FDIC Federal Register Citations

[Federal Register: July 21, 1997 (Volume 62, Number 139)]

[Notices]

[Page 39052-39055]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr21jy97-123]

[[Page 39052]]

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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

FEDERAL RESERVE SYSTEM

FEDERAL DEPOSIT INSURANCE CORPORATION

Agency Information Collection Activities: Submission of OMB

Review; Comment Request

AGENCY: Office of the Comptroller of the Currency (OCC), Treasury;

Board of Governors of the Federal Reserve System (Board); and Federal

Deposit Insurance Corporation (FDIC).

ACTION: Notice of information collection to be submitted to the Office

of Management and Budget (OMB) for review and approval under the

Paperwork Reduction Act of 1995.

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SUMMARY: On November 4, 1996, the OCC, the Board, and the FDIC (the

agencies) requested public comment for 60 days on a proposed change in

the method by which banks file their quarterly Reports of Condition and

Income (Call Reports), which are currently approved collections of

information. Under that proposal, the agencies would no longer accept

Call Reports that banks file directly with the agencies in hard copy

(paper) form. Instead, the only Call Reports that the agencies would

accept would be those filed electronically or on computer diskette with

the agencies' electronic collection agent. A bank could either file its

reports directly with the agent or contract with another party for the

conversion of its reports from hard copy (paper) to automated form and

the filing of the reports with the agent. After considering the

comments the agencies received, the Federal Financial Institutions

Examination Council (FFIEC), of which the agencies are members, adopted

certain modifications to the proposed change in filing method.

In accordance with the requirements of the Paperwork Reduction Act

of 1995 (44 U.S.C. chapter 35), the agencies may not conduct or

sponsor, and the respondent is not required to respond to, an

information collection that has been extended, revised, or implemented

on or after October 1, 1995, unless it displays a currently valid OMB

control number. Comments are invited on: (a) Whether the proposed

revisions to the following collections of information are necessary for

the proper performance of the agencies's 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 collection on respondents, including

through the use of automated collection techniques or other forms of

information technology; and (e) estimates of capital or startup costs

and costs of operational, maintenance, and purchase of services to

provide information.

DATES: Comments must be submitted on or before August 20, 1997.

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: Written comments should be submitted to the Communications

Division, Office of the Comptroller of the Currency, 250 E Street,

S.W., Third Floor, Washington, D.C. 20219; Attention: OMB Control No.

1557-0081 (FAX number (202) 874-5274; Internet address:

Regs.comments@occ.treas.gov). Comments will be available for inspection

and photocopying at the OCC's Public Reference Room, 250 E Street,

S.W., Washington, D.C. 20219, between 9:00 a.m. and 5:00 p.m. on

business days. Appointments for inspection of comments can be made by

calling (202) 874-5043.

Board: Written comments should be addressed to Mr. William W.

Wiles, Secretary, Board of Governors of the Federal Reserve System,

20th and C Streets, N.W., Washington, D.C.20551, Attention: OMB Control

No. 7100-0036, or delivered to the Board's mail room between 8:45 a.m.

and 5:15 p.m., and to the security control room outside of those hours.

Both the mail room and the security control room are accessible from

the courtyard entrance on 20th Street between Constitution Avenue and C

Street, N.W. Comments received may be inspected in room M-P-500 between

9:00 a.m. and 5:00 p.m., except as provided in section 261.8 of the

Board's Rules regarding Availability of Information, 12 CFR 261.8(a).

FDIC: Written comments should be sent to Robert E. Feldman,

Executive Secretary, Attention: Comments/OES, Federal Deposit Insurance

Corporation, 550 17th Street, N.W., Washington, D.C. 20429, Attention:

OMB Control No. 3064-0052. 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 7:00 a.m. and 5:00 p.m. (Fax number:

202) 898-3838; Internet address: comments@fdic.gov). Comments may be

inspected and photocopied in the FDIC Public Information Center, Room

100, 801 17th Street, N.W., Washington, D.C. 20429, between 9:00 a.m.

and 4:30 p.m. on business days.

A copy of the comments may also be submitted to the OMB desk

officer for the agencies: Alexander Hunt, Office of Information and

Regulatory Affairs, Office of Management and Budget, New Executive

Office Building, Room 3208, Washington, D.C. 20503.

FOR FURTHER INFORMATION CONTACT: A copy of an agency's submission to

OMB for review and approval under the Paperwork Reduction Act of 1995

may be requested from the agency clearance officer whose name appears

below.

OCC: John Ference, OCC Clearance Officer, or Jessie Gates (202)

874-5090, Office of the Comptroller of the Currency, 250 E Street,

S.W., Washington, D.C. 20219.

Board: Mary M. McLaughlin, Board Clearance Officer, (202) 452-3829,

Division of Research and Statistics, Board of Governors of the Federal

Reserve System, 20th and C Streets, N.W., Washington, D.C. 20551.

Telecommunications Device for the Deaf (TDD) users only, Diane Jenkins,

(202) 452-3544, Board of Governors of the Federal Reserve System, 20th

and C Streets, N.W., Washington, D.C. 20551.

FDIC: Steven F. Hanft, FDIC Clearance Officer, (202) 898-3907,

Office of the Executive Secretary, Federal Deposit Insurance

Corporation, 550 17th Street N.W., Washington, D.C. 20429.

SUPPLEMENTARY INFORMATION: Request for OMB approval to extend, with a

revision to the filing method, the following currently approved

collections of information:

Report Title: Consolidated Reports of Condition and Income (Call

Report).

Form Number: FFIEC 031, 032, 033, 034.\1\

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\1\ The FFIEC 031 report form is filed by banks with domestic

and foreign offices. The FFIEC 032 report form is filed by banks

with domestic offices only and total assets of $300 million or more.

The FFIEC 033 report form is filed by banks with domestic offices

only and total assets of $100 million or more but less than $300

million. The FFIEC 034 report form is filed by banks with domestic

offices only and total assets of less than $100 million.

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Frequency of Response: Quarterly.

For OCC

OMB Number: 1557-0081.

Affected Public: National Banks.

Estimated Number of Respondents: 2,800 national banks.

Estimated Time per Response: 39.92 burden hours.

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Estimated Total Annual Burden: 447,132 burden hours.

For Board

OMB Number: 7100-0036.

Affected Public: State Member Banks.

Estimated Number of Respondents: 1,002 state member banks.

Estimated Time per Response: 45.80 burden hours.

Estimated Total Annual Burden: 183,566 burden hours.

For FDIC

OMB Number: 3064-0052.

Affected Public: Insured State Nonmember Commercial and Savings

Banks.

Estimated Number of Respondents: 6,374 insured state nonmember

banks.

Estimated Time per Response: 29.67 burden hours.

Estimated Total Annual Burden: 756,511 burden hours.

The estimated time per response is an average which varies by

agency because of differences in the composition of the banks under

each agency's supervision (e.g., size distribution of banks, types of

activities in which they are engaged, and number of banks with foreign

offices). The time per response for a bank is estimated to range from

15 to 400 hours, depending on individual circumstances.

General Description of Report: This information collection is

mandatory: 12 U.S.C. 161 (for national banks), 12 U.S.C. 324 (for state

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

commercial and savings banks). Except for select sensitive items, this

information collection is not given confidential treatment. Small

businesses (i.e., small banks) are affected.

Abstract: Call Reports are filed quarterly with the agencies for

their use in monitoring the condition and performance of reporting

banks and the industry as a whole. Call Reports also are used to

calculate banks' deposit insurance and Financing Corporation

assessments and for monetary policy and other public policy purposes.

Current Actions: Under the auspices of the FFIEC, the agencies

originally proposed that they would no longer accept Call Reports filed

directly with them in hard copy (paper) form. The agencies proposed

that the only Call Reports that they would accept would be those that

are filed electronically or on computer diskette with the agencies'

electronic collection agent, Electronic Data systems Corporation (EDS).

A bank could either file its reports electronically or on computer

diskette directly with EDS or arrange for a third party to convert its

reports from hard copy (paper) form to automated form and then file

them with EDS. The agencies proposed to phase out their acceptance of

paper Call Report forms as of the June 30, September 30, And December

31, 1997, report dates based on bank size. After considering the

comments, the FFIEC approved certain modifications to the proposed

change in filing method for Call Reports. The comments on the initial

proposal and the changes made in response thereto are discussed below.

Type of Review: Revision.

On November 4, 1996, the agencies jointly published a notice

soliciting comment for 60 days on a proposal to no longer accept Call

Reports filed directly with them in paper form (61 FR 56737). The

notice described the change in filing method that the agencies, with

the approval of the FFIEC, were proposing to implement in three phases

for their currently approved Call Report information collections.

beginning with the reports for June 30, 1997.

In response to this notice, the agencies collectively received 24

comment letters, 17 from small banking organizations and 7 from trade

groups, including the American Bankers Association (ABA), America's

Community Bankers (ACB), the Independent Bankers Association of America

(IBAA), and 4 state bankers associations (Illinois, Missouri, and 2 in

Wisconsin).

All but three of the bank commenters opposed the proposal. The one

bank that supported the proposal (Which has $125 million in assets)

indicated that it already purchases and uses Call Report preparation

software, is satisfied with its ease of use, and would not be unduly

burdened by having to file electronically. Two other banks (with $70

and $30 million in assets) requested only that the implementation dates

be delayed to give them more time to prepare for the change in filing

method. The remaining banking organizations objected to the proposal

because of the cost of purchasing Call Report preparation software, the

time to learn how to use the software, and similar expense-related

reasons. However, none of these bankers' comments acknowledged that the

proposal contained an alternative which would not require them to

purchase Call Report software, i.e, the agencies stated in the proposal

that individual banks would be permitted to continue completing their

reports on paper, provided that such a bank arranged for a third party,

such as one of the Call Report software vendors, to convert the bank

data from paper to electronic form.

Of the trade groups, ACB supported the proposal, noting that the

Office of Thrift Supervision (OTS) already requires savings

associations to file their Thrift Financial Reports electronically

(although OTS provides the necessary software directly to each savings

association). The ABA stated that it no longer opposes mandatory

electronic submission of Call Reports. In this regard, the ABA

indicated that several of the bankers they consulted about the proposal

``have reported that by switching to Call Report software they have

decreased the amount of time their cashiers and other bank personnel

spend on preparing the Call Report. As a result, they believe that the

benefits that they have obtained by using the software have outweighed

the initial costs and annual fees for maintaining the software.''

However, the ABA recommended that the FFIEC and the agencies should

streamline the Call Report before making electronic filing mandatory.

The ABA also stated that bankers were concerned that the agencies would

find it easier to make unnecessary changes and add unnecessary items to

the Call Report if the report had to be filed electronically. The IBAA

stated that ``[t]he majority of community banks providing comments to

the IBAA do not foresee any problems complying with'' an electronic

filing requirement. The IBAA added that ``in the long run filing

electronically should make the Call Report preparation and banking

agencies' review processes more efficient and less burdensome for

banks.'' The IBAA noted, however, that some community banks strongly

believe the benefits do not outweigh the costs. The IBAA urged the

agencies to explore ways to reduce the cost of the proposal to banks

not currently filing electronically.

The concerns raised by the state bankers associations were similar

to those of other commenters, although the Illinois Bankers Association

stated that ``paperwork for this quarterly report requirement * * *

will be reduced with electronic filing'' and that ``the banking

industry supports this proposal.'' Concerns expressed by these trade

groups (including the Illinois Bankers Association) generally dealt

with the costs that will be incurred by some banks, training on the use

of Call Report software, and the amount of lead time until the

effective date.

In developing the proposed change in filing method for Call

Reports, the FFIEC and the agencies recognized that some banks,

especially smaller banks with limited experience with personal

computers, would be concerned about the costs associated with

purchasing

[[Page 39054]]

computer software \2\ and filing their reports electronically or on

computer diskette with EDS, the agencies' collection agent. Thus, the

proposal stated that the agencies would permit banks to continue

completing their reports on paper. However, a bank preferring to take

this approach would need to arrange for a third party to convert its

completed Call Report from paper to electronic form. The proposal

indicated that banks could contract with a Call Report software vendor

or some other party for this data conversion. Despite the proposal's

inclusion of this alternative, few of the commenters who objected to

the proposed requirement that bank Call Reports be filed with EDS in an

automated from acknowledged that the proposal contained the paper-based

alternative which would enable them to file indirectly with EDS and

avoid incurring Call Report software and other computer-related costs.

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\2\ Call Report preparation software is available from:

DBI Financial Systems, Inc., P.O. Box 1249, Cannon Beach, Oregon

97110, Telephone: (800) 774-3279.

DPSC Software, Inc., 23501 Park Sorrento, Suite 105, Calabasas,

California 91302, Telephone: (800) 825-3772.

Information Technology, Inc., 1345 Old Cheney Road, Lincoln,

Nebraska 68512, Telephone: (402) 423-2682.

Sheshunoff Information Services Inc., P.O. Box 13203 Capitol

Station, Austin, Texas 78711-3203, Telephone: (800) 505-8333.

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The FFIEC and the agencies continue to be cognizant of the cost

considerations raised by several of the commenters. Nevertheless, the

agencies believe that, after the initial adjustment period, the

benefits to bankers from using Call Report software to prepare their

reports compare favorably with the costs. This view is consistent with

the previously cited comments by the ABA and IBAA. However,

notwithstanding the benefits to both banks and the agencies from the

use of Call Report software (discussed below), the agencies are

retaining the paper-based filing alternative that they had proposed.

Furthermore, to make it simpler for those banks choosing to prepare

their reports in paper form, the FFIEC and the agencies will permit

banks to contract directly from EDS, the agencies' electronic

collection agent, to convert their paper reports to automated form.

Banks may also contract with any other party (such as Call Report

software vendor) for the conversation and electronic filing of their

reports as originally proposed. When one of these parties converts a

bank's data to automated form by keypunching or some other means, the

bank would continue to be responsible for the accuracy of the data in

its report. In addition, banks must ensure that EDS receives their

completed Call Reports in automated form not later than 30 days after

the Call Report date in accordance with existing Call Report submission

standards.

With respect to the benefits of Call Report software and electronic

filing, the agencies have provided the software companies with a

significant number of edits that the agencies normally use for

validating the Call Report information submitted to them each quarter.

As a result, while each bank is responsible for the quality of its Call

Report data, a bank using a commercial software package can correct

errors identified by the software package prior to filing the Call

Report, and provide better quality data to the agencies. This procedure

saves a bank time by reducing agency inquiries for data correction

after the Call Report has been filed. The commercial software also

provides immediate confirmation to a bank that files electronically

that EDS has received its Call Report. In addition, electronic

submission translates into lower costs for the agencies and for the

insurance funds administered by the FDIC. Thus, because the use of Call

Report software and the electronic submission of reports promotes the

accuracy of and speeds the receipt and processing of Call Reports data,

the FFIEC and the agencies may in the future propose to discontinue or

otherwise modify the paper-based filing alternative.

As proposed, the agencies would have required banks with assets of

$50 million or more as of June 30, 1996, to file, or arrange for a

third party to file, their Call Reports electronically or on computer

diskette with EDS beginning with the reports for June 30, 1997. The

requirement would have applied to banks with assets of $25 million or

more beginning as of the September 30, 1997, report date. For all other

banks, the requirement was scheduled to take effect with the reports

for December 31, 1997. In response to requests from commenters for

additional time to prepare for this change in filing method, the FFIEC

has decided to adjust the implementation schedule. Accordingly, the

revised timetable is as follows:

<bullet> For banks with assets of $50 million or more, the

requirement would not take effect as of the September 30, 1997, report

date.

<bullet> For all other banks, the requirements would take effect as

of the December 31, 1997, report date.

The FFIEC believes it is appropriate to fully implement the change

in filing method during the final two quarters of the 1997 reporting

year when no other changes to the Call Report are being introduced.

Because any revisions to the reporting requirements for the Call Report

itself normally take effect in the first quarter of the year, delaying

the final phase of the electronic filing timetable until the March 31,

1998, report date, might result in the smallest banks having to contend

with reporting new or revised types of information in the Call Report

in the same quarter that they are, for the first time, using Call

Report software or arranging for a third party to convert their Call

Report data from paper to electronic form.

Moreover, the FFIEC does not believe that delaying electronic

filing until after the FFIEC and the agencies have streamlined the Call

Report in accordance with the mandate in Section 307 of the Riegle

Community Development and Regulatory Improvement Act of 1994, as

suggested by the ABA, is warranted. The FFIEC and the agencies remain

committed to achieving the goals that Congress set for them in Section

307 in an orderly and well thought out manner. After considering the

comments received, the Agencies believe that the benefits of using

software to prepare the Call Report in its current form outweighs the

costs. Accordingly, the FFIEC sees no reason to postpone the date when

the agencies receive all Call Reports in electronic form their

collection agent beyond the filing period for the year-end 1997

reports.

The ABA expressed concern that an electronic filing requirement

would make it easier for the agencies to make unnecessary changes to

the Call Report. Revisions to the Call Report requirements remain

subject to the Paperwork Reduction Act of 1995, which requires the

agencies to issue proposed reporting changes for public comment,

consider the comments received, and submit the final changes to OMB for

review and approval. Therefore, the implementation of electronic filing

for Call Report will not make it simpler for the agencies or the FFIEC

to change the Call Report.

One banker stated that he prepares his bank's Call Report using

spreadsheet software of his own design and that this method is less

costly for his bank than purchasing Call Report software from a

software vender. He recommended that the agencies, in conjunction with

EDS, develop a method that would enable banks that want to use

internally-developed spreadsheets to transmit their spreadsheets to the

agencies' electronic collection agent. The FFIEC and the agencies

considered this suggestion, but concluded that having the agencies

[[Page 39055]]

design an additional electronic filing method would not be feasible and

practicable. As the proposal noted, banks wishing to file

electronically already have as an alternative to purchasing software

the option of developing a spreadsheet or some other software program.

In this regard, the agencies have for nearly 10 years permitted any

bank to design its own Call Report preparation software, obtain

information from the electronic collection agent about the features

necessary for the bank to electronically transmit its Call Report and

add these features to its software, and complete a certification

process with the collection agent to ensure that the bank's software

can successfully transmit the bank's Call Report data file.

Furthermore, because a bank that uses internally-developed spreadsheet

software to assist in the preparation of its Call Report would

currently submit its completed report on the paper report forms, the

proposal's previously mentioned paper-based alternative also would be

available to the bank

Finally, the Illinois Bankers Association mentioned that some

bankers had questioned the security of the electronic transmission

process and the potential for transmission errors that could render the

Call Report data inaccurate. In this regard, EDS, the banking agencies'

electronic collection agent, has established procedures to ensure that

the electronically transmitted Call Report files are secure and that

the data remains confidential. When a bank transmits its completed Call

Report to EDS, it does so over a private packet-switching network. An

individual bank's data file is transmitted to EDS in ``packets,'' which

means that the complete file is broken into smaller files that are sent

individually. This procedure adds security because a bank's Call Report

data is never on the private network as a single complete file. In

addition, EDS's private network is highly reliable because it is

designed to reroute or ``switch'' transmission traffic when necessary

to avoid transmission errors. Once a bank's multiple ``packets'' of

Call Report data have been received by EDS, the packets are reassembled

into the bank's Call Report data file and stored in secure, remote

directories that deny access to unauthorized users because they employ

appropriate usercode and password security. Before EDS makes its

periodic transmissions of Call Report data files of the banking

agencies, the files to be transmitted are reformatted into a bulk file

format which is compressed and bears little resemblance to the original

Call Report files. EDS then transmits the Call Report bulk data file

over its private network to the Board's private network. Because these

networks use private lines, they are protected from dial access by

unauthorized users.

(This signature page pertains to the joint notice and request for

comment, ``submission for OMB review; comment request'')

Dated: July 15, 1997.

Karen Solomon,

Director, Legislative and Regulatory Activities Division, Office of the

Comptroller of the Currency.

Board of Governors of the Federal Reserve System, July 7, 1997.

William W. Wiles,

Secretary of the Board.

(This signature page pertains to the joint notice and request for

comment, ``agency information collection activities: submission for

OMB review; comment request'')

Dated at Washington, D.C., this 3rd day of July, 1997.

Federal Deposit Insurance Corporation.

Valerie J. Best,

Assistant Executive Secretary (Operations).

[FR Doc. 97-19115 Filed 7-18-97; 8:45 am]

BILLING CODE 4810-33-M, 6210-01-M, 6714-01-M