[Federal Register Volume 79, Number 242 (Wednesday, December 17, 2014)]
[Notices]
[Pages 75152-75155]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-29418]


=======================================================================
-----------------------------------------------------------------------

FEDERAL DEPOSIT INSURANCE CORPORATION


Agency Information Collection Activities: Information Collection 
Revision; Comment Request (3064-0189)

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Notice of Information Collection To Be Submitted to OMB for 
Review and Approval Under the Paperwork Reduction Act, and Request for 
Comment

-----------------------------------------------------------------------

SUMMARY: The Federal Deposit Insurance Corporation (``FDIC'') invites 
the general public and other Federal agencies to take this opportunity 
to comment on a revision of a continuing information collection, 
titled, ``Company-Run Annual Stress Test Reporting Template and 
Documentation for Covered Institutions with Total Consolidated Assets 
of $50 Billion or More under the Dodd-Frank Wall Street Reform and 
Consumer Protection Act,'' (3064-0189), as required by the Paperwork 
Reduction Act of 1995.

DATES: Comments must be received by January 16, 2015.

ADDRESSES: You may submit written comments by any of the following 
methods:
    <bullet> Agency Web site: http://www.fdic.gov/regulations/laws/federal/. Follow the instructions for submitting comments on the FDIC 
Web site.
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> Email: <a href="/cdn-cgi/l/email-protection#c182aeacaca4afb5b28187858882efa6aeb7"><span class="__cf_email__" data-cfemail="f6b5999b9b93988285b6b0b2bfb5d8919980">[email protected]</span></a>. Include ``Annual Stress Test 
Reporting Template and Documentation for Covered Institutions with 
Total Consolidated Assets of $50 Billion or More'' on the subject line 
of the message.
    <bullet> Mail: Gary A. Kuiper, Counsel, or John Popeo, Counsel, 
Legal Division, Attention: Comments, FDIC, 550 17th Street NW., MB-
3098, Washington, DC 20429.
    <bullet> Hand Delivery/Courier: Guard station at the rear of the 
550 17th Street Building (located on F Street) on business days between 
7:00 a.m. and 5:00 p.m.
    <bullet> Public Inspection: All comments received will be posted 
without change to http://www.fdic.gov/regulations/laws/federal/ 
including any personal information provided.
    Additionally, you may send a copy of your comments: By mail to the 
U.S. Office of Management and Budget, 725 17th Street NW., #10235, 
Washington, DC 20503 or by facsimile to 202.395.6974, Attention: 
Federal Banking Agency Desk Officer.

FOR FURTHER INFORMATION CONTACT: You can request additional information 
from John Popeo (202.898.6923), or Gary Kuiper (202.898.3877), Legal 
Division, Federal Deposit Insurance Corporation, 550 17th Street NW., 
MB-3098, Washington, DC 20429. In addition, copies of the templates 
referenced in this notice can be found on the FDIC's Web site (http://www.fdic.gov/regulations/laws/federal/).

SUPPLEMENTARY INFORMATION: The FDIC is requesting comment on the 
following changes to the information collection:

[[Page 75153]]

    Title: Company-Run Annual Stress Test Reporting Template and 
Documentation for Covered Institutions with Total Consolidated Assets 
of $50 Billion or More under the Dodd-Frank Wall Street Reform and 
Consumer Protection Act.
    OMB Control Number: 3064-0189
    Description: Section 165(i)(2) of the Dodd-Frank Wall Street Reform 
and Consumer Protection Act \1\ (``Dodd-Frank Act'') requires certain 
financial companies, including state nonmember banks and state savings 
associations, to conduct annual stress tests \2\ and requires the 
primary financial regulatory agency \3\ of those financial companies to 
issue regulations implementing the stress test requirements.\4\ A state 
nonmember bank or state savings association is a ``covered bank'' and 
therefore subject to the stress test requirements if its total 
consolidated assets are more than $10 billion. Under section 165(i)(2), 
a covered bank is required to submit to the Board of Governors of the 
Federal Reserve System (Board) and to its primary financial regulatory 
agency a report at such time, in such form, and containing such 
information as the primary financial regulatory agency may require.\5\
---------------------------------------------------------------------------

    \1\ Public Law 111-203, 124 Stat. 1376 (July 21, 2010).
    \2\ 12 U.S.C. 5365(i)(2)(A).
    \3\ 12 U.S.C. 5301(12).
    \4\ 12 U.S.C. 5365(i)(2)(C).
    \5\ 12 U.S.C. 5365(i)(2)(B).
---------------------------------------------------------------------------

    On October 15, 2012, the FDIC published in the Federal Register a 
final rule implementing the section 165(i)(2) annual stress test 
requirement.\6\ The final rule requires covered banks to meet specific 
reporting requirements under section 165(i)(2). In 2012, the FDIC first 
implemented the reporting templates for covered banks with total 
consolidated assets of $50 billion or more and provided instructions 
for completing the reports.\7\ This information collection notice 
describes revisions by the FDIC to those reporting templates and 
related instructions, as well as required information. The information 
contained in these information collections may be given confidential 
treatment to the extent allowed by law (5 U.S.C. 552(b)(4)).
---------------------------------------------------------------------------

    \6\ 77 FR 62417 (October 15, 2012).
    \7\ 77 FR 52718 (August 30, 2012) and 77 FR 70435 (November 26, 
2012).
---------------------------------------------------------------------------

    Consistent with past practice, the FDIC intends to use the data 
collected to assess the reasonableness of the stress test results of 
covered banks and to provide forward-looking information to the FDIC 
regarding a covered institution's capital adequacy. The FDIC also may 
use the results of the stress tests to determine whether additional 
analytical techniques and exercises could be appropriate to identify, 
measure, and monitor risks at the covered bank. The stress test results 
are expected to support ongoing improvement in a covered bank's stress 
testing practices with respect to its internal assessments of capital 
adequacy and overall capital planning.
    The FDIC recognizes that many covered banks with total consolidated 
assets of $50 billion or more are required to submit reports using the 
Board's Comprehensive Capital Analysis and Review (``CCAR'') reporting 
form, FR Y-14A. The FDIC also recognizes the Board has modified the FR 
Y-14A, and the FDIC will keep its reporting requirements as similar as 
possible with the Board's FR Y-14A in order to minimize burden on 
affected institutions. Therefore, the FDIC is revising its reporting 
requirements to remain consistent with the Board's FR Y-14A for covered 
banks with total consolidated assets of $50 billion or more.

Revisions to Reporting Templates for Institutions With $50 Billion or 
More in Assets

    On July 9, 2013, the FDIC approved an interim final rule that will 
revise and replace the FDIC's risk-based and leverage capital 
requirements to be consistent with agreements reached by the Basel 
Committee on Banking Supervision in ``Basel III: A Global Regulatory 
Framework for More Resilient Banks and Banking Systems'' (``Basel 
III'').\8\ The final rule was published in the Federal Register on 
April 14, 2014 (``Revised Capital Framework'').\9\ The revisions 
include implementation of a new definition of regulatory capital, a new 
common equity tier 1 minimum capital requirement, a higher minimum tier 
1 capital requirement, and, for banking organizations subject to the 
Advanced Approaches capital rules, a supplementary leverage ratio that 
incorporates a broader set of exposures in the denominator measure. In 
addition, the rule will amend the methodologies for determining risk 
weighted assets. All banking organizations that are not subject to the 
Advanced Approaches Rule must begin to comply with the Revised Capital 
Framework on January 1, 2015.
---------------------------------------------------------------------------

    \8\ 78 FR 55340 (September 10, 2013).
    \9\ 79 FR 20754 (April 14, 2014).
---------------------------------------------------------------------------

    Due to the timing of the Dodd-Frank Act stress test and the revised 
capital rulemaking, the FDIC considered several options for the timing 
and scope of this proposal to collect information related to the 
capital rulemaking. On September 30, 2014, the FDIC published in the 
Federal Register, a 60-day information collection notice requesting 
public comment on proposed revisions to the DFAST-14A stress testing 
reporting templates.\10\ The FDIC received no comments on the proposed 
changes to the DFAST-14A stress testing reporting templates. The 
revisions to the DFAST-14A reporting templates consist of adding data 
items, deleting data items, and redefining existing data items. These 
changes will provide additional information to greatly enhance the 
ability of the FDIC to analyze the validity and integrity of firms' 
projections, improve comparability across firms, and increase 
consistency between the FR Y-14A reporting templates and DFAST-14A 
reporting templates. The FDIC has conducted a thorough review of the 
changes and believes that the incremental burden of these changes is 
justified given the need for these data to properly conduct the FDIC's 
supervisory responsibilities related to the stress testing.
---------------------------------------------------------------------------

    \10\ 79 FR 58780 (September 30, 2014).
---------------------------------------------------------------------------

Summary Schedule

Revisions to Income Statement Sub-Schedule

    Under the current reporting template,, there is a definitional 
difference between the realized gains (losses) on available-for-sale 
(``AFS'') and held-to-maturity (``HTM'') securities reported on the 
Income Statement (items 127 and 128) and the AFS and HTM totals 
computed on sub-schedule A.3.c (Projected Other-Than-Temporary 
Impairment (``OTTI'') for AFS and HTM Securities by Portfolio), 
resulting from the Revised Capital Framework. In order to accurately 
collect information for the Income Statement, the FDIC proposes 
changing items 127 and 128 to be reported items instead of being equal 
to the total amounts on sub-schedule A.3.c. Additionally, for 
consistency with changes proposed to sub-schedule A.5 (Counterparty 
Risk) described below, items 59 and 62 (Trading Incremental Default 
Losses and Other CCR Losses) would be modified to be Trading Issuer 
Default Losses and CCR Losses, and line item 61 (Counterparty 
Incremental Default Losses) would be removed.

Revisions to RWA and Capital Sub-Schedules

    To better align the collection of regulatory capital components 
with

[[Page 75154]]

schedule RC-R of the Reports of Condition and Income (``Call Report''), 
the definitions of the items on schedule A.1.d (Capital) have been 
modified to refer to or mirror the definitions that appear on the Call 
Report. Furthermore, in order to ensure comparability among respondents 
and that transition provisions are being accurately and consistently 
applied, respondents would be required to apply the appropriate 
transition provisions to all transition-affected items of schedule 
A.1.d per the revised regulatory capital rule. With regard to the RWA 
sub-schedules, the standardized approach RWA and market RWA items of 
schedule A.1.c.1 (General RWA) have been changed in accordance with 
modifications to schedule RC-R of the Call Report that are currently 
being considered, and moved to a separate schedule A.1.c.2 
(Standardized RWA). These changes include both the modification and 
addition of items, for an overall addition of 12 items. Additionally, 
the computed items one through five of the current sub-schedule A.1.c.2 
(Advanced RWA) would be removed. Despite the alignment of these 
schedules with the Call Report, the column of actual values has not 
been removed because the values reported on these schedules are assumed 
to have completed the transition schedule outlined in the Revised 
Capital Framework, whereas values reported on the Call Report follow 
the transition schedule.

Revisions to Retail Repurchase Sub-Schedule

    Due to recent activity by respondents involving settlements related 
to their representation & warranty (``R&W'') liabilities, additional 
detail would be collected about the R&W liabilities. Specifically, 
items would be added that collect the unpaid principal balance 
(``UPB'') of loans covered by completed settlements for which liability 
remains and for which no liability remains by vintage beginning with 
2004, as well as total settlement across vintages, for the following 
categories of loans: loans sold to Fannie Mae, loans sold to Freddie 
Mac, loans insured by the U.S. government, loans securitized with 
monoline insurance, loans secured without monoline insurance, and whole 
loans sold.

Revisions to Securities Sub-Schedule

    Because covered bonds are a material exposure to companies that 
have unique characteristics relative to other asset categories 
currently on this sub-schedule, the FDIC would add a covered bond 
category to sub-schedules A.3.b, A.3.c, A.3.d, and A.3.e in order to 
appropriately and separately evaluate respondents' projections of these 
assets. Additionally, two columns would be added to collect information 
for each of the asset categories of sub-schedule A.3.d that would allow 
changes in market value to be distinguished from changes in portfolio 
allocation for each projected quarter: (1) Beginning Fair Market Value, 
and (2) Fair Value Rate of Change, which is the weighted average 
percent change in fair value over the quarter. Finally, to reduce 
reporting burden and increase efficiency in reporting, the nine sub-
asset categories of Domestic Non-Agency Residential Mortgage-Backed 
Securities (``RMBS'') would be removed from the same sub-schedules, and 
the AFS and HTM portions of sub-schedule A.3.c would be combined into 
an additional column to identify AFS amounts versus HTM amounts.

Revisions to Trading Sub-Schedule

    Because credit valuation adjustment (``CVA'') losses are modeled 
separately from trading portfolio losses, the FDIC proposes that the 
profit (loss) amount related to CVA hedges be reported separately from 
other trading activity in the trading sub-schedule.

Revisions to Counterparty Risk Sub-Schedule

    In order to allow respondents to use alternative methodologies for 
estimating losses related to the default of issuers and counterparties, 
the requirement of using the incremental default risk (``IDR'') 
methodology would be removed. Accordingly, items 1, 1a and 1b (Trading 
Incremental Default Losses, Trading Incremental Default Losses from 
securitized products, and Trading Incremental Default Losses from other 
credit sensitive instruments) would be modified to be Trading Issuer 
Default Losses. Additionally, items 3 (Counterparty Incremental Default 
Losses) and 3a (Impact of CCR IDR Hedges) would be removed, item 4 
(Other CCR Losses) would be modified to be CCR Losses, and the item, 
Effect of CCR Hedges, would be added.

Regulatory Capital Instruments Schedule

    Proposed changes to the Regulatory Capital Instruments Schedule 
would be responsive to industry feedback and ensure that information is 
being accurately captured. Specifically, the FDIC proposes (1) adding 
an item that collects employee stock compensation to the four quarterly 
redemption/repurchase and issuance activity sub-sections; (2) adding 18 
items to the general risk-based capital rules section and 28 items to 
the revised regulatory capital section that collect activity other than 
issuances or repurchases for each instrument in the section, because 
respondents add this activity to other items; and (3) changing the 
capital balance items in the general risk-based capital rules section 
and the revised regulatory capital section from reported items to 
formulas, since they would be able to be computed using the items 
proposed above.

Regulatory Capital Transitions Schedule

    Similar to the changes proposed to the RWA and Capital sub-
schedules of the Summary Schedule, proposed changes to the Regulatory 
Capital Transitions Schedule would be made to better align the 
collection of regulatory capital components with modifications to 
schedule RC-R of the Call Report, which are currently being considered. 
The FDIC proposes (1) aligning the definitions of the items on the 
Capital Composition sub-schedule to be consistent with schedule RC-R; 
(2) modifying the RWA General sub-schedule to align with proposed 
revisions to schedule RC-R, including changing the name to Standardized 
RWA and modifying, removing, and adding items for a net increase of 15 
items; (3) modifying, adding, and removing items of the Advanced RWA 
sub-schedule to align with sub-schedule A.1.c.2 (Advanced RWA on the 
Summary Schedule), for a net increase of 21 items; and (4) revising the 
Leverage Ratio sub-schedule in accordance with the supplementary 
leverage ratio rulemaking proposal, for a net increase of 10 items. 
Despite the alignment of these schedules with the Call Report, the 
column of actual values has not been removed because the values 
reported on these schedules are assumed to have completed the 
transition schedule outlined in the Revised Capital Framework, whereas 
values reported on the Call Report follow the transition schedule.

Operational Risk Schedule

    Proposed changes to the Operational Risk Schedule would provide 
greater insight into the types and frequency of operational risk 
expenses incurred by respondents, which would improve ongoing 
supervisory activities.
    The FDIC proposes adding a data item for respondents to voluntarily 
disclose how much of their mortgage related litigation reserve is 
attributable to contractual representation and warranty claims.

[[Page 75155]]

Counterparty Credit Risk Schedule

    Significant additions would be made to the Counterparty Credit Risk 
Schedule in order to more adequately and accurately capture exposure 
information related to derivatives and securities financing 
transactions (``SFTs''). These additions would remediate deficiencies 
discovered in the current collection related to exposure, including a 
lack of information regarding collateral, asset types, and total 
exposure to a given counterparty, and have been carefully evaluated 
internally and vetted with respondents.
    The FDIC proposes: (1) Adding a sub-schedule that collects the 
derivative exposures at a legal-entity netting-agreement level for the 
top 25 non-central clearing counterparty (``non-CCP'') and non-G-7 
counterparties, as well as all CCPs and the G-7 counterparties, that 
includes a breakout of collateral into cash and non-cash, and exposures 
into 14 asset categories; (2) changing the current SFT sub-schedule to 
collect exposures and collateral separately at a counterparty legal-
entity netting-agreement level for the top 25 non-CCP and non-G-7 
counterparties, as well as all CCPs and the G-7 counterparties, and 
adding asset sub-categories for a total of 30 specific asset types; (3) 
removing all columns with the institution specification of margin 
period of risk (``MPOR'') under the global market shocks from sub-
schedules F.1.a through F.1.e and F.2; (4) removing the column LGD 
Derived from Unstressed PD on F.2; and (5) adding columns to worksheet 
F.1.e to collect both gross and net stressed and unstressed current 
exposure to central clearing counterparties.

Burden Estimates

    The FDIC estimates the burden of this collection as follows:

Current

    Number of Respondents: 4.
    Annual Burden per Respondent: 1,040.
    Total Annual Burden: 4,160.

Proposed

    Estimated Number of Respondents: 4.
    Annual Burden per Respondent: 1,040.
    Estimated Total Annual Burden: 4,160 hours.
    The FDIC recognizes that the Board has estimated 88,401 hours for 
bank holding companies to prepare the Summary, Macroscenario, 
Operational risk, Regulatory capital transitions, Regulatory capital 
instruments, and Counterparty credit risk schedules submitted for the 
FR Y-14A. The FDIC believes that the systems covered institutions use 
to prepare the FR Y-14A reporting templates will also be used to 
prepare the reporting templates described in this notice. Comments 
continue to be invited on:
    (a) Whether the collection of information is necessary for the 
proper performance of the functions of the FDIC, including whether the 
information has practical utility;
    (b) The accuracy of the FDIC's estimate of the burden of the 
collection of information;
    (c) Ways to enhance the quality, utility, and clarity of the 
information to be collected;
    (d) Ways to minimize the burden of the collection 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.

    Dated at Washington, DC, this 11th day of December.
Robert E. Feldman,
Executive Secretary, Federal Deposit Insurance Corporation.
[FR Doc. 2014-29418 Filed 12-16-14; 8:45 am]
BILLING CODE 6714-01-P


</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>