies addressed the revisions to

the FR Y-9C. As previously discussed,

the proposed changes to this report keep

the reporting requirements consistent

with those changes being incorporated

in the ‘‘Call Report’’ to be filed by

commercial banks as of March 31, 1995.

In the past, bank holding companies

have commented that reporting burden

is minimized by keeping the changes in

the Call Report and the FR Y-9C

consistent and by implementing the

changes as of the same date.

In their comment letters, two bank

holding companies supported the

proposed changes to the report. Another

bank holding company commented that

the proposal expanded the information

collected and increased the reporting

burden and recommended generally that

the Board eliminate all requirements not

essential for the performance of the

Board’s supervisory responsibilities.

Specifically, the company

recommended that the Board eliminate

the proposed requirement for bank

holding companies to report gross

redemptions of mutual funds and

annuities. This item is one of several

items relating to the sale of mutual

funds by banking organizations added to

the report. The Call Report collects

some data, but does not collect the

amount of redemptions. The Board

believes that reporting the amount of

redemptions, in addition to the amount

of sales, is essential to measure the flow

of funds into these new products and,

accordingly, has approved the collection

of these data. The measurement of the

flow of funds is important in assessing

the growth of these products. The Board

also plans to propose to the FFIEC that

these data be collected on the Call

Report.

The commenter also recommended

that the Board delay implementation of

the changes until June 30, 1995. The

Board believes that the burden on the

majority of companies is lessened by

making the changes to the FR Y-9C at

the same time as the changes are

implemented in the Call Report and has

approved the changes for the FR Y-9C

as of the March 31, 1995, report. The

reports are due forty-five days after

March 31, 1995.

Following the review of the public

comments, the revisions to the FR Y-9C

approved by the Board include:

Schedule HC-A, Securities:

(1) Memoranda items to collect the

amortized cost and fair (market) value of

high-risk mortgage securities and

structured notes have been added.

(2) The reporting instructions for the

category labeled ‘‘mortgage-backed

securities’’ have been revised to ensure

that all such securities are reported. In

addition, the line items for

collateralized mortgage obligations

(CMOs) and real estate mortgage

investment conduits (REMICs) issued by

the Federal National Mortgage

Association (FNMA) and the Federal

Home Loan Mortgage Corporation

(FHLMC) have been modified to

explicitly include REMICs issued by

Government National Mortgage

Association (GNMA).

Schedule HC-F, Off-Balance Sheet

Items:

Part 2 of this schedule has been

revised to collect additional information

on derivative instruments, including

breakdowns of notional contract

amounts by instrument type, by risk

exposure underlying the contract, and

by whether the contract is traded on the

exchange or over the counter. In

addition, the total notional amount and

gross positive and gross negative fair

values of contracts held for trading

purposes and for purposes other than

trading have been included on the

schedule.

Schedule HI, Income Statement:

Memoranda items have been included

to collect trading revenue that reflects

the combined revenues from cash and

derivative instruments, with a

breakdown by underlying risk exposure,

and information on the effect on

earnings of derivatives held for

purposes other than trading.

Schedules HC-I and HC-J, Risk-Based

Capital:

(1) An item has been included to

collect the net credit exposure of all

derivative contracts taking into

consideration netting arrangements

permissible under the risk-based capital

standards.

(2) The risk-based capital ‘‘notional

principal value, maturity and

replacement cost matrix’’ for derivatives

has been expanded to include an

additional remaining maturity time

band and four additional categories of

derivative contracts (gold, other

precious metals, other commodity and

equity contracts).
Federal Register / Vol. 60, No. 61 / Thursday, March 30, 1995 / Notices 16475

Schedule HI-B, Charge-offs and

Recoveries and Changes in Allowance

for Loan and Lease Losses:

The reconciliation of the allocated

transfer risk reserve on Memoranda, Part

2, Column B has been deleted.

Schedule Of Trading Account Assets

and Liabilities:

A schedule for the reporting of trading

account assets and liabilities in a

manner consistent with the schedule

included in the Call Report has been

added to the report. This schedule is to

be completed by bank holding

companies with total consolidated

assets of $1 billion or more, or with $2

billion or more in par/notional amounts

of interest rate, foreign exchange rate

and other commodity and equity

contracts.

Mutual Funds and Annuities

Information:

Line items to collect quarterly gross

sales of mutual funds (by type of fund)

and annuities, including sales of

proprietary mutual funds and annuities,

and the fee income generated from the

sale and servicing of mutual funds and

annuities in domestic offices have been

added to the report. In addition, a line

item to collect the total amount of gross

redemptions of mutual funds and

annuities during the quarter has been

included.

Deletion of Line Items:

In addition to the above changes that

were addressed in the Federal Register

notice (59 FR 66540), the Board also has

approved two further changes to the FR

Y-9C—the elimination of two line items

from Schedule HC-F. These two items

are: Memorandum item 1, ‘‘Mortgages

sold with recourse that incur no capital

charge,’’ and Memorandum item 2,

‘‘Mortgages sold with recourse prior to

October 12, 1990.’’ The Board noted that

one item is no longer needed following

the revisions to the Capital Guidelines

required by the Riegle Community

Development and Regulatory

Improvement Act of 1994, and the

second item related to recourse is also

no longer necessary.

Final approval under OMB delegated

authority of the extension, with

revision, of the following reports:

1. Report title: Quarterly Financial

Statements of Nonbanking Subsidiaries

of Bank Holding Companies

Agency form number: FR Y-11Q.

OMB Docket number: 7100-0244.

Frequency: Quarterly.

Reporters: Bank Holding Companies.

Annual reporting hours: 6,696.

Estimated average hours per response:

Range from 3.0 to 8.0 hours.

Number of respondents: 270.

Small businesses are affected.

General description of report: This

information collection is mandatory (12

U.S.C. 1844(b) and (c) and 12 CFR

225.5(b). Confidential treatment is not

routinely given to the data in these

reports. However, confidential treatment

for the reporting information, in whole

or in part, can be requested in

accordance with the instructions to the

form.

Abstract: The Board has approved the

revision of the FR Y-11Q. As approved,

the FR Y-11Q will:

(1) Expand the report to collect more

detailed financial information,

comparable to items collected on the FR

Y-9C and

(2) Revise the reporting criteria for

bank holding companies with assets of

$150 million or more to collect

information on an individual basis from

each nonbank subsidiary viewed as

having a significant effect on the

condition of the bank holding company.

The revised comprehensive financial

statements include a balance sheet, offbalance sheet items, a memoranda

section, an income statement, and a

statement of changes in equity capital.

All bank holding companies with total

consolidated assets of $150 million or

more would file a report for each

individual nonbank subsidiary with

total assets equal to 5 percent or more

of the bank holding company’s

consolidated Tier 1 capital, or where the

subsidiary’s total operating revenue

equals 5 percent or more of the bank

holding company’s consolidated total

operating revenue.

Under the prior reporting

requirements, the Board collected freeform financial data from each nonbank

subsidiary on the FR Y-6, Annual

Report of Bank Holding Companies. In

addition, nonbank subsidiary data were

collected on three automated forms.

Large bank holding companies with

significant nonbanking assets submitted

the FR Y-11Q and the FR Y-11AS. The

prior FR Y-11Q was submitted quarterly

and collected data from all nonbank

subsidiaries on a combined basis. The

FR Y-11AS was submitted annually and

collected nonbank data on a combined

basis by the principal line of business of

the nonbank subsidiaries. The third

form, FR Y-11I, collected selected

financial data from all bank holding

companies on each of their nonbank

subsidiaries on an annual basis. Under

the proposal issued for public comment

and now given final approval by the

Board, the Board eliminated the

collection of free-form nonbank

financial data in the FR Y-6, Annual

Report of Bank Holding Companies, to

offset the increase in the burden of the

collection of automated data on the

revised FR Y-11Q and the revised FR Y11I. The Board gave final approval to

the deletion of the free-form nonbank

financial data in the FR Y-6 on February

7, 1995 (60 FR 12215). The Board also

proposed to delete the requirement to

submit the FR Y-11AS, and all

commenters favored the deletion of this

report. Thus, the Board has eliminated

the requirement for certain bank holding

companies to submit the FR Y-11AS.

Public Comments: Comments on the

proposed revisions to the reports

collecting data from nonbank

subsidiaries were received from four

bank holding companies. In addition to

those commenting on the FR Y-9C, one

commenter only commented on the FR

Y-11 series. This commenter supported

the proposed revisions and stated that

under the revised report that they would

only have to file a report for one

subsidiary on a quarterly basis rather

than providing quarterly data on all

subsidiaries on a combined basis.

Another commenter welcomed the

deletion of certain nonbanking data, but

stated their opposition to the increased

burden of the FR Y-11Q.

A third commenter proposed

increasing the materiality test for

completing the FR Y-11Q and suggested

several options. These include: nonbank

assets as a percentage of total

consolidated assets; investment in

nonbank subsidiaries as a percentage of

Tier 1 capital; or increasing the test of

nonbank assets as a percent of Tier 1

capital. The materiality test proposed

and adopted by the Board is based on

the criteria utilized by Federal Reserve

examination staff in determining those

nonbanking subsidiaries subject to onsite examinations. In general, this

materiality test is used to define those

material nonbanking subsidiaries that

can have a significant impact on the

financial condition of the bank holding

company.

The fourth commenter agreed that a

revision of the information reported by

nonbank subsidiaries is warranted, but

suggested that the reporting format

follow that of the FR 2314, Report of

Condition of Foreign Subsidiaries.

However, since the proposed format of

the FR Y-11Q and FR Y-11I is consistent

with the format of other bank holding

company reports and the Call Report

filed by commercial banks, the Board

approved the format as proposed. The

Board believes that conforming the

format to that of the Call Report and the

other holding company reports should

reduce the burden on most bank holding

companies. The commenter also

recommended that the criteria for

determining material nonbank

subsidiaries exclude intercompany

transactions. The Board believes that

intercompany transactions should be
16476 Federal Register / Vol. 60, No. 61 / Thursday, March 30, 1995 / Notices

included as these nonbank subsidiaries

serve as funding vehicles for other

credit extending nonbank subsidiaries

and pose liquidity risks to the bank

holding company. Finally, the

commenter recommended that the

proposed FR Y-11I be further

summarized. The revised format is

composed of significant asset and

liability accounts. Additional schedules

are required to be completed only if the

nonbank subsidiary is engaged in

extensions of credit. The Board believes

that the revised report represents the

minimum information that should be

collected from nonbank subsidiaries to

evaluate their financial position and to

monitor their potential impact on the

bank holding company.

2.Report title: Annual Financial

Statements for Nonbanking

Subsidiaries.

Agency form number: FR Y-11I.

OMB Docket number: 7100-0244.

Frequency: Annual.

Reporters: Bank Holding Companies.

Annual reporting hours: 13,216.

Estimated average hours per response:

Range from 0.4 to 8.0 hours.

Number of respondents: 4130.

Small businesses are affected.

General description of report: This

information collection is mandatory (12

U.S.C. 1844(b) and (c)) and 12 CFR

225.5(b). Confidential treatment is not

routinely given to the data in these

reports. However, confidential treatment

for the reporting information, in whole

or in part, can be requested in

accordance with the instructions to the

form.

Abstract and Public Comments: The

prior FR Y-11I report was filed by a toptier bank holding company for each of

its nonbank subsidiaries, whether

directly or indirectly owned. Combined

and consolidated reporting was

permitted in some instances. The report

consisted of ten summary financial

items and two items providing

consolidation information.

The Federal Reserve has approved the

following revisions to the FR Y-11I:

(1) Expand the report to collect more

detailed financial information,

comparable to items proposed for the FR

Y-11Q but with certain detail reported

only as summary items and

(2) Revise the reporting criteria to

collect information on an individual

basis annually from each nonbank

subsidiary not required to file the

proposed FR Y-11Q. The revised

financial statements will include a

balance sheet, income statement, offbalance sheet, and a statement on

changes in equity capital. The FR Y-11I

will also include a loan schedule to be

submitted only by respondents engaged

in credit extending activities. The

public comments are discussed under

the FR Y-11Q report.

Final approval under OMB delegated

authority of the elimination of the

following report:

1. Report title: Combined Financial

Statements of Nonbank Subsidiaries of

Holding Companies, by Type of

Nonbank Subsidiary.

Agency form number: FR Y-11AS.

OMB Docket number: 7100-0244.

Frequency: Annual.

Reporters: Bank Holding Companies.

Annual reporting hours: 1,680.

Estimated average hours per response:

Range from 1.0 to 17.0 hours.

Number of respondents: 271.

Small businesses are affected.

General description of report: This

information collection is mandatory (12

U.S.C. 1844(b) and (c) and 12 CFR

225.5(b). Confidential treatment is not

routinely given to the data in these

reports. However, confidential treatment

for the reporting information, in whole

or in part, can be requested in

accordance with the instructions to the

form.

Abstract: The FR Y-11AS was filed by

all bank holding companies meeting the

prior reporting criteria for the FR Y-11Q.

The report collected the same report

items as the FR Y-11Q by type of

nonbank activity and consists of a

balance sheet, income statement, and a

memoranda section. The Board has

eliminated this reporting requirement,

and all commenters supported this

action.

REGULATORY FLEXIBILITY ACT

ANALYSIS

The Board certifies that the above

bank holding company reporting

requirements are not expected to have a

significant economic impact on small

entities within the meaning of the

Regulatory Flexibility Act (5 U.S.C. 601

et seq.). The reporting requirements for

the small companies require

significantly fewer items of data to be

submitted than the amount of

information required of large bank

holding companies.

The information that is collected on

the reports is essential for the detection

of emerging financial problems, the

assessment of a holding company’s

financial condition and capital

adequacy, the performance of preinspection reviews, and the evaluation

of expansion activities through mergers

and acquisitions. The imposition of the

reporting requirements is essential for

the Board’s supervision of bank holding

companies under the Bank Holding

Company Act.

By order of the Board of Governors of the

Federal Reserve System, March 24, 1995.

Jennifer J. Johnson,

Deputy Secretary of the Board.

[FR Doc. 95–7796 Filed 3–29–95; 8:45AM]

Billing Code 6210–01–F

First Community Corporation, et al.;

Formations of; Acquisitions by; and

Mergers of Bank Holding Companies

The companies listed in this notice

have applied for the Board’s approval

under section 3 of the Bank Holding

Company Act (12 U.S.C. 1842) and §

225.14 of the Board’s Regulation Y (12

CFR 225.14) to become a bank holding

company or to acquire a bank or bank

holding company. The factors that are

considered in acting on the applications

are set forth in section 3(c) of the Act

(12 U.S.C. 1842(c)).

Each application is available for

immediate inspection at the Federal

Reserve Bank indicated. Once the

application has been accepted for

processing, it will also be available for

inspection at the offices of the Board of

Governors. Interested persons may

express their views in writing to the

Reserve Bank or to the offices of the

Board of Governors. Any comment on

an application that requests a hearing

must include a statement of why a

written presentation would not suffice

in lieu of a hearing, identifying

specifically any questions of fact that

are in dispute and summarizing the

evidence that would be presented at a

hearing.

Unless otherwise noted, comments

regarding each of these applications

must be received not later than April 24,

1995.

A. Federal Reserve Bank of

Richmond (Lloyd W. Bostian, Jr., Senior

Vice President) 701 East Byrd Street,

Richmond, Virginia 23261:

1. First Community Corporation,

Columbia, South Carolina; to become a

bank holding company by acquiring 100

percent of the voting shares of First

Community Bank, N.A., Lexington,

South Carolina (in organization).

B. Federal Reserve Bank of Chicago

(James A. Bluemle, Vice President) 230

South LaSalle Street, Chicago, Illinois

60690:

1. Suburban Illinois Bancorp, Inc.,

Elmhurst, Illinois; to become a bank

holding company by acquiring 100

percent of the voting shares of Suburban

Bank of Elmhurst, Elmhurst, Illinois.

C. Federal Reserve Bank of St. Louis

(Randall C. Sumner, Vice President) 411

Locust Street, St. Louis, Missouri 63166:

1. Mountain View Bancshares, Inc.,

Mountain View, Arkansas; to become a