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Inactive Financial Institution Letters
December 31, 1996
to the Reports of Condition and Income
(Call Reports) for 1997
Federal Financial Institutions Examination
Council (FFIEC) has approved revisions to
the reporting requirements for the Reports
of Condition and Income (Call Report) for
1997. The Examination Council is providing
this early notification to assist you in planning
for these upcoming Call Report changes, which
also must be approved by the U.S. Office of
Management and Budget (OMB) before they can
become final. More detailed information about
changes in Call Report requirements for 1997,
including the related instructions, will be
distributed to all banks within the coming
Proposed Call Report revisions for 1997 were issued for public comment on September 16, 1996. The revisions approved by the Examination Council, which are described in the attached document, incorporate modifications made to the proposal in response to the comments received. The revisions for 1997 include:
These Call Report revisions will take effect as of the March 31, 1997, report date, except for the reporting changes related to interest rate risk. In the March 31, 1997, Call Report, banks may report a reasonable estimate for any new or revised item for which the requested information is not readily available.
The Examination Council has deferred the effective date for the revised interest rate risk information until the June 30, 1997, report date in order to provide banks with additional time to make any necessary systems changes. The option to report reasonable estimates for items for which the requested information is not readily available applies to the interest rate risk-related items in the June 30, 1997, Call Report.
On November 4, 1996, acting under the auspices of the Examination Council, the banking agencies requested comment on a proposal to discontinue their acceptance of Call Reports that banks file directly with them in hard copy (paper) form (see FIL-94-96 dated November 22, 1996). Under this proposal, the agencies would, instead, accept only those Call Reports filed with their electronic collection agent, Electronic Data Systems Corporation (EDS). A bank could either file its reports directly with EDS (by using a computer and modem or by sending EDS a computer diskette) or arrange for a third party to first convert its paper reports to automated form and then file the reports with EDS. The agencies would implement the new filing practice as of the June 30, September 30, and December 31, 1997, report dates based on bank size. The proposal's comment period ends on January 3, 1997. Banks will be advised as more information on this proposed filing practice becomes available.
Banks are reminded that Financial Accounting Standards Board (FASB) Statement No. 125, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities" (FAS 125), takes effect on January 1, 1997. Banks must adopt the provisions of FAS 125 for Call Report purposes for transactions occurring after December 31, 1996, except for any provisions of this new accounting standard deferred for implementation by the FASB. FAS 125 also applies to servicing contracts and certain financial assets in existence before January 1, 1997. Thus, the March 31, 1997, Call Report will be the first regulatory report to be completed in accordance with the provisions of FAS 125 for which the FASB has not delayed implementation. Banks should note that FAS 125 establishes a new accounting approach for distinguishing transfers of financial assets that are reported as sales from transfers that are reported as borrowings. Because this new approach will apply to transfers of financial assets beginning in 1997, including such basic transactions as loan participations, banks are encouraged to consult with their outside accountants concerning the effect of FAS 125 on their asset transfer activities and the actions needed to implement FAS 125.
Please forward this letter to the person responsible for preparing Call Reports at your bank. For more information or assistance, national banks and FDIC-supervised banks may contact the FDIC's Call Reports Analysis Unit in Washington, DC, toll-free on 1-800-688-3342 or 202-898-6607. Assistance is provided Monday through Friday between 8:00 a.m. and 5:00 p.m. Eastern time. State member banks may contact their district Federal Reserve Bank.
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Distribution: Insured Commercial Banks and FDIC-Supervised Savings Banks
Note: Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 801 17th Street, N.W., Room 100, Washington, D.C. 20434 ((703) 562-2200)
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