Federal Register: January 27, 2004
(Volume 69, Number 17)]
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
FEDERAL RESERVE SYSTEM
FEDERAL DEPOSIT INSURANCE CORPORATION
Agency Information Collection Activities: Submission for OMB Review; Comment Request
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: Notice of information collection to be submitted to OMB for
review and approval under the Paperwork Reduction Act of 1995.
SUMMARY: In accordance with the requirements of the Paperwork Reduction
Act of 1995 (44 U.S.C. chapter 35), the OCC, the Board, and the FDIC
(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 November 8, 2002, the agencies requested public
comment for 60 days on proposed
revisions to the Consolidated Reports of Condition and Income (Call
Report), which are currently approved collections of information. After
making certain modifications, some of these proposed revisions were
adopted by the Federal Financial Institutions Examination Council
(FFIEC), of which the agencies are members, approved by OMB, and took
effect March 31, 2003. After considering the comments the agencies
received on the other proposed revisions from the November 2002
proposal, the FFIEC has adopted these remaining revisions with certain
changes and the agencies are submitting them to OMB for review and
DATES: Comments must be submitted on or before February 26, 2004.
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: Comments should be sent to the Public Information Room, Office
of the Comptroller of the Currency, Mailstop 1-5, Attention: 1557-0081,
250 E Street, SW., Washington, DC 20219. Due to delays in paper mail
delivery in the Washington area, commenters are encouraged to submit
comments by fax or e-mail. Comments may be sent by fax to (202) 874-
4448, or by e-mail to firstname.lastname@example.org. 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: Written comments, which should refer to ``Consolidated
Reports of Condition and Income, 7100-0036,'' may be mailed to Ms.
Jennifer J. Johnson, Secretary, Board of Governors of the Federal
Reserve System, 20th and C Streets, NW., Washington, DC 20551. Due to
temporary disruptions in the Board's mail service, commenters are
encouraged to submit comments by electronic mail to
email@example.com, or by fax to the Office of the
Secretary at 202-452-3819 or 202-452-3102. Comments addressed to Ms.
Johnson also may be delivered to the Board's mailroom between 8:45 a.m.
and 5:15 p.m. weekdays, and to the security control room outside of
those hours. Both the mailroom and the security control room are
accessible from the Eccles Building courtyard entrance on 20th Street
between Constitution Avenue and C Street, NW. Comments received may be
inspected in room M-P-500 between 9 a.m. and 5 p.m. on weekdays
pursuant to sections 261.12 and 261.14 of the Board's Rules Regarding
Availability of Information, 12 CFR 261.12 and 261.14.
FDIC: Written comments should be addressed to Steven F. Hanft,
Paperwork Clearance Officer, Room MB-3964, Federal Deposit Insurance
Corporation, 550 17th Street, NW., Washington, DC 20429. All comments
should refer to ``Consolidated Reports of Condition and Income, 3064-
0052.'' Commenters are encouraged to submit comments by electronic mail
to firstname.lastname@example.org or by fax to (202) 898-3838. Comments also 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
A copy of the comments may also be submitted to the OMB desk
officer for the agencies: Joseph F. Lackey, Jr., Office of Information
and Regulatory Affairs, Office of Management and Budget, New Executive
Office Building, Room 10235, Washington, DC 20503 or electronic mail to
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, sample copies
of Call Report forms can be obtained at the FFIEC's Web site (http://www.ffiec.gov
OCC: John Ference, Acting OCC Clearance Officer, or Camille Dixon,
(202) 874-5090, Legislative and Regulatory Activities Division, Office
of the Comptroller of the Currency, 250 E Street, SW., Washington, DC
Board: Cynthia M. Ayouch, 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-
FDIC: Steven F. Hanft, Paperwork Clearance Officer, (202) 898-3907,
Legal Division, Federal Deposit Insurance Corporation, 550 17th Street,
NW., Washington, DC 20429.
SUPPLEMENTARY INFORMATION: Request for OMB approval to extend, with
revision, the following currently approved collections of information:
Report Title: Consolidated Reports of Condition and Income.
Form Number: 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.
OMB Number: 1557-0081.
Estimated Number of Respondents: 2,126 national banks.
Estimated Time per Response: 42.30 burden hours.
Estimated Total Annual Burden: 359,719 burden hours.
OMB Number: 7100-0036.
Estimated Number of Respondents: 952 state member banks.
Estimated Time per Response: 48.35 burden hours.
Estimated Total Annual Burden: 184,117 burden hours.
OMB Number: 3064-0052.
Estimated Number of Respondents: 5,332 insured state nonmember
Estimated Time per Response: 32.95 burden hours.
Estimated Total Annual Burden: 702,758 burden hours.
The estimated time per response for the Call Report 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
institutions, types of activities in which they are engaged, and number
of banks with foreign offices). For the Call Report as it would be
revised, the time per response for a bank is estimated to range from 15
to 600 hours, depending on individual circumstances.
General Description of Report
These information collections are 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, and for
all banks for deposit information). Except for selected items, these
information collections are not given confidential treatment.
Banks file Call Reports 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 Reports provide the most current statistical data available for
identifying areas of focus for both on-site and off-site examinations,
for evaluating bank corporate applications such as mergers, and for
monetary and other public policy purposes. Call Reports are also used
to calculate all banks' deposit insurance and Financing Corporation
assessments and national banks' semiannual assessment fees.
On November 8, 2002, the OCC, the Board, and the FDIC jointly
notice soliciting comments for 60 days on proposed revisions to the
Call Report (67 FR 68229). The agencies' notice addressed a number of
different types of changes to the Call Report requirements. These
changes related to the content of the Call Report itself, the
submission deadline for certain banks, and the agencies' process for
validating and publicly releasing the data that banks report.
After considering the comments the agencies received on the
November 2002 proposal, the FFIEC and the agencies adopted some of the
proposed revisions after making certain modifications to them,
submitted them to OMB for review with a request for public comment on
them (68 FR 10310), and received OMB approval to implement them as of
March 31, 2003. The agencies' notice also explained that the FFIEC and
the agencies were continuing to evaluate three other elements of their
November 2002 proposal:
(1) A reduction from 45 to 30 days in the Call Report filing period
for banks with more than one foreign office,1
(2) The creation of a supplement to the Call Report that would
enable the agencies to collect a limited amount of data from certain
banks in the event of an immediate and critical need for specific
(3) The establishment of edit criteria that would have to be met in
order for a bank's Call Report data to be accepted beginning upon
implementation of the agencies' new business model for collecting and
validating Call Reports in 2004.
The FFIEC and the agencies have concluded their evaluations of
these three elements of their November 2002 proposal and have decided
to proceed with them in modified form as more fully discussed below. In
addition, in preparation for the implementation of the agencies' new
Call Report business model, banks will begin to provide contact
information for the authorized officer who signs their Call Report as
part of their submission of the report. The contact information would
be afforded confidential treatment and includes the officer's name,
title, phone number, e-mail address, and fax number. This revision
would take effect with the Call Report for March 31, 2004.
Type of Review: Revisions of currently approved collections.
Comments Received on the Agencies' Proposal
In response to their November 8, 2002, notice, the agencies
received 13 comment letters, eight from banks and banking
organizations, three from bankers' associations, one from a
governmental entity, and one from a trade group outside the banking
industry. The FFIEC and the agencies have considered the comments
received from these 13 respondents as they relate to the revisions that
are the subject of this notice.
Reduction in the Filing Period for Banks with More Than One Foreign
Office--Of the 13 commenters, 8 addressed the proposed reduction from
45 to 30 days in the filing period for banks with more than one foreign
office. One bankers' association observed that its member banks
generally did not perceive this proposed change to be a problem.
However, five large banks and two other bankers' associations objected
to this proposed change. These commenters indicated that, compared to
other banks of similar size that have a 30-day filing deadline, banks
with multiple foreign offices are more heavily involved in certain
activities, such as securitizations, credit enhancements, and fiduciary
activities, which affect the amount and complexity of the information
these banks must report in the Call Report. In addition, foreign office
data often must be translated from another currency into U.S. dollars
and converted from local accounting principles to U.S. accounting
principles. These commenters therefore expressed concern about the cost
and burden of a shorter filing period, which would require affected
banks to modify their reporting systems and processes and add or
reallocate staff. They further stated that an earlier filing deadline
could adversely affect data quality, at least in part by limiting the
amount of time available for the review of Call Report data prior to
Commenters suggested alternatives to the agencies' proposal to
reduce the filing period for banks with multiple foreign offices to 30
days beginning June 30, 2003. One alternative would be for the agencies
to implement a staggered submission process for banks with multiple
foreign offices under which these banks would file a preliminary
balance sheet, income statement, and domestic office deposit data
within 30 days followed by complete Call Report data within 45 days.
Another alternative would be for the agencies to adopt a three-year
phased-in approach like the Securities and Exchange Commission (SEC)
did in August 2002 when it shortened the filing period for larger
public companies' quarterly reports on Form 10-Q from 45 to 35 days.
Finally, commenters suggested that if the filing period for the Call
Report data is reduced, the filing periods for other regulatory reports
that banking organizations submit to the agencies should be lengthened.
In proposing to reduce the filing period for the approximately 40
banks with more than one foreign office, a group that includes the
largest banks in the industry, the agencies noted that more timely
receipt of Call Report data from all institutions would enable the
agencies to make these data, and the agencies' analyses thereof,
available to bankers and the marketplace earlier than at present. The
agencies' proposal also cited the SEC's August 2002 decision to
accelerate the filing period for quarterly and annual reports required
from larger public companies under the federal securities laws as
evidence of the importance of earlier public availability of
information to decision-making. At the same time, the FFIEC and the
agencies understand the concerns expressed by commenters about the
impact that an almost immediate one-third reduction in the filing
period would have on the systems and staffs of affected banks. The
FFIEC and the agencies have considered these concerns and the
alternatives suggested by commenters as well as the Board's March 2003
decision concerning the shortening of the filing deadline for the bank
holding company report on form FR Y-9C (68 FR 15725). As a result, the
FFIEC and the agencies have modified their original proposal and,
similar to the actions by the SEC and Board, are adopting a phased-in
approach for the Call Report. For banks with more than one foreign
office, the filing deadline will be reduced to 40 calendar days from 45
calendar days starting with the June 2004 Call Report and to 35
calendar days starting with the June 2005 Call Report. These reduced
filing periods will apply to each quarterly Call Report, including the
year-end report. For all other banks, the Call Report filing deadline
will remain 30 calendar days.
The changes in Call Report requirements that OMB approved for
implementation as of March 31, 2003, included authorization for the
FDIC to contact not more than 20 banks with more than one foreign
office on or about each May 1 and November 1 if their March 31 and
September 30 Call Reports had not been received in order to obtain
certain deposit data needed to estimate insured deposits. As approved
by OMB, the FDIC is permitted to
survey these banks as long as the current 45-day filing period remains
in effect. However, under the current statutory and regulatory
timeframes for setting the semiannual deposit insurance assessment
rates, the FDIC Board is required to announce the assessment rate
schedules on approximately May 15 and November 15 each year. In order
to do so, the FDIC Board must meet to decide on the rate schedule for
the next semiannual period in early May and November. Thus, the
reduction in the Call Report filing period to 35 days, rather than to
30 days as the agencies proposed in November 2002, does not eliminate
the need for the FDIC's limited-scope deposit data survey. Accordingly,
as long as the Call Report filing period for banks with multiple
foreign offices exceeds 30 days, the FDIC is seeking ongoing authority
to contact not more than 20 banks of these banks by telephone on or
about each May 1 and November 1 if their March 31 and September 30 Call
Reports have not been submitted. The FDIC would then receive the
requested information on the amount of domestic office deposits and
estimated uninsured deposits from the surveyed banks over the
telephone, by e-mail, or by fax.
Call Report Supplement--Two banks and two bankers'' associations
offered comments on the proposed addition to the Call Report of a
supplement that the agencies would expect to use in the infrequent
event of an immediate and critical need to collect certain information
from a segment of the banking industry.2 The November 2002 proposal
noted that the Paperwork Reduction Act of 1995 has emergency procedures
for obtaining OMB approval to collect information on a one-time basis,
but stated the agencies' preference to take a proactive approach and
obtain authority to collect critical data in advance of such a future
need. The Board currently has comparable authority to collect a
supplement to the FR Y-9C bank holding company report (Supplement to
the Consolidated Financial Statements for Bank Holding Companies; FR Y-
9CS; OMB No. 7100-0128).
One commenter questioned whether the agencies' proposed addition of
a supplement to the Call Report had satisfied applicable Administrative
Procedure Act requirements because the proposal lacked sufficient
specificity, made no provision for confidential treatment of the data
that would be collected, and the burden estimate was without
foundation. Rather than creating a Call Report supplement, this
commenter recommended that the agencies should rely on the existing
emergency provisions of the Paperwork Reduction Act should they be
confronted with an ad hoc need for critical information.
Two other commenters sought clarification of the frequency with
which the Call Report supplement would be collected and magnitude of
the data that would be requested because of the cost and burden to
banks should the agencies overuse their authority for this supplement.
One of these commenters also expressed concern about the absence of a
prior opportunity to evaluate and comment on the data to be collected
on the supplement, which led the commenter to recommend that such data
be accorded confidential treatment. In contrast, the other commenter
recommended that the agencies should permit institutions to request
confidential treatment for their data. Finally, both of these
commenters, as well as the fourth commenter, questioned what the
submission deadline for the supplement would be. In addition, the
fourth commenter recommended that the agencies set specific criteria
for identifying the banks that must complete the supplement and limit
the data to be collected to specific predefined items. This commenter
also sought clarification of the circumstances in which there would be
an ``immediate and critical need'' for data.
The Paperwork Reduction Act of 1995 and OMB's implementing
regulation (5 CFR 1320) establish procedures for obtaining OMB approval
for information collections. The November 2002 notice that the agencies
published in the Federal Register seeking public comment on the
proposed Call Report supplement is sufficiently specific to meet the
standards established in that law and regulation. The notice and
comment requirements of the Administrative Procedure Act do not apply
to the proposed supplement. The Paperwork Reduction Act does not
require that burden estimates for collections of information meet a
specified level of precision, accuracy, and reliability. It requires
only that the agencies make explicit the assumptions they used to
estimate the number of respondents and the time needed to respond. The
assumptions underlying the burden estimate associated with the proposed
supplement have a degree of reliability that is typical for collections
of this nature.
Furthermore, the agencies believe that they established appropriate
constraints in their proposal with respect to their use of a Call
Report supplement in order to limit the frequency of its use and the
resulting reporting burden. In this regard, to limit the potential for
overuse of the Call Report supplement, the agencies proposed that the
members of the Federal Financial Institutions Examination Council would
be required to approve the specific use of the supplement. Thus, the
Examination Council's Reports Task Force would not have the delegated
authority to institute a data collection using the Call Report
supplement. The agencies note that the Board has used its authority to
collect the bank holding company supplement (FR Y-9CS) only twice over
the last 18 years, and its most recent use was to capture information
on new activities authorized by the Gramm-Leach-Bliley Act of 1999.
In their November 2002 proposal, the agencies also stated that in
any quarter in which the supplement were to be collected, no more than
10 percent of the banks under each agency's supervision would be
required to complete the supplement and the reporting burden imposed on
these banks would not exceed one hour per quarter. This is based on the
assumption that the event giving rise to an immediate and critical data
need would have a significant effect on a limited number of
institutions. Thus, if the agencies were confronted with an immediate
and critical need for data from more than 10 percent of their
supervised banks or if the collection of such data would impose a
reporting burden greater than one hour per quarter, the agencies would
have to request OMB approval to use the Call Report supplement to
collect the data. Otherwise, the agencies would need to follow the
emergency procedures established under the Paperwork Reduction Act for
obtaining the authority to collection the data on a one-time basis.
Should there be a continuing need for data reported on the supplement
or collected under emergency authority, the agencies would have to
adhere to the standard Paperwork Reduction Act procedures for revising
an existing approved information collection.
As for the circumstances in which the agencies would envision an
``immediate and critical need'' for data, the proposal cited as
examples an unexpected market event or change in credit conditions that
materially affects certain institutions as well as a statutory change.
Another example would be a material change in accounting standards. If
and when an
immediate and critical need for data were to arise and the Examination
Council members approved the use of the Call Report supplement, the
supplement would consist of specifically defined items (and related
instructions) and specific criteria would be established for
identifying the banks required to complete the supplement. The
supplement normally would be collected as part of the next quarterly
Call Report and the submission deadline for the supplement would be the
same as for the Call Report (unless the Examination Council approved a
later deadline). Accordingly, the ``as of'' date for the items on the
supplement typically would be the Call Report date (or a period ending
as of the report date). The Examination Council's approval to collect
the supplement also would specify whether the reported data would be
accorded confidential treatment on an individual institution basis,
taking into consideration the nature of the data and the limited number
of banks from which it would be collected. The FFIEC and the agencies
would advise all banks about the supplemental reporting requirement at
the earliest practicable date, and the notification would contain the
information discussed above in this paragraph.
Criteria for Acceptance of Call Report Data--In August 2002, the
FFIEC, on behalf of the agencies, issued a Request for Proposal for the
design and implementation of a new business model for processing Call
Report data. In June 2003, the FFIEC awarded a contract for the
development of this new business model, a principal feature of which is
a central data repository (CDR) to collect, validate, manage and
distribute Call Report information. As part of the introduction of this
new business model, currently targeted for implementation with the
September 2004 Call Report, the agencies would change the validation
process for Call Report data.
At present, a bank's completed Call Report data are subjected to
numerous edit checks to assess the accuracy and reasonableness of the
reported data after the data have been electronically submitted to the
agencies. If the agencies' validation process identifies any edit
failures or exceptions in a bank's reported data, an agency Call Report
analyst normally contacts the bank, typically by telephone, to obtain
either an explanation of the facts and circumstances that support the
correctness of data as reported or any necessary corrections. This
follow-up with a bank takes place anywhere from one day to four weeks
after a bank has submitted its data.
Under the new business model, the validation process will take
place in conjunction with a bank's submission of its Call Report data
to the agencies. The CDR will contain all of the edit criteria and
formulas, where they would be publicly available. Call Report
preparation software into which the edits have been incorporated will
identify any edit failures or exceptions while a bank is completing its
report. The bank will then be able to correct its data to eliminate any
validity edit failures, which are mathematical and logical tests. The
software will also provide a method for the bank to supply explanatory
comments concerning any quality edit exceptions, which are tests of the
reasonableness of the data, including tests against historical
performance and other relational tests.
Upon implementation of the CDR, the agencies proposed to not accept
a bank's Call Report submission if it contains any validity edit
failures and lacks explanatory comments for any quality edit
exceptions. Because a bank would be aware of any edit failures or
exceptions as it completes its Call Report, edit failures and
exceptions will be addressed immediately rather than after-the-fact as
they are under the agencies' current approach to data validation.
Although banks will still have to correct validity edit failures and
provide explanations for quality edit exceptions that support their
reported data, the planned shift in the validation process should
reduce the agencies' subsequent questions about these data. The new
process also should result in quicker validation, acceptance,
disclosure, and use of individual bank Call Report data.
Three banks and two bankers' associations commented on several
matters relating to this aspect of the November 2002 proposal. Four of
these commenters stated that the proposed requirement for a bank to
provide explanatory comments for quality edit exceptions by the
submission deadline for its Call Report data, rather than in response
to an agency inquiry after the data have been filed and edited, will
necessitate more work on the bank's part before it files its data than
under the current processing system. They indicated that this has the
potential to increase reporting burden and reduce the time available to
a bank to ensure the accuracy of its reported data. The fifth commenter
stated that the quality edits must be logical and reasonable in number
so that banks do not spend an unreasonable amount of time and effort
providing explanatory comments.
The agencies acknowledge that the change in the timing of when
banks need to address edit failures and exceptions means that banks
will need to allot time prior to the Call Report submission deadline to
address any edit failures or exceptions identified by their Call Report
preparation software. However, under the agencies' current validation
process, the average number of edit exceptions identified upon receipt
of Call Report data is from 3 to 4 per bank. The actual number of edit
exceptions varies from none for about 35 percent of all banks to an
average of about 12 for the largest banks with foreign offices. The
number of edit exceptions per bank is not expected to change with the
introduction of the CDR. Thus, the number of explanations that most
banks will need to provide as part of their Call Report submission
under the new business model should not be excessive. Furthermore, one
of the purposes for implementing the new process is to ensure that
banks are accountable for the quality and accuracy of their data so
that the data validation process can be completed sooner, which will
enable the data to be made available to users within the agencies and
to the public earlier.
Four of the commenters sought assurance from the agencies that
banks' explanatory comments for quality edit exceptions would be
accorded confidential treatment. Reasons given for this request
included the following: (1) Public disclosure of explanatory comments
could place banks at a competitive disadvantage compared to other
companies not subject to such disclosure requirements; (2) the
explanatory comments are of a supervisory nature and are supplemental
to the Call Report data; (3) the comments may be misinterpreted by the
public; and (4) edit exceptions may occur as a result of institution-
specific business strategies or transactions.
Under the agencies' current data validation approach, agency Call
Report analysts record the explanations they obtain from banks
concerning edit exceptions that are identified when their Call Report
data are processed after they have been submitted to the agencies.
Obtaining these after-the-fact explanations is an element of the
agencies' overall supervision of banks and, as commenters observed, the
explanations currently receive confidential treatment. The agencies'
adoption of the new business model will simply shift the timing of
receipt of the explanations that banks will provide to support the
correctness of the data they have reported. Accordingly, the agencies
will continue to treat banks'
explanatory comments that address any quality edit exceptions as
confidential. Should the agencies seek to make the explanatory comments
publicly available in the future, they will propose a change in their
policy and request public comment.
Five commenters recommended that the agencies disclose the quality
edits they plan to implement in advance of their effective date so that
banks can evaluate and comment on them. All but one of these commenters
suggested that the issuance of these edits take place at least two
quarters in advance. Another commenter expressed concern that because
explanatory comments about edit exceptions would be an integral part of
a bank's Call Report submission, the edits themselves would be
considered part of the reporting requirements, which would make them
subject to notice and comment. The agencies believe that both they and
banks will benefit from the release of planned edits prior to their
implementation date. The implementation of revisions to the data
collected in the Call Report normally takes place as of the March 31
report date. The agencies' timeline for the introduction of reporting
revisions under the new business model calls upon them to make the
edits associated with reporting revisions available to banks, software
vendors, and other interested parties for review on the CDR Web site
five and one half months before the customary March 31 effective
date.3 Banks and other parties could then submit any questions or
comments about these edits to the agencies. The final version of these
edits would be available on the CDR Web site three and one half months
before the effective date. Banks also would be free to provide the
agencies with their views on specific Call Report edits at any other
time. In this regard, the agencies note that, for more than one year,
they have published the Call Report edits currently in use on the
FFIEC's Web site (http://www.ffiec.gov/ffiec_report_forms.htm) for
Two commenters indicated that some banks on occasion have triggered
certain validity edit failures due to unusual circumstances and not
because of inaccurately reported data. These commenters expressed
concern that there would be situations in which the agencies would not
accept a bank's Call Report data due to a validity edit failure caused
by a problem with the edit itself rather than with the data. This could
result in the late filing of an institution's data, which could subject
the institution to monetary penalties. These two commenters as well as
a third recommended that the agencies' new business model include an
override feature that would allow them to accept data as reported when
a validity edit problem exists. The agencies are reviewing their
validity edits to ensure that they are properly designated as such. Any
that are more properly considered quality edits will be redesignated
accordingly. In addition, once the new business model is implemented,
should the agencies find that an edit contained within the CDR is not
performing properly, they will be able to override the edit until the
problem is resolved.
Two commenters also requested that, when a bank has reached the
Call Report submission deadline but its data contain one or more
quality edit exceptions, the bank should be allowed to file its data
while indicating that the exception is still under investigation. From
the agencies' perspective, a key reason for requiring banks to provide
explanatory comments concerning quality edit exceptions is to hold
banks accountable and responsible for the quality of the Call Report
data that they submit. When a bank prepares its data, it will need to
complete its internal review process at an early enough date prior to
the submission deadline so that if changes to the bank's Call Report
data arise from the final review of the data and trigger edit
exceptions, the bank has sufficient time to do any necessary research.
Therefore, the agencies do not believe it is appropriate for a bank to
file its Call Report with an explanatory comment stating that it is
investigating the reason for an edit exception. In addition, as noted
above, the average number of edit exceptions per bank Call Report under
the agencies' existing validation process is low.
Two commenters noted that there are quality edit exceptions that
recur from quarter to quarter and suggested that the new business model
should permit some flexibility in responding to quality edit
exceptions. One possible means for doing so would be by providing a
method that would enable banks to carry quality edit explanations
forward from one quarter to the next so that they can avoid reentering
the same explanation in successive quarters. The agencies recognize
that such a method would aid in reducing burden, but they are also
concerned about the potential for a bank to carry forward the prior
quarter's explanation when that explanation does not fit the
circumstances giving rise to the quality edit exception in the current
quarter. Nevertheless, the Call Report software vendors are aware of
this matter and each vendor will determine the level of service that it
will make available to its bank customers in its software.
In addition, two commenters sought a better explanation of what
constitutes a quality edit for which an explanation would be required
in order for a bank's Call Report data to be accepted. More
specifically, one commenter asked whether the quality edits include
edits that compare a bank's currently reported data to data reported in
a prior period and to data reported in another regulatory report, e.g.,
the bank holding company report on the Board's form FR Y-9C. As
previously mentioned, the Call Report edits currently in use are posted
on the FFIEC's Web site for banks' reference. The agencies currently
employ and will continue to use edits that perform comparisons between
current and prior period data. As for comparisons between data from the
Call Report and data from another regulatory report, edits of this
nature will not at this time be included among the quality edits the
agencies' new business model will use to determine whether to accept a
bank's Call Report data. Nevertheless, the agencies may use edits of
this nature in their analyses of individual banks' Call Report data
after the data has been submitted to the CDR and accepted by the
Finally, one commenter recommended that the agencies not
immediately finalize their proposal to not accept a Call Report
submission that contains any validity edit failures and lacks
explanatory comments for any quality edit exceptions, but to continue
to work with the banking industry to ensure that the Call Report
acceptance process is workable and secure before implementing it. In
the time since this comment was received in January 2003, the agencies
have established a collaborative working group of representatives from
banking institutions and industry trade groups. This group serves as a
two-way vehicle for gaining input from, and responding to, banks
concerning all aspects of the new business model, including the
criteria for acceptance of Call Report submissions. Through meetings
and conference calls, the agencies are in frequent communication with
industry representatives. The collaborative process will also entail
voluntary testing of the new CDR system in three phases prior to
industry-wide implementation: A functional pilot test beginning in
approximately April 2004, an end-to-end test beginning in approximately
May 2004, and a volume test beginning
in approximately August 2004. Following the successful completion of
testing, the agencies will proceed with global enrollment so that all
banks are ready to submit their Call Report data using the new CDR
system, which is scheduled to be implemented as of the September 30,
2004, report date. The Call Report acceptance process will begin as
proposed at that time.
Request for Comment
Comments are invited on:
(a) Whether the proposed revisions to the Call Report collections
of information are necessary for the proper performance of the
agencies' functions, including whether the information has practical
(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 notice will be shared among
the agencies. All comments will become a matter of public record.
Written comments should address the accuracy of the burden estimates
and ways to minimize burden as well as other relevant aspects of these
information collection requests.
Dated: January 20, 2004.
Mark J. Tenhundfeld,
Assistant Director, Legislative and Regulatory Activities Division,
Office of the Comptroller of the Currency.
Board of Governors of the Federal Reserve System, January 14,
Jennifer J. Johnson,
Secretary of the Board.
Dated in Washington, DC, this 22nd day of January, 2004.<
Federal Deposit Insurance Corporation.
Robert E. Feldman,
[FR Doc. 04-1729 Filed 1-26-04; 8:45 am]
BILLING CODE 4810-33-P, 6210-01-P and 6714-01-P
1 Because the agencies had proposed in November 2002 to reduce
this filing period effective June 30, 2003, their notice requesting
comment on the revisions submitted to OMB for review stated that any
reduction in the filing period would not take effect until after
June 30, 2003.
2 One other bank briefly referred to the creation of this
supplement in conjunction with its comments concerning the reduction
in the filing period.
3 These edits would not be published for comment in the