Each depositor insured to at least $250,000 per insured bank



Home > News & Events > Inactive Financial Institution Letters




Inactive Financial Institution Letters
 
[Federal Register: June 8, 2004 (Volume 69, Number 110)]
[Proposed Rules]               
[Page 31922-31927]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08jn04-24]                         

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

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 327

RIN 3064-AC84

 
Deposit Insurance Assessments--Certified Statements

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Notice of proposed rulemaking with request for comment.

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

SUMMARY: The Federal Deposit Insurance Corporation (FDIC) proposes to 
modernize and simplify its deposit insurance assessment regulations 
governing certified statements, to provide regulatory burden relief to 
insured depository institutions. Under the proposal, insured 
institutions would be required to obtain their certified statements on 
the Internet via the FDIC's transaction-based e-business website, 
FDICconnect. Correct certified statements would no longer be signed or 
returned to the FDIC. The semiannual certified statement process would 
be synchronized with the present quarterly invoice process. Two 
quarterly certified statement invoices would comprise the semiannual 
certified statement and reflect the semiannual assessment amount. If an 
insured institution agrees with its quarterly certified statement 
invoice, it would simply pay the assessed amount and retain the invoice 
in its own files. If it disagrees with the quarterly certified 
statement invoice, it would either amend its report of condition or 
similar report (to correct data errors) or amend its quarterly 
certified statement invoice (to correct calculation errors). The FDIC 
would automatically treat either as the insured institution's request 
for revision of its assessment computation, eliminating the requirement 
of a separate filing. These proposed changes, which would reduce the 
time and effort required to comply with the certified statement 
process, result from the FDIC's ongoing program under the Economic 
Growth and Regulatory Paperwork Reduction Act (EGRPRA) to provide 
regulatory burden relief to insured depository institutions.

DATES: Comments must be submitted on or before August 9, 2004.

ADDRESSES: Interested parties are invited to submit written comments to 
the FDIC by any of the following methods:

     Federal eRulemaking Portal: http://www.regulations.gov. 

Follow the instructions for submitting comments.
     Agency Web site: http://www.fdic.gov/regulations/laws/federal/propose.html.
 Follow the instructions for submitting comments 
on the FDIC Web site.
     E-mail: comments@FDIC.gov. Include ``Part 327--Certified 
Statements'' in the subject line of the message.
     Mail: Robert E. Feldman, Executive Secretary, Attention: 
Comments/Legal ESS, Federal Deposit Insurance Corporation, 550 17th 
Street, NW., Washington, DC 20429.
     Hand Delivery/Courier: Comments may be hand-delivered to 
the guard station located at the rear of the FDIC's 17th Street 
building (accessible from F Street) on business days between 7 a.m. and 
5 p.m.

    Instructions: All submissions received must include the agency name 
and use the title ``Part 327--Certified Statements.'' The FDIC may post 
comments on its Internet site at: http://www.fdic.gov/regulations/laws/federal/propose.html.
 Comments may be inspected and photocopied in the 

FDIC Public Information Center, Room 100, 801 17th Street, NW., 
Washington, DC, between 9 a.m. and 4:30 p.m. on business days.

FOR FURTHER INFORMATION CONTACT: Steve Wagoner, Senior Assessment 
Specialist, Division of Finance, (202) 416-7152; Linda A. Abood, 
Supervisory IT Specialist, Division of Information Resources 
Management, (703) 516-1202; or Christopher Bellotto, Counsel, (202) 
898-3801, Legal Division, Federal Deposit Insurance Corporation, 550 
17th Street, NW., Washington, DC 20429.

SUPPLEMENTARY INFORMATION:
    The FDIC is proposing to amend 12 CFR 327.2 to modernize and 
simplify the certified statement process and to reduce the regulatory 
burden on insured depository institutions under its ongoing EGRPRA 
program. At present, the FDIC issues to each insured depository 
institution two deposit insurance invoices each semiannual period. The 
second invoice received during the semiannual period is the certified 
statement. An insured

[[Page 31923]]

institution must certify the accuracy of the information on the 
certified statement--by signing it--and return it to the FDIC. If the 
information is incorrect, the institution must amend the certified 
statement, return it to the FDIC, and file a separate request for 
revision of assessment computation in order to change the amount of an 
assessment payment.
    Under the proposal, the two quarterly invoices--each to be called a 
quarterly certified statement invoice--would together comprise the 
semiannual certified statement. Insured institutions would download 
their quarterly certified statement invoices directly from the FDIC's 
e-business Web site, FDICconnect. If, after reviewing the data, the 
institution believes its quarterly certified statement invoice is 
correct, it would no longer be required to sign or return the invoice 
to the FDIC. Instead, an insured institution would pay the amount 
specified on the invoice and retain it in the institution's files.
    Disagreements with quarterly certified statement invoices would be 
handled with greater ease. If an institution believes the report of 
condition or similar report (Call Report or Thrift Financial Report 
(TFR)) data used on a quarterly certified statement invoice is not 
correct, the institution would amend its Call Report/TFR (as it does 
now); if an institution believes the Call Report/TFR data on the 
invoice is correct, but the calculation of the assessment amount is 
incorrect, the institution would amend the invoice to show the desired 
change, sign it, and return it to the FDIC within the specified 
timeframe. Either way, the FDIC would automatically treat the 
institution's action as a request for revision of assessment 
computation under section 327.3(h), and the present need for the 
institution to file a separate request for revision under the FDIC's 
regulations would be eliminated. With these changes, the regulatory 
burden in the assessment process would be reduced for the benefit of 
insured depository institutions. The FDIC would benefit as well, by 
significantly reducing staff time required for administering the risk-
based assessment system and assessment billing and collection process.

I. Background

    Under section 7(c) of the Federal Deposit Insurance Act (FDI Act or 
Act) (12 U.S.C. 1817(c)) insured depository institutions are required 
to file a certified statement with the FDIC for each semiannual deposit 
insurance assessment period, containing such information as the FDIC 
``may require for determining the institution's semiannual 
assessment.'' 12 U.S.C. 1817(c)(1)(A). The FDI Act also provides that 
the certified statement ``shall * * * be in such form and set forth 
such supporting information as the Board of Directors shall prescribe * 
* *'' 12 U.S.C. 1817(c)(1)(B)(i). In this way, the Act vests in the 
FDIC discretion to prescribe the information contained in, as well as 
the form of, semiannual certified statements. As a result of the FDIC's 
exercise of this discretion over a period of years, the certified 
statement process has evolved in response to advances in collection 
procedures and data processing technology.
    Prior to 1995, the FDIC mailed a blank certified statement form to 
each insured depository institution each semiannual period. Each 
institution was required to transcribe manually on this form the 
deposit data culled from its two prior Call Reports/TFRs and to 
calculate its assessment payment. The assessment was paid for the 
entire semiannual period one month after the beginning of the 
semiannual period (i.e., January 31 and July 31). An officer of the 
institution was required to certify the accuracy of that information by 
signing the form, which was then returned to the FDIC along with the 
institution's check for the assessment amount. Under this system almost 
all of the certified statements were returned to the FDIC each 
semiannual period, but about 10 percent of the certified statements 
received contained mistakes, due in part to simple transpositions of 
figures and mathematical errors that required correction and revision.
    The FDIC revised the process for collecting deposit insurance 
assessments--adopting the present system of quarterly payments in 1994 
and implementing it in March of 1995. 59 FR 67153 (Dec. 29, 1994). As 
part of this changeover to the current automated invoicing and 
collection system, the FDIC assumed responsibility for ``filling out'' 
the certified statement and calculating each institution's deposit 
insurance assessment. The information used by the FDIC in completing 
certified statements is derived from institutions' Call Reports/TFRs, 
and is stored by the FDIC electronically. Because the June and December 
Call Report/TFR data was not available electronically until after the 
next semiannual payment date,\1\ the FDIC instituted the practice of 
collecting semiannual assessments in two quarterly installments to 
facilitate FDIC preparation of assessment forms for insured 
institutions.
---------------------------------------------------------------------------

    \1\ The June 30 Call Report/TFR data was not available 
electronically until after the July 31 payment date; similarly, the 
December 31 Call Report/TFR data was not available electronically 
until after the January 31 payment date.
---------------------------------------------------------------------------

    Accordingly, since 1995, the semiannual assessment has been 
collected in two quarterly installments; the sum of these installments 
equals an institution's semiannual assessment. Each quarterly 
installment is based on deposit data contained in one of the two 
quarterly Call Reports/TFRs submitted by the institution during the 
previous semiannual period. Under section 7(a)(3) of the FDI Act (12 
U.S.C. 1817(a)(3)), reports of condition must contain a declaration by 
an officer of the institution, and a signed attestation by two other 
institution officers, that the information set forth is true and 
correct.
    The FDIC computes the amount of each quarterly installment by 
retrieving the relevant electronic data from the Call Report/TFR for 
each institution. Once computed, the FDIC sends each insured 
institution an invoice for the first semiannual installment, and, three 
months later, a certified statement for the second installment. The 
invoice and the certified statement \2\ are each mailed about two weeks 
prior to the actual collection of each respective installment; 
collection is accomplished via Automated Clearing House (ACH) direct 
debit of the account designated by the institution for that purpose.\3\
---------------------------------------------------------------------------

    \2\ The term ``invoice'' will be used to refer to the invoice 
for the first quarterly installment; the term ``certified 
statement'' will be used to refer to the invoice for the second 
quarterly installment.
    \3\ The mailing date is about two weeks prior to the ACH 
payment/settlement date. The FDIC also collects Financing 
Corporation (FICO) assessments pursuant to the same statutory 
requirements that govern FDIC deposit insurance assessments. The 
FICO rate is established based on the deposit data reflected on the 
invoice and certified statements. To ensure timely collection of 
adequate funds for FICO, institutions pay the original amount due, 
and any appropriate adjustments, plus interest, are part of a 
subsequent quarterly assessment collection.
---------------------------------------------------------------------------

    The invoice and the certified statement differ in two essential 
respects. The invoice contains the data, assessment computation, and 
amount due for the first installment of the semiannual period only. The 
certified statement, however, contains more than just the data, 
assessment computation, and amount due for the second installment of 
the semiannual period. It also restates the first installment 
information and combines the two sets of information into a semiannual 
presentation. In addition, the second installment invoice--the 
certified statement--contains a signature block and must be signed and 
returned to the FDIC, while the first installment invoice is subject to 
neither requirement. Under the current process, if the institution

[[Page 31924]]

agrees with the information on the first installment invoice, the 
institution takes no action other than to fund the designated 
assessment account sufficiently to allow the direct debit of the 
account. At most institutions, an officer will review the first 
installment invoice before authorizing payment by comparing the deposit 
data on the invoice to the amounts reported by the institution on its 
corresponding Call Report/TFR, reconciling any adjustments from prior 
assessment periods as may be noted on the back of the invoice, 
verifying the rate multiplier used and the ACH account information, and 
spot checking mathematical calculations. If the institution disagrees 
with the information on the first installment invoice, the institution 
must, by regulation (12 CFR 327.3(h)), file a request for revision of 
its assessment computation if it wishes to change its assessment 
payment, which in practice is usually done to obtain a refund.
    If an institution agrees with the second installment invoice (the 
certified statement), in addition to ensuring that the designated 
account is adequately funded and payment is authorized, an officer of 
the institution must certify the accuracy of the statement and return 
it to the FDIC. Generally, this process will involve checking the 
restated first invoice data again, as well as checking the data for the 
second half of the semiannual period. The institution must return its 
certified statement (usually by mail) signed by an officer, not later 
than the second quarterly payment date of the semiannual period (i.e., 
certified statements must be returned by March 30 for the January-June 
semiannual period and by September 30 for the July-December semiannual 
period).\4\ If the institution disagrees with the certified statement, 
the institution must annotate the changes, certify by signing, and 
return the form to the FDIC. As with the first installment, the 
institution is required under section 327.3(h) to file a request for 
revision of its assessment computation if it wishes to change its 
assessment payment, which in practice is usually done to obtain a 
refund.
---------------------------------------------------------------------------

    \4\ An institution's assessment for the first semiannual period 
of each year (January 1 through June 30) is calculated on the 
deposits reported on the previous September and December Call 
Report/TFR. The first installment (due January 2) is based on the 
September deposits and the second installment (due March 30) is 
based on the December deposits. The assessment for the second 
semiannual period (July 1 through December 31) is calculated on the 
deposits reported on the previous March and June Call Report/TFR. 
The first installment (due June 30) is based on the March deposits, 
and the second installment (due September 30) is based on the June 
deposits. See 12 CFR 327.3.
---------------------------------------------------------------------------

    Under the existing automated system, the certified statement has 
evolved from a semiannual form used by insured institutions to report 
their deposit data and calculate their assessment payments, into a form 
designed to confirm the accuracy of information previously provided by 
the institution (via Call Reports/TFRs) and the accuracy of the FDIC's 
assessment calculations based on that information.
    The present certified statement process imposes significant and 
unnecessary burdens on insured institutions and the FDIC. The FDIC must 
mail out over 9,000 first installment invoices and an equal number of 
certified statements each semiannual period. Institution officials have 
to review and accept the first installment assessment calculation 
twice: once in reviewing the first installment invoice and then a 
second time, when reviewing the certified statement. Institutions must 
also return their certified statements to the FDIC, even if no 
discrepancies are found, a process prone to recurrent errors. For 
example, some institutions return the wrong form (the first installment 
invoice rather than the certified statement), or the certified 
statement may be lost in transit. Approximately 1,000 institutions fail 
to file their certified statements on time each semiannual period, 
necessitating significant follow-up efforts by FDIC staff through 
letters and telephone calls.
    In addition, institutions filing corrected certified statements or 
invoices are required under section 327.3(h) to file a separate request 
for revision of that payment with the FDIC within 60 days from the date 
of the quarterly assessment invoice. The request for revision sets in 
motion the process of FDIC review of the validity of the certified 
statement amendment, the accuracy of the corresponding assessment 
payment, and the potential for a refund or additional charges based on 
the FDIC's determination. Finally, the return of certified statements 
to the FDIC was important when institutions themselves filled out the 
certified statement and computed the assessment owed to the FDIC. 
Today, however, the information used to complete the certified 
statement is drawn from Call Reports/TFRs previously attested to by 
officers of the insured depository institutions and stored 
electronically by the FDIC. In effect, the information on the certified 
statements has already been certified and transmitted to the FDIC. 
Moreover, unlike the certified statement, the completed Call Report/TFR 
signature and attestation page is not returned to the appropriate 
Federal banking agency. Instead, the page is signed and attached to the 
hard-copy record of the completed Call Report/TFR, which the 
institution retains in its own files.
    For these reasons, return of certified statements to the FDIC has 
been identified under the FDIC's ongoing EGRPRA program as an outdated, 
redundant, and burdensome process, both for the industry and the FDIC.

II. Proposed Amendments to Sec.  327.2

    Under the proposed revisions to section 327.2, the two quarterly 
assessment invoices issued during a semiannual period would each become 
a component of the required semiannual certified statement. The two 
quarterly certified statement invoices combined would--as the invoice 
and certified statement do now--reflect an institution's total 
assessment payment for each semiannual period.
    The FDIC would, under the proposal, no longer mail out paper copies 
of certified statement invoices to insured institutions. Instead, 
insured institutions would access their quarterly certified statement 
invoices each quarter via the FDIC's transaction-based e-business Web 
site, FDICconnect, which would require that all institutions obtain 
Internet access. In addition, Notices of Assessment Risk 
Classification, presently mailed with the first quarterly invoice each 
semiannual period (see 12 CFR 327.4(a)), would be provided with the 
first quarterly certified statement invoice each semiannual period on 
FDICconnect.
    Each institution would register an employee as its FDICconnect 
Designated Coordinator, who would access the quarterly certified 
statement invoice or grant access for that purpose to another 
individual. Accessing quarterly certified statement invoices via 
FDICconnect would comply with the provisions of the Government 
Paperwork Elimination Act, which requires agencies to offer on-line 
alternatives to paper-based processes. Recognizing, however, that 
Internet access might be unavailable or pose a hardship to some insured 
institutions, the FDIC seeks comment from interested parties on the 
need for and scope of an exemption to allow for delivery of quarterly 
certified statement invoices by an alternate method.
    The FDIC is also considering, as a courtesy, notifying all insured 
depository institutions via e-mail of the availability of the quarterly 
certified statement invoice. Comment is requested on whether the 
proposed e-mail notification process is necessary or

[[Page 31925]]

desirable. Having obtained their quarterly certified statement invoices 
via FDICconnect, return of those statements to the FDIC--if the 
institution believes the invoice is correct--would no longer be 
required. If an institution agrees with its quarterly certified 
statement invoice, an officer of the institution would simply retain it 
in the institution's files for the five-year record retention period 
established in the FDI Act. See 12 U.S.C. 1817(b)(5). Because the data 
used to complete the quarterly certified statement invoice has been 
previously attested to on the institution's Call Report/TFR, the data 
would be deemed certified by the institution, and signing the quarterly 
certified statement invoice would not be required. The institution need 
only pay the assessment indicated on the quarterly certified statement 
invoice--by funding its designated account and permitting the FDIC's 
direct debit--to be in conformity with both the proposed rule and the 
FDI Act.
    If an institution disagrees with the Call Report/TFR data used to 
compute the assessment amount listed on a quarterly certified statement 
invoice, the institution would amend its Call Report/TFR data (as it 
does now), and the FDIC would automatically treat the amendment as a 
request for revision of assessment computation under 12 CFR 327.3(h). 
Similarly, if an institution disagrees with the calculation of the 
assessment amount (with no change required to Call Report/TFR data), 
the institution would annotate the quarterly certified statement 
invoice with the correct information, certify its accuracy by signing, 
return it to the FDIC within the specified timeframe, and the FDIC 
would automatically treat the amended invoice as a request for revision 
of assessment computation under Sec.  327.3(h). In either case, no 
separate request for revision would be needed.\5\ In the event of an 
assessment dispute, the FDIC would also be able to request from an 
insured institution the quarterly certified statement invoice retained 
in the institution's files.
---------------------------------------------------------------------------

    \5\ The requirements for filing a request for review of an 
institution's assessment risk classification under 12 CFR 327.4(d) 
would be unaffected by this change.
---------------------------------------------------------------------------

    Under the proposal, quarterly certified statement invoices from 
prior semiannual periods would still be subject to change should an 
institution discover errors and seek to amend its Call Report/TFR. The 
FDIC would consider such requests for assessment changes for the full 
five-year statute of limitations period for assessments. Institutions 
would also continue to be obligated to ensure that the debit to the 
institution's designated ACH account is adequately funded and 
authorized.
    The proposal would provide several benefits to the industry. By 
accessing FDICconnect institutions would obtain their assessment 
invoice data more quickly and more reliably, and at less cost to the 
FDIC. The official delegated with the responsibility for an 
institution's FDIC assessments could retrieve quarterly certified 
statement invoices at his or her convenience twenty-four hours a day 
(allowing limited downtime for maintenance during off hours) without 
mail or internal routing delays. Signing and returning correct 
quarterly certified statement invoices would be eliminated. Making each 
invoice a component of the semiannual certified statement would 
synchronize the payment and certification processes, and also clear up 
confusion caused by the requirement that institutions return every 
other invoice. In addition, insured institutions' officers would be 
able to eliminate some steps in their review. Under the current system, 
the institutions must review their first invoice data twice--once on 
the first invoice and again when it is reiterated on the certified 
statement. The proposal would eliminate this needless repetition, 
thereby reducing the regulatory burden imposed by the certified 
statement process. Finally, the proposal would simplify and streamline 
the FDIC's review process for assessment payment changes; when an 
amended quarterly certified statement invoice is returned to the FDIC, 
a separately filed request for revision of assessment computation would 
no longer be required.
    The FDIC believes that the present certified statement process has 
not kept up with the evolution and modernization of assessment 
collections. Several proposed revisions have been identified under the 
FDIC's ongoing EGRPRA program. Under the proposed revisions, the 
assessment process would be simplified by synchronizing assessment 
certification with the quarterly payment process in a format that would 
better meet the needs of insured institutions and the FDIC. Internet 
access would assure timely and reliable receipt by insured institutions 
of their quarterly certified statement invoices and would be the first 
step toward providing future business processes between insured 
institutions and the FDIC electronically. Institutions would be 
relieved of the administrative chore of ensuring that correct certified 
statements are signed and mailed back to the FDIC, and reviews would be 
simplified. The FDIC would realize cost savings by eliminating the need 
to process and mail over 9,000 paper invoices each calendar quarter, 
track receipt of, file and store returned certified statements, and 
take follow-up actions for statements that are not returned to the 
FDIC. The proposed revisions would also obviate the need for insured 
institutions to file requests for revision of assessment computation to 
effect payment changes associated with certified statement amendments.

III. Request for Comment

    The Board invites comments on all aspects of the proposed rule, 
including any other revisions to simplify, clarify, or improve the 
process of filing certified statements. Interested persons are invited 
to submit written comments during the 60-day comment period.

IV. Paperwork Reduction Act

    The proposed rule contains a revision to an existing collection of 
information. The revision has been submitted to the Office of 
Management and Budget (OMB) for review and approval pursuant to the 
Paperwork Reduction Act (44 U.S.C. 3501 et seq.). The FDIC has 
previously obtained OMB approval of this collection of information 
under control number 3064-0057. Comments specifically regarding the 
accuracy of the burden estimate and suggestions for reducing the burden 
should be sent to: Gary Kuiper, Legal Division (Consumer and Compliance 
Unit), Room PA-1730-3038, 550 17th Street, NW., Washington, DC 20429. 
All comments should refer to the title of the proposal. Comments may be 
hand delivered to the guard station at the rear of the 17th St Building 
(located on F Street), on business days between 7 a.m. and 5 p.m., 
Attention: Comments, Federal Deposit Insurance Corporation, 550 17th 
Street, NW., Washington, DC 20429. Copies of comments should also be 
sent to: Mark Menchak, FDIC Desk Officer: Office of Management and 
Budget, Office of Information and Regulatory Affairs, New Executive 
Office Building, Washington, DC 20503.
    Comments are invited on:
    (a) Whether the collection of information is necessary for the 
proper performance of the agency's functions, including whether the 
information has practical utility;
    (b) The accuracy of the estimates of the burden of the revised 
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;

[[Page 31926]]

    (d) Ways to minimize the burden of the revised information 
collection on respondents, including 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.
    At the end of the comment period, the comments and recommendations 
received will be analyzed to determine the extent to which the revised 
information collections should be modified. All comments will become a 
matter of public record.
    Title of the Collection: Certified statement for semiannual deposit 
insurance assessment.
    Summary of proposed changes to the information collection: As 
discussed more fully in the preamble, the proposed revisions to 12 CFR 
327.2 would change the manner in which the FDIC provides--and FDIC-
insured institutions receive--quarterly assessment invoices and 
certified statements. At present the FDIC mails certified statements 
and invoices to approximately 9,700 insured institutions each 
semiannual period. Each invoice and certified statement must be 
reviewed by the institution. The data on the invoice is reiterated on 
the certified statement and must be reviewed again. Institutions must 
sign and return the certified statements to the FDIC whether the 
certified statements are correct or incorrect. If the institution 
believes the certified statement is incorrect, a separate request for 
review must also be filed if the institution wishes to obtain a refund.
    Under the proposed rule, institutions will access their quarterly 
certified statement invoices via the FDIC's e-business Web site, 
FDICconnect. Return of correct invoices will be eliminated. An insured 
institution will review each quarterly certified statement invoice just 
once. Only quarterly certified statement invoices that the institution 
believes are not correct will be returned to the FDIC, amended to show 
corrections. The FDIC will treat an amended certified statement invoice 
as a request for review, eliminating the need for the institution to 
file a separate request under 12 CFR 327.3(h). The proposed amendment 
will require insured depository institutions to obtain their quarterly 
certified statement invoices on the Internet, comply with a 
registration process for FDICconnect, and retain a copy of the 
quarterly certified statement invoice for their records. Access to 
quarterly certified statement invoices via FDICconnect will be more 
secure than the mail, will eliminate much internal routing of 
statements within institutions, will permit 24-hour access to quarterly 
certified statement invoices (with minimal maintenance downtime), and 
will eliminate significant FDIC tracking and processing.
    Estimated Paperwork Burden Under the Proposal:
    Number of respondents: 9,700.
    Annual number of responses per respondent: 2.
    Total annual responses: 19,400.
    Estimated average time per response: 20 minutes.
    Total estimated annual burden hours: 6,467.

V. Regulatory Flexibility Act

    Pursuant to 5 U.S.C. 605(b) the FDIC certifies that the proposed 
rule would not have a significant economic impact on a substantial 
number of small businesses within the meaning of the Regulatory 
Flexibility Act (5 U.S.C. 601, et seq.). The proposed rule, if 
finalized, will affect all insured depository institutions (there are 
approximately 9,700 at present). Of the total number of insured 
institutions, approximately 60% are small business entities (assets of 
$150 million or less). The proposed rule will slightly reduce the 
regulatory burden (from an estimated 30 minutes per response to an 
estimated 20 minutes per response) imposed by the certified statement 
process, and therefore will not have a significant economic impact on 
any insured depository institution.
    The proposed rule will change the manner in which the FDIC provides 
and insured institutions receive certified statements, as set out in 
the Preamble. Under the proposed rule, institutions will access their 
quarterly certified statement invoices via the FDIC's e-business Web 
site, FDICconnect, rather than by mail. No significant burden is 
anticipated in this requirement because the FDIC believes that very few 
institutions do not already have Internet access or cannot readily 
obtain it (in the Preamble the FDIC seeks comment on the need for a 
hardship exemption). Return of correct invoices will be eliminated. An 
insured institution will review each quarterly certified statement 
invoice only once, unlike the present system. Only quarterly certified 
statement invoices that the institution believes are not correct will 
be returned to the FDIC, amended to show corrections. The FDIC will 
treat amended certified statement invoices as requests for review, 
eliminating the need for institutions to make a separate filing under 
12 CFR 327.3(h). The proposed rule will clarify that institutions 
should retain a copy of the quarterly certified statement invoice for 
their records, but no significant burden is anticipated in this 
requirement because the FDIC believes that insured institutions already 
retain copies of their certified statements and invoices. Access to 
quarterly certified statement invoices via FDICconnect will be more 
secure than the mail, will eliminate much internal routing of 
statements within institutions, will permit 24-hour access to quarterly 
certified statement invoices (with minimal maintenance downtime), and 
will eliminate significant FDIC tracking and processing. In short, the 
proposal will reduce the regulatory burden on insured institutions.

VI. The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families

    The FDIC has determined that the proposed rule will not affect 
family well-being within the meaning of section 654 of the Treasury and 
General Government Appropriations Act, enacted as part of the Omnibus 
Consolidated and Emergency Supplemental Appropriations Act of 1999 
(Pub. L. 105-277, 112 Stat. 2681).

VII. Solicitation of Comments on Use of Plain Language

    Section 722 of the Gramm-Leach-Bliley Act requires banking agencies 
to use plain language in all proposed and final rules published after 
January 1, 2000. Comments are invited on how to make the proposed rule 
easier to understand. For example, you may wish to address the rule's 
organization, clarity, technical language, or formatting. Have we 
organized the material to suit your needs? If not, how could this 
material be better organized? Are the requirements in the rule clearly 
stated? If not, how could the rule be more clearly stated? Do the 
regulations contain technical language or jargon that is not clear? If 
so, which language requires clarification? Would a different format 
(grouping and order of sections, use of headings, paragraphing) make 
the regulation easier to understand? If so, what changes to the format 
would make the regulation easier to understand? Would more, but 
shorter, sections be better? If so, which sections should be changed? 
What else could we do to make the regulation easier to understand?

List of Subjects in 12 CFR Part 327

    Assessments, Bank deposit insurance, Banks, Banking, Financing 
Corporation, Freedom of information, Hearing and appeal procedures, 
Record retention,

[[Page 31927]]

Reporting and recordkeeping requirements, Savings associations.

    For the reasons stated in the preamble, the Board of Directors of 
the Federal Deposit Insurance Corporation proposes to amend part 327 of 
Title 12 of the Code of Federal Regulations as follows:

PART 327--ASSESSMENTS

    1. The authority citation for part 327 continues to read as 
follows:

    Authority: 12 U.S.C. 1441, 1441b, 1813, 1815, 1817-1819; Pub. L. 
104-208, 110 Stat. 3009-479 (12 U.S.C. 1821).

    2. Section 327.2 of subpart A is revised to read as follows:


Sec.  327.2  Certified statements.

    (a) Required. (1) Each insured depository institution shall certify 
its semiannual certified statement in the manner and form set forth in 
this section.
    (2) The semiannual certified statement shall be comprised of the 
two quarterly assessment invoices issued during each semiannual period 
as prescribed in Sec.  327.3(c) and (d). The two quarterly certified 
statement invoices combined shall reflect the amount and computation of 
the institution's semiannual assessment. Any rule applicable to the 
certified statement shall apply to each quarterly certified statement 
invoice.
    (b) Availability and access. (1) The Corporation shall make 
available to each insured depository institution via the FDIC's e-
business Web site FDICconnect two quarterly certified statement 
invoices during each semiannual period.
    (2) Insured depository institutions shall access their quarterly 
certified statement invoices via FDICconnect, unless the FDIC provides 
notice to insured depository institutions of a successor system. In the 
event of a contingency, the FDIC may employ an alternative means of 
delivering the quarterly certified statement invoices.
    (c) Review by institution. The president of each insured depository 
institution, or such other officer as the institution's president or 
board of directors or trustees may designate, shall review the 
information shown on each quarterly certified statement invoice.
    (d) Retention by institution. If the appropriate officer of the 
insured depository institution agrees that to the best of his or her 
knowledge and belief the information shown on the quarterly certified 
statement invoice is true, correct and complete and in accordance with 
the Federal Deposit Insurance Act and the regulations issued under it, 
the institution shall pay the amount specified on the invoice and shall 
retain the quarterly certified statement invoice in the institution's 
files for five years as specified in section 7(b)(5) of the Federal 
Deposit Insurance Act.
    (e) Amendment by institution. If the appropriate officer of the 
insured depository institution determines that to the best of his or 
her knowledge and belief the information shown on the quarterly 
certified statement invoice is not true, correct and complete and in 
accordance with the Federal Deposit Insurance Act and the regulations 
issued under it, the institution shall pay the amount specified on the 
invoice, and may
    (1) Amend its Report of Condition, or other similar report, to 
correct any data believed to be inaccurate on the quarterly certified 
statement invoice; amendments to such reports timely filed under 
section 7(g) of the Federal Deposit Insurance Act but not permitted to 
be made by an institution's primary Federal regulator may be filed with 
the FDIC for consideration in determining deposit insurance 
assessments; or
    (2) Amend and sign its quarterly certified statement invoice to 
correct a calculation believed to be inaccurate and return it to the 
FDIC by the quarterly payment date for that semiannual period as 
specified in Sec.  327.3(c) and (d).
    (f) Certification. Data used by the Corporation to complete the 
quarterly certified statement invoice has been previously attested to 
by the institution in its Reports of Condition, or other similar 
reports, filed with the institution's primary Federal regulator. When 
an insured institution pays the amount shown on the quarterly certified 
statement invoice and does not correct that invoice as provided in 
paragraph (e) of this section, the information on that invoice shall be 
deemed certified for purposes of paragraph (a) of this section and 
section 7(c) of the Federal Deposit Insurance Act.
    (g) Requests for revision of assessment computation. The timely 
filing of an amended Report of Condition or other similar report, or an 
amended quarterly certified statement invoice, that will result in a 
change to deposit insurance assessments owed or paid by an insured 
depository institution shall be treated as a timely filed request for 
revision of computation of quarterly assessment payment under Sec.  
327.3(h).

    Dated at Washington, DC, this 21st day of May, 2004.

    By order of the Board of Directors.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 04-12922 Filed 6-7-04; 8:45 am]

BILLING CODE 6714-01-P




Last Updated 6/07/2004 communications@fdic.gov