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FDIC Federal Register Citations

[Federal Register: February 4, 2008 (Volume 73, Number 23)]
[Notices]              
[Page 6506-6515]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04fe08-50]                        

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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.

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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.

[[Page 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 for-profit.

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 for-profit.

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

[[Page 6508]]

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 on-site 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

[[Page 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

[[Page 6510]]

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.
---------------------------------------------------------------------------

    \1\ See 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).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \3\ For 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).
---------------------------------------------------------------------------

    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

[[Page 6511]]

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

[[Page 6512]]

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

[[Page 6513]]

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 asset-
backed 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.

[[Page 6514]]

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' risk-based 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.

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%)
 


Last Updated 02/04/2008 Regs@fdic.gov