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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
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