Agency Information Collection Activities: Information Collection Renewal; Submission for OMB Review; Leveraged Lending, 24940-24941 [2016-09878]

Agencies

• Office of the Comptroller of the Currency
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 81, Number 81 (Wednesday, April 27, 2016)]
[Notices]
[Pages 24940-24941]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-09878]


-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency


Agency Information Collection Activities: Information Collection 
Renewal; Submission for OMB Review; Leveraged Lending

AGENCY: Office of the Comptroller of the Currency (OCC), Treasury.

ACTION: Notice and request for comment.

-----------------------------------------------------------------------

SUMMARY: The OCC, as part of its continuing effort to reduce paperwork 
and respondent burden, invites the general public and other Federal 
agencies to take this opportunity to comment on a continuing 
information collection, as required by the Paperwork Reduction Act of 
1995 (PRA) (44 U.S.C. chapter 35).
    In accordance with the requirements of the PRA, the OCC 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 OCC is soliciting comment concerning the renewal of its 
information collection titled, ``Leveraged Lending.'' The OCC also is 
giving notice that it has sent the collection to OMB for review.

DATES: Comments must be received by May 27, 2016.

ADDRESSES: Because paper mail in the Washington, DC area and at the OCC 
is subject to delay, commenters are encouraged to submit comments by 
email, if possible. Comments may be sent to: Legislative and Regulatory 
Activities Division, Office of the Comptroller of the Currency, 
Attention: 1557-0315, 400 7th Street SW., Suite 3E-218, Mail Stop 9W-
11, Washington, DC 20219. In addition, comments may be sent by fax to 
(571) 465-4326 or by electronic mail to prainfo@occ.treas.gov. You may 
personally inspect and photocopy comments at the OCC, 400 7th Street 
SW., Washington, DC 20219. For security reasons, the OCC requires that 
visitors make an appointment to inspect comments. You may do so by 
calling (202) 649-6700 or, for persons who are deaf or hard of hearing, 
TTY, (202) 649-5597. Upon arrival, visitors will be required to present 
valid government-issued photo identification and submit to security 
screening in order to inspect and photocopy comments.
    All comments received, including attachments and other supporting 
materials, are part of the public record and subject to public 
disclosure. Do not

[[Page 24941]]

include any information in your comment or supporting materials that 
you consider confidential or inappropriate for public disclosure.
    Additionally, please send a copy of your comments by mail to: OCC 
Desk Officer, 1557-0315, U.S. Office of Management and Budget, 725 17th 
Street NW., #10235, Washington, DC 20503, or by email to: oira 
submission@omb.eop.gov.

FOR FURTHER INFORMATION CONTACT: Shaquita Merritt, Clearance Officer, 
(202) 649-5490 or, for persons who are deaf or hard of hearing, TTY, 
(202) 649-5597, Legislative and Regulatory Activities Division, Office 
of the Comptroller of the Currency, 400 7th Street SW., Washington, DC 
20219.

SUPPLEMENTARY INFORMATION: The OCC is proposing to extend OMB approval 
of the following information collection:
    Title: Leveraged Lending.
    OMB Control No.: 1557-0315.
    Description: On March 22, 2013, the agencies \1\ issued guidance 
stating that they expected financial institutions \2\ to properly 
evaluate and monitor underwritten credit risks in leveraged loans, to 
understand the effect of changes in borrowers' business valuations on 
credit portfolio quality, and to assess the sensitivity of future 
credit losses to these changes in business valuations.\3\ In 
underwriting such credits, financial institutions should ensure that 
borrowers are able to repay credits when due and that borrowers have 
sustainable capital structures, including bank borrowings and other 
debt, to support their continued operations through economic cycles. 
Financial institutions also should be able to demonstrate they 
understand the risks and the potential impact of stressful events and 
circumstances on borrowers' financial condition.
---------------------------------------------------------------------------

    \1\ OCC, Board of Governors of the Federal Reserve System, and 
Federal Deposit Insurance Corporation.
    \2\ For the OCC, the term ``financial institution'' or 
``institution'' includes national banks, Federal savings 
associations, and Federal branches and agencies supervised by the 
OCC.
    \3\ 78 FR 17766 (March 22, 2013).
---------------------------------------------------------------------------

    The final guidance stated that financial institutions should have: 
(i) Underwriting policies for leveraged lending, including stress-
testing procedures for leveraged credits; (ii) risk management 
policies, including stress-testing procedures for pipeline exposures; 
and, (iii) policies and procedures for incorporating the results of 
leveraged credit and pipeline stress tests into the firm's overall 
stress-testing framework.
    Respondents are financial institutions with leveraged lending 
activities as defined in the guidance.
    Title: Leveraged Lending.
    OMB Control No.: 1557-0315.
    Frequency of Response: Annual.
    Affected Public: Financial institutions with leveraged lending.
    Burden Estimates:
    Estimated number of respondents: 29.
    Estimated total annual burden: 39,162 hours to build; 49,462 hours 
for ongoing use.
    Total estimated annual burden: 88,624 hours.
    Comments: On February 17, 2016, the OCC published a notice for 60 
days of comment regarding the collection, 81 FR 8126. The OCC received 
one comment on the 60-day notice from an individual. The commenter 
questioned the utility and benefit of the information collection 
aspects of the guidance compared with the burden. Specifically, the 
commenter stated the information collections on stress-testing for 
leveraged lending, including for pipeline exposures, is already 
contained in other OCC or interagency guidance. The commenter also 
suggested that the OCC should define a leveraged loan and clarify the 
limits of acceptable leveraged lending risk.
    The OCC believes that the information collections provide utility 
and benefit, as they can allow banks to monitor more closely their 
leveraged lending activity. Increased monitoring can improve a bank's 
response to potential deteriorations in the leveraged lending 
portfolio. Regarding burden, the leveraged lending information 
collections are voluntary. If a bank decides that the burdens of 
certain collections would outweigh the costs, then the bank can choose 
not to implement those collections. While the OCC has issued other 
guidance documents on stress-testing, either standalone or on an 
interagency basis, those documents provide higher-level guidance for 
stress-testing of all assets and liabilities. The leveraged lending 
guidance provides additional considerations for stress-testing 
specifically related to leveraged lending, which is not present in 
other OCC or interagency guidance.
    During the initial issuance of the leveraged lending guidance, the 
OCC considered whether to establish a single definition of leveraged 
loan or leveraged lending. However, the agencies concluded that 
leveraged lending is not homogenous across industries or banks, and did 
not believe that a ``one-size-fits-all'' definition was appropriate. 
The OCC continues to believe that those banks following the leveraged 
lending guidance should have this flexibility in setting the parameters 
of their leveraged lending and risk management programs.
    Comments continue to be requested on:
    (a) Whether the information collections are necessary for the 
proper performance of the OCC's functions, including whether the 
information has practical utility;
    (b) The accuracy of the OCC's estimates of the burden of the 
information collections, 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 startup costs and costs of operation, 
maintenance, and purchase of services to provide information.

    Dated: April 21, 2016.
Mary Hoyle Gottlieb,
Regulatory Specialist, Office of the Comptroller of the Currency.
[FR Doc. 2016-09878 Filed 4-26-16; 8:45 am]
 BILLING CODE 4810-33-P