[Federal Register: February 4, 2008 (Volume 73, Number 23)] [Notices] [Page 6506-6515] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr04fe08-50] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF THE TREASURY Office of the Comptroller of the Currency FEDERAL RESERVE SYSTEM FEDERAL DEPOSIT INSURANCE CORPORATION DEPARTMENT OF THE TREASURY Office of Thrift Supervision Agency Information Collection Activities: Submission for OMB Review; Joint Comment Request AGENCIES: Office of the Comptroller of the Currency (OCC), Treasury; Board of Governors of the Federal Reserve System (Board); Federal Deposit Insurance Corporation (FDIC); and Office of Thrift Supervision (OTS), Treasury. ACTION: Notice of information collections to be submitted to OMB for review and approval under the Paperwork Reduction Act. ----------------------------------------------------------------------- SUMMARY: In accordance with the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), the OCC, the Board, the FDIC, and the OTS (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 September 11, 2007, the agencies, under the auspices of the Federal Financial Institutions Examination Council (FFIEC), requested public comment for 60 days on a proposal to extend, with revision, the Consolidated Reports of Condition and Income (Call Report) for banks and the Thrift Financial Report (TFR) for savings associations, which are currently approved collections of information that are collected quarterly. After considering the comments, the FFIEC and the agencies have modified some of the proposed changes, which will be implemented March 31, 2008, as proposed, but with the reporting of certain proposed new items optional for this initial report date. DATES: Comments must be submitted on or before March 5, 2008. 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: Communications Division, Office of the Comptroller of the Currency, Public Information Room, Mailstop 1-5, Attention: 1557-0081, 250 E Street, SW., Washington, DC 20219. In addition, comments may be sent by fax to (202) 874-4448, or by electronic mail to regs.comments@occ.treas.gov. 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: 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://. http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm. Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments. E-mail: regs.comments@federalreserve.gov. 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 http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, unless modified 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. [[Page 6507]] FDIC: You may submit comments, which should refer to ``Consolidated Reports of Condition and Income, 3064-0052,'' by any of the following methods: http://www.FDIC.gov/regulations/laws/federal/notices.html.. E-mail: comments@FDIC.gov. Include ``Consolidated Reports of Condition and Income, 3064-0052'' in the subject line of the message. Mail: Valerie J. Best (202-898-3812), Supervisory Counsel, Attn: Comments, Room F-1070, 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: All comments received will be posted without change to http://www.fdic.gov/regulations/laws/federal/notices.html including any personal information provided. Comments may be inspected at the FDIC Public Information Center, Room E-1002, 3501 Fairfax Drive, Arlington, VA 22226, between 9 a.m. and 5 p.m. on business days. OTS: You may submit comments, identified by ``1550-0023 (TFR: March 2008 Revisions),'' by any of the following methods: E-mail address: infocollection.comments@ots.treas.gov. Please include ``1550-0023 (TFR: March 2008 Revisions)'' in the subject line of the message and include your name and telephone number in the message. Fax: (202) 906-6518. Mail: Information Collection Comments, Chief Counsel's Office, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552, Attention: ``1550-0023 (TFR: March 2008 Revisions).'' Hand Delivery/Courier: Guard's Desk, East Lobby Entrance, 1700 G Street, NW., from 9 a.m. to 4 p.m. on business days, Attention: Information Collection Comments, Chief Counsel's Office, Attention: ``1550-0023 (TFR: March 2008 Revisions).'' Instructions: All submissions received must include the agency name and OMB Control Number for this information collection. All comments received will be posted without change to the OTS Internet Site at http://www.ots.treas.gov/pagehtml.cfm?catNumber=67&an=1, including any personal information provided. Docket: For access to the docket to read background documents or comments received, go to http://www.ots.treas.gov/pagehtml.cfm?catNumber=67&an=1. In addition, you may inspect comments at the Public Reading Room, 1700 G Street, NW., by appointment. To make an appointment for access, call (202) 906-5922, send an e-mail to public.info@ots.treas.gov, or send a facsimile transmission to (202) 906-7755. (Prior notice identifying the materials you will be requesting will assist us in serving you.) We schedule appointments on business days between 10 a.m. and 4 p.m. In most cases, appointments will be available the next business day following the date we receive a request. Additionally, commenters may send a copy of their comments to the OMB desk officer for the agencies by mail to the Office of Information and Regulatory Affairs, U.S. Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street, NW., Washington, DC 20503, or by fax to (202) 395-6974. 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 the Call Report forms can be obtained at the FFIEC's Web site (http://www.ffiec.gov/ffiec_report_forms.htm ). Copies of the TFR can be obtained from the OTS's Web site (http://www.ots.treas.gov/main.cfm?catNumber=2&catParent=0 ). OCC: Mary Gottlieb, OCC Clearance Officer, (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. Shore, Federal Reserve 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: Valerie J. Best, Supervisory Counsel, (202) 898-3812, Legal Division, Federal Deposit Insurance Corporation, 550 17th Street, NW., Washington, DC 20429. OTS: Ira L. Mills, OTS Clearance Officer, at Ira.Mills@ots.treas.gov, (202) 906-6531, or facsimile number (202) 906- 6518, Litigation Division, Chief Counsel's Office, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552. SUPPLEMENTARY INFORMATION: The agencies are requesting OMB approval to revise and extend for three years the Call Report and the TFR, which are currently approved collections of information. 1. Report Title: Consolidated Reports of Condition and Income (Call Report). Form Number: Call Report: 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. OCC: OMB Number: 1557-0081. Estimated Number of Respondents: 1,750 national banks. Estimated Time per Response: 45.42 burden hours. Estimated Total Annual Burden: 317,967 burden hours. Board OMB Number: 7100-0036. Estimated Number of Respondents: 885 state member banks. Estimated Time per Response: 52.07 burden hours. Estimated Total Annual Burden: 184,328 burden hours. FDIC OMB Number: 3064-0052. Estimated Number of Respondents: 5,199 insured state nonmember banks. Estimated Time per Response: 36.16 burden hours. Estimated Total Annual Burden: 751,983 burden hours. The estimated time per response for the Call Report is an average that 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). The average reporting burden for the Call Report is estimated to range from 16 to 635 hours per quarter, depending on an individual institution's circumstances. 2. Report Title: Thrift Financial Report (TFR). Form Number: OTS 1313 (for savings associations). Frequency of Response: Quarterly. Affected Public: Business or other for-profit. OTS OMB Number: 1550-0023. Estimated Number of Respondents: 838 savings associations. Estimated Time per Response: 36.50 burden hours. Estimated Total Annual Burden: 193,881 burden hours. 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), 12 U.S.C. 1817 (for insured state nonmember commercial and savings [[Page 6508]] banks), and 12 U.S.C. 1464 (for savings associations). Except for selected data items, these information collections are not given confidential treatment. Abstract Institutions submit Call Report and TFR data to 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. Call Report and TFR data provide the most current statistical data available for evaluating institutions' corporate applications, for identifying areas of focus for both on-site and off-site examinations, and for monetary and other public policy purposes. The agencies use Call Report and TFR data in evaluating interstate merger and acquisition applications to determine, as required by law, whether the resulting institution would control more than ten percent of the total amount of deposits of insured depository institutions in the United States. Call Report and TFR data are also used to calculate all institutions' deposit insurance and Financing Corporation assessments, national banks' semiannual assessment fees, and the OTS's assessments on savings associations. Current Actions I. Overview On September 11, 2007, the agencies requested comment on proposed revisions to the Call Report and the TFR (72 FR 51814). All four agencies proposed to revise the Call Report and TFR instructions for reporting daily average deposit data by newly insured institutions for deposit insurance assessment purposes to conform the instructions with the FDIC's assessment regulations (12 CFR Part 327). In the same Federal Register notice, the OCC, the Board, and the FDIC (the banking agencies) also proposed to implement a number of other changes to the Call Report requirements. These Call Report changes included several related to 1-4 family residential mortgage loans such as separately reporting interest and fee income and quarterly averages for 1-4 family residential mortgages and all other real estate loans and adding new items for restructured troubled mortgages and mortgage loans in process of foreclosure. The banking agencies proposed to expand Call Report Schedule RC-P on closed-end 1-4 family residential mortgage banking activities, which is completed by larger banks and smaller banks with a significant level of such activities, to include originations, purchases, and sales of open-end mortgages as well as closed-end and open-end mortgage loan repurchases and indemnifications during the quarter. The Call Report's trading account definition was proposed to be modified in response to the creation of a fair value option in generally accepted accounting principles (GAAP). Revisions were proposed to Call Report Schedule RC- Q, which collects data on fair value measurements for trading assets and liabilities and other assets and liabilities accounted for under a fair value option, and certain other schedules, including the loan schedule (Schedule RC-C), to enhance the information available on instruments accounted for under this option. Other revisions were also proposed to be made to the schedule on trading assets and liabilities (Schedule RC-D). The banking agencies also proposed to clarify the Call Report instructions for reporting credit derivative data in the risk- based capital schedule (Schedule RC-R) and to make a corresponding change to the schedule itself; to change the threshold for reporting significant items of other noninterest income and expense in the explanations schedule (Schedule RI-E); and to conform the instructions for reporting fully insured brokered deposits in Schedule RC-E, Deposit Liabilities, to the instructions for reporting time deposits in this schedule. Finally, the banking agencies requested comment on a plan to discontinue the mailing of paper Call Report forms and instructions to banks. The revisions to the Call Report and the TFR set forth herein, which were approved for publication by the FFIEC, were proposed to take effect as of March 31, 2008. After considering the comments received on the proposal, the proposed revision to the Call Report and TFR instructions for reporting daily average deposit data by newly insured institutions for deposit insurance assessment purposes would be implemented March 31, 2008, as proposed. With respect to the remaining proposed revisions, which apply only to the Call Report, the banking agencies approved certain modifications to them to address concerns expressed by commenters. The banking agencies will move forward with the modified reporting changes on March 31, 2008, although the reporting of certain proposed new items will be optional for this initial report date and will be required beginning June 30, 2008. For the March 31, 2008, report date, institutions may provide reasonable estimates for any new or revised Call Report item required to be reported as of that date for which the requested information is not readily available. For the new Call Report items that are optional as of the March 31, 2008, report date, this same policy on the use of reasonable estimates will apply to these new items as of the June 30, 2008, report date. The agencies collectively received comments from nine respondents: seven banking organizations, one bankers' organization, and a government agency. None of the commenters addressed all of the aspects of the proposal. Rather, individual respondents addressed certain specific proposed changes. No comments were received on the instructional change for reporting daily average deposit data by newly insured institutions (the only proposed revision that also applied to the TFR), the proposed new items for restructured troubled 1-4 family residential mortgages and for the fair value and unpaid principal balance by loan category of loans held for sale or investment that are measured at fair value, the revised reporting threshold for the trading assets and liabilities schedule, the revisions to the regulatory capital schedule and instructions for credit derivatives, the conformity changes for brokered deposits within the deposits schedule, and the proposed discontinuance of mailing Call Report forms and instructions. In contrast, the three banking organizations that commented on the proposed modification of the Call Report's trading account definition all expressed support for this definitional change. Thus, all of the revisions discussed in this paragraph will be implemented as proposed. With respect to the other proposed revisions to the Call Report, some commenters recommended that certain changes be phased in rather than being implemented as of March 31, 2008, because the information was not readily available in a form that would facilitate reporting in proposed new data items. Some commenters also requested clarifications of terminology used to describe certain proposed items or the amounts to be reported in these items. One commenter opposed the proposed collection of a two-way breakdown of the difference between the fair value and the unpaid principal balance of loans measured at fair value under a fair value option, which would disclose the portion attributable to changes in credit risk since origination and the portion attributable to all other factors. Another commenter supported proposed changes to the Call Report schedule on fair value measurements, but recommended that the schedule's focus on disclosures [[Page 6509]] about such measurements for instruments to which a fair value option has been applied be broadened to cover all instruments measured at fair value. One commenter suggested the addition of a de minimis dollar amount to the proposed percentage threshold for disclosures of components of other noninterest income and expense. Finally, the proposal contained a footnote indicating that the banking agencies are considering a separate proposal to incorporate the FDIC's Summary of Deposits report into the Call Report, a proposed change about which two commenters voiced concerns. This separate proposal remains under consideration and would be subject to notice and comment before it could be implemented. The banking agencies' responses to the comments received and a discussion of the related Call Report revisions are presented below. II. Discussion of Revisions A. Reporting of Data for Deposit Insurance Assessments in the Call Report and TFR by Newly Insured Institutions On March 31, 2007, the banking agencies and the OTS introduced a revision and reduction in the overall reporting requirements related to deposit insurance assessments in Call Report Schedule RC-O and TFR Schedule DI, respectively, that was intended to simplify regulatory reporting. As part of these revised overall reporting requirements, the agencies provided an interim period covering the March 31, 2007, through December 31, 2007, report dates during which each institution had the option to submit its Call Reports or TFRs using either the current or revised formats for reporting the data used to measure their assessment base. The revised reporting format will take effect for all institutions on March 31, 2008, at which time the current reporting format will be eliminated. The instructions issued in March 2007 for the revised reporting format state that an institution that becomes newly insured on or after April 1, 2008, would be required to report daily average balances beginning in the first quarterly Call Report or TFR that it files. However, these instructions do not conform to the language in Section 327.5(a)(1) of the FDIC's assessment regulations (12 CFR 327.5(a)(1)) with respect to their treatment of institutions that become insured between April 1, 2007, and March 31, 2008. Therefore, the agencies proposed to revise the instructions to Call Report Schedule RC-O and TFR Schedule DI to require an institution that becomes insured after March 31, 2007, but on or before March 31, 2008, to begin reporting daily average balances in its Call Report or TFR for the March 31, 2008, report date. The agencies received no comments on this proposed reporting revision, which will be implemented as proposed. B. Call Report Revisions Related to 1-4 Family Residential Mortgage Loans Since year-end 2000, commercial bank holdings of 1-4 family residential mortgage loans in domestic offices have increased nearly 108 percent to more than $1.9 trillion. Nearly 98 percent of all banks hold such mortgages. 1-4 family residential mortgages now represent the single largest category of loans held by commercial banks, surpassing commercial and industrial loans as the largest category in 2002. As a percentage of total loans and leases at commercial banks, 1-4 family residential mortgages have grown from 24 percent at year-end 2000 to 32 percent at year-end 2006. Similarly, 1-4 family residential mortgages have increased from less than 15 percent of total assets to nearly 19 percent of total assets during this period. During the first quarter of 2007, bank originations and purchases of closed-end 1-4 family residential mortgages for resale exceeded $287 billion. The use of nontraditional residential mortgage products has grown and the number of banks that have offered such products has increased. Also, the volume of 1-4 family residential mortgage loans extended to subprime borrowers has increased. At the same time, home prices have stagnated or declined in many areas of the country. Foreclosure rates have substantially increased along with an increase in restructured loans. The higher concentration of 1-4 family residential mortgages across the industry and the changing risk profile of the loans with which banks are associated in some capacity has led the banking agencies to evaluate the information they collect about such loans in the Call Report. Therefore, the banking agencies will proceed with their proposed Call Report changes that are intended to enhance the ability to monitor the nature and extent of banks' involvement with 1-4 family residential mortgage loans as originators, holders, sellers, and servicers of such loans. Commenters requested a six-month reporting delay on some of the new items and asked the banking agencies to clarify for reporting purposes what principal amount funded means when reporting on open-end mortgages. The banking agencies considered these suggestions and made a number of changes in response. 1. Interest and Fee Income and Quarterly Average Currently, banks report the total amount of interest and fee income on their ``Loans secured by real estate'' (in domestic offices) in the Call Report income statement (Schedule RI, item 1.a.(1)(a) on the FFIEC 031 and item 1.a.(1) on the FFIEC 041) and the quarterly average for these loans (in domestic offices) in the quarterly averages schedule (Schedule RC-K, item 6.a.(2) on the FFIEC 031 and item 6.b on the FFIEC 041). The banking agencies proposed to split these existing income statement and quarterly average items into separate items for the interest and fee income on and the quarterly averages of ``Loans secured by 1-4 family residential properties'' and ``All other loans secured by real estate.'' One banking organization commented on these additions to the Call Report. This bank noted that these additions would require changes to its loan processing and accounting systems, which will affect loan personnel, but that it is possible to implement these changes. The banking agencies will proceed to add these items to the Call Report as proposed. 2. Restructured Mortgages Banks currently report information on the amount of loans whose terms have been modified, because of the borrower's financial difficulties, to provide for a reduction of either interest or principal. When such restructured loans are past due 30 days or more or are in nonaccrual status in relation to their modified terms as of the report date, they are reported in Schedule RC-N, Memorandum item 1. In contrast, when such restructured loans are less than 30 days past due and are not otherwise in nonaccrual status, that is, when they are deemed to be in compliance with their modified terms as discussed in the Call Report instructions, banks report the amount of these loans in the Call Report loan schedule (Schedule RC-C, part I, Memorandum item 1). However, the instructions advise banks to exclude restructured loans secured by 1-4 family residential properties from these Memorandum items. This exclusion was incorporated into the Call Report instructions because the original disclosure requirements for troubled debt restructurings under GAAP provided that creditors need not disclose information on restructured real estate loans secured by 1-4 family [[Page 6510]] residential properties.\1\ However, this exemption from disclosure under GAAP has since been eliminated.\2\ Accordingly, the banking agencies proposed to add a new Memorandum item to Schedule RC-C, part I, for ``Loans secured by 1-4 family residential properties (in domestic offices)'' that have been restructured and are in compliance with their modified terms and a new Memorandum item to Schedule RC-N for restructured ``Loans secured by 1-4 family residential properties (in domestic offices)'' that under their modified terms are past due 30 days or more or in nonaccrual status. --------------------------------------------------------------------------- \1\ See Financial Accounting Standards Board Statement No. 15, Accounting by Debtors and Creditors for Troubled Debt Restructurings, footnote 25. \2\ 2 See Financial Accounting Standards Board Statement No. 114, Accounting by Creditors for Impairment of a Loan, paragraph 22(f). --------------------------------------------------------------------------- No public comments were received on these additions to the Call Report. The banking agencies will proceed to add these items to the Call Report as proposed. 3. Mortgages in Foreclosure The banking agencies currently collect data on the amount of loans secured by 1-4 family residential properties that are past due 30 days or more or are in nonaccrual status (Schedule RC-N, item 1.c) and on the amount of foreclosed 1-4 family residential properties held by the bank (Schedule RC-M, item 3.b.(3)). However, regardless of whether the bank owns the loans or services the loans for others, banks do not report the volume of 1-4 family residential mortgage loans that are in process of foreclosure, an indicator of potential additions to the bank's ``other real estate owned'' in the near term. The banking agencies proposed to add two new Memorandum items for the amount of 1-4 family residential mortgage loans owned by the bank and serviced by the bank that are in foreclosure as of the quarter-end report date. Mortgage loans in foreclosure would be those for which the legal process of foreclosure has been initiated, but for which the foreclosure process has not yet been resolved at quarter-end.\3\ These Memorandum items would be added to the Call Report loan schedule (Schedule RC-C, part I) and the servicing, securitization, and asset sale activities schedule (Schedule RC-S), with the carrying amount (before any applicable allowance for loan and leases losses) reported in the former Memorandum item and the outstanding principal amount reported in the latter Memorandum item. Reporting mortgage loans as being in process of foreclosure will not exempt those loans owned by the bank from being reported as past due or nonaccrual, as appropriate, in Call Report Schedule RC-N, and will not exempt those loans serviced by the bank that are reported in Schedule RC-S, item 1, from being reported as past due, as appropriate, in that schedule. --------------------------------------------------------------------------- \3\ For banks that participate in the Mortgage Bankers Association's (MBA) National Delinquency Survey, the time at which mortgage loans would become reportable as being in process of foreclosure for Call Report purposes would be the same time at which mortgage loans become reportable as being in ``foreclosure inventory'' for MBA survey purposes (although the dollar amount of such loans would be reported in the Call Report while the number of such loans are reported for MBA survey purposes). --------------------------------------------------------------------------- The bankers' organization provided comments on these proposed items and three banking organizations supported their comments. The commenters did not object to reporting these items but requested that the data collection be delayed six months because the data are not currently readily available. The banking agencies elected to go forward with collecting the new data items as proposed because of the substantial increase in the number of foreclosures reported by the industry and the potentially higher number of foreclosures in the next couple of years. Given current conditions in the residential mortgage market, the agencies have a strong supervisory interest in being able to evaluate foreclosure data and obtain data needed as the starting point for trend analyses at the earliest possible date. As with all new Call Report items, banks may report reasonable estimates for the amounts of loans in foreclosure for the first reporting period (March 31, 2008) using the best information available. 4. Open-end 1-4 Family Residential Mortgage Banking Activities Banks with $1 billion or more in total assets and smaller banks that meet certain criteria currently provide data on originations, purchases, and sales of closed-end 1-4 family residential mortgage loans during the quarter arising from their mortgage banking activities in domestic offices in Call Report Schedule RC-P. These banks also report the amount of closed-end 1-4 family residential mortgage loans held for sale at quarter-end as well as the noninterest income for the quarter from the sale, securitization, and servicing of these mortgage loans. Data (other than for noninterest income) is provided separately for first lien and junior lien mortgages in Schedule RC-P. About 650 banks complete Schedule RC-P, less than 300 of which have total assets of less than $1 billion. However, this information does not provide a complete picture of banks' mortgage banking activities since it excludes open-end 1-4 family residential mortgages extended under lines of credit. From year-end 2001 to year-end 2006, bank holdings of 1-4 family residential mortgage loans extended under lines of credit more than tripled to nearly $470 billion. Accordingly, the banking agencies proposed to expand the scope of Schedule RC-P to include separate items for originations, purchases, and sales of open-end 1-4 family residential mortgages during the quarter; the amount of such mortgages held for sale at quarter-end; and noninterest income for the quarter from the sale, securitization, and servicing of open-end residential mortgages. When reporting the originations, purchases, sales, and mortgages held for sale, banks would report both the total commitment under the line of credit and the principal amount funded under the line. For banks with less than $1 billion in total assets, the criteria used to determine whether Schedule RC-P must be completed would be modified to include both closed-end and open-end 1-4 family residential mortgage banking activities. One banking organization and the bankers' organization provided comments on these proposed revisions and three other banking organizations supported the latter's comments. The bankers' organization did not object to reporting the new items but requested that the data collection be delayed six months because of the time needed to identify and capture the unused commitment amounts and outstanding principal balances. The banking agencies agreed not to require the new open-end mortgage data to be reported until the June 30, 2008, Call Report, with reporting of these data optional in the March 31, 2008, Call Report, if the information is available. The banking organization encouraged the banking agencies to clearly define the terms ``total commitment under the lines of credit'' and the ``principal amount funded under the lines of credit'' as they relate to originations of open-end 1-4 family residential mortgages during the quarter because different interpretations could result in the absence of clear instructions. The organization recommended that ``total commitment'' be defined as the initial committed balance made to customers on newly established open-end lines of credit and ``principal amount funded'' be defined as initial fundings made to customers on newly established lines. The banking agencies agree on the [[Page 6511]] necessity for clear definitions of these terms. Thus, the instructions for reporting the ``total commitment'' would define it as the total amount of the lines of credit granted to customers at the time the open-end credits were originated, which is consistent with the banking organization's recommendation. For retail and wholesale originations of such open-end loans, the instructions would define ``principal amount funded'' as the initial fundings made to customers on newly established lines of credit. In addition, for open-end loans purchased, sold, held for sale, and (as discussed in the following section) repurchased or indemnified, the ``principal amount funded'' would be defined as the principal balance outstanding of loans extended under lines of credit at the transaction date or at quarter-end, as appropriate. 5. Mortgage Repurchases and Indemnifications As a result of its 1-4 family residential mortgage banking activities, a bank may be obligated to repurchase mortgage loans that it has sold or otherwise indemnify the loan purchaser against loss because of borrower defaults, loan defects, other breaches of representations and warranties, or for other reasons, thereby exposing the bank to additional risk. Such information is not currently captured in Call Report Schedule RC-P. Therefore, the banking agencies proposed to add four new items to Schedule RC-P to collect data on mortgage loan repurchases and indemnifications during the quarter. For both closed- end first lien and closed-end junior lien 1-4 family residential mortgages, banks would report the outstanding principal amount of mortgages repurchased or indemnified as of the date of repurchase or indemnification. For open-end 1-4 family residential mortgages, banks would report both the total commitment under the line of credit and the principal amount funded under the line for mortgages repurchased or indemnified. The banking agencies received comments from one banking organization and the bankers' organization on these additions to the Call Report, with three other banking organizations supporting the bankers' organization's comments. The banking organization sought clarification as to the scope of indemnifications, particularly with respect to whether indemnifications that consisted of reimbursements of legal fees or administrative costs were expected to be reported. The agencies will clarify in the instructions that indemnifications are limited to reimbursements for credit losses, including reimbursements for losses arising from sales of real estate collateral. The bankers' organization also requested a clarification involving terminology, questioning whether, if there is a difference between the book value of a loan and its principal balance, which amount banks are expected to report. The banking agencies reiterate that the amount to be reported for closed-end loans is the mortgages' outstanding principal amount as of the date of repurchase or indemnification, not the book value of these mortgages. For open-end residential mortgage loans, the concept of ``principal amount funded'' is discussed in the preceding section. Finally, also as discussed in the preceding section, the new items on repurchases and indemnifications of open-end loans will not be required to be reported until the June 30, 2008, report date, with reporting of these data optional as of the March 31, 2008, report date, if the information is available. Subject to these modifications and clarifications to their original proposal, the banking agencies will proceed to implement these new items on repurchases and indemnifications. C. Call Report Data on Trading Assets and Liabilities and Other Assets and Liabilities Accounted for Under a Fair Value Option 1. Reporting of Assets and Liabilities Under the Fair Value Option as Trading On February 15, 2007, the Financial Accounting Standards Board (FASB) issued Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (FAS 159), which is effective for fiscal years beginning after November 15, 2007. Earlier adoption of FAS 159 was permitted as of the beginning of an earlier fiscal year, provided the bank (i) also adopts all of the requirements of FASB Statement No. 157, Fair Value Measurements (FAS 157) at the early adoption date of FAS159; (ii) has not yet issued a financial statement or submitted Call Report data for any period of that fiscal year; and (iii) satisfies certain other conditions. Thus, a bank with a calendar year fiscal year may have voluntarily adopted FAS 159 as of January 1, 2007. Changes in the fair value of financial assets and liabilities to which the fair value option is applied are reported in current earnings as is currently the case for trading assets and liabilities. Since the fair value option standard allows a bank to elect fair value measurement through earnings for financial assets and financial liabilities, the banking agencies understand that some institutions would like to reclassify certain loans elected to be accounted for under the fair value option as trading assets. The Call Report instructions currently do not allow loans held for sale to be reported as trading assets. Under FAS 159, all securities within the scope of FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities (FAS 115), that a bank has elected to report at fair value under a fair value option should be classified as trading securities. Recognizing the provisions of FAS 159, the banking agencies proposed the following clarification to the Call Report instructions, including the Call Report Glossary entry for ``Trading Account.'' Banks may classify assets (other than securities within the scope of FAS 115 for which a fair value option is elected) and liabilities as trading if the bank applies fair value accounting, with changes in fair value reported in current earnings, and manages these assets and liabilities as trading positions, subject to the controls and applicable regulatory guidance related to trading activities. Three banking organizations provided comments in support of the proposed expanded definition of the trading account to permit the classification of certain loans as trading. The banking agencies will proceed with the revised definition of trading account as proposed. 2. Revision of Certain Fair Value Measurement and Fair Value Option Information in the Call Report Effective for the March 31, 2007, report date, the banking agencies started collecting information on certain assets and liabilities measured at fair value on Call Report Schedule RC-Q, Financial Assets and Liabilities Measured at Fair Value. Schedule RC-Q was intended to be consistent with the disclosure and other requirements contained in FAS 157 and FAS 159. Based on the banking agencies' review of initial industry practice and inquiries from banks, the agencies have determined that industry practice for preparing and reporting FAS 157 disclosures has evolved differently than the process for the information collected on Schedule RC-Q. This divergence has resulted in unnecessary burden and less transparency for the affected banks in two material respects. First, Schedule RC-Q does not allow banks to separately identify each of the three levels of fair value measurements prescribed by FAS 157. The banking agencies included Level 1 fair value [[Page 6512]] measurements in the total fair value amount in column A of Schedule RC- Q as a means of minimizing reporting burden. However, the omission of a separate column on Schedule RC-Q for Level 1 fair value measurements has increased the time bank managements spend preparing and reviewing Schedule RC-Q because the fair value disclosures on Schedule RC-Q differ from those in the banks' other financial statements. Second, Schedule RC-Q does not allow banks to separately identify any amounts by which the gross fair values of assets and liabilities reported for Level 2 and 3 fair value measurements included in columns B and C have been offset (netted) in the determination of the total fair value reported on the Call Report balance sheet (Schedule RC), which is disclosed in column A of Schedule RC-Q. Based on a review of industry practice, these disclosures are commonly made in the banks' other financial statements. To reduce confusion related to the differences in industry practice and the Call Report, the banking agencies proposed to add two columns to Schedule RC-Q to allow banks to report any netting adjustments and Level 1 fair value measurements separately in a manner consistent with industry practice. The new columns would be captioned column B, Amounts Netted in the Determination of Total Fair Value Reported on Schedule RC, and column C, Level 1 Fair Value Measurements. Existing column B, Level 2 Fair Value Measurements, and column C, Level 3 Fair Value Measurements, of Schedule RC-Q would be recaptioned as columns D and E, respectively. Column A would remain unchanged. One commenter, a banking organization, offered comments on the proposed changes to Schedule RC-Q. The commenter supported the addition of the two new columns to the schedule. The commenter also suggested the banking agencies amend the scope of Schedule RC-Q to collect information on all assets and liabilities measured at fair value pursuant to FAS 157 rather than the current scope, which collects information primarily based on a bank's election to measure assets at fair value under a fair value option and only includes some of the assets and liabilities covered by FAS 157. The banking agencies recognize that a significant number of banks have only recently adopted FAS 157 and are working through a number of implementation issues. In addition, the FASB recently proposed a 1-year delay in the effective date of FAS 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis. In light of these factors, the banking agencies determined it would not be prudent, at this time, to modify the scope of the Schedule RC-Q to include all assets and liabilities covered by FAS 157 as suggested by the commenter. The banking agencies will proceed with the addition of the two additional columns to Schedule RC-Q as proposed. The banking agencies also considered other types of information that will be necessary to effectively assess the safety and soundness of banks that utilize the fair value option pursuant to FAS 159. Based on this assessment, the banking agencies proposed to amend certain other Call Report schedules to improve the agencies' ability to make comparisons among entities that elect a fair value option and those that do not. The primary focus of these proposed changes is to enhance the information provided by banks that elect the fair value option for loans. The proposed changes are based on the principal objectives for disclosures and the required disclosures in FAS 159, which were intended to provide ``information to enable users to understand the differences between fair value and contractual cash flows'' and to provide information ``that would have been disclosed if the fair value option had not been elected.'' Specifically, the banking agencies proposed to add items to Schedule RC-C, part I, Loans and Leases, to collect data on the loans reported in this schedule that are measured at fair value under a fair value option: (1) The fair value of such loans measured by major loan category, (2) the unpaid principal balance of such loans by major loan category, and (3) the aggregate amount of the difference between the fair value and the unpaid principal balance of such loans that is attributable (a) to changes in the credit risk of the loan since its origination and (b) to all other factors. Because Schedule RC-C, part I, only provides data on loans held for investment and for sale, the banking agencies proposed to add the same items to Schedule RC-D, Trading Assets and Liabilities, for loans measured at fair value under a fair value option that are designated as held for trading. The banking agencies also proposed to add a new item to Schedule RC-D for ``Other trading liabilities'' in recognition of a bank's ability to elect to measure certain liabilities at fair value in accordance with FAS 159 and designate them as held for trading. The banking agencies proposed to add two items to Schedule RC-N, Past Due and Nonaccrual Loans, Leases, and Other Assets, to collect data on the fair value and unpaid principal balance of loans measured at fair value under a fair value option that are past due or in nonaccrual status. The items would follow the existing three column breakdown on Schedule RC-N that banks utilize to report all other past due and nonaccrual loans. Since trading assets are not currently reported on Schedule RC-N, the banking agencies proposed to add similar items to Schedule RC-D to collect the total fair value and unpaid principal balance of loans 90 days or more past due that are classified as trading. Finally, the banking agencies proposed to add items to Schedule RI, Income Statement, to collect information on: (1) Net gains (losses) recognized in earnings on assets that are reported at fair value under a fair value option; (2) estimated net gains (losses) on loans attributable to changes in instrument-specific credit risk; (3) net gains (losses) recognized in earnings on liabilities that are reported at fair value under a fair value option; (4) estimated net gains (losses) on liabilities attributable to changes in the instrument-specific credit risk. Two banking organizations and the bankers' organization provided comments on the proposed changes. One banking organization opposed the proposal to collect information on Schedules RC-C and RC-D on the aggregate amount of the difference between the fair value and the unpaid principal balance of loans measured at fair value under a fair value option attributable to (a) changes in the credit risk of the loan since its origination and (b) all other factors. The banking organization indicated the proposed information may exist in theory but that banks do not have the ability to readily and reliably produce this information. The banking agencies reconsidered the proposal and concur with the commenter's assessment of banks' ability to readily and reliably produce this information. As a result, the banking agencies will not implement the proposed change. One banking organization opposed the proposed breakouts on Schedule RC-D of the fair value and the unpaid principal balance of loans measured at fair value under a fair value option by major loan category indicating the information was excessive and burdensome to collect for loans designated as trading and would require changes to the bank's trading systems. The banking agencies' safety and soundness objective for collecting this information is to make comparisons among entities that elect a fair value [[Page 6513]] option for loans and those that do not. This objective can not be achieved if the information collected on Schedules RC-C and RC-D is not comparable. Since banks have considerable experience reporting information by major loan category as required by Schedule RC-C and are only now able to report loans under a fair value option on Schedule RC- D, the banking agencies determined it would be less burdensome to adapt the proposed loan breakouts on Schedule RC-D to the current breakouts on Schedule RC-C than to develop a unique format for reporting loans under a fair value option in both Schedules RC-C and RC-D as inferred by the commenter. The banking agencies will proceed with the breakouts for loans reported under a fair value option on Schedule RC-D as proposed. The banking organization also questioned whether the banking agencies should collect separate items on Schedule RI for the net gains (losses) recognized in earnings on assets that are reported at fair value under a fair value option and the estimated net gains (losses) on loans attributable to changes in instrument-specific credit risk. Similarly, the commenter questioned whether the agencies should collect separate items on Schedule RI for the net gains (losses) recognized in earnings on liabilities that are reported at fair value under a fair value option and the estimated net gains (losses) on liabilities attributable to changes in the instrument-specific credit risk. The commenter suggested the agencies clarify what changes other than credit risk would be reported in net gains (losses) on assets and liabilities reported at fair value under a fair value option that would warrant a separate breakout for net gains (losses) on loans and liabilities for instrument-specific credit risk. The content of the proposed items for Schedule RI are the same as those mandated by the disclosure requirements of paragraphs 19(a), (c)(1), and (d)(1) of FAS 159. However, to reduce burden, the banking agencies grouped the requirements of subparagraph (a) into net gains (losses) recognized in earnings on assets that are reported at fair value under a fair value option and net gains (losses) recognized in earnings on liabilities that are reported at fair value under a fair value option rather than requiring separate breakouts for the amount of gains and losses on fair value option items for each line item on a bank's balance sheet as required by paragraph 19(a). Thus, the banking agencies' rationale for collecting the separate breakouts on Schedule RI is the same as FAS 159, to facilitate comparisons between banks that adopt the fair value option and those that do not. The banking agencies will proceed with the proposed breakouts on Schedule RI for net gains (losses) recognized in earnings on assets and liabilities reported under a fair value option and the estimated net gains (losses) on loans and liabilities reported under a fair value option attributable to changes in instrument-specific credit risk as proposed. The bankers' organization recommended a six month delay in the effective date of the proposal to collect information on Schedule RC-N on the fair value and unpaid principal balance of loans measured at fair value under a fair value option that are past due or in nonaccrual status and Schedule RC-D on the total fair value and unpaid principal balance of loans 90 days or more past due. The commenter indicated the delay would give banks sufficient time to make changes to their systems to capture this information. The banking agencies agree that a delay would be advisable and will delay the implementation date of the proposed Schedule RC-N and RC-D items by 90 days, which will make the changes effective for the June 30, 2008, report date. However, the banking agencies will allow banks the option of submitting this information effective for the March 31, 2008, report date, if the information is available. The banking agencies did not receive comments on the proposal to add items to Schedule RC-C, part I, Loans and Leases, to collect the fair value and unpaid principal balance of loans measured at fair value under a fair value option by major loan category. The banking agencies also did not receive comments on the proposal to add a new item to Schedule RC-D for ``Other trading liabilities.'' The banking agencies will proceed with these changes as proposed. 3. Other Revisions to the Call Report Information on Trading Assets and Liabilities The banking agencies proposed three revisions to Schedule RC-D to enhance the agencies' ability to assess bank exposures to market, liquidity, credit, operational, and other risks posed by trading assets and liabilities and to appropriately assess the safety and soundness of banks with these exposures and banks with significant concentrations in trading assets and liabilities. First, the banking agencies proposed to eliminate the single line item for trading assets in foreign offices on the FFIEC 031 Call Report form and revise the schedule to include separate columns for the consolidated bank and for domestic offices. Second, the banking agencies proposed to change the reporting threshold for Schedule RC-D. As proposed, Schedule RC-D would be completed for any quarter when the quarterly average for trading assets in Schedule RC-K, item 7, was $2 million or more in any of the four preceding quarters. Third, the banking agencies proposed to require banks with average trading assets of $1 billion or more in any of the four preceding quarters to provide additional detail on trading assets and liabilities currently included in certain trading asset and liability categories. These banks would provide additional breakouts for asset- backed securities by major category, collateralized debt obligations (both synthetic and non-synthetic), retained interests in securitizations, equity securities (both with and without readily determinable fair values), and loans held pending securitization. In addition, these banks would be required to provide a description of and report the fair value of any type of trading asset or liability in the ``Other trading assets'' and ``Other trading liabilities'' categories that is greater than $25,000 and exceeds 25 percent of the amount reported in that trading category. One banking organization requested the banking agencies reconsider the proposed expansion of information for banks with average trading assets of $1 billion or more due to current systems limitations. The banking agencies assessed the systems challenges resulting from other regulatory initiatives at banking organizations with trading assets of $1 billion or more and determined a delay in the implementation date for these changes would be reasonable. The banking agencies will delay the implementation date of the proposed expanded information on Schedule RC-D items by 90 days, which will make the changes effective for the June 30, 2008, report date. However, the banking agencies will allow banks the option of submitting this information effective for the March 31, 2008 report date, if the information is available. The banking agencies did not receive comments on the proposal to eliminate the single line item for trading assets in foreign offices on the FFIEC 031 Call Report form and revise the schedule to include separate columns for the consolidated bank and for domestic offices. The banking agencies also did not receive comments on the proposal to change the reporting threshold for Schedule RC-D. The banking agencies will proceed with these changes as proposed. [[Page 6514]] D. Reporting Credit Derivative Data for Risk-Based Capital Purposes in the Call Report For credit derivative contracts that are covered by the banking agencies' risk-based capital standards, the Call Report instructions require banks to report these credit derivatives in item 52, ``All other off-balance sheet liabilities,'' of Schedule RC-R, Regulatory Capital, unless the credit derivatives represent recourse arrangements or direct credit substitutes, which are reported in one of the preceding items in the Derivatives and Off-Balance Sheet Items section of the schedule. This reporting approach was developed to enable banks that sold credit protection and held the credit derivative to apply a 100 percent risk weight to the notional amount consistent with the risk-based capital treatment of standby letters of credit and guarantees. At present, Schedule RC-R, item 54, ``Derivative contracts,'' specifically excludes credit derivatives and does not include a 100 percent risk weight column because the maximum risk weight on the counterparty credit risk charge for other types of derivatives is 50 percent. However, this reporting approach does not consider that some credit derivative positions are subject to a counterparty credit risk charge, which is calculated for other derivative positions in item 54, even if the credit derivatives are held by a bank that is subject to the market risk capital rules. The banking agencies proposed to modify the Call Report instructions for Schedule RC-R to allow the reporting of the credit equivalent amount of credit derivatives subject to the counterparty credit risk charge in item 54 of the schedule and to extend the existing 100 percent risk weight column in Schedule RC-R to item 54, ``Derivative contracts.'' The banking agencies did not receive comments on the proposed changes for credit derivatives in Schedule RC-R. However, upon further consideration of the reporting of such derivatives in Schedule RC-R, item 54, the banking agencies concluded that extending the 100 percent risk weight column to this item is not necessary. The instructions will indicate that credit derivatives entered into for trading purposes and subject to the market risk capital guidelines should be reported in item 54. E. Revision of Reporting Threshold for Other Noninterest Income and Other Noninterest Expense in the Call Report The banking agencies proposed to change the threshold for reporting detailed information on the components of other noninterest income and other noninterest expense as reported on Schedule RI-E, Explanations, items 1 and 2. Specifically, the banking agencies proposed to change the threshold to require banks to separately disclose the description and amount of any item included in Schedule RI, item 5.l, ``Other noninterest income'' that exceeds 3 percent of other noninterest income and any item included in Schedule RI, item 7.d, ``Other noninterest expense'' that exceeds 3 percent of other noninterest expense. In addition, the banking agencies proposed to add one new preprinted caption for other noninterest income and four new preprinted captions for other noninterest expense to help banks comply with the disclosure requirements. As with the existing preprinted captions for other noninterest income and other noninterest expense, banks are only required to use these descriptions and provide the amounts for these components when the amounts included in other noninterest income or other noninterest expense exceed the reporting threshold. The new preprinted other noninterest income caption is bank card/credit card interchange fees. The new preprinted noninterest expense captions are accounting and auditing expenses, consulting and advisory expenses, automated teller machine (ATM) and interchange expenses, and telecommunications expenses. Two banking organizations and the government agency provided comments on the proposed changes. The agency supported the additional new preprinted captions. One banking organization indicated the application of the new thresholds to the smaller base of other noninterest income or expense would result in their bank reporting amounts as small as $1,000 in the other noninterest income disclosures and $7,500 in the other noninterest expense disclosures. The commenter recommended the banking agencies establish a $50,000 floor to the reporting threshold to eliminate the reporting of de minimis amounts. The banking agencies recognize the merit of this request and will implement modified thresholds to require banks to separately disclose the description and amount of any item in other noninterest income that is greater than $25,000 and exceeds 3 percent of other noninterest income and any item included in other noninterest expense that is greater than $25,000 and exceeds 3 percent of other noninterest expense. The $25,000 amount is consistent with the threshold floors used for ``All other assets'' in Schedule RC-F, Other Assets, and ``All other liabilities'' in Schedule RC-G, Other Liabilities. Another banking organization commented that they would have difficulty breaking out expenses incurred for multiple services provided by a third party vendor where separate charges for specific services would be burdensome to identify. The commenter requested the banking agencies provide a definition of telecommunications expenses. To reduce reporting burden, the banking agencies will modify the instructions for Schedule RI-E, item 2, ``Other noninterest expense,'' to indicate that banks should report expenses that reflect a single charge for grouped or ``bundled'' services in the item that most closely describes the predominant type of expense incurred, and that this categorization should be used consistently over time. Regarding the definition of telecommunications expenses, banks should include any expenses associated with telephone, cable, and internet services (including web page maintenance). F. Reporting Brokered Time Deposits Participated Out by the Broker in the Call Report The banking agencies revised the instructions for Schedule RC-E, Memorandum items 2.b, ``Total time deposits of less than $100,000,'' and 2.c, ``Total time deposits of $100,000 or more,'' in March 2007. This was done so that brokered time deposits issued in denominations of $100,000 or more that are participated out by the broker in shares of less than $100,000 would be reported in the former rather than the latter Memorandum item. However, the banking agencies did not make a conforming instructional revision to Schedule RC-E, Memorandum items 1.c.(1) and 1.c.(2), on fully insured brokered deposits. This means that these participated brokered time deposits continue to be reported as brokered deposits of greater than $100,000 rather than brokered deposits of less than $100,000. To achieve consistent reporting of these brokered time deposits in Schedule RC-E, the banking agencies proposed to revise Schedule RC-E, Memorandum items 1.c.(1) and 1.c.(2), so that brokered time deposits issued in denominations of $100,000 or more that are participated out by the broker in shares of less than $100,000 are reported in Memorandum item 1.c.(1) as fully insured brokered deposits of less than $100,000. The banking agencies did not receive any comments on this proposed change to the reporting of brokered time deposits, which will be implemented as proposed. [[Page 6515]] III. Discontinuance of Mailing of Call Report Forms and Instructions The banking agencies requested comment on their plan to discontinue the mailing of Call Report forms and instructions for the FFIEC 031 and FFIEC 041. The agencies' current practice is to mail sample forms to banks only in those quarters when significant revisions are made to the report forms. Updates to the Call Report instruction book have been printed and mailed to banks in those quarters when such updates have been issued. The Call Report forms and their instructions are available on the FFIEC's Web site (http://www.ffiec.gov/ffiec_report_forms.htm) and the FDIC's Web site (http://www.fdic.gov/regulations/resources/call/ gulations/resources/call/ instructions are completed. A paper copy of the report forms and instructions can be printed from the Web sites. In addition, banks that use Call Report software generally can print paper copies of blank forms from their software. No comments were received on this issue. The agencies will discontinue mailing paper Call Report forms and instructions in 2008, while retaining their practice of making these materials available to banks electronically. IV. Other Matters On February 14, 2007, the OCC, the Board, the FDIC, and the OTS requested comment on a proposed regulatory capital schedule for collecting Basel IA risk-based capital data in the Call Report and the TFR (72 FR 7115). No comments were received on this proposal. On July 20, 2007, the four agencies announced an agreement to issue a proposal to adopt a standardized approach under the Basel II Accord that would replace the Basel IA proposal. As a consequence, the agencies are withdrawing their Basel IA regulatory capital reporting proposal. A regulatory capital reporting proposal for the standardized approach will be issued for comment at a later date. V. Paperwork Reduction Act Request for Comment Public comment is requested on all aspects of this joint notice. Comments are invited on: (a) Whether the proposed revisions to the Call Report and TFR collections of information are necessary for the proper performance of the agencies' functions, including whether the information has practical utility; (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)