6506 Federal Register / Vol. 73, No. 23 / Monday, February 4, 2008 / Notices 

satellite carrier failed to comply with its 

obligations. 

The satellite carrier shall, within 30 

days of such written notification, 

respond in writing to such notification 

and comply with such obligations or 

state its reasons for believing that it is 

in compliance. A local station that 

disputes a satellite carrier’s response 

may obtain review of such response by 

filing a compliant with the Commission 

in accordance with 47 CFR 76.7 of the 

rules. 

OMB Control Number: 3060–1105. 

Title: Digital TV Transition Status 

Report. 

Form Number: FCC Form 387. 

Type of Review: Revision of a 

currently approved collection. 

Respondents: Business or other forprofit entities; not-for-profit institutions. 

Number of Respondents: 1,812. 

Frequency of Response: On occasion 

reporting requirement. 

Estimated Time per Response: 2 

hours. 

Total Annual Burden: 3,624 hours. 

Total Annual Costs: $1,268,400. 

Nature of Response: Required to 

obtain or retain benefits. 

Confidentiality: No need for 

confidentiality required. 

Privacy Impact Assessment: No 

impact(s). 

Needs and Uses: Congress has 

mandated that after February 17, 2009, 

full-power television broadcast stations 

must transmit only in digital signals, 

and may no longer transmit analog 

signals. On December 22, 2007, the 

Commission adopted a Report and 

Order, In the Matter of the Third 

Periodic Review of the Commission’s 

Rules and Policies Affecting the 

Conversion to Digital Television, MB 

Docket No. 07–91, FCC 07–228, to 

establish the rules, policies and 

procedures necessary to complete the 

nation’s transition to Digital TV (DTV). 

With the DTV transition deadline less 

than 14 months away, the Commission 

must ensure that broadcasters meet their 

statutory responsibilities and complete 

construction of, and begin operations 

on, the facility on their final, posttransition (digital) channel that will 

reach viewers in their authorized 

service areas by the statutory transition 

deadline, when they must cease 

broadcasting in analog. 

The Commission wants to ensure that 

no consumers are left behind in the DTV 

transition. 

This Report and Order requires all 

full-power television stations to file a 

DTV Transition Status Report using FCC 

Form 387 on or before February 19, 

2008. In addition, stations must update 

these forms as events warrant and, by 

October 20, 2008, if they have not by 

that date reported the completion of 

their transition, i.e., that they have 

begun operating their full facility as 

authorized by the post-transition DTV 

Table Appendix B. Stations must 

provide the specific details of their 

current transition status, any additional 

steps necessary for digital-only 

operation upon expiration of the 

February 17, 2009 transition deadline, 

and a timeline for making those steps. 

Federal Communications Commission. 

Marlene H. Dortch, 

Secretary. 

[FR Doc. E8–1978 Filed 2–1–08; 8:45 am] 

BILLING CODE 6712–01–P 

DEPARTMENT OF THE TREASURY 

Office of the Comptroller of the 

Currency 

FEDERAL RESERVE SYSTEM 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

DEPARTMENT OF THE TREASURY 

Office of Thrift Supervision 

Agency Information Collection 

Activities: Submission for OMB 

Review; Joint Comment Request 

AGENCIES: Office of the Comptroller of 

the Currency (OCC), Treasury; Board of 

Governors of the Federal Reserve 

System (Board); Federal Deposit 

Insurance Corporation (FDIC); and 

Office of Thrift Supervision (OTS), 

Treasury. 

ACTION: Notice of information 

collections to be submitted to OMB for 

review and approval under the 

Paperwork Reduction Act. 

SUMMARY: In accordance with the 

requirements of the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

chapter 35), the OCC, the Board, the 

FDIC, and the OTS (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. On September 11, 2007, the 

agencies, under the auspices of the 

Federal Financial Institutions 

Examination Council (FFIEC), requested 

public comment for 60 days on a 

proposal to extend, with revision, the 

Consolidated Reports of Condition and 

Income (Call Report) for banks and the 

Thrift Financial Report (TFR) for 

savings associations, which are 

currently approved collections of 

information that are collected quarterly. 

After considering the comments, the 

FFIEC and the agencies have modified 

some of the proposed changes, which 

will be implemented March 31, 2008, as 

proposed, but with the reporting of 

certain proposed new items optional for 

this initial report date. 

DATES: Comments must be submitted on 

or before March 5, 2008. 

ADDRESSES: Interested parties are 

invited to submit written comments to 

any or all of the agencies. All comments, 

which should refer to the OMB control 

number(s), will be shared among the 

agencies. 

OCC: Communications Division, 

Office of the Comptroller of the 

Currency, Public Information Room, 

Mailstop 1–5, Attention: 1557–0081, 

250 E Street, SW., Washington, DC 

20219. In addition, comments may be 

sent by fax to (202) 874–4448, or by 

electronic mail to 

regs.comments@occ.treas.gov. You can 

inspect and photocopy the comments at 

the OCC’s Public Information Room, 250 

E Street, SW., Washington, DC 20219. 

You can make an appointment to 

inspect the comments by calling (202) 

874–5043. 

Board: You may submit comments, 

which should refer to ‘‘Consolidated 

Reports of Condition and Income, 7100–

0036,’’ by any of the following methods: 

• Agency Web Site: http:// 

www.federalreserve.gov. Follow the 

instructions for submitting comments 

on the http://www.federalreserve.gov/ 

generalinfo/foia/ProposedRegs.cfm. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail: 

regs.comments@federalreserve.gov. 

Include docket number in the subject 

line of the message. 

• Fax: 202–452–3819 or 202–452–

3102. 

• Mail: Jennifer J. Johnson, Secretary, 

Board of Governors of the Federal 

Reserve System, 20th Street and 

Constitution Avenue, NW., Washington, 

DC 20551. 

All public comments are available 

from the Board’s Web site at http:// 

www.federalreserve.gov/generalinfo/ 

foia/ProposedRegs.cfm as submitted, 

unless modified for technical reasons. 

Accordingly, your comments will not be 

edited to remove any identifying or 

contact information. Public comments 

may also be viewed electronically or in 

paper in Room MP–500 of the Board’s 

Martin Building (20th and C Streets, 

NW.) between 9 a.m. and 5 p.m. on 

weekdays. 


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Federal Register / Vol. 73, No. 23 / Monday, February 4, 2008 / Notices 6507 

FDIC: You may submit comments, 

which should refer to ‘‘Consolidated 

Reports of Condition and Income, 3064–

0052,’’ by any of the following methods: 

• http://www.FDIC.gov/regulations/ 

laws/federal/notices.html. 

• E-mail: comments@FDIC.gov. 

Include ‘‘Consolidated Reports of 

Condition and Income, 3064–0052’’ in 

the subject line of the message. 

• Mail: Valerie J. Best (202–898–

3812), Supervisory Counsel, Attn: 

Comments, Room F–1070, Federal 

Deposit Insurance Corporation, 550 17th 

Street, NW., Washington, DC 20429. 

• Hand Delivery: Comments may be 

hand delivered to the guard station at 

the rear of the 550 17th Street Building 

(located on F Street) on business days 

between 7 a.m. and 5 p.m. 

Public Inspection: All comments 

received will be posted without change 

to http://www.fdic.gov/regulations/laws/ 

federal/notices.html including any 

personal information provided. 

Comments may be inspected at the FDIC 

Public Information Center, Room E–

1002, 3501 Fairfax Drive, Arlington, VA 

22226, between 9 a.m. and 5 p.m. on 

business days. 

OTS: You may submit comments, 

identified by ‘‘1550–0023 (TFR: March 

2008 Revisions),’’ by any of the 

following methods: 

• E-mail address: 

infocollection.comments@ots.treas.gov. 

Please include ‘‘1550–0023 (TFR: March 

2008 Revisions)’’ in the subject line of 

the message and include your name and 

telephone number in the message. 

• Fax: (202) 906–6518. 

• Mail: Information Collection 

Comments, Chief Counsel’s Office, 

Office of Thrift Supervision, 1700 G 

Street, NW., Washington, DC 20552, 

Attention: ‘‘1550–0023 (TFR: March 

2008 Revisions).’’

• Hand Delivery/Courier: Guard’s 

Desk, East Lobby Entrance, 1700 G 

Street, NW., from 9 a.m. to 4 p.m. on 

business days, Attention: Information 

Collection Comments, Chief Counsel’s 

Office, Attention: ‘‘1550–0023 (TFR: 

March 2008 Revisions).’’

Instructions: All submissions received 

must include the agency name and OMB 

Control Number for this information 

collection. All comments received will 

be posted without change to the OTS 

Internet Site at http://www.ots.treas.gov/ 

pagehtml.cfm?catNumber=67&an=1, 

including any personal information 

provided. 

Docket: For access to the docket to 

read background documents or 

comments received, go to http:// 

www.ots.treas.gov/ 

pagehtml.cfm?catNumber=67&an=1. In 

addition, you may inspect comments at 

the Public Reading Room, 1700 G Street, 

NW., by appointment. To make an 

appointment for access, call (202) 906–

5922, send an e-mail to 

public.info@ots.treas.gov, or send a 

facsimile transmission to (202) 906–

7755. (Prior notice identifying the 

materials you will be requesting will 

assist us in serving you.) We schedule 

appointments on business days between 

10 a.m. and 4 p.m. In most cases, 

appointments will be available the next 

business day following the date we 

receive a request. 

Additionally, commenters may send a 

copy of their comments to the OMB 

desk officer for the agencies by mail to 

the Office of Information and Regulatory 

Affairs, U.S. Office of Management and 

Budget, New Executive Office Building, 

Room 10235, 725 17th Street, NW., 

Washington, DC 20503, or by fax to 

(202) 395–6974. 

FOR FURTHER INFORMATION CONTACT: For 

further information about the revisions 

discussed in this notice, please contact 

any of the agency clearance officers 

whose names appear below. In addition, 

copies of the Call Report forms can be 

obtained at the FFIEC’s Web site 

(http://www.ffiec.gov/ 

ffiec_report_forms.htm). Copies of the 

TFR can be obtained from the OTS’s 

Web site (http://www.ots.treas.gov/ 

main.cfm?catNumber=2&catParent=0). 

OCC: Mary Gottlieb, OCC Clearance 

Officer, (202) 874–5090, Legislative and 

Regulatory Activities Division, Office of 

the Comptroller of the Currency, 250 E 

Street, SW., Washington, DC 20219. 

Board: Michelle E. Shore, Federal 

Reserve Board Clearance Officer, (202) 

452–3829, Division of Research and 

Statistics, Board of Governors of the 

Federal Reserve System, 20th and C 

Streets, NW., Washington, DC 20551. 

Telecommunications Device for the Deaf 

(TDD) users may call (202) 263–4869. 

FDIC: Valerie J. Best, Supervisory 

Counsel, (202) 898–3812, Legal 

Division, Federal Deposit Insurance 

Corporation, 550 17th Street, NW., 

Washington, DC 20429. 

OTS: Ira L. Mills, OTS Clearance 

Officer, at Ira.Mills@ots.treas.gov, (202) 

906–6531, or facsimile number (202) 

906–6518, Litigation Division, Chief 

Counsel’s Office, Office of Thrift 

Supervision, 1700 G Street, NW., 

Washington, DC 20552. 

SUPPLEMENTARY INFORMATION: The 

agencies are requesting OMB approval 

to revise and extend for three years the 

Call Report and the TFR, which are 

currently approved collections of 

information. 

1. Report Title: Consolidated Reports 

of Condition and Income (Call Report). 

Form Number: Call Report: FFIEC 031 

(for banks with domestic and foreign 

offices) and FFIEC 041 (for banks with 

domestic offices only). 

Frequency of Response: Quarterly. 

Affected Public: Business or other forprofit. 

OCC: 

OMB Number: 1557–0081. 

Estimated Number of Respondents: 

1,750 national banks. 

Estimated Time per Response: 45.42 

burden hours. 

Estimated Total Annual Burden: 

317,967 burden hours. 

Board 

OMB Number: 7100–0036. 

Estimated Number of Respondents: 

885 state member banks. 

Estimated Time per Response: 52.07 

burden hours. 

Estimated Total Annual Burden: 

184,328 burden hours. 

FDIC 

OMB Number: 3064–0052. 

Estimated Number of Respondents: 

5,199 insured state nonmember banks. 

Estimated Time per Response: 36.16 

burden hours. 

Estimated Total Annual Burden: 

751,983 burden hours. 

The estimated time per response for 

the Call Report is an average that varies 

by agency because of differences in the 

composition of the institutions under 

each agency’s supervision (e.g., size 

distribution of institutions, types of 

activities in which they are engaged, 

and existence of foreign offices). The 

average reporting burden for the Call 

Report is estimated to range from 16 to 

635 hours per quarter, depending on an 

individual institution’s circumstances. 

2. Report Title: Thrift Financial 

Report (TFR). 

Form Number: OTS 1313 (for savings 

associations). 

Frequency of Response: Quarterly. 

Affected Public: Business or other forprofit. 

OTS 

OMB Number: 1550–0023. 

Estimated Number of Respondents: 

838 savings associations. 

Estimated Time per Response: 36.50 

burden hours. 

Estimated Total Annual Burden: 

193,881 burden hours. 

General Description of Reports 

These information collections are 

mandatory: 12 U.S.C. 161 (for national 

banks), 12 U.S.C. 324 (for state member 

banks), 12 U.S.C. 1817 (for insured state 

nonmember commercial and savings 


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6508 Federal Register / Vol. 73, No. 23 / Monday, February 4, 2008 / Notices 

banks), and 12 U.S.C. 1464 (for savings 

associations). Except for selected data 

items, these information collections are 

not given confidential treatment. 

Abstract 

Institutions submit Call Report and 

TFR 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 and 

TFR data provide the most current 

statistical data available for evaluating 

institutions’ corporate applications, for 

identifying areas of focus for both onsite and off-site examinations, and for 

monetary and other public policy 

purposes. The agencies use Call Report 

and TFR data in evaluating interstate 

merger and acquisition applications to 

determine, as required by law, whether 

the resulting institution would control 

more than ten percent of the total 

amount of deposits of insured 

depository institutions in the United 

States. Call Report and TFR data are also 

used to calculate all institutions’ deposit 

insurance and Financing Corporation 

assessments, national banks’

semiannual assessment fees, and the 

OTS’s assessments on savings 

associations. 

Current Actions 

I. Overview 

On September 11, 2007, the agencies 

requested comment on proposed 

revisions to the Call Report and the TFR 

(72 FR 51814). All four agencies 

proposed to revise the Call Report and 

TFR instructions for reporting daily 

average deposit data by newly insured 

institutions for deposit insurance 

assessment purposes to conform the 

instructions with the FDIC’s assessment 

regulations (12 CFR Part 327). 

In the same Federal Register notice, 

the OCC, the Board, and the FDIC (the 

banking agencies) also proposed to 

implement a number of other changes to 

the Call Report requirements. These Call 

Report changes included several related 

to 1–4 family residential mortgage loans 

such as separately reporting interest and 

fee income and quarterly averages for 1–

4 family residential mortgages and all 

other real estate loans and adding new 

items for restructured troubled 

mortgages and mortgage loans in 

process of foreclosure. The banking 

agencies proposed to expand Call 

Report Schedule RC-P on closed-end 1–

4 family residential mortgage banking 

activities, which is completed by larger 

banks and smaller banks with a 

significant level of such activities, to 

include originations, purchases, and 

sales of open-end mortgages as well as 

closed-end and open-end mortgage loan 

repurchases and indemnifications 

during the quarter. The Call Report’s 

trading account definition was proposed 

to be modified in response to the 

creation of a fair value option in 

generally accepted accounting 

principles (GAAP). Revisions were 

proposed to Call Report Schedule RC-Q, 

which collects data on fair value 

measurements for trading assets and 

liabilities and other assets and liabilities 

accounted for under a fair value option, 

and certain other schedules, including 

the loan schedule (Schedule RC-C), to 

enhance the information available on 

instruments accounted for under this 

option. Other revisions were also 

proposed to be made to the schedule on 

trading assets and liabilities (Schedule 

RC-D). The banking agencies also 

proposed to clarify the Call Report 

instructions for reporting credit 

derivative data in the risk-based capital 

schedule (Schedule RC-R) and to make 

a corresponding change to the schedule 

itself; to change the threshold for 

reporting significant items of other 

noninterest income and expense in the 

explanations schedule (Schedule RI-E); 

and to conform the instructions for 

reporting fully insured brokered 

deposits in Schedule RC-E, Deposit 

Liabilities, to the instructions for 

reporting time deposits in this schedule. 

Finally, the banking agencies requested 

comment on a plan to discontinue the 

mailing of paper Call Report forms and 

instructions to banks. 

The revisions to the Call Report and 

the TFR set forth herein, which were 

approved for publication by the FFIEC, 

were proposed to take effect as of March 

31, 2008. After considering the 

comments received on the proposal, the 

proposed revision to the Call Report and 

TFR instructions for reporting daily 

average deposit data by newly insured 

institutions for deposit insurance 

assessment purposes would be 

implemented March 31, 2008, as 

proposed. With respect to the remaining 

proposed revisions, which apply only to 

the Call Report, the banking agencies 

approved certain modifications to them 

to address concerns expressed by 

commenters. The banking agencies will 

move forward with the modified 

reporting changes on March 31, 2008, 

although the reporting of certain 

proposed new items will be optional for 

this initial report date and will be 

required beginning June 30, 2008. For 

the March 31, 2008, report date, 

institutions may provide reasonable 

estimates for any new or revised Call 

Report item required to be reported as 

of that date for which the requested 

information is not readily available. For 

the new Call Report items that are 

optional as of the March 31, 2008, report 

date, this same policy on the use of 

reasonable estimates will apply to these 

new items as of the June 30, 2008, report 

date. 

The agencies collectively received 

comments from nine respondents: seven 

banking organizations, one bankers’

organization, and a government agency. 

None of the commenters addressed all 

of the aspects of the proposal. Rather, 

individual respondents addressed 

certain specific proposed changes. No 

comments were received on the 

instructional change for reporting daily 

average deposit data by newly insured 

institutions (the only proposed revision 

that also applied to the TFR), the 

proposed new items for restructured 

troubled 1–4 family residential 

mortgages and for the fair value and 

unpaid principal balance by loan 

category of loans held for sale or 

investment that are measured at fair 

value, the revised reporting threshold 

for the trading assets and liabilities 

schedule, the revisions to the regulatory 

capital schedule and instructions for 

credit derivatives, the conformity 

changes for brokered deposits within 

the deposits schedule, and the proposed 

discontinuance of mailing Call Report 

forms and instructions. In contrast, the 

three banking organizations that 

commented on the proposed 

modification of the Call Report’s trading 

account definition all expressed support 

for this definitional change. Thus, all of 

the revisions discussed in this 

paragraph will be implemented as 

proposed. 

With respect to the other proposed 

revisions to the Call Report, some 

commenters recommended that certain 

changes be phased in rather than being 

implemented as of March 31, 2008, 

because the information was not readily 

available in a form that would facilitate 

reporting in proposed new data items. 

Some commenters also requested 

clarifications of terminology used to 

describe certain proposed items or the 

amounts to be reported in these items. 

One commenter opposed the proposed 

collection of a two-way breakdown of 

the difference between the fair value 

and the unpaid principal balance of 

loans measured at fair value under a fair 

value option, which would disclose the 

portion attributable to changes in credit 

risk since origination and the portion 

attributable to all other factors. Another 

commenter supported proposed changes 

to the Call Report schedule on fair value 

measurements, but recommended that 

the schedule’s focus on disclosures 


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Federal Register / Vol. 73, No. 23 / Monday, February 4, 2008 / Notices 6509 

about such measurements for 

instruments to which a fair value option 

has been applied be broadened to cover 

all instruments measured at fair value. 

One commenter suggested the addition 

of a de minimis dollar amount to the 

proposed percentage threshold for 

disclosures of components of other 

noninterest income and expense. 

Finally, the proposal contained a 

footnote indicating that the banking 

agencies are considering a separate 

proposal to incorporate the FDIC’s 

Summary of Deposits report into the 

Call Report, a proposed change about 

which two commenters voiced 

concerns. This separate proposal 

remains under consideration and would 

be subject to notice and comment before 

it could be implemented. 

The banking agencies’ responses to 

the comments received and a discussion 

of the related Call Report revisions are 

presented below. 

II. Discussion of Revisions 

A. Reporting of Data for Deposit 

Insurance Assessments in the Call 

Report and TFR by Newly Insured 

Institutions 

On March 31, 2007, the banking 

agencies and the OTS introduced a 

revision and reduction in the overall 

reporting requirements related to 

deposit insurance assessments in Call 

Report Schedule RC–O and TFR 

Schedule DI, respectively, that was 

intended to simplify regulatory 

reporting. As part of these revised 

overall reporting requirements, the 

agencies provided an interim period 

covering the March 31, 2007, through 

December 31, 2007, report dates during 

which each institution had the option to 

submit its Call Reports or TFRs using 

either the current or revised formats for 

reporting the data used to measure their 

assessment base. The revised reporting 

format will take effect for all institutions 

on March 31, 2008, at which time the 

current reporting format will be 

eliminated. 

The instructions issued in March 

2007 for the revised reporting format 

state that an institution that becomes 

newly insured on or after April 1, 2008, 

would be required to report daily 

average balances beginning in the first 

quarterly Call Report or TFR that it files. 

However, these instructions do not 

conform to the language in Section 

327.5(a)(1) of the FDIC’s assessment 

regulations (12 CFR 327.5(a)(1)) with 

respect to their treatment of institutions 

that become insured between April 1, 

2007, and March 31, 2008. Therefore, 

the agencies proposed to revise the 

instructions to Call Report Schedule 

RC–O and TFR Schedule DI to require 

an institution that becomes insured after 

March 31, 2007, but on or before March 

31, 2008, to begin reporting daily 

average balances in its Call Report or 

TFR for the March 31, 2008, report date. 

The agencies received no comments on 

this proposed reporting revision, which 

will be implemented as proposed. 

B. Call Report Revisions Related to 1–4 

Family Residential Mortgage Loans 

Since year-end 2000, commercial 

bank holdings of 1–4 family residential 

mortgage loans in domestic offices have 

increased nearly 108 percent to more 

than $1.9 trillion. Nearly 98 percent of 

all banks hold such mortgages. 1–4 

family residential mortgages now 

represent the single largest category of 

loans held by commercial banks, 

surpassing commercial and industrial 

loans as the largest category in 2002. As 

a percentage of total loans and leases at 

commercial banks, 1–4 family 

residential mortgages have grown from 

24 percent at year-end 2000 to 32 

percent at year-end 2006. Similarly, 1–

4 family residential mortgages have 

increased from less than 15 percent of 

total assets to nearly 19 percent of total 

assets during this period. During the 

first quarter of 2007, bank originations 

and purchases of closed-end 1–4 family 

residential mortgages for resale 

exceeded $287 billion. 

The use of nontraditional residential 

mortgage products has grown and the 

number of banks that have offered such 

products has increased. Also, the 

volume of 1–4 family residential 

mortgage loans extended to subprime 

borrowers has increased. At the same 

time, home prices have stagnated or 

declined in many areas of the country. 

Foreclosure rates have substantially 

increased along with an increase in 

restructured loans. The higher 

concentration of 1–4 family residential 

mortgages across the industry and the 

changing risk profile of the loans with 

which banks are associated in some 

capacity has led the banking agencies to 

evaluate the information they collect 

about such loans in the Call Report. 

Therefore, the banking agencies will 

proceed with their proposed Call Report 

changes that are intended to enhance 

the ability to monitor the nature and 

extent of banks’ involvement with 1–4 

family residential mortgage loans as 

originators, holders, sellers, and 

servicers of such loans. Commenters 

requested a six-month reporting delay 

on some of the new items and asked the 

banking agencies to clarify for reporting 

purposes what principal amount funded 

means when reporting on open-end 

mortgages. The banking agencies 

considered these suggestions and made 

a number of changes in response. 

1. Interest and Fee Income and 

Quarterly Average 

Currently, banks report the total 

amount of interest and fee income on 

their ‘‘Loans secured by real estate’’ (in 

domestic offices) in the Call Report 

income statement (Schedule RI, item 

1.a.(1)(a) on the FFIEC 031 and item 

1.a.(1) on the FFIEC 041) and the 

quarterly average for these loans (in 

domestic offices) in the quarterly 

averages schedule (Schedule RC–K, item 

6.a.(2) on the FFIEC 031 and item 6.b on 

the FFIEC 041). The banking agencies 

proposed to split these existing income 

statement and quarterly average items 

into separate items for the interest and 

fee income on and the quarterly 

averages of ‘‘Loans secured by 1–4 

family residential properties’’ and ‘‘All 

other loans secured by real estate.’’

One banking organization commented 

on these additions to the Call Report. 

This bank noted that these additions 

would require changes to its loan 

processing and accounting systems, 

which will affect loan personnel, but 

that it is possible to implement these 

changes. The banking agencies will 

proceed to add these items to the Call 

Report as proposed. 

2. Restructured Mortgages 

Banks currently report information on 

the amount of loans whose terms have 

been modified, because of the 

borrower’s financial difficulties, to 

provide for a reduction of either interest 

or principal. When such restructured 

loans are past due 30 days or more or 

are in nonaccrual status in relation to 

their modified terms as of the report 

date, they are reported in Schedule RC–

N, Memorandum item 1. In contrast, 

when such restructured loans are less 

than 30 days past due and are not 

otherwise in nonaccrual status, that is, 

when they are deemed to be in 

compliance with their modified terms as 

discussed in the Call Report 

instructions, banks report the amount of 

these loans in the Call Report loan 

schedule (Schedule RC–C, part I, 

Memorandum item 1). However, the 

instructions advise banks to exclude 

restructured loans secured by 1–4 

family residential properties from these 

Memorandum items. 

This exclusion was incorporated into 

the Call Report instructions because the 

original disclosure requirements for 

troubled debt restructurings under 

GAAP provided that creditors need not 

disclose information on restructured 

real estate loans secured by 1–4 family 


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6510 Federal Register / Vol. 73, No. 23 / Monday, February 4, 2008 / Notices 

1See Financial Accounting Standards Board 

Statement No. 15, Accounting by Debtors and 

Creditors for Troubled Debt Restructurings, footnote 

25. 

2 2 See Financial Accounting Standards Board 

Statement No. 114, Accounting by Creditors for 

Impairment of a Loan, paragraph 22(f). 

3For banks that participate in the Mortgage 

Bankers Association’s (MBA) National Delinquency 

Survey, the time at which mortgage loans would 

become reportable as being in process of foreclosure 

for Call Report purposes would be the same time 

at which mortgage loans become reportable as being 

in ‘‘foreclosure inventory’’ for MBA survey 

purposes (although the dollar amount of such loans 

would be reported in the Call Report while the 

number of such loans are reported for MBA survey 

purposes). 

residential properties.1 However, this 

exemption from disclosure under GAAP 

has since been eliminated.2

Accordingly, the banking agencies 

proposed to add a new Memorandum 

item to Schedule RC–C, part I, for 

‘‘Loans secured by 1–4 family 

residential properties (in domestic 

offices)’’ that have been restructured 

and are in compliance with their 

modified terms and a new 

Memorandum item to Schedule RC–N 

for restructured ‘‘Loans secured by 1–4 

family residential properties (in 

domestic offices)’’ that under their 

modified terms are past due 30 days or 

more or in nonaccrual status. 

No public comments were received on 

these additions to the Call Report. The 

banking agencies will proceed to add 

these items to the Call Report as 

proposed. 

3. Mortgages in Foreclosure 

The banking agencies currently 

collect data on the amount of loans 

secured by 1–4 family residential 

properties that are past due 30 days or 

more or are in nonaccrual status 

(Schedule RC–N, item 1.c) and on the 

amount of foreclosed 1–4 family 

residential properties held by the bank 

(Schedule RC–M, item 3.b.(3)). 

However, regardless of whether the 

bank owns the loans or services the 

loans for others, banks do not report the 

volume of 1–4 family residential 

mortgage loans that are in process of 

foreclosure, an indicator of potential 

additions to the bank’s ‘‘other real estate 

owned’’ in the near term. 

The banking agencies proposed to add 

two new Memorandum items for the 

amount of 1–4 family residential 

mortgage loans owned by the bank and 

serviced by the bank that are in 

foreclosure as of the quarter-end report 

date. Mortgage loans in foreclosure 

would be those for which the legal 

process of foreclosure has been 

initiated, but for which the foreclosure 

process has not yet been resolved at 

quarter-end.3 These Memorandum items 

would be added to the Call Report loan 

schedule (Schedule RC–C, part I) and 

the servicing, securitization, and asset 

sale activities schedule (Schedule RC–

S), with the carrying amount (before any 

applicable allowance for loan and leases 

losses) reported in the former 

Memorandum item and the outstanding 

principal amount reported in the latter 

Memorandum item. Reporting mortgage 

loans as being in process of foreclosure 

will not exempt those loans owned by 

the bank from being reported as past 

due or nonaccrual, as appropriate, in 

Call Report Schedule RC–N, and will 

not exempt those loans serviced by the 

bank that are reported in Schedule RC–

S, item 1, from being reported as past 

due, as appropriate, in that schedule. 

The bankers’ organization provided 

comments on these proposed items and 

three banking organizations supported 

their comments. The commenters did 

not object to reporting these items but 

requested that the data collection be 

delayed six months because the data are 

not currently readily available. The 

banking agencies elected to go forward 

with collecting the new data items as 

proposed because of the substantial 

increase in the number of foreclosures 

reported by the industry and the 

potentially higher number of 

foreclosures in the next couple of years. 

Given current conditions in the 

residential mortgage market, the 

agencies have a strong supervisory 

interest in being able to evaluate 

foreclosure data and obtain data needed 

as the starting point for trend analyses 

at the earliest possible date. As with all 

new Call Report items, banks may report 

reasonable estimates for the amounts of 

loans in foreclosure for the first 

reporting period (March 31, 2008) using 

the best information available. 

4. Open-end 1–4 Family Residential 

Mortgage Banking Activities 

Banks with $1 billion or more in total 

assets and smaller banks that meet 

certain criteria currently provide data 

on originations, purchases, and sales of 

closed-end 1–4 family residential 

mortgage loans during the quarter 

arising from their mortgage banking 

activities in domestic offices in Call 

Report Schedule RC–P. These banks 

also report the amount of closed-end 1–

4 family residential mortgage loans held 

for sale at quarter-end as well as the 

noninterest income for the quarter from 

the sale, securitization, and servicing of 

these mortgage loans. Data (other than 

for noninterest income) is provided 

separately for first lien and junior lien 

mortgages in Schedule RC–P. About 650 

banks complete Schedule RC–P, less 

than 300 of which have total assets of 

less than $1 billion. However, this 

information does not provide a 

complete picture of banks’ mortgage 

banking activities since it excludes 

open-end 1–4 family residential 

mortgages extended under lines of 

credit. From year-end 2001 to year-end 

2006, bank holdings of 1–4 family 

residential mortgage loans extended 

under lines of credit more than tripled 

to nearly $470 billion. Accordingly, the 

banking agencies proposed to expand 

the scope of Schedule RC–P to include 

separate items for originations, 

purchases, and sales of open-end 1–4 

family residential mortgages during the 

quarter; the amount of such mortgages 

held for sale at quarter-end; and 

noninterest income for the quarter from 

the sale, securitization, and servicing of 

open-end residential mortgages. When 

reporting the originations, purchases, 

sales, and mortgages held for sale, banks 

would report both the total commitment 

under the line of credit and the 

principal amount funded under the line. 

For banks with less than $1 billion in 

total assets, the criteria used to 

determine whether Schedule RC–P must 

be completed would be modified to 

include both closed-end and open-end 

1–4 family residential mortgage banking 

activities. 

One banking organization and the 

bankers’ organization provided 

comments on these proposed revisions 

and three other banking organizations 

supported the latter’s comments. The 

bankers’ organization did not object to 

reporting the new items but requested 

that the data collection be delayed six 

months because of the time needed to 

identify and capture the unused 

commitment amounts and outstanding 

principal balances. The banking 

agencies agreed not to require the new 

open-end mortgage data to be reported 

until the June 30, 2008, Call Report, 

with reporting of these data optional in 

the March 31, 2008, Call Report, if the 

information is available. 

The banking organization encouraged 

the banking agencies to clearly define 

the terms ‘‘total commitment under the 

lines of credit’’ and the ‘‘principal 

amount funded under the lines of 

credit’’ as they relate to originations of 

open-end 1–4 family residential 

mortgages during the quarter because 

different interpretations could result in 

the absence of clear instructions. The 

organization recommended that ‘‘total 

commitment’’ be defined as the initial 

committed balance made to customers 

on newly established open-end lines of 

credit and ‘‘principal amount funded’’

be defined as initial fundings made to 

customers on newly established lines. 

The banking agencies agree on the 


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necessity for clear definitions of these 

terms. Thus, the instructions for 

reporting the ‘‘total commitment’’

would define it as the total amount of 

the lines of credit granted to customers 

at the time the open-end credits were 

originated, which is consistent with the 

banking organization’s 

recommendation. For retail and 

wholesale originations of such open-end 

loans, the instructions would define 

‘‘principal amount funded’’ as the initial 

fundings made to customers on newly 

established lines of credit. In addition, 

for open-end loans purchased, sold, 

held for sale, and (as discussed in the 

following section) repurchased or 

indemnified, the ‘‘principal amount 

funded’’ would be defined as the 

principal balance outstanding of loans 

extended under lines of credit at the 

transaction date or at quarter-end, as 

appropriate. 

5. Mortgage Repurchases and 

Indemnifications 

As a result of its 1–4 family 

residential mortgage banking activities, 

a bank may be obligated to repurchase 

mortgage loans that it has sold or 

otherwise indemnify the loan purchaser 

against loss because of borrower 

defaults, loan defects, other breaches of 

representations and warranties, or for 

other reasons, thereby exposing the 

bank to additional risk. Such 

information is not currently captured in 

Call Report Schedule RC–P. Therefore, 

the banking agencies proposed to add 

four new items to Schedule RC–P to 

collect data on mortgage loan 

repurchases and indemnifications 

during the quarter. For both closed-end 

first lien and closed-end junior lien 1–

4 family residential mortgages, banks 

would report the outstanding principal 

amount of mortgages repurchased or 

indemnified as of the date of repurchase 

or indemnification. For open-end 1–4 

family residential mortgages, banks 

would report both the total commitment 

under the line of credit and the 

principal amount funded under the line 

for mortgages repurchased or 

indemnified. 

The banking agencies received 

comments from one banking 

organization and the bankers’

organization on these additions to the 

Call Report, with three other banking 

organizations supporting the bankers’

organization’s comments. The banking 

organization sought clarification as to 

the scope of indemnifications, 

particularly with respect to whether 

indemnifications that consisted of 

reimbursements of legal fees or 

administrative costs were expected to be 

reported. The agencies will clarify in the 

instructions that indemnifications are 

limited to reimbursements for credit 

losses, including reimbursements for 

losses arising from sales of real estate 

collateral. The bankers’ organization 

also requested a clarification involving 

terminology, questioning whether, if 

there is a difference between the book 

value of a loan and its principal balance, 

which amount banks are expected to 

report. The banking agencies reiterate 

that the amount to be reported for 

closed-end loans is the mortgages’

outstanding principal amount as of the 

date of repurchase or indemnification, 

not the book value of these mortgages. 

For open-end residential mortgage 

loans, the concept of ‘‘principal amount 

funded’’ is discussed in the preceding 

section. 

Finally, also as discussed in the 

preceding section, the new items on 

repurchases and indemnifications of 

open-end loans will not be required to 

be reported until the June 30, 2008, 

report date, with reporting of these data 

optional as of the March 31, 2008, report 

date, if the information is available. 

Subject to these modifications and 

clarifications to their original proposal, 

the banking agencies will proceed to 

implement these new items on 

repurchases and indemnifications. 

C. Call Report Data on Trading Assets 

and Liabilities and Other Assets and 

Liabilities Accounted for Under a Fair 

Value Option 

1. Reporting of Assets and Liabilities 

Under the Fair Value Option as Trading 

On February 15, 2007, the Financial 

Accounting Standards Board (FASB) 

issued Statement No. 159, The Fair 

Value Option for Financial Assets and 

Financial Liabilities (FAS 159), which is 

effective for fiscal years beginning after 

November 15, 2007. Earlier adoption of 

FAS 159 was permitted as of the 

beginning of an earlier fiscal year, 

provided the bank (i) also adopts all of 

the requirements of FASB Statement No. 

157, Fair Value Measurements (FAS 

157) at the early adoption date of 

FAS159; (ii) has not yet issued a 

financial statement or submitted Call 

Report data for any period of that fiscal 

year; and (iii) satisfies certain other 

conditions. Thus, a bank with a 

calendar year fiscal year may have 

voluntarily adopted FAS 159 as of 

January 1, 2007. Changes in the fair 

value of financial assets and liabilities 

to which the fair value option is applied 

are reported in current earnings as is 

currently the case for trading assets and 

liabilities. Since the fair value option 

standard allows a bank to elect fair 

value measurement through earnings for 

financial assets and financial liabilities, 

the banking agencies understand that 

some institutions would like to 

reclassify certain loans elected to be 

accounted for under the fair value 

option as trading assets. The Call Report 

instructions currently do not allow 

loans held for sale to be reported as 

trading assets. 

Under FAS 159, all securities within 

the scope of FASB Statement No. 115, 

Accounting for Certain Investments in 

Debt and Equity Securities (FAS 115), 

that a bank has elected to report at fair 

value under a fair value option should 

be classified as trading securities. 

Recognizing the provisions of FAS 159, 

the banking agencies proposed the 

following clarification to the Call Report 

instructions, including the Call Report 

Glossary entry for ‘‘Trading Account.’’

Banks may classify assets (other than 

securities within the scope of FAS 115 

for which a fair value option is elected) 

and liabilities as trading if the bank 

applies fair value accounting, with 

changes in fair value reported in current 

earnings, and manages these assets and 

liabilities as trading positions, subject to 

the controls and applicable regulatory 

guidance related to trading activities. 

Three banking organizations provided 

comments in support of the proposed 

expanded definition of the trading 

account to permit the classification of 

certain loans as trading. The banking 

agencies will proceed with the revised 

definition of trading account as 

proposed. 

2. Revision of Certain Fair Value 

Measurement and Fair Value Option 

Information in the Call Report 

Effective for the March 31, 2007, 

report date, the banking agencies started 

collecting information on certain assets 

and liabilities measured at fair value on 

Call Report Schedule RC–Q, Financial 

Assets and Liabilities Measured at Fair 

Value. Schedule RC–Q was intended to 

be consistent with the disclosure and 

other requirements contained in FAS 

157 and FAS 159. Based on the banking 

agencies’ review of initial industry 

practice and inquiries from banks, the 

agencies have determined that industry 

practice for preparing and reporting 

FAS 157 disclosures has evolved 

differently than the process for the 

information collected on Schedule RC–

Q. This divergence has resulted in 

unnecessary burden and less 

transparency for the affected banks in 

two material respects. 

First, Schedule RC–Q does not allow 

banks to separately identify each of the 

three levels of fair value measurements 

prescribed by FAS 157. The banking 

agencies included Level 1 fair value 


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measurements in the total fair value 

amount in column A of Schedule RC–

Q as a means of minimizing reporting 

burden. However, the omission of a 

separate column on Schedule RC–Q for 

Level 1 fair value measurements has 

increased the time bank managements 

spend preparing and reviewing 

Schedule RC–Q because the fair value 

disclosures on Schedule RC–Q differ 

from those in the banks’ other financial 

statements. Second, Schedule RC–Q 

does not allow banks to separately 

identify any amounts by which the gross 

fair values of assets and liabilities 

reported for Level 2 and 3 fair value 

measurements included in columns B 

and C have been offset (netted) in the 

determination of the total fair value 

reported on the Call Report balance 

sheet (Schedule RC), which is disclosed 

in column A of Schedule RC–Q. Based 

on a review of industry practice, these 

disclosures are commonly made in the 

banks’ other financial statements. 

To reduce confusion related to the 

differences in industry practice and the 

Call Report, the banking agencies 

proposed to add two columns to 

Schedule RC–Q to allow banks to report 

any netting adjustments and Level 1 fair 

value measurements separately in a 

manner consistent with industry 

practice. The new columns would be 

captioned column B, Amounts Netted in 

the Determination of Total Fair Value 

Reported on Schedule RC, and column 

C, Level 1 Fair Value Measurements. 

Existing column B, Level 2 Fair Value 

Measurements, and column C, Level 3 

Fair Value Measurements, of Schedule 

RC–Q would be recaptioned as columns 

D and E, respectively. Column A would 

remain unchanged. 

One commenter, a banking 

organization, offered comments on the 

proposed changes to Schedule RC–Q. 

The commenter supported the addition 

of the two new columns to the schedule. 

The commenter also suggested the 

banking agencies amend the scope of 

Schedule RC–Q to collect information 

on all assets and liabilities measured at 

fair value pursuant to FAS 157 rather 

than the current scope, which collects 

information primarily based on a bank’s 

election to measure assets at fair value 

under a fair value option and only 

includes some of the assets and 

liabilities covered by FAS 157. The 

banking agencies recognize that a 

significant number of banks have only 

recently adopted FAS 157 and are 

working through a number of 

implementation issues. In addition, the 

FASB recently proposed a 1-year delay 

in the effective date of FAS 157 for all 

nonfinancial assets and nonfinancial 

liabilities, except those that are 

recognized or disclosed at fair value in 

the financial statements on a recurring 

basis. In light of these factors, the 

banking agencies determined it would 

not be prudent, at this time, to modify 

the scope of the Schedule RC–Q to 

include all assets and liabilities covered 

by FAS 157 as suggested by the 

commenter. The banking agencies will 

proceed with the addition of the two 

additional columns to Schedule RC–Q 

as proposed. 

The banking agencies also considered 

other types of information that will be 

necessary to effectively assess the safety 

and soundness of banks that utilize the 

fair value option pursuant to FAS 159. 

Based on this assessment, the banking 

agencies proposed to amend certain 

other Call Report schedules to improve 

the agencies’ ability to make 

comparisons among entities that elect a 

fair value option and those that do not. 

The primary focus of these proposed 

changes is to enhance the information 

provided by banks that elect the fair 

value option for loans. The proposed 

changes are based on the principal 

objectives for disclosures and the 

required disclosures in FAS 159, which 

were intended to provide ‘‘information 

to enable users to understand the 

differences between fair value and 

contractual cash flows’’ and to provide 

information ‘‘that would have been 

disclosed if the fair value option had not 

been elected.’’

Specifically, the banking agencies 

proposed to add items to Schedule RC–

C, part I, Loans and Leases, to collect 

data on the loans reported in this 

schedule that are measured at fair value 

under a fair value option: (1) The fair 

value of such loans measured by major 

loan category, (2) the unpaid principal 

balance of such loans by major loan 

category, and (3) the aggregate amount 

of the difference between the fair value 

and the unpaid principal balance of 

such loans that is attributable (a) to 

changes in the credit risk of the loan 

since its origination and (b) to all other 

factors. Because Schedule RC–C, part I, 

only provides data on loans held for 

investment and for sale, the banking 

agencies proposed to add the same 

items to Schedule RC–D, Trading Assets 

and Liabilities, for loans measured at 

fair value under a fair value option that 

are designated as held for trading. The 

banking agencies also proposed to add 

a new item to Schedule RC–D for ‘‘Other 

trading liabilities’’ in recognition of a 

bank’s ability to elect to measure certain 

liabilities at fair value in accordance 

with FAS 159 and designate them as 

held for trading. 

The banking agencies proposed to add 

two items to Schedule RC–N, Past Due 

and Nonaccrual Loans, Leases, and 

Other Assets, to collect data on the fair 

value and unpaid principal balance of 

loans measured at fair value under a fair 

value option that are past due or in 

nonaccrual status. The items would 

follow the existing three column 

breakdown on Schedule RC–N that 

banks utilize to report all other past due 

and nonaccrual loans. Since trading 

assets are not currently reported on 

Schedule RC–N, the banking agencies 

proposed to add similar items to 

Schedule RC–D to collect the total fair 

value and unpaid principal balance of 

loans 90 days or more past due that are 

classified as trading. Finally, the 

banking agencies proposed to add items 

to Schedule RI, Income Statement, to 

collect information on: (1) Net gains 

(losses) recognized in earnings on assets 

that are reported at fair value under a 

fair value option; (2) estimated net gains 

(losses) on loans attributable to changes 

in instrument-specific credit risk; (3) net 

gains (losses) recognized in earnings on 

liabilities that are reported at fair value 

under a fair value option; (4) estimated 

net gains (losses) on liabilities 

attributable to changes in the 

instrument-specific credit risk. 

Two banking organizations and the 

bankers’ organization provided 

comments on the proposed changes. 

One banking organization opposed the 

proposal to collect information on 

Schedules RC–C and RC–D on the 

aggregate amount of the difference 

between the fair value and the unpaid 

principal balance of loans measured at 

fair value under a fair value option 

attributable to (a) changes in the credit 

risk of the loan since its origination and 

(b) all other factors. The banking 

organization indicated the proposed 

information may exist in theory but that 

banks do not have the ability to readily 

and reliably produce this information. 

The banking agencies reconsidered the 

proposal and concur with the 

commenter’s assessment of banks’

ability to readily and reliably produce 

this information. As a result, the 

banking agencies will not implement 

the proposed change. 

One banking organization opposed 

the proposed breakouts on Schedule 

RC–D of the fair value and the unpaid 

principal balance of loans measured at 

fair value under a fair value option by 

major loan category indicating the 

information was excessive and 

burdensome to collect for loans 

designated as trading and would require 

changes to the bank’s trading systems. 

The banking agencies’ safety and 

soundness objective for collecting this 

information is to make comparisons 

among entities that elect a fair value 


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option for loans and those that do not. 

This objective can not be achieved if the 

information collected on Schedules RC–

C and RC–D is not comparable. Since 

banks have considerable experience 

reporting information by major loan 

category as required by Schedule RC–C 

and are only now able to report loans 

under a fair value option on Schedule 

RC–D, the banking agencies determined 

it would be less burdensome to adapt 

the proposed loan breakouts on 

Schedule RC–D to the current breakouts 

on Schedule RC–C than to develop a 

unique format for reporting loans under 

a fair value option in both Schedules 

RC–C and RC–D as inferred by the 

commenter. The banking agencies will 

proceed with the breakouts for loans 

reported under a fair value option on 

Schedule RC–D as proposed. 

The banking organization also 

questioned whether the banking 

agencies should collect separate items 

on Schedule RI for the net gains (losses) 

recognized in earnings on assets that are 

reported at fair value under a fair value 

option and the estimated net gains 

(losses) on loans attributable to changes 

in instrument-specific credit risk. 

Similarly, the commenter questioned 

whether the agencies should collect 

separate items on Schedule RI for the 

net gains (losses) recognized in earnings 

on liabilities that are reported at fair 

value under a fair value option and the 

estimated net gains (losses) on liabilities 

attributable to changes in the 

instrument-specific credit risk. The 

commenter suggested the agencies 

clarify what changes other than credit 

risk would be reported in net gains 

(losses) on assets and liabilities reported 

at fair value under a fair value option 

that would warrant a separate breakout 

for net gains (losses) on loans and 

liabilities for instrument-specific credit 

risk. The content of the proposed items 

for Schedule RI are the same as those 

mandated by the disclosure 

requirements of paragraphs 19(a), (c)(1), 

and (d)(1) of FAS 159. However, to 

reduce burden, the banking agencies 

grouped the requirements of 

subparagraph (a) into net gains (losses) 

recognized in earnings on assets that are 

reported at fair value under a fair value 

option and net gains (losses) recognized 

in earnings on liabilities that are 

reported at fair value under a fair value 

option rather than requiring separate 

breakouts for the amount of gains and 

losses on fair value option items for 

each line item on a bank’s balance sheet 

as required by paragraph 19(a). Thus, 

the banking agencies’ rationale for 

collecting the separate breakouts on 

Schedule RI is the same as FAS 159, to 

facilitate comparisons between banks 

that adopt the fair value option and 

those that do not. The banking agencies 

will proceed with the proposed 

breakouts on Schedule RI for net gains 

(losses) recognized in earnings on assets 

and liabilities reported under a fair 

value option and the estimated net gains 

(losses) on loans and liabilities reported 

under a fair value option attributable to 

changes in instrument-specific credit 

risk as proposed. 

The bankers’ organization 

recommended a six month delay in the 

effective date of the proposal to collect 

information on Schedule RC–N on the 

fair value and unpaid principal balance 

of loans measured at fair value under a 

fair value option that are past due or in 

nonaccrual status and Schedule RC–D 

on the total fair value and unpaid 

principal balance of loans 90 days or 

more past due. The commenter 

indicated the delay would give banks 

sufficient time to make changes to their 

systems to capture this information. The 

banking agencies agree that a delay 

would be advisable and will delay the 

implementation date of the proposed 

Schedule RC–N and RC–D items by 90 

days, which will make the changes 

effective for the June 30, 2008, report 

date. However, the banking agencies 

will allow banks the option of 

submitting this information effective for 

the March 31, 2008, report date, if the 

information is available. 

The banking agencies did not receive 

comments on the proposal to add items 

to Schedule RC–C, part I, Loans and 

Leases, to collect the fair value and 

unpaid principal balance of loans 

measured at fair value under a fair value 

option by major loan category. The 

banking agencies also did not receive 

comments on the proposal to add a new 

item to Schedule RC–D for ‘‘Other 

trading liabilities.’’ The banking 

agencies will proceed with these 

changes as proposed. 

3. Other Revisions to the Call Report 

Information on Trading Assets and 

Liabilities 

The banking agencies proposed three 

revisions to Schedule RC–D to enhance 

the agencies’ ability to assess bank 

exposures to market, liquidity, credit, 

operational, and other risks posed by 

trading assets and liabilities and to 

appropriately assess the safety and 

soundness of banks with these 

exposures and banks with significant 

concentrations in trading assets and 

liabilities. First, the banking agencies 

proposed to eliminate the single line 

item for trading assets in foreign offices 

on the FFIEC 031 Call Report form and 

revise the schedule to include separate 

columns for the consolidated bank and 

for domestic offices. Second, the 

banking agencies proposed to change 

the reporting threshold for Schedule 

RC–D. As proposed, Schedule RC–D 

would be completed for any quarter 

when the quarterly average for trading 

assets in Schedule RC–K, item 7, was $2 

million or more in any of the four 

preceding quarters. Third, the banking 

agencies proposed to require banks with 

average trading assets of $1 billion or 

more in any of the four preceding 

quarters to provide additional detail on 

trading assets and liabilities currently 

included in certain trading asset and 

liability categories. These banks would 

provide additional breakouts for assetbacked securities by major category, 

collateralized debt obligations (both 

synthetic and non-synthetic), retained 

interests in securitizations, equity 

securities (both with and without 

readily determinable fair values), and 

loans held pending securitization. In 

addition, these banks would be required 

to provide a description of and report 

the fair value of any type of trading asset 

or liability in the ‘‘Other trading assets’’

and ‘‘Other trading liabilities’’

categories that is greater than $25,000 

and exceeds 25 percent of the amount 

reported in that trading category. 

One banking organization requested 

the banking agencies reconsider the 

proposed expansion of information for 

banks with average trading assets of $1 

billion or more due to current systems 

limitations. The banking agencies 

assessed the systems challenges 

resulting from other regulatory 

initiatives at banking organizations with 

trading assets of $1 billion or more and 

determined a delay in the 

implementation date for these changes 

would be reasonable. The banking 

agencies will delay the implementation 

date of the proposed expanded 

information on Schedule RC–D items by 

90 days, which will make the changes 

effective for the June 30, 2008, report 

date. However, the banking agencies 

will allow banks the option of 

submitting this information effective for 

the March 31, 2008 report date, if the 

information is available. 

The banking agencies did not receive 

comments on the proposal to eliminate 

the single line item for trading assets in 

foreign offices on the FFIEC 031 Call 

Report form and revise the schedule to 

include separate columns for the 

consolidated bank and for domestic 

offices. The banking agencies also did 

not receive comments on the proposal to 

change the reporting threshold for 

Schedule RC–D. The banking agencies 

will proceed with these changes as 

proposed. 


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D. Reporting Credit Derivative Data for 

Risk-Based Capital Purposes in the Call 

Report 

For credit derivative contracts that are 

covered by the banking agencies’ riskbased capital standards, the Call Report 

instructions require banks to report 

these credit derivatives in item 52, ‘‘All 

other off-balance sheet liabilities,’’ of 

Schedule RC–R, Regulatory Capital, 

unless the credit derivatives represent 

recourse arrangements or direct credit 

substitutes, which are reported in one of 

the preceding items in the Derivatives 

and Off-Balance Sheet Items section of 

the schedule. This reporting approach 

was developed to enable banks that sold 

credit protection and held the credit 

derivative to apply a 100 percent risk 

weight to the notional amount 

consistent with the risk-based capital 

treatment of standby letters of credit and 

guarantees. At present, Schedule RC–R, 

item 54, ‘‘Derivative contracts,’’

specifically excludes credit derivatives 

and does not include a 100 percent risk 

weight column because the maximum 

risk weight on the counterparty credit 

risk charge for other types of derivatives 

is 50 percent. However, this reporting 

approach does not consider that some 

credit derivative positions are subject to 

a counterparty credit risk charge, which 

is calculated for other derivative 

positions in item 54, even if the credit 

derivatives are held by a bank that is 

subject to the market risk capital rules. 

The banking agencies proposed to 

modify the Call Report instructions for 

Schedule RC–R to allow the reporting of 

the credit equivalent amount of credit 

derivatives subject to the counterparty 

credit risk charge in item 54 of the 

schedule and to extend the existing 100 

percent risk weight column in Schedule 

RC–R to item 54, ‘‘Derivative contracts.’’

The banking agencies did not receive 

comments on the proposed changes for 

credit derivatives in Schedule RC–R. 

However, upon further consideration of 

the reporting of such derivatives in 

Schedule RC–R, item 54, the banking 

agencies concluded that extending the 

100 percent risk weight column to this 

item is not necessary. The instructions 

will indicate that credit derivatives 

entered into for trading purposes and 

subject to the market risk capital 

guidelines should be reported in item 

54. 

E. Revision of Reporting Threshold for 

Other Noninterest Income and Other 

Noninterest Expense in the Call Report 

The banking agencies proposed to 

change the threshold for reporting 

detailed information on the components 

of other noninterest income and other 

noninterest expense as reported on 

Schedule RI–E, Explanations, items 1 

and 2. Specifically, the banking agencies 

proposed to change the threshold to 

require banks to separately disclose the 

description and amount of any item 

included in Schedule RI, item 5.l, 

‘‘Other noninterest income’’ that 

exceeds 3 percent of other noninterest 

income and any item included in 

Schedule RI, item 7.d, ‘‘Other 

noninterest expense’’ that exceeds 3 

percent of other noninterest expense. 

In addition, the banking agencies 

proposed to add one new preprinted 

caption for other noninterest income 

and four new preprinted captions for 

other noninterest expense to help banks 

comply with the disclosure 

requirements. As with the existing 

preprinted captions for other 

noninterest income and other 

noninterest expense, banks are only 

required to use these descriptions and 

provide the amounts for these 

components when the amounts 

included in other noninterest income or 

other noninterest expense exceed the 

reporting threshold. The new preprinted 

other noninterest income caption is 

bank card/credit card interchange fees. 

The new preprinted noninterest expense 

captions are accounting and auditing 

expenses, consulting and advisory 

expenses, automated teller machine 

(ATM) and interchange expenses, and 

telecommunications expenses. 

Two banking organizations and the 

government agency provided comments 

on the proposed changes. The agency 

supported the additional new 

preprinted captions. One banking 

organization indicated the application 

of the new thresholds to the smaller 

base of other noninterest income or 

expense would result in their bank 

reporting amounts as small as $1,000 in 

the other noninterest income 

disclosures and $7,500 in the other 

noninterest expense disclosures. The 

commenter recommended the banking 

agencies establish a $50,000 floor to the 

reporting threshold to eliminate the 

reporting of de minimis amounts. The 

banking agencies recognize the merit of 

this request and will implement 

modified thresholds to require banks to 

separately disclose the description and 

amount of any item in other noninterest 

income that is greater than $25,000 and 

exceeds 3 percent of other noninterest 

income and any item included in other 

noninterest expense that is greater than 

$25,000 and exceeds 3 percent of other 

noninterest expense. The $25,000 

amount is consistent with the threshold 

floors used for ‘‘All other assets’’ in 

Schedule RC–F, Other Assets, and ‘‘All 

other liabilities’’ in Schedule RC–G, 

Other Liabilities. 

Another banking organization 

commented that they would have 

difficulty breaking out expenses 

incurred for multiple services provided 

by a third party vendor where separate 

charges for specific services would be 

burdensome to identify. The commenter 

requested the banking agencies provide 

a definition of telecommunications 

expenses. To reduce reporting burden, 

the banking agencies will modify the 

instructions for Schedule RI–E, item 2, 

‘‘Other noninterest expense,’’ to indicate 

that banks should report expenses that 

reflect a single charge for grouped or 

‘‘bundled’’ services in the item that 

most closely describes the predominant 

type of expense incurred, and that this 

categorization should be used 

consistently over time. Regarding the 

definition of telecommunications 

expenses, banks should include any 

expenses associated with telephone, 

cable, and internet services (including 

web page maintenance). 

F. Reporting Brokered Time Deposits 

Participated Out by the Broker in the 

Call Report 

The banking agencies revised the 

instructions for Schedule RC–E, 

Memorandum items 2.b, ‘‘Total time 

deposits of less than $100,000,’’ and 2.c, 

‘‘Total time deposits of $100,000 or 

more,’’ in March 2007. This was done so 

that brokered time deposits issued in 

denominations of $100,000 or more that 

are participated out by the broker in 

shares of less than $100,000 would be 

reported in the former rather than the 

latter Memorandum item. However, the 

banking agencies did not make a 

conforming instructional revision to 

Schedule RC–E, Memorandum items 

1.c.(1) and 1.c.(2), on fully insured 

brokered deposits. This means that 

these participated brokered time 

deposits continue to be reported as 

brokered deposits of greater than 

$100,000 rather than brokered deposits 

of less than $100,000. To achieve 

consistent reporting of these brokered 

time deposits in Schedule RC–E, the 

banking agencies proposed to revise 

Schedule RC–E, Memorandum items 

1.c.(1) and 1.c.(2), so that brokered time 

deposits issued in denominations of 

$100,000 or more that are participated 

out by the broker in shares of less than 

$100,000 are reported in Memorandum 

item 1.c.(1) as fully insured brokered 

deposits of less than $100,000. 

The banking agencies did not receive 

any comments on this proposed change 

to the reporting of brokered time 

deposits, which will be implemented as 

proposed. 


ebenthall on PRODPC61 with NOTICES
Federal Register / Vol. 73, No. 23 / Monday, February 4, 2008 / Notices 6515 

III. Discontinuance of Mailing of Call 

Report Forms and Instructions 

The banking agencies requested 

comment on their plan to discontinue 

the mailing of Call Report forms and 

instructions for the FFIEC 031 and 

FFIEC 041. The agencies’ current 

practice is to mail sample forms to 

banks only in those quarters when 

significant revisions are made to the 

report forms. Updates to the Call Report 

instruction book have been printed and 

mailed to banks in those quarters when 

such updates have been issued. 

The Call Report forms and their 

instructions are available on the FFIEC’s 

Web site (http://www.ffiec.gov/ 

ffiec_report_forms.htm) and the FDIC’s 

Web site (http://www.fdic.gov/ 

regulations/resources/call/index.html) 

each quarter before any mailings of the 

paper forms and instructions are 

completed. A paper copy of the report 

forms and instructions can be printed 

from the Web sites. In addition, banks 

that use Call Report software generally 

can print paper copies of blank forms 

from their software. 

No comments were received on this 

issue. The agencies will discontinue 

mailing paper Call Report forms and 

instructions in 2008, while retaining 

their practice of making these materials 

available to banks electronically. 

IV. Other Matters 

On February 14, 2007, the OCC, the 

Board, the FDIC, and the OTS requested 

comment on a proposed regulatory 

capital schedule for collecting Basel IA 

risk-based capital data in the Call Report 

and the TFR (72 FR 7115). No comments 

were received on this proposal. On July 

20, 2007, the four agencies announced 

an agreement to issue a proposal to 

adopt a standardized approach under 

the Basel II Accord that would replace 

the Basel IA proposal. As a 

consequence, the agencies are 

withdrawing their Basel IA regulatory 

capital reporting proposal. A regulatory 

capital reporting proposal for the 

standardized approach will be issued 

for comment at a later date. 

V. Paperwork Reduction Act Request 

for Comment 

Public comment is requested on all 

aspects of this joint notice. Comments 

are invited on: 

(a) Whether the proposed revisions to 

the Call Report and TFR collections of 

information are necessary for the proper 

performance of the agencies’ functions, 

including whether the information has 

practical utility; 

(b) The accuracy of the agencies’

estimates of the burden of the 

information collections as they are 

proposed to be revised, including the 

validity of the methodology and 

assumptions used; 

(c) Ways to enhance the quality, 

utility, and clarity of the information to 

be collected; 

(d) Ways to minimize the burden of 

information collections on respondents, 

including through the use of automated 

collection techniques or other forms of 

information technology; and 

(e) Estimates of capital or start up 

costs and costs of operation, 

maintenance, and purchase of services 

to provide information. 

Comments submitted in response to 

this joint notice will be shared among 

the agencies. All comments will become 

a matter of public record. 

Dated: January 31, 2008. 

Stuart E. Feldstein, 

Assistant Director, Legislative and Regulatory 

Activities Division, Office of the Comptroller 

of the Currency. 

Board of Governors of the Federal Reserve 

System, January 29, 2008. 

Jennifer J. Johnson 

Secretary of the Board. 

Dated at Washington, DC, this 25th day of 

January, 2008. 

Federal Deposit Insurance Corporation. 

Valerie J. Best, 

Assistant Executive Secretary. 

Dated: January 25, 2008. 

Deborah Dakin, 

Senior Deputy Chief Counsel, Regulations and 

Legislation Division, Office of Thrift 

Supervision. 

[FR Doc. E8–2024 Filed 2–1–08; 8:45 am] 

BILLING CODES 6720–01–P (25%); 6714–01–P (25%); 

6210–01–P (25%); 4810–33–P (25%) 

FEDERAL RESERVE SYSTEM 

Proposed Agency Information 

Collection Activities; Comment 

Request 

AGENCY: Board of Governors of the 

Federal Reserve System 

SUMMARY: Background. 

On June 15, 1984, the Office of 

Management and Budget (OMB) 

delegated to the Board of Governors of 

the Federal Reserve System (Board) its 

approval authority under the Paperwork 

Reduction Act (PRA), as per 5 CFR 

1320.16, to approve of and assign OMB 

control numbers to collection of 

information requests and requirements 

conducted or sponsored by the Board 

under conditions set forth in 5 CFR 

1320 Appendix A.1. Board–approved 

collections of information are 

incorporated into the official OMB 

inventory of currently approved 

collections of information. Copies of the 

Paperwork Reduction Act Submission, 

supporting statements and approved 

collection of information instruments 

are placed into OMB’s public docket 

files. The Federal Reserve may not 

conduct or sponsor, and the respondent 

is not required to respond to, an 

information collection that has been 

extended, revised, or implemented on or 

after October 1, 1995, unless it displays 

a currently valid OMB control number. 

Request for comment on information 

collection proposals 

The following information 

collections, which are being handled 

under this delegated authority, have 

received initial Board approval and are 

hereby published for comment. At the 

end of the comment period, the 

proposed information collections, along 

with an analysis of comments and 

recommendations received, will be 

submitted to the Board for final 

approval under OMB delegated 

authority. 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; and 

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. 

DATES: Comments must be submitted on 

or before April 4, 2008. 

ADDRESSES: You may submit comments, 

identified by FR Y–3, FR Y–3N, and FR 

Y–4; FR K–1; or FR 1379, by any of the 

following methods: 

• Agency Web Site: http:// 

www.federalreserve.gov. Follow the 

instructions for submitting comments at 

http://www.federalreserve.gov/ 

generalinfo/foia/ProposedRegs.cfm. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E–mail: 

regs.comments@federalreserve.gov. 

Include docket number in the subject 

line of the message. 

• FAX: 202/452–3819 or 202/452–

3102. 

• Mail: Jennifer J. Johnson, Secretary, 

Board of Governors of the Federal 


ebenthall on PRODPC61 with NOTICES