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FDIC Federal Register Citations

[Federal Register: March 6, 1997 (Volume 62, Number 44)]
[Rules and Regulations]               
[Page 10199-10201]
From the Federal Register Online via GPO Access []
12 CFR Part 350
RIN 3064-AB98
Disclosure of Financial and Other Information by FDIC-Insured 
State Nonmember Banks
AGENCY: Federal Deposit Insurance Corporation (FDIC or Corporation).
ACTION: Final rule.
SUMMARY: As part of the FDIC's systematic review of its regulations and 
written policies under section 303(a) of the Riegle Community 
Development and Regulatory Improvement Act of 1994 (CDRI), the FDIC is 
revising its regulation entitled ``Disclosure of Financial and Other 
Information by FDIC-Insured State Nonmember Banks'' (the Rule). The 
revision removes references to the obsolete savings bank Call Report. 
It also permits the annual report required by the Corporation's 
regulation on annual independent audits and reporting requirements to 
be used as the annual disclosure statement in certain circumstances, 
and updates and clarifies certain other references in the Rule.
EFFECTIVE DATE: April 7, 1997.
Specialist, Division of Supervision, (202) 898-8905; or Sandra 
Comenetz, Counsel, Legal Division, (202) 898-3582, FDIC, 550 17th 
Street N.W., Washington, DC 20429.
    The FDIC is conducting a systematic review of its regulations and 
written policies. Section 303(a) of the CDRI (12 U.S.C. 4803(a)) 
requires each federal banking agency to streamline and modify its 
regulations and written policies in order to improve efficiency, reduce 
unnecessary costs, and eliminate unwarranted constraints on credit 
availability. Section 303(a) also requires each federal agency to 
remove inconsistencies and outmoded and duplicative requirements from 
its regulations and written policies. Part 350 contains outdated and 
unnecessary language that needs to be revised or removed.
    Part 350 was adopted by the FDIC Board of Directors on December 17, 
1987, and published on December 31, 1987, 52 FR 49379, effective 
February 1, 1988. The Rule requires FDIC-supervised banks and branches 
of foreign banks to prepare, and make available on request, annual 
disclosure statements consisting of: (1) Required financial data 
comparable to specified schedules in Call Reports filed for the 
previous two year-ends; (2) information that the FDIC may require of 
particular organizations; and (3) other optional information. The 
annual disclosure statement must be prepared by March 31 of the 
following year, or the fifth day after an organization's annual report 
covering the year is sent to shareholders, whichever occurs first. In 
place of Call Report data, a bank may use audited financial statements 
or reports prepared pursuant to other regulations by the bank or a 
parent one-bank holding company.
    The contents of the annual disclosure statement listed in 
Sec. 350.4(a)(1)(iv) and (v) refer in part to schedules in the Call 
Report for FDIC-supervised savings banks. The FDIC eliminated the 
separate savings bank Call Report in 1989. Therefore, these outdated 
references are being deleted.
    The FDIC has proposed amending 12 CFR part 335 by incorporating by 
reference the rules and regulations promulgated by the Securities and 
Exchange Commission under the Securities Exchange Act of 1934 rather 
than having its own detailed rules and regulations. (61 FR 33696) 
Therefore, Sec. 350.5(a) is revised to refer simply to part 335 rather 
than to specific subsections of this regulation.
    The Federal Deposit Insurance Corporation Improvement Act of 1991 
added section 36 to the Federal Deposit Insurance Act. Section 36 and 
its implementing regulation, 12 CFR part 363, require all insured 
depository institutions with $500 million or more in total assets at 
the beginning of their fiscal year to have an annual audit of their 
financial statements performed by an independent public accountant. The 
audited financial statements are part of an annual report that 
institutions subject to section 36 must prepare and submit to the FDIC. 
A new paragraph (d) is added to Sec. 350.5 permitting the use of these 
annual reports as annual disclosure statements in certain situations.
    In addition, several other wording changes have been made to 
improve the clarity of the regulations.
Public Comment Waiver and Effective Date
    This regulation is being issued as a final rule. The Administrative 
Procedure Act, 5 U.S.C. 551 et seq. (APA) requires that general notice 
of a proposed rulemaking be published in the Federal Register. 5 U.S.C. 
553(b). However, the revision of part 350 is exempt from the Federal 
Register publication requirement pursuant to subsection 553(b)(B). This 
section of the APA creates a publication exemption ``when the agency 
for good cause finds * * * that notice and public procedure thereon are 
impracticable, unnecessary, or contrary to the public interest.'' 5 
U.S.C. 553(b)(B). The revisions to part 350 are minor and technical; 
therefore the notice and public comment requirements of section 553(b) 
are unnecessary. Id. In addition, the APA provides that the required 
publication of a substantive rule in the Federal Register shall be made 
not less than 30 days before its effective date. 5 U.S.C. 553(d). Part 
350 would be exempt from this requirement also for good cause. The 
amendments are of such a nature that the public does not need a delayed 
period of time to conform or adjust to them. 5 U.S.C. 553(d)(3).
Paperwork Reduction Act
    No collection of information pursuant to section 3504(h) of the 
Paperwork Reduction Act (44 U.S.C. 3501 et seq.) is required by the 
amendments. Therefore, no information has been submitted to the Office 
of Management and Budget for review.
[[Page 10200]]
Regulatory Flexibility Act
    Because the revisions to part 350 are published in final form 
without a notice of proposed rulemaking, no regulatory flexibility 
analysis is required.
Small Business Regulatory Enforcement Fairness Act
    The Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA) (Pub. L. 104-121) provides generally for Congressional review 
of final agency rules. The reporting requirement is triggered when 
agencies issue a final rule as defined by the Administrative Procedure 
Act (APA) at 5 U.S.C. 551. Because the FDIC is issuing a final rule as 
defined by the APA, the FDIC will file the reports required by SBREFA.
    The Office of Management and Budget has determined that the 
revision of part 350 does not constitute a ``major rule'' as defined by 
List of Subjects in 12 CFR Part 350
    Accounting, Banks, banking, Reporting and recordkeeping 
    For the reasons set forth in the preamble, the Board of Directors 
of the FDIC hereby amends part 350 of chapter III of title 12 of the 
Code of Federal Regulations as follows:
    1. The authority citation for part 350 continues to read as 
    Authority: 12 U.S.C. 1817(a)(1), 1819 ``Seventh'' and ``Tenth''.
    2. Section 350.3 is revised to read as follows:
Sec. 350.3  Requirement for annual disclosure statement.
    (a) Contents. Each bank shall prepare as of December 31 and make 
available on request an annual disclosure statement. The statement 
shall contain information required by Sec. 350.4(a) and (b) and may 
include other information that bank management believes appropriate, as 
provided in Sec. 350.4(c).
    (b) Availability. A bank shall make its annual disclosure statement 
available to the public beginning not later than the following March 31 
or, if the bank mails an annual report to its shareholders, beginning 
not later than five days after the mailing of such reports, whichever 
occurs first. A bank shall make a disclosure statement available 
continuously until the disclosure statement for the succeeding year 
becomes available.
    3. Section 350.4 is revised to read as follows:
Sec. 350.4  Contents of annual disclosure statement.
    (a) Financial reports. The annual disclosure statement for any year 
shall reflect a fair presentation of the bank's financial condition at 
the end of that year and the preceding year and, except for state-
licensed branches of foreign banks, the results of operations for each 
such year. The annual disclosure statement may, at the option of bank 
management, consist of the bank's entire Call Report, or applicable 
portions thereof, for the relevant dates and periods. At a minimum, the 
statement must contain information comparable to that provided in the 
following Call Report schedules:
    (1) For insured state-chartered organizations that are not members 
of the Federal Reserve System:
    (i) Schedule RC (Balance Sheet);
    (ii) Schedule RC-N (Past Due and Nonaccrual, Loans, Leases, and 
Other Assets--column A covering financial instruments past due 30 
through 89 days and still accruing and Memorandum item 1 need not be 
    (iii) Schedule RI (Income Statement);
    (iv) Schedule RI-A (Changes in Equity Capital); and
    (v) Schedule RI-B, Part II (Changes in Allowance for Loan and Lease 
    (2) For insured state-licensed branches of foreign banks:
    (i) Schedule RAL (Assets and Liabilities);
    (ii) Schedule E (Deposit Liabilities and Credit Balances); and
    (iii) Schedule P (Other Borrowed Money).
    (b) Other required information. The annual disclosure statement 
shall include such other information as the FDIC may require of a 
particular bank. This could include disclosure of enforcement actions 
where the FDIC deems it in the public interest to do so.
    (c) Optional information. A bank may, at its option, provide 
additional information that bank management considers important to an 
evaluation of the overall condition of the bank. This information could 
include, but is not limited to, a discussion of the financial data; 
information relating to mergers and acquisitions; the existence of and 
facts relating to regulatory enforcement actions; business plans; and 
material changes in balance sheet and income statement items.
    (d) Disclaimer. The following legend shall be included in every 
annual disclosure statement to advise the public that the FDIC has not 
reviewed the information contained therein: ``This statement has not 
been reviewed, or confirmed for accuracy or relevance, by the Federal 
Deposit Insurance Corporation.''
    4. Section 350.5 is revised to read as follows:
Sec. 350.5  Alternative annual disclosure statements.
    The requirements of Sec. 350.4(a) may be satisfied:
    (a) In the case of a bank having a class of securities registered 
pursuant to section 12 of the Securities Exchange Act of 1934, by the 
bank's annual report to security holders for meetings at which 
directors are to be elected or the bank's annual report (see 12 CFR 
part 335);
    (b) In the case of a bank with independently audited financial 
statements, by copies of the audited financial statements and the 
certificate or report of the independent accountant to the extent that 
such statements contain information comparable to that specified in 
Sec. 350.4(a); and
    (c) In the case of a bank subsidiary of a one-bank holding company, 
by an annual report of the one-bank holding company prepared in 
conformity with the regulations of the Securities and Exchange 
Commission or by sections in the holding company's consolidated 
financial statements on Form FR Y-9C pursuant to Regulation Y of the 
Federal Reserve Board (12 CFR part 225) that are comparable to the Call 
Report schedules enumerated in Sec. 350.4(a)(1), provided that in 
either case not less than 95 percent of the holding company's 
consolidated total assets and total liabilities are assets and 
liabilities of the bank and the bank's consolidated subsidiaries.
    (d) In the case of a bank covered by 12 CFR part 363, by an annual 
report prepared pursuant to 12 CFR 363.4. However, if the annual report 
is for a bank subsidiary of a holding company which provides only the 
consolidated financial statements of the holding company, this annual 
report may be used to satisfy the requirements of this part only if it 
is the report of a one-bank holding company and provided that not less 
than 95 percent of the holding company's consolidated total assets and 
total liabilities are assets and liabilities of the bank and the bank's 
consolidated subsidiaries.
    5. Section 350.6 is revised to read as follows:
Sec. 350.6  Signature and attestation.
    An authorized officer of the bank shall sign the annual disclosure 
statement. The officer shall also attest to
[[Page 10201]]
the correctness of the information contained in the statement if the 
financial reports are not accompanied by a certificate or report of an 
independent accountant.
    6. Section 350.12 is revised to read as follows:
Sec. 350.12  Disclosure required by applicable banking or securities 
law or regulations.
    The requirements of this part are not intended to replace or waive 
any disclosure required to be made under applicable banking or 
securities law or regulations.
    By order of the Board of Directors.
    Dated at Washington, D. C. this 4th day of February, 1997.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Deputy Executive Secretary.
[FR Doc. 97-5510 Filed 3-5-97; 8:45 am]

Last Updated 03/06/1997

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