DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
FEDERAL RESERVE SYSTEM
FEDERAL DEPOSIT INSURANCE CORPORATION
Proposed Agency Information Collection Activities; Comment
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 and request for comment.
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. The Federal Financial Institutions Examination Council
(FFIEC), of which the agencies are members, has approved the agencies'
publication for public comment of proposed revisions to the
Consolidated Reports of Condition and Income (Call Report), which are
currently approved collections of information. At the end of the
comment period, the comments and recommendations received will be
analyzed to determine the extent to which the FFIEC and the agencies
should modify the proposed revisions prior to giving final approval.
The agencies will then submit the revisions to OMB for review and
DATES: Comments must be submitted on or before May 10, 2005.
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: You may submit comments, identified by [Attention: 1557-0081],
by any of the following methods:
E-mail: firstname.lastname@example.org. Include [Attention:
1557-0081] in the subject line of the message.
Fax: (202) 874-4448.
Mail: Public Information Room, Office of the Comptroller
of the Currency, 250 E Street, SW., Mailstop 1-5, Washington, DC 20219;
Public Inspection: You may inspect and photocopy comments at the
Public Information Room. You can make an appointment to inspect the
comments by calling (202) 874-5043.
Board: You may submit comments, which should refer to
``Consolidated Reports of Condition and Income, 7100-0036,'' by any of
the following methods:
Agency Web Site: http://www.federalreserve.gov Follow the instructions for
submitting comments on the http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Include docket number in the subject line of the message.
FAX: 202-452-3819 or 202-452-3102.
Mail: Jennifer J. Johnson, Secretary, Board of Governors
of the Federal Reserve System, 20th Street and Constitution Avenue,
NW., Washington, DC 20551.
All public comments are available from the Board's Web site at
submitted, except as necessary for technical reasons. Accordingly, your
comments will not be edited to remove any identifying or contact
information. Public comments may also be viewed electronically or in
paper in Room MP-500 of the Board's Martin Building (20th and C
Streets, NW.) between 9 a.m. and 5 p.m. on weekdays.
FDIC: You may submit comments, which should refer to ``Consolidated
Reports of Condition and Income, 3064-0052,'' by any of the following
Include ``Consolidated Reports of Condition and Income,
3064-0052'' in the subject line of the
Mail: Steven F. Hanft (202-898-3907), Paperwork Clearance
Officer, Room MB-3064, Federal Deposit Insurance Corporation, 550 17th
Street, NW., Washington, DC 20429.
Hand Delivery: 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 a.m. and 5 p.m.
Public Inspection: You may inspect comments at the FDIC Public
Information Center, Room 100, 801 17th Street, NW., between 9 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: Mark Menchik, Office of Information and
Regulatory Affairs, Office of Management and Budget, New Executive
Office Building, Room 10235, Washington, DC 20503, or electronic mail
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, copies of
Call Report forms can be obtained at the FFIEC's Web site (http://www.ffiec.gov/ffiec_report_forms.htm
OCC: Mary Gottlieb, 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 20219.
Board: Michelle E. Long, 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: The agencies are proposing to revise the
Call Report, which is currently an approved collection of information
for each of the agencies.
The effect of the proposed revisions to the reporting requirements
will vary from institution to institution depending on the extent to
which an institution acquires loans with evidence of deterioration of
credit quality since origination, including acquisitions of such loans
in business combinations accounted for using the purchase method. The
agencies expect that the proposed revisions will generally apply only
to the limited number of institutions that are involved in purchase
business combinations or that engage in purchases of loans with credit
quality problems as a business activity. Furthermore, the proposed
revisions entail the reporting of information included in disclosures
required under applicable generally accepted accounting principles.
Therefore, the agencies estimate that the implementation of these
reporting revisions will result in a nominal increase in the current
reporting burden imposed on all banks by the Call Report. The following
burden estimates include the proposed revisions.
Report Title: Consolidated Reports of Condition and Income (Call
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: 2,000 national banks.
Estimated Time per Response: 46.43 burden hours.
Estimated Total Annual Burden: 371,403 burden hours.
OMB Number: 7100-0036.
Estimated Number of Respondents: 922 state member banks.
Estimated Time per Response: 52.38 burden hours.
Estimated Total Annual Burden: 193,177 burden hours.
OMB Number: 3064-0052.
Estimated Number of Respondents: 5,332 insured state nonmember
Estimated Time per Response: 37.08 burden hours.
Estimated Total Annual Burden: 790,796 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
institutions under each agency's supervision (e.g., size distribution
of institutions, types of activities in which they are engaged, and
existence of foreign offices). For the Call Report, the average
reporting burden includes the effect on burden of the new Central Data
Repository (CDR) system for processing Call Reports. The time per
response for the Call Report is estimated to range from 15 to 600
hours, depending on an individual institution's circumstances, before
considering the effect of voluntary testing and global enrollment
activities related to the CDR. The reporting burden for testing and
enrollment activities for an individual institution is estimated to
range from 16 to 69 hours, depending on the institution's level of
General Description of Reports
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). Except
for selected items, these information collections are not given
Institutions file Call Reports with the agencies each quarter for
the agencies' use in monitoring the condition, performance, and risk
profile of individual institutions and the industry as a whole. In
addition, Call Reports provide the most current statistical data
available for evaluating institutions' 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
Reports are also used to calculate all institutions' deposit insurance
and Financing Corporation assessments and national banks' semiannual
This joint notice and request for comment addresses proposed
to the Call Report in response to Statement of Position 03-3,
Accounting for Certain Loans or Debt Securities Acquired in a Transfer
(SOP 03-3), which was issued by the American Institute of Certified
Public Accountants (AICPA) and is effective for loans acquired in
fiscal years beginning after December 15, 2004. The agencies are
proposing to add three items to the Call Report relating to loans
within the scope of SOP 03-3. In addition, the agencies are revising
the Call Report instructions to explain how the delinquency status of
loans within the scope of SOP 03-3 should be determined for purposes of
disclosing past due loans in the Call Report.
The proposed revisions to the Call Report have been approved for
publication by the FFIEC. The agencies intend to implement the proposed
Call Report changes as of the June 30, 2005, report date. Nonetheless,
as is customary for Call Report changes, if the information required to
be reported in accordance with the proposed reporting revisions is not
readily available, institutions are advised that they may report
reasonable estimates of this information for the report date as of
which the proposed changes first take effect.
Type of Review: Revision of currently approved collections.
II. Discussion of Proposed Revisions
In December 2003, the AICPA issued SOP 03-3. In general, this
Statement of Position applies to ``purchased impaired loans,'' i.e.,
loans that a bank has purchased, including those acquired in a purchase
business combination, when there is evidence of deterioration of credit
quality since the origination of the loan and it is probable, at the
purchase date, that the bank will be unable to collect all
contractually required payments receivable. The Statement of Position
applies to loans acquired in fiscal years beginning after December 15,
2004, with early adoption permitted. Banks must follow SOP 03-3 for
Call Report purposes in accordance with its effective date based on
their fiscal years. The Statement of Position does not apply to the
loans that a bank has originated. SOP 03-3 also excludes certain
acquired loans from its scope.
Under SOP 03-3, a purchased impaired loan is initially recorded at
its purchase price (in a purchase business combination, the present
value of amounts to be received). The Statement of Position limits the
yield that may be accreted on the loan (the accretable yield) to the
excess of the bank's estimate of the undiscounted principal, interest,
and other cash flows expected at acquisition to be collected on the
loan over the bank's initial investment in the loan. The excess of
contractually required cash flows over the cash flows expected to be
collected on the loan, which is referred to as the nonaccretable
difference, must not be recognized as an adjustment of yield, loss
accrual, or valuation allowance. Neither the accretable yield nor the
nonaccretable difference may be shown on the balance sheet. After
acquisition, increases in the cash flows expected to be collected
generally should be recognized prospectively as an adjustment of the
loan's yield over its remaining life. Decreases in cash flows expected
to be collected should be recognized as an impairment through an
addition to the loan loss allowance.
The Statement of Position prohibits a bank from ``carrying over''
or creating valuation allowances (loan loss allowances) in the initial
accounting for purchased impaired loans. This prohibition applies to
the purchase of an individual impaired loan, a pool or group of
impaired loans, and impaired loans acquired in a purchase business
combination. As a consequence, SOP 03-3 provides that valuation
allowances should reflect only those losses incurred after acquisition,
that is, the present value of all cash flows expected at acquisition
that ultimately are not to be received. Thus, because of the accounting
model set forth in SOP 03-3, banks will need to segregate their
purchased impaired loans, if any, from the remainder of their loan
portfolio for purposes of determining their overall allowance for loan
and lease losses.
According to the Basis for Conclusions of SOP 03-3, the AICPA's
Accounting Standards Executive Committee ``believes that the accounting
for acquired loans within the scope of this SOP is sufficiently
different from the accounting for originated loans, particularly with
respect to provisions for impairment, such that the amount of loans
accounted for in accordance with this SOP should be disclosed
separately in the notes to financial statements.'' The agencies agree
with this assessment and have considered the disclosures required by
SOP 03-3. Therefore, to assist the agencies in understanding the
relationship between the allowance for loan and lease losses and the
carrying amount of the loan portfolios of those banks whose portfolios
include purchased impaired loans, the agencies are proposing to add
three items to the Call Report. All three of these items represent
information included in the disclosures required by SOP 03-3. The
agencies would add two Memorandum items to Schedule RC-C, part I, Loans
and Leases: (1) The outstanding balance \1\ and (2) the carrying amount
(before any loan loss allowances) as of the report date of the
purchased impaired loans held for investment \2\ that are included in
Schedule RC-C. In addition, the agencies would add a Memorandum item to
Schedule RI-B, part II, Changes in Allowance for Loan and Lease Losses,
in which banks would report the amount of loan loss allowances for
purchased impaired loans held for investment that is included in the
total amount of the allowance for loan and lease losses as of the
\1\ The outstanding balance is the undiscounted sum of all
amounts, including amounts deemed principal, interest, fees,
penalties, and other under the loan, owed to the bank at the report
date, whether or not currently due and whether or not any such
amounts have been charged off by the bank. The outstanding balance
does not include amounts that would be accrued under the contract as
interest, fees, penalties, and other after the report date.
\2\ Loans held for investment are those loans that the bank has
the intent and ability to hold for the foreseeable future or until
maturity or payoff. Thus, the outstanding balance and carrying
amount of any purchased impaired loans that are held for sale would
not be reported in these proposed Memorandum items.
The agencies also plan to revise the instructions to Schedule RC-N,
Past Due and Nonaccrual Loans, Leases, and Other Assets, to explain how
purchased impaired loans should be reported in this schedule. SOP 03-3
does not prohibit placing loans on nonaccrual status and any nonaccrual
purchased impaired loans should be reported accordingly in Schedule RC-
N. For those purchased impaired loans that are not on nonaccrual
status, banks should determine their delinquency status in accordance
with the contractual repayment terms of the loans without regard to the
purchase price of (initial investment in) these loans or the amount and
timing of the cash flows expected at acquisition.
III. Request for Comment
Public comment is requested on all aspects of this joint notice. In
addition, 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 joint notice will be shared
among the agencies and will be summarized or included in the agencies'
requests for OMB approval. 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 the information collection request.
Stuart E. Feldstein,
Assistant Director, Legislative and Regulatory Activities Division,
Office of the Comptroller of the Currency.
Board of Governors of the Federal Reserve System, February 28,
Jennifer J. Johnson,
Secretary of the Board.
Dated at Washington, DC, this 3rd day of March, 2005.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
[FR Doc. 05-4664 Filed 3-10-05; 8:45 am]