FDIC Federal Register Citations

[Federal Register: July 6, 2006 (Volume 71, Number 129)]

[Notices]

[Page 38401-38402]

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

[DOCID:fr06jy06-73]

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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

FEDERAL RESERVE SYSTEM

FEDERAL DEPOSIT INSURANCE CORPORATION

Effect of the Federal Deposit Insurance Reform Act on the Consolidated Reports of Condition

and Income

AGENCIES: 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: Joint notice.

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SUMMARY: On May 8, 2006, the agencies, under the auspices of the

Federal Financial Institutions Examination Council (FFIEC), published a

joint notice, with a request for comment, announcing the effect of the

Federal Deposit Insurance Reform Act on the reporting of certain

deposit-related data in the Consolidated Reports of Condition and

Income (Call Report; FFIEC 031 and 041). The notice described

regulatory reporting revisions being made to the Call Report effective

June 30, 2006, primarily in response to an increase in the deposit

insurance coverage for certain retirement plan deposits from $100,000

to $250,000. After considering the comments received on the agencies'

notice, the agencies are providing additional information concerning

the implementation of the regulatory reporting changes related to

retirement plan deposits eligible for $250,000 in insurance coverage.

DATES: The regulatory reporting revisions related to certain retirement

plan deposits take effect June 30, 2006, subject to transition

guidance.

FOR FURTHER INFORMATION CONTACT:

OCC: Mary Gottlieb, OCC Clearance Officer, or Camille Dickerson,

(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. Long, 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: Steven F. Hanft, (202) 898-3907, Room MB-3064, Legal

Division, Federal Deposit Insurance Corporation, 550 17th Street, NW.,

Washington, DC 20429.

SUPPLEMENTARY INFORMATION:

I. Background

Banks file Call Report data with the agencies each quarter for the

agencies' use in monitoring the condition, performance, and risk

profile of reporting banks and the industry as a whole. In addition,

Call Report data provide the most current statistical data available

for evaluating bank corporate applications such as mergers, for

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

and for monetary and other public policy purposes. Call Report data are

also used to calculate all banks' deposit insurance and Financing

Corporation assessments and national banks' semiannual assessment fees.

II. Current Actions

The Federal Deposit Insurance Reform Act of 2005 (Reform Act) (Pub.

L. 109-171), enacted in February 2006, increased the deposit insurance

limit for certain retirement plan deposit accounts from $100,000 to

$250,000. The basic insurance limit for other depositor--individuals,

joint accountholders, businesses, government entities, and trusts--

remains at $100,000. The FDIC issued an interim rule to implement this

increase in coverage and other provisions of the Reform Act pertaining

to deposit insurance coverage effective April 1, 2006 (71 FR 14629).

Because the deposit insurance coverage for certain retirement plan

deposits has increased while the insurance limit for deposit accounts

in other ownership capacities has not changed, the agencies announced

on May 8, 2006 (71 FR 26809), that data on the number and amount of

retirement deposit accounts with balances within and in excess of the

new $250,000 insurance limit will begin to be reported separately in

the Call Report from data on the number and amount of other deposit

accounts within and in excess of the $100,000 insurance limit (Schedule

RC-O, Memorandum item 1). The agencies also stated that the Call Report

instructions for reporting estimated uninsured deposits by banks with

$1 billion or more in total assets (Schedule RC-O, Memorandum item 2)

and for reporting fully insured brokered deposits (Schedule RC-E,

Memorandum item 1.c) will be revised to reflect the new insurance limit

for retirement deposit accounts. The agencies' announcement also

advised that these reporting revisions would take effect June 30, 2006,

the first report date following the effective date of the FDIC's

interim rule and that, for the June 30 report date only, banks may

provide reasonable estimates for any new or revised Call Report item

for which the requested information is not readily available. After

banks make any necessary changes to their systems and records, the

agencies estimated that these deposit-related reporting changes would

produce an average net increase of 0.5 hours per bank per year in the

ongoing reporting burden of the Call Report.

The agencies received comments on their notice from America's

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

(ICBA), and the American Bankers Association (ABA).

ACB supported the Call Report revisions but expressed concern about

the short amount of time for banks to implement the items. ACB urged

the agencies to waive any penalties for reporting errors specific to

the new or revised items in the June 30, 2006, Call Report. The

agencies do not anticipate imposing monetary penalties on banks for

such reporting errors in that Call Report.

The ICBA commented that the reporting revisions are not overly

burdensome and the ability to report reasonable estimates in the June

30, 2006, Call Report is helpful. The ICBA added, however, that once

necessary systems changes are made, the ongoing reporting burden from

the revised reporting requirements would be 20 to 30 minutes per

quarter rather than the 30 minutes per year that the agencies had

estimated. The agencies will revise their estimate of the effect of the

deposit-related reporting changes to an average net increase of 1.33

hours per bank per year in the ongoing reporting burden of the Call

Report.

The ABA urged the agencies to delay the reporting revisions until

the FDIC finalizes its interim rule on retirement deposit account

insurance and banks have had time to make necessary systems changes.

The ABA noted that the amount of time that banks have to prepare for

these reporting revisions is shorter than usual and indicated that bank

deposit records and systems do not clearly distinguish the types of

retirement deposit accounts eligible for the higher insurance coverage

from other accounts. It also asserted that there is uncertainty in the

banking industry as to which retirement deposit accounts are eligible

for the higher insurance coverage. To address these concerns, the

agencies will implement the following transitional approach to

the Call Report revisions related to retirement deposit accounts.

First, because banks have long reported the total amount of

deposits held in Individual Retirement Accounts (IRAs) and Keogh Plan

accounts in Call Report Schedule RC-E, Memorandum item 1.a, these two

types of retirement deposit accounts should already be identified in

banks' deposit records and systems. All deposits held in IRAs and those

deposits held in Keogh Plan accounts that are ``self-directed'' are

eligible for the $250,000 insurance coverage. For IRAs, banks may

provide reasonable estimates for the information to be reported in the

revised Schedule RC-O and Schedule RC-E Memorandum items in their June

30 and September 30, 2006, Call Reports. For Keogh Plan accounts, banks

may provide reasonable estimates of the portion of these accounts

eligible for the $250,000 insurance coverage in the revised Schedule

RC-O and Schedule RC-E Memorandum items in their June 30 and September

30, 2006, Call Reports. If a bank's existing deposit records and

systems for Keogh Plan accounts provide insufficient information to

allow the bank to make a reasonable estimate, the bank may treat all

deposits held in Keogh Plan accounts as eligible for the $250,000

insurance coverage in these two Call Reports (even though some of these

accounts may not be ``self-directed'' and, therefore, would not be

eligible for the increased coverage).

Second, banks should determine whether they have other retirement

deposit accounts eligible for the $250,000 insurance coverage (i.e.,

accounts other than IRAs and Keogh Plan accounts). Banks may provide

reasonable estimates for the information to be reported in the revised

Schedule RC-O and Schedule RC-E Memorandum items in their June 30 and

September 30, 2006, Call Reports. If a bank's existing deposit records

and systems for these other retirement deposit accounts provide

insufficient information to allow the bank to make a reasonable

estimate, the bank may treat all of these deposit accounts as eligible

for the $100,000 insurance coverage in these two Call Reports.

For the December 31, 2006, Call Report, banks would be expected to

have made appropriate systems changes to enable them to report

reasonably accurate data on all types of retirement deposit accounts

eligible for the $250,000 insurance coverage. Therefore, banks would no

longer be permitted to elect to treat all Keogh Plan accounts as

eligible for the $250,000 insurance coverage and all other retirement

deposit accounts as eligible for the $100,000 insurance coverage in the

revised Schedule RC-O and Schedule RC-E Memorandum items in their

December 31, 2006, Call Report. Thereafter, banks' deposit records and

systems should enable them to report information on all retirement

deposit accounts in these Call Report items in accordance with the

applicable instructions.

In addition, the agencies have received inquiries concerning the

reporting of brokered certificates of deposit issued in $1,000 amounts

under a master certificate of deposit in the revised Schedule RC-O and

Schedule RC-E Memorandum items. For these so-called ``retail brokered

deposits,'' multiple purchases by individual depositors from an

individual bank normally do not exceed the applicable deposit insurance

limit (either $100,000 or $250,000), but under current deposit

insurance rules the deposit broker is not required to provide

information routinely on these purchasers and their account ownership

capacity to the bank issuing the deposits. For purposes of reporting in

the Call Report, these brokered certificates of deposit in $1,000

amounts are rebuttably presumed to be fully insured brokered deposits

and should be reported in Schedule RC-E, Memorandum item 1.c.(1),

``Issued in denominations of less than $100,000.'' These deposits

should also be included in Schedule RC-E, Memorandum item 2.b, ``Total

time deposits of less than $100,000.'' For purposes of revised Schedule

RCO, Memorandum item 1, the instructions state that multiple accounts

of the same depositor should not be aggregated. Therefore, in the

absence of information on account ownership capacity for retail

brokered certificates of deposit in $1,000 amounts, which are

rebuttably presumed to be fully insured brokered deposits, banks

issuing these brokered deposits should include them in Schedule RC-O,

Memorandum item 1, as ``Deposit accounts of $100,000 or less.''

Dated: June 27, 2006.

James Gillespie,

Deputy Chief Counsel, Office of the Comptroller of the Currency.

Board of Governors of the Federal Reserve System, June 29, 2006.

Jennifer J. Johnson,

Secretary of the Board.

Dated at Washington, DC, this 27th day of June, 2006.

Federal Deposit Insurance Corporation.

Robert E. Feldman,

Executive Secretary.

[FR Doc. 06-6020 Filed 7-5-06; 8:45 am]

BILLING CODE 4810-33-P