Submission for OMB Review; Comment Request-Thrift Financial Report: Schedules SC, CC, DI, SI, SB, and RM, 68326-68331 [E9-30490]

Download as PDF 68326 Federal Register / Vol. 74, No. 245 / Wednesday, December 23, 2009 / Notices DEPARTMENT OF THE TREASURY OMB Control Number: 1513–0071. TTB Recordkeeping Number: 5230/1. Abstract: This information collection is used by tobacco products importers or manufacturers who import or make large cigars. Records are needed to verify wholesale prices of those cigars as the tax is based on those prices. This collection also ensures that all tax revenue due to the government is collected. The record retention requirement for this information collection is 3 years. Current Actions: We are submitting this information collection for extension purposes only. The information collection, estimated number of respondents, and estimated total annual burden hours remain unchanged. Type of Review: Extension of a currently approved collection. Affected Public: Business or other forprofit. Estimated Number of Respondents: 818. Estimated Total Annual Burden Hours: 1,906. srobinson on DSKHWCL6B1PROD with NOTICES Title: Tobacco Products Importer or Manufacturer—Records of Large Cigar Wholesale Prices. Submission for OMB Review; Comment Request—Thrift Financial Report: Schedules SC, CC, DI, SI, SB, and RM Office of Thrift Supervision Title: Recordkeeping for Tobacco Products and Cigarette Papers or Tubes Brought from Puerto Rico to the U.S. OMB Control Number: 1513–0108. TTB Form or Recordkeeping Number: None. Abstract: The prescribed recordkeeping requirements apply to persons who ship tobacco products or cigarette papers or tubes from Puerto Rico to the United States. The records verify the amount of taxes to be paid and that any required bond is sufficient to cover unpaid liabilities. The records must be retained for 3 years. Current Actions: We are submitting this information collection for extension purposes only. The information collection, estimated number of respondents, and estimated total annual burden hours remain unchanged. Type of Review: Extension of a currently approved collection. Affected Public: Business or other forprofit. Estimated Number of Respondents: 4. Estimated Total Annual Burden Hours: 1. Dated: December 17, 2009. Francis W. Foote, Director, Regulations and Rulings Division. [FR Doc. E9–30446 Filed 12–22–09; 8:45 am] BILLING CODE 4810–31–P VerDate Nov<24>2008 16:41 Dec 22, 2009 Jkt 220001 AGENCY: Office of Thrift Supervision (OTS), Treasury. ACTION: Notice and request for comment. SUMMARY: In accordance with the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), OTS 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 August 19, 2009, OTS requested public comment for 60 days (74 FR 41981) on a proposal to extend, with revisions, the Thrift Financial Report (TFR), which is currently an approved collection of information. The notice described regulatory reporting revisions proposed for the TFR, Schedule SC—Consolidated Statement of Condition, Schedule CC— Consolidated Commitments and Contingencies, Schedule DI— Consolidated Deposit Information, Schedule SB—Consolidated Small Business Loans, and a proposed new schedule, Schedule RM—Annual Supplemental Consolidated Data on Reverse Mortgages. The changes are proposed to become effective in March 2010 except for the proposed new schedule RM which would become effective in December 2010. The changes would revise three existing lines in the TFR, revise the reporting frequency for Schedule SB— Consolidated Small Business Loans from annual to quarterly, and add 24 new line items (including the 16 line items in the new Schedule RM). After considering the one comment letter received on the proposed changes, OTS has adopted all of the proposed changes. In addition, OTS is proposing to add four new line items to Schedule SI— Consolidated Supplemental Information, on assets covered by FDIC loss-sharing agreements in response to a recommendation from the bankers’ organization commenter. OTS is submitting the proposed changes to OMB for review and approval. DATES: Submit written comments on or before January 22, 2010. The regulatory reporting revisions described herein take effect on March 31, 2010, and on December 31, 2010. ADDRESSES: Send comments, referring to the collection by ‘‘1550–0023 (TFR PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 Revisions—2010)’’, to OMB and OTS at these addresses: Office of Information and Regulatory Affairs, Attention: Desk Officer for OTS, U.S. Office of Management and Budget, 725 17th Street, NW., Room 10235, Washington, DC 20503, or by fax to (202) 395–6974, and Information Collection Comments, Chief Counsel’s Office, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552, by fax to (202) 906–6518, or by e-mail to infocollection.comments@ots.treas.gov. OTS will post comments and the related index on the OTS Internet Site at http: //www.ots.treas.gov/ ?p=LawsRegulations. In addition, interested persons may inspect comments at the Public Reading Room, 1700 G Street, NW., Washington, DC by appointment. To make an appointment, call (202) 906–5922, send an e-mail to publicinfo@ots.treas.gov, or send a facsimile transmission to (202) 906– 7755. FOR FURTHER INFORMATION CONTACT: For further information or to obtain a copy of the submission to OMB, please contact 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. You can obtain a copy of the 2010 Thrift Financial Report forms from the OTS Web site at http:// www.ots.treas.gov/ ?p=ThriftFinancialReports or you may request it by electronic mail from tfr.instructions@ots.treas.gov. You can request additional information about this proposed information collection from James Caton, Managing Director, Economics and Industry Analysis Division, (202) 906–5680, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552. SUPPLEMENTARY INFORMATION: The effect of the proposed revisions to the reporting requirements of these information collections will vary from institution to institution, depending on the institution’s involvement with the types of activities or transactions to which the proposed changes apply. OTS estimates that implementation of these reporting changes will result in a small increase in the current reporting burden imposed by the TFR. The following burden estimates include the effect of the proposed revisions. Title: Thrift Financial Report. OMB Number: 1550–0023. Form Number: OTS 1313. Statutory Requirement: 12 U.S.C. 1464(v) imposes reporting requirements E:\FR\FM\23DEN1.SGM 23DEN1 Federal Register / Vol. 74, No. 245 / Wednesday, December 23, 2009 / Notices for savings associations. Except for selected items, these information collections are not given confidential treatment. Type of Review: Revision of currently approved collections. Affected Public: Savings Associations. Estimated Number of Respondents and Recordkeepers: 771. Estimated Burden Hours per Respondent: 57.4 hours average for quarterly schedules and 2.0 hours average for schedules required only annually plus recordkeeping of an average of one hour per quarter. Estimated Frequency of Response: Quarterly. Estimated Total Annual Burden: 185,158 hours. Abstract: OTS is proposing to revise and extend for three years the TFR, which is currently an approved collection of information. All OTSregulated savings associations must comply with the information collections described in this notice. OTS collects this information each calendar quarter or less frequently if so stated. OTS uses this information to monitor the condition, performance, and risk profile of individual institutions and systemic risk among groups of institutions and the industry as a whole. Except for selected items, these information collections are not given confidential treatment. srobinson on DSKHWCL6B1PROD with NOTICES I. Background OTS last revised the form and content of the TFR in a manner that significantly affected a substantial percentage of institutions in June 2009, and has additional revisions scheduled to become effective in December 2009. Throughout 2009, OTS has evaluated its ongoing information needs. OTS recognizes that the TFR imposes reporting requirements, which are a component of the regulatory burden facing institutions. Another contributor to this regulatory burden is the examination process, particularly onsite examinations during which institution staffs spend time and effort responding to inquiries and requests for information designed to assist examiners in evaluating the condition and risk profile of the institution. The amount of attention that examiners direct to risk areas of the institution under examination is, in large part, determined from TFR data. These data, and analytical reports, including the Uniform Thrift Performance Report, assist examiners in scoping and making their preliminary assessments of risks during the planning phase of the examination. VerDate Nov<24>2008 16:41 Dec 22, 2009 Jkt 220001 A risk-focused review of the information from an institution’s TFR allows examiners to make preliminary risk assessments prior to onsite work. The degree of perceived risk determines the extent of the examination procedures that examiners initially plan for each risk area. If the outcome of these procedures reveals a different level of risk in a particular area, the examiner adjusts the examination scope and procedures accordingly. TFR data are also a vital source of information for the monitoring and regulatory activities of OTS. Among their benefits, these activities aid in determining whether the frequency of an institution’s examination cycle should remain at maximum allowed time intervals, thereby lessening overall regulatory burden. More risk-focused TFR data enhance the ability of OTS to assess whether an institution is experiencing changes in its risk profile that warrant immediate follow-up, which may include accelerating the timing of an on-site examination. In developing this proposal, OTS considered a range of potential information needs, particularly in the areas of credit risk, liquidity, and liabilities, and identified those additions to the TFR that are most critical and relevant to OTS in fulfilling its supervisory responsibilities. OTS recognizes that increased reporting burden will result from the addition to the TFR of the new items discussed in this proposal. Nevertheless, when viewing these proposed revisions to the TFR within a larger context, they help to enhance the on- and off-site supervision capabilities of OTS, which assist with controlling the overall regulatory burden on institutions. II. Current Actions On August 19, 2009, OTS requested comment on proposed changes to the Thrift Financial Report (74 FR 41981) that would take effect as of March 31, 2010, unless otherwise noted. These revisions would revise the reporting frequency for small business and small farm data reported in Schedule SB from annually to quarterly, revise three existing lines, and add 24 new lines to the TFR, which include the 16 line items proposed for the new Schedule RM–Annual Supplemental Consolidated Data on Reverse Mortgages. OTS received one comment letter on the proposed revisions from a trade group representing banks of all sizes and charter types. The commenter’s major concern was about the additional burden in the proposal to change ‘‘Schedule SB—Consolidated Small Business Loans’’ from the current PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 68327 annual filing frequency to the proposed quarterly filing requirement. III. TFR Revisions Proposed for March 2010 A. Additional Detail on Credit Card Loans and Commitments OTS received a favorable comment on revisions proposed for credit card loans and commitments. Therefore, these revisions will be implemented in March 2010 as proposed. The extent to which the supply of credit has declined during the current financial crisis has been of great interest to the federal banking agencies and to Congress. Credit provided by financial institutions plays a central role in any economic recovery. The Federal banking agencies need data to determine when credit conditions have eased. One way to measure the supply of credit is to analyze the change in total lending commitments by financial institutions, considering both the amount of loans outstanding and the volume of unused credit lines. These data are also needed for safety and soundness purposes because draws on commitments during periods when financial institutions face significant funding pressures, such as during the fall of 2008, can place significant and unexpected demands on the liquidity and capital positions of these institutions. Therefore, OTS proposes to collect further detail on credit card lending in TFR Schedules SC and CC. These new data items would improve the OTS’s ability to timely and accurately evaluate trends in thrift institutions’ supply of credit available to households and businesses. These data would also be useful in determining thrift institutions’ impact on the effectiveness of the government’s economic stabilization programs. Unused commitments associated with open-end credit card lines are currently reported in line CC423. This data item is not sufficiently detailed for monitoring the supply of credit because it mixes consumer credit card lines with credit card lines for businesses and other entities. Because of this aggregation, it is not possible to monitor credit available specifically to households. Furthermore, bank supervisors would benefit from the split, because the usage patterns, profitability, and evolution of credit quality through the business cycle are likely to differ for consumer credit cards and business credit cards. Therefore, the OTS proposes to revise line CC423 to collect data on unused credit card lines to consumers, and to add a line, CC424, to collect data on unused credit card lines to other entities. Outstanding E:\FR\FM\23DEN1.SGM 23DEN1 68328 Federal Register / Vol. 74, No. 245 / Wednesday, December 23, 2009 / Notices srobinson on DSKHWCL6B1PROD with NOTICES balances from draws on these credit lines that have not been sold are already reported on Schedule SC. Thrifts report draws on credit cards issued to consumers on line SC328. Draws on credit cards issued to businesses are included with unsecured commercial loans on line SC303. OTS proposes to add a line, SC304, to collect data on the amount of business-related credit card loans outstanding that are included in line SC303. B. Time Deposits of $100,000 or Greater OTS received a comment on ‘‘Time Deposits of $100,000 or Greater’’ recommending replacing the proposed breakout of time deposits and brokered deposits on stated dollar thresholds with a requirement that thrifts report such deposits based upon the then current FDIC coverage limit in effect at the time of the report. The clearest method of receiving consistent data from the thrifts is to clearly state the specific dollar thresholds. Therefore, these revisions will be implemented in March 2010 as proposed. On October 3, 2008, the Emergency Economic Stabilization Act of 2008 temporarily raised the standard maximum deposit insurance amount (SMDIA) from $100,000 to $250,000 per depositor. Under this legislation, the SMDIA was to return to $100,000 after December 31, 2009. However, on May 20, 2009, the Helping Families Save Their Homes Act extended this temporary increase in the SMDIA to $250,000 per depositor through December 31, 2013, after which the SMDIA is scheduled to return to $100,000. At present, thrifts report time deposits in TFR Schedule DI, Consolidated Deposit Information, including total time deposits in line DI340, time deposits of $100,000 or greater in line DI350, and time deposits in IRA or Keogh accounts of $100,000 or greater. In response to the extension of the temporary increase in the limit on deposit insurance coverage, the federal banking agencies understand that time deposits with balances in excess of $100,000, but less than or equal to $250,000, have been growing and can be expected to increase further. However, given the existing Schedule DI reporting requirements, OTS is unable to monitor growth in thrifts’ time deposits with balances within the temporarily increased limit on deposit insurance coverage. Therefore, OTS is proposing to revise line DI350 from ‘‘Time Deposits of $100,000 or Greater (Excluding Brokered Time Deposits Participated Out by the Broker in Shares of Less VerDate Nov<24>2008 16:41 Dec 22, 2009 Jkt 220001 Than $100,000 and Brokered Certificates of Deposit Issued in $1,000 Amounts Under a Master Certificate of Deposit)’’ to ‘‘Time Deposits of $100,000 through $250,000 (Excluding Brokered Time Deposits Participated Out by the Broker in Shares of Less Than $100,000 and Brokered Certificates of Deposit Issued in $1,000 Amounts Under a Master Certificate of Deposit)’’, and to add a line DI352 for ‘‘Time Deposits Greater than $250,000’’. Existing line DI340, Total Time Deposits, and DI360, IRA/Keogh Accounts of $100,000 or Greater Included in Time Deposits, would not change. C. Revisions of Brokered Deposit Items As described above in Section III.B., the SMDIA has been increased temporarily from $100,000 to $250,000 through year-end 2013. However, the data that thrifts currently report in the TFR on fully insured brokered deposits in TFR line DI100 is based on the $100,000 insurance limit (except for brokered retirement deposit accounts for which the deposit insurance limit was already $250,000). Therefore, in response to the temporary increase in the SMDIA, OTS is proposing to revise line DI100 from ‘‘Total BrokerOriginated Deposits: Fully Insured’’ to ‘‘Total Broker-Originated Deposits: Fully Insured: With Balances Less than $100,000’’, and to add a line DI102 for ‘‘Total Broker-Originated Deposits: Fully Insured: With Balances of $100,000 through $250,000’’. Furthermore, given the linkage between the deposit insurance limits and the reporting on fully insured brokered deposits in Schedule DI, the scope of these items needs to be changed whenever deposit insurance limits change. To ensure that the scope of these lines, including the dollar amounts cited in the captions for these items, changes automatically as a function of the deposit insurance limit in effect on the report date, the TFR instructions would be revised to state that the specific dollar amounts used as the basis for reporting fully insured brokered deposits in lines DI100 and DI102 reflect the deposit insurance limits in effect on the report date. In addition, consistent with the reporting of time deposits in other items of Schedule DI, brokered deposits would be reported based on their balances rather than the denominations in which they were issued. Line DI100 would include time deposits issued to deposit brokers in the form of large ($100,000 or more) certificates of deposit that have been participated out by the broker in shares with balances of less than $100,000. For brokered PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 deposits that represent retirement deposit accounts eligible for $250,000 in deposit insurance coverage, report such brokered deposits in this item only if their balances are less than $100,000. Line DI102 would include brokered deposits (including brokered retirement deposit accounts) with balances of $100,000 through $250,000. Also report in this item brokered deposits that represent retirement deposit accounts eligible for $250,000 in deposit insurance coverage that have been issued in denominations of more than $250,000 that have been participated out by the broker in shares of $100,000 through exactly $250,000. D. Interest Expense and Quarterly Averages for Brokered Deposits Under Section 29 of the Federal Deposit Insurance Act (12 U.S.C. 1831f), an insured depository institution that is less than well capitalized generally may not pay a rate of interest that significantly exceeds the prevailing rate in the institution’s ‘‘normal market area’’ and/or the prevailing rate in the ‘‘market area’’ from which the deposit is accepted. In the case of an adequately capitalized institution with a waiver to accept brokered deposits, the institution may not pay a rate of interest on brokered deposits accepted from outside the bank’s ‘‘normal market area’’ that significantly exceeds the ‘‘national rate’’ as defined by the FDIC. On May 29, 2009, the FDIC’s Board of Directors adopted a final rule making certain revisions to the interest rate restrictions under Section 337.6 of the FDIC’s regulations. Under the final rule, the ‘‘national rate’’ is a simple average of rates paid by U.S. depository institutions as calculated by the FDIC.1 When evaluating compliance with the interest rate restrictions in Section 337.6 by an institution that is less than well capitalized, the FDIC generally will deem the national rate to be the prevailing rate in all market areas. The final rule is effective January 1, 2010. At present, the federal banking agencies are not able to evaluate the level and trend of the cost of brokered time deposits to institutions that have acquired such funds, nor can the agencies compare the cost of such deposits across institutions with brokered time deposits. Data on the cost of brokered deposits would also assist the agencies in evaluating the overall cost of institutions’ time deposits, for which data have long been collected in 1 The FDIC publishes a weekly schedule of national rates and national interest-rate caps by maturity, which can be accessed at http:// www.fdic.gov/regulations/resources/rates/. E:\FR\FM\23DEN1.SGM 23DEN1 Federal Register / Vol. 74, No. 245 / Wednesday, December 23, 2009 / Notices srobinson on DSKHWCL6B1PROD with NOTICES the Call Report for banks and TFR for thrifts. Furthermore, many of the financial institutions that have failed since the beginning of 2008 have relied extensively on brokered deposits to support their asset growth. Therefore, to enhance OTS’s ability to evaluate funding costs and the impact of brokered time deposits on these costs, OTS is proposing to add four new line items to TFR Schedule DI. The other federal banking agencies are proposing to add similar line items to the Call Report with two Memorandum items to Schedule RC–K, Quarterly Averages, and two items to Schedule RI, Income Statement. In these new line items to TFR Schedule DI, thrifts would report lines DI114 for ‘‘Total Broker-Originated Deposits: Interest Expense for Fully Insured Brokered Deposits’’, DI116 for ‘‘Total Broker-Originated Deposits: Interest Expense for Other Brokered Deposits’’, DI544 for ‘‘Average Daily Deposit Totals: Fully Insured Brokered Time Deposits’’, and DI545 for ‘‘Average Daily Deposit Totals: Other Brokered Time Deposits’’. E. Change in Reporting Frequency for Schedule SB—Consolidated Small Business Loans OTS received a comment that the reporting frequency be changed to semiannual instead of the proposed quarterly reporting frequency for thrifts with over $1 billion in total assets and annually for others. Small financial institutions play a key role in lending to small businesses and farms; therefore, following the proposed comment would significantly reduce the value of the data to policymakers. The TFR data provides information that cannot be obtained from other indicators of small business conditions; therefore, Schedule SB will be required quarterly starting in March 2010 as proposed. Section 122 of the Federal Deposit Insurance Corporation Improvement Act requires the federal banking agencies to collect from insured institutions annually the information the agencies ‘‘may need to assess the availability of credit to small businesses and small farms.’’ The OTS meets this requirement through Schedule SB that requests information on the number and amount currently outstanding of ‘‘loans to small businesses’’ and ‘‘loans to small farms,’’ as defined in the TFR instructions, which all thrift institutions must report annually as of June 30. With the United States now more than a year into a recession, the current administration ‘‘firmly believes that economic recovery will be driven in large part by America’s small VerDate Nov<24>2008 16:41 Dec 22, 2009 Jkt 220001 businesses,’’ but ‘‘small business owners are finding it harder to get the credit necessary to stay in business.’’ 2 Because ‘‘[c]redit is essential to economic recovery,’’ Treasury Secretary Geithner stated on March 16, 2009, ‘‘we need our nation’s banks to go the extra mile in keeping credit lines in place on reasonable terms for viable businesses.’’ 3 Accordingly, Secretary Geithner asked the Federal banking agencies ‘‘to call for quarterly, as opposed to annual reporting of small business loans, so that we can carefully monitor the degree that credit is flowing to our nation’s entrepreneurs and small business owners.’’ 4 In response to Secretary Geithner’s request and to improve the agencies’ own ability to assess the availability of credit to small businesses and small farms, the OTS proposes to change the frequency with which thrifts must submit TFR Schedule SB from annually to quarterly beginning March 31, 2010. OTS is not proposing to revise the information that thrifts are required to report on this schedule. The other federal banking agencies are proposing a similar change in reporting frequency with which banks must submit Call Report Schedule RC–C, Part II. F. New Proposed Annual Schedule for December 2010: Reverse Mortgage Data Reverse mortgages are complex loan products that leverage equity in homes to provide lump sum cash payments or lines of credit to borrowers. These products are typically marketed to senior citizens who own homes. Access to data regarding loan volumes, dollar amounts outstanding, and the institutions offering reverse mortgages or participating in reverse mortgage activity is severely limited. Therefore, OTS is currently unable to effectively identify and monitor institutions that offer these products due to a lack of reverse mortgage data. The reverse mortgage market currently consists of two basic types of products: A federally-insured product known as a Home Equity Conversion Mortgage (HECM) and proprietary products designed and originated by financial institutions (Non-HECM). Some reverse mortgages provide for a lump sum payment to the borrower at closing, with no ability for the borrower to receive additional funds under the mortgage later. Other reverse mortgages are structured like home equity lines of 2 http://www.financialstability.gov/ roadtostability/smallbusinesscommunity.html. 3 http://www.financialstability.gov/latest/tg58remarks.html. 4 Ibid. PO 00000 Frm 00106 Fmt 4703 Sfmt 4703 68329 credit in that they provide the borrower with additional funds after closing, either as fixed monthly payments, under a line of credit, or both. There are also reverse mortgages that provide a combination of a lump sum payment to the borrower at closing and additional payments to the borrower after the closing of the loan. The volume of reverse mortgage activity is expected to increase dramatically in the coming years as the U.S. population ages. A number of consumer protection related risk and safety and soundness related risks are associated with these products and OTS needs to collect information from thrift institutions involved in reverse mortgage activities to monitor and mitigate these risks. For example, proprietary reverse mortgages structured as lines of credit, which are not insured by the federal government, expose borrowers to the risk that the lender will be unwilling or unable to meet its obligation to make payments due to the borrower. Additionally, in those circumstances in which housing prices are declining, there is the risk that the reverse mortgage loan balance may exceed the value of the underlying collateral value of the home. OTS proposes that a new schedule designated as ‘‘Schedule RM’’ consisting of sixteen line items be added to the Thrift Financial Report to collect reverse mortgage data on an annual basis beginning on December 31, 2010. Collecting this information will provide OTS with the necessary information for policy development and the management of risk exposures posed by thrifts involvement with reverse mortgages. In this new Schedule, thrifts would separately report the amount of their outstanding HECM reverse mortgages and proprietary reverse mortgages as shown below in the sixteen line items: 1. RM110: Amount of Home Equity Conversion Mortgage Loans Outstanding. 2. RM112: Amount of Proprietary (Non-HECM) Reverse Mortgage Loans Outstanding. 3. RM310: Annual Interest Income from Home Equity Conversion Mortgage Loans. 4. RM312: Annual Interest Income from Proprietary (Non-HECM) Reverse Mortgage Loans. 5. RM330: Number of referrals to another lender during the calendar year from whom you received compensation for services performed for the lender in connection with the lender’s origination of a Home Equity Conversion Mortgage. 6. RM332: Number of referrals to another lender during the calendar year E:\FR\FM\23DEN1.SGM 23DEN1 srobinson on DSKHWCL6B1PROD with NOTICES 68330 Federal Register / Vol. 74, No. 245 / Wednesday, December 23, 2009 / Notices from whom you received compensation for services performed for the lender in connection with the lender’s origination of a Proprietary (Non-HECM) Reverse Mortgage. 7. RM420: Annual Origination Fee Income from Home Equity Conversion Mortgage Loans. 8. RM422: Annual Origination Fee Income from Proprietary (Non-HECM) Reverse Mortgage Loans. 9. RM510: Commitments Outstanding to Originate Mortgages Secured by Home Equity Conversion Mortgage Loans. 10. RM512: Commitments Outstanding to Originate Mortgages Secured by Proprietary (Non-HECM) Reverse Mortgage Loans. 11. RM610: Amount of Home Equity Conversion Mortgages originated for the calendar year. 12. RM612: Amount of Proprietary (Non-HECM) Reverse Mortgage Loans originated for the calendar year. 13. RM620: Annual Loans and Participations Purchased Secured By Home Equity Conversion Mortgage Loans. 14. RM622: Annual Loans and Participations Purchased Secured By Proprietary (Non-HECM) Reverse Mortgage Loans. 15. RM630: Annual Loans and Participations Sold Secured By Home Equity Conversion Mortgage Loans. 16. RM632: Annual Loans and Participations Sold Secured By Proprietary (Non-HECM) Reverse Mortgage Loans. OTS received a comment that, overall, the organization had no concerns with this new schedule, except for the items relating to the reporting of the estimated number of fee-paid referrals. The organization asked OTS to reconsider this reporting requirement because it may require thrifts to report information that is inconsistent with the legal requirements of the Real Estate Settlement Procedures Act (RESPA). OTS has reviewed the proposed reporting of data on reverse mortgage referrals and acknowledges that its description of this proposed reporting requirement could be viewed in this manner. Under RESPA and its implementing regulations, a mortgage lender may pay fees or compensation to another party, such as a financial institution that has referred a customer to the mortgage lender, only for services actually performed by that party. Accordingly, to avoid possible misinterpretation or misunderstanding, OTS is revising its proposed annual data items for the reporting of the number of fee-paid referrals during the year. As VerDate Nov<24>2008 16:41 Dec 22, 2009 Jkt 220001 revised, thrifts would annually report the number of reverse mortgage loan referrals to other lenders during the year from whom they have received any compensation for services performed in connection with the origination of reverse mortgages. The revised referral data items would be implemented beginning December 31, 2010. The other proposed reverse mortgage data items would be implemented as proposed beginning on the same date. G. Assets Covered by FDIC Loss-Sharing Agreements The commenter requested that the OTS and other federal banking agencies revise the TFR and the Call Report to collect information on loss-sharing agreements with the FDIC even though this had not been proposed by the agencies. The organization noted that there is currently no guidance on how a financial institution that acquires a failed financial institution should report any loss-sharing agreement in the TFR or Call Report. It also stated that the TFR and Call Report do not provide users with a ‘‘readily accessible summary of the bank’s net exposures on assets that are subject to loss-share agreements. The organization observed that ‘‘[t]his will become an increasingly important long-term and more common reporting issue as additional failed banks are acquired from the FDIC under a loss-share agreement.’’ Under loss sharing, the FDIC agrees to absorb a portion of the loss on a specified pool of a failed institution’s assets in order to maximize asset recoveries and minimize the FDIC’s losses. In general, the FDIC will reimburse 80 percent of losses incurred by an acquiring institution on covered assets over a specified period of time up to a stated threshold amount, with the acquirer absorbing 20 percent. Any losses above the stated threshold amount will be reimbursed by the FDIC at 95 percent of the losses booked by the acquirer. Over the past year, the FDIC has entered into loss-sharing agreements with acquiring institutions in connection with approximately 80 failed bank and thrift acquisitions. Some acquiring institutions have been involved in multiple failed institution acquisitions. Continued use of losssharing agreements is expected in connection with the resolution of failures of insured institutions by the FDIC. Assets covered by loss-sharing agreements include, but are not limited to, loans, other real estate, and debt securities. As the bankers’ organization indicated, the TFR and Call Report do not include a ‘‘readily accessible PO 00000 Frm 00107 Fmt 4703 Sfmt 4703 summary’’ of assets that reporting banks have acquired from failed institutions that are covered by FDIC loss-sharing agreements. Any covered loans and leases that are past due 30 days or more or are in nonaccrual status are reportable in items PD195, PD295, and PD395 of the TFR and in items 10 and 10.a of Call Report Schedule RC–N, Past Due and Nonaccrual Loans, Leases, and Other Assets, as loans and leases that are wholly or partially guaranteed by the U.S. Government. However, these items would also include loans and leases guaranteed by other U.S. Government agencies (such as the Small Business Administration and the Federal Housing Administration) that are past due 30 days or more or are in nonaccrual status and they would exclude loans and leases covered by FDIC loss-sharing agreements that do not meet these past due or nonaccrual reporting conditions as of the report date. Thus, the amount of covered loans and leases is not readily identifiable from the TFR or Call Report and the amount of other covered assets cannot be determined at all from the TFR or Call Report. The agencies agree with the bankers’ organization that the reporting of summary data on covered assets would be beneficial to TFR and Call Report users and to the institutions holding covered assets. Therefore, OTS proposes to add the following four line items to the TFR as of March 31, 2010: 1. SI770: Carrying amount of loans and leases covered by FDIC loss sharing agreements; 2. SI772: Carrying amount of real estate owned covered by FDIC loss sharing agreements; 3. SI774: Carrying amount of debt securities covered by FDIC loss sharing agreements; and 4. SI776: Carrying amount of other assets covered by FDIC loss sharing agreements. The other federal banking agencies will add such a summary to Call Report Schedule RC–M, Memoranda, effective March 31, 2010. In this summary, banks that have entered into loss-sharing agreements with the FDIC would separately report the carrying amounts of (1) loans and leases, (2) other real estate owned, (3) debt securities, and (4) other assets covered by such agreements. The federal banking agencies will also consider whether the collection of additional information concerning covered assets would be warranted and, if so, it would be incorporated into a formal proposal that the agencies would publish with a request for comment in accordance with E:\FR\FM\23DEN1.SGM 23DEN1 Federal Register / Vol. 74, No. 245 / Wednesday, December 23, 2009 / Notices the requirements of the Paperwork Reduction Act of 1995. Dated: December 18, 2009. Ira L. Mills, OTS Clearance Officer, Office of Thrift Supervision. [FR Doc. E9–30490 Filed 12–22–09; 8:45 am] srobinson on DSKHWCL6B1PROD with NOTICES BILLING CODE 6720–01–P VerDate Nov<24>2008 16:41 Dec 22, 2009 Jkt 220001 PO 00000 Frm 00108 Fmt 4703 Sfmt 4703 E:\FR\FM\23DEN1.SGM 23DEN1 68331

Agencies

[Federal Register Volume 74, Number 245 (Wednesday, December 23, 2009)]
[Notices]
[Pages 68326-68331]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-30490]


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DEPARTMENT OF THE TREASURY

Office of Thrift Supervision


Submission for OMB Review; Comment Request--Thrift Financial 
Report: Schedules SC, CC, DI, SI, SB, and RM

AGENCY: Office of Thrift Supervision (OTS), Treasury.

ACTION: Notice and request for comment.

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SUMMARY: In accordance with the requirements of the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3507), OTS 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 August 19, 2009, OTS requested public comment 
for 60 days (74 FR 41981) on a proposal to extend, with revisions, the 
Thrift Financial Report (TFR), which is currently an approved 
collection of information. The notice described regulatory reporting 
revisions proposed for the TFR, Schedule SC--Consolidated Statement of 
Condition, Schedule CC--Consolidated Commitments and Contingencies, 
Schedule DI--Consolidated Deposit Information, Schedule SB--
Consolidated Small Business Loans, and a proposed new schedule, 
Schedule RM--Annual Supplemental Consolidated Data on Reverse 
Mortgages. The changes are proposed to become effective in March 2010 
except for the proposed new schedule RM which would become effective in 
December 2010.
    The changes would revise three existing lines in the TFR, revise 
the reporting frequency for Schedule SB--Consolidated Small Business 
Loans from annual to quarterly, and add 24 new line items (including 
the 16 line items in the new Schedule RM). After considering the one 
comment letter received on the proposed changes, OTS has adopted all of 
the proposed changes. In addition, OTS is proposing to add four new 
line items to Schedule SI--Consolidated Supplemental Information, on 
assets covered by FDIC loss-sharing agreements in response to a 
recommendation from the bankers' organization commenter. OTS is 
submitting the proposed changes to OMB for review and approval.

DATES: Submit written comments on or before January 22, 2010. The 
regulatory reporting revisions described herein take effect on March 
31, 2010, and on December 31, 2010.

ADDRESSES: Send comments, referring to the collection by ``1550-0023 
(TFR Revisions--2010)'', to OMB and OTS at these addresses: Office of 
Information and Regulatory Affairs, Attention: Desk Officer for OTS, 
U.S. Office of Management and Budget, 725 17th Street, NW., Room 10235, 
Washington, DC 20503, or by fax to (202) 395-6974, and Information 
Collection Comments, Chief Counsel's Office, Office of Thrift 
Supervision, 1700 G Street, NW., Washington, DC 20552, by fax to (202) 
906-6518, or by e-mail to infocollection.comments@ots.treas.gov. OTS 
will post comments and the related index on the OTS Internet Site at 
http://www.ots.treas.gov/?p=LawsRegulations. In addition, interested 
persons may inspect comments at the Public Reading Room, 1700 G Street, 
NW., Washington, DC by appointment. To make an appointment, call (202) 
906-5922, send an e-mail to publicinfo@ots.treas.gov, or send a 
facsimile transmission to (202) 906-7755.

FOR FURTHER INFORMATION CONTACT: For further information or to obtain a 
copy of the submission to OMB, please contact 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.
    You can obtain a copy of the 2010 Thrift Financial Report forms 
from the OTS Web site at http://www.ots.treas.gov/?p=ThriftFinancialReports or you may request it by electronic mail from 
tfr.instructions@ots.treas.gov. You can request additional information 
about this proposed information collection from James Caton, Managing 
Director, Economics and Industry Analysis Division, (202) 906-5680, 
Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552.

SUPPLEMENTARY INFORMATION: The effect of the proposed revisions to the 
reporting requirements of these information collections will vary from 
institution to institution, depending on the institution's involvement 
with the types of activities or transactions to which the proposed 
changes apply. OTS estimates that implementation of these reporting 
changes will result in a small increase in the current reporting burden 
imposed by the TFR. The following burden estimates include the effect 
of the proposed revisions.
    Title: Thrift Financial Report.
    OMB Number: 1550-0023.
    Form Number: OTS 1313.
    Statutory Requirement: 12 U.S.C. 1464(v) imposes reporting 
requirements

[[Page 68327]]

for savings associations. Except for selected items, these information 
collections are not given confidential treatment.
    Type of Review: Revision of currently approved collections.
    Affected Public: Savings Associations.
    Estimated Number of Respondents and Recordkeepers: 771.
    Estimated Burden Hours per Respondent: 57.4 hours average for 
quarterly schedules and 2.0 hours average for schedules required only 
annually plus recordkeeping of an average of one hour per quarter.
    Estimated Frequency of Response: Quarterly.
    Estimated Total Annual Burden: 185,158 hours.
    Abstract: OTS is proposing to revise and extend for three years the 
TFR, which is currently an approved collection of information. All OTS-
regulated savings associations must comply with the information 
collections described in this notice. OTS collects this information 
each calendar quarter or less frequently if so stated. OTS uses this 
information to monitor the condition, performance, and risk profile of 
individual institutions and systemic risk among groups of institutions 
and the industry as a whole. Except for selected items, these 
information collections are not given confidential treatment.

I. Background

    OTS last revised the form and content of the TFR in a manner that 
significantly affected a substantial percentage of institutions in June 
2009, and has additional revisions scheduled to become effective in 
December 2009. Throughout 2009, OTS has evaluated its ongoing 
information needs. OTS recognizes that the TFR imposes reporting 
requirements, which are a component of the regulatory burden facing 
institutions. Another contributor to this regulatory burden is the 
examination process, particularly on-site examinations during which 
institution staffs spend time and effort responding to inquiries and 
requests for information designed to assist examiners in evaluating the 
condition and risk profile of the institution. The amount of attention 
that examiners direct to risk areas of the institution under 
examination is, in large part, determined from TFR data. These data, 
and analytical reports, including the Uniform Thrift Performance 
Report, assist examiners in scoping and making their preliminary 
assessments of risks during the planning phase of the examination.
    A risk-focused review of the information from an institution's TFR 
allows examiners to make preliminary risk assessments prior to onsite 
work. The degree of perceived risk determines the extent of the 
examination procedures that examiners initially plan for each risk 
area. If the outcome of these procedures reveals a different level of 
risk in a particular area, the examiner adjusts the examination scope 
and procedures accordingly.
    TFR data are also a vital source of information for the monitoring 
and regulatory activities of OTS. Among their benefits, these 
activities aid in determining whether the frequency of an institution's 
examination cycle should remain at maximum allowed time intervals, 
thereby lessening overall regulatory burden. More risk-focused TFR data 
enhance the ability of OTS to assess whether an institution is 
experiencing changes in its risk profile that warrant immediate follow-
up, which may include accelerating the timing of an on-site 
examination.
    In developing this proposal, OTS considered a range of potential 
information needs, particularly in the areas of credit risk, liquidity, 
and liabilities, and identified those additions to the TFR that are 
most critical and relevant to OTS in fulfilling its supervisory 
responsibilities. OTS recognizes that increased reporting burden will 
result from the addition to the TFR of the new items discussed in this 
proposal. Nevertheless, when viewing these proposed revisions to the 
TFR within a larger context, they help to enhance the on- and off-site 
supervision capabilities of OTS, which assist with controlling the 
overall regulatory burden on institutions.

II. Current Actions

    On August 19, 2009, OTS requested comment on proposed changes to 
the Thrift Financial Report (74 FR 41981) that would take effect as of 
March 31, 2010, unless otherwise noted. These revisions would revise 
the reporting frequency for small business and small farm data reported 
in Schedule SB from annually to quarterly, revise three existing lines, 
and add 24 new lines to the TFR, which include the 16 line items 
proposed for the new Schedule RM-Annual Supplemental Consolidated Data 
on Reverse Mortgages.
    OTS received one comment letter on the proposed revisions from a 
trade group representing banks of all sizes and charter types. The 
commenter's major concern was about the additional burden in the 
proposal to change ``Schedule SB--Consolidated Small Business Loans'' 
from the current annual filing frequency to the proposed quarterly 
filing requirement.

III. TFR Revisions Proposed for March 2010

A. Additional Detail on Credit Card Loans and Commitments

    OTS received a favorable comment on revisions proposed for credit 
card loans and commitments. Therefore, these revisions will be 
implemented in March 2010 as proposed.
    The extent to which the supply of credit has declined during the 
current financial crisis has been of great interest to the federal 
banking agencies and to Congress. Credit provided by financial 
institutions plays a central role in any economic recovery. The Federal 
banking agencies need data to determine when credit conditions have 
eased. One way to measure the supply of credit is to analyze the change 
in total lending commitments by financial institutions, considering 
both the amount of loans outstanding and the volume of unused credit 
lines. These data are also needed for safety and soundness purposes 
because draws on commitments during periods when financial institutions 
face significant funding pressures, such as during the fall of 2008, 
can place significant and unexpected demands on the liquidity and 
capital positions of these institutions. Therefore, OTS proposes to 
collect further detail on credit card lending in TFR Schedules SC and 
CC. These new data items would improve the OTS's ability to timely and 
accurately evaluate trends in thrift institutions' supply of credit 
available to households and businesses. These data would also be useful 
in determining thrift institutions' impact on the effectiveness of the 
government's economic stabilization programs.
    Unused commitments associated with open-end credit card lines are 
currently reported in line CC423. This data item is not sufficiently 
detailed for monitoring the supply of credit because it mixes consumer 
credit card lines with credit card lines for businesses and other 
entities. Because of this aggregation, it is not possible to monitor 
credit available specifically to households. Furthermore, bank 
supervisors would benefit from the split, because the usage patterns, 
profitability, and evolution of credit quality through the business 
cycle are likely to differ for consumer credit cards and business 
credit cards. Therefore, the OTS proposes to revise line CC423 to 
collect data on unused credit card lines to consumers, and to add a 
line, CC424, to collect data on unused credit card lines to other 
entities. Outstanding

[[Page 68328]]

balances from draws on these credit lines that have not been sold are 
already reported on Schedule SC. Thrifts report draws on credit cards 
issued to consumers on line SC328. Draws on credit cards issued to 
businesses are included with unsecured commercial loans on line SC303. 
OTS proposes to add a line, SC304, to collect data on the amount of 
business-related credit card loans outstanding that are included in 
line SC303.

B. Time Deposits of $100,000 or Greater

    OTS received a comment on ``Time Deposits of $100,000 or Greater'' 
recommending replacing the proposed breakout of time deposits and 
brokered deposits on stated dollar thresholds with a requirement that 
thrifts report such deposits based upon the then current FDIC coverage 
limit in effect at the time of the report. The clearest method of 
receiving consistent data from the thrifts is to clearly state the 
specific dollar thresholds. Therefore, these revisions will be 
implemented in March 2010 as proposed.
    On October 3, 2008, the Emergency Economic Stabilization Act of 
2008 temporarily raised the standard maximum deposit insurance amount 
(SMDIA) from $100,000 to $250,000 per depositor. Under this 
legislation, the SMDIA was to return to $100,000 after December 31, 
2009. However, on May 20, 2009, the Helping Families Save Their Homes 
Act extended this temporary increase in the SMDIA to $250,000 per 
depositor through December 31, 2013, after which the SMDIA is scheduled 
to return to $100,000.
    At present, thrifts report time deposits in TFR Schedule DI, 
Consolidated Deposit Information, including total time deposits in line 
DI340, time deposits of $100,000 or greater in line DI350, and time 
deposits in IRA or Keogh accounts of $100,000 or greater. In response 
to the extension of the temporary increase in the limit on deposit 
insurance coverage, the federal banking agencies understand that time 
deposits with balances in excess of $100,000, but less than or equal to 
$250,000, have been growing and can be expected to increase further. 
However, given the existing Schedule DI reporting requirements, OTS is 
unable to monitor growth in thrifts' time deposits with balances within 
the temporarily increased limit on deposit insurance coverage.
    Therefore, OTS is proposing to revise line DI350 from ``Time 
Deposits of $100,000 or Greater (Excluding Brokered Time Deposits 
Participated Out by the Broker in Shares of Less Than $100,000 and 
Brokered Certificates of Deposit Issued in $1,000 Amounts Under a 
Master Certificate of Deposit)'' to ``Time Deposits of $100,000 through 
$250,000 (Excluding Brokered Time Deposits Participated Out by the 
Broker in Shares of Less Than $100,000 and Brokered Certificates of 
Deposit Issued in $1,000 Amounts Under a Master Certificate of 
Deposit)'', and to add a line DI352 for ``Time Deposits Greater than 
$250,000''. Existing line DI340, Total Time Deposits, and DI360, IRA/
Keogh Accounts of $100,000 or Greater Included in Time Deposits, would 
not change.

C. Revisions of Brokered Deposit Items

    As described above in Section III.B., the SMDIA has been increased 
temporarily from $100,000 to $250,000 through year-end 2013. However, 
the data that thrifts currently report in the TFR on fully insured 
brokered deposits in TFR line DI100 is based on the $100,000 insurance 
limit (except for brokered retirement deposit accounts for which the 
deposit insurance limit was already $250,000). Therefore, in response 
to the temporary increase in the SMDIA, OTS is proposing to revise line 
DI100 from ``Total Broker-Originated Deposits: Fully Insured'' to 
``Total Broker-Originated Deposits: Fully Insured: With Balances Less 
than $100,000'', and to add a line DI102 for ``Total Broker-Originated 
Deposits: Fully Insured: With Balances of $100,000 through $250,000''.
    Furthermore, given the linkage between the deposit insurance limits 
and the reporting on fully insured brokered deposits in Schedule DI, 
the scope of these items needs to be changed whenever deposit insurance 
limits change. To ensure that the scope of these lines, including the 
dollar amounts cited in the captions for these items, changes 
automatically as a function of the deposit insurance limit in effect on 
the report date, the TFR instructions would be revised to state that 
the specific dollar amounts used as the basis for reporting fully 
insured brokered deposits in lines DI100 and DI102 reflect the deposit 
insurance limits in effect on the report date.
    In addition, consistent with the reporting of time deposits in 
other items of Schedule DI, brokered deposits would be reported based 
on their balances rather than the denominations in which they were 
issued. Line DI100 would include time deposits issued to deposit 
brokers in the form of large ($100,000 or more) certificates of deposit 
that have been participated out by the broker in shares with balances 
of less than $100,000. For brokered deposits that represent retirement 
deposit accounts eligible for $250,000 in deposit insurance coverage, 
report such brokered deposits in this item only if their balances are 
less than $100,000.
    Line DI102 would include brokered deposits (including brokered 
retirement deposit accounts) with balances of $100,000 through 
$250,000. Also report in this item brokered deposits that represent 
retirement deposit accounts eligible for $250,000 in deposit insurance 
coverage that have been issued in denominations of more than $250,000 
that have been participated out by the broker in shares of $100,000 
through exactly $250,000.

D. Interest Expense and Quarterly Averages for Brokered Deposits

    Under Section 29 of the Federal Deposit Insurance Act (12 U.S.C. 
1831f), an insured depository institution that is less than well 
capitalized generally may not pay a rate of interest that significantly 
exceeds the prevailing rate in the institution's ``normal market area'' 
and/or the prevailing rate in the ``market area'' from which the 
deposit is accepted. In the case of an adequately capitalized 
institution with a waiver to accept brokered deposits, the institution 
may not pay a rate of interest on brokered deposits accepted from 
outside the bank's ``normal market area'' that significantly exceeds 
the ``national rate'' as defined by the FDIC. On May 29, 2009, the 
FDIC's Board of Directors adopted a final rule making certain revisions 
to the interest rate restrictions under Section 337.6 of the FDIC's 
regulations. Under the final rule, the ``national rate'' is a simple 
average of rates paid by U.S. depository institutions as calculated by 
the FDIC.\1\ When evaluating compliance with the interest rate 
restrictions in Section 337.6 by an institution that is less than well 
capitalized, the FDIC generally will deem the national rate to be the 
prevailing rate in all market areas. The final rule is effective 
January 1, 2010.
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    \1\ The FDIC publishes a weekly schedule of national rates and 
national interest-rate caps by maturity, which can be accessed at 
http://www.fdic.gov/regulations/resources/rates/.
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    At present, the federal banking agencies are not able to evaluate 
the level and trend of the cost of brokered time deposits to 
institutions that have acquired such funds, nor can the agencies 
compare the cost of such deposits across institutions with brokered 
time deposits. Data on the cost of brokered deposits would also assist 
the agencies in evaluating the overall cost of institutions' time 
deposits, for which data have long been collected in

[[Page 68329]]

the Call Report for banks and TFR for thrifts. Furthermore, many of the 
financial institutions that have failed since the beginning of 2008 
have relied extensively on brokered deposits to support their asset 
growth. Therefore, to enhance OTS's ability to evaluate funding costs 
and the impact of brokered time deposits on these costs, OTS is 
proposing to add four new line items to TFR Schedule DI. The other 
federal banking agencies are proposing to add similar line items to the 
Call Report with two Memorandum items to Schedule RC-K, Quarterly 
Averages, and two items to Schedule RI, Income Statement.
    In these new line items to TFR Schedule DI, thrifts would report 
lines DI114 for ``Total Broker-Originated Deposits: Interest Expense 
for Fully Insured Brokered Deposits'', DI116 for ``Total Broker-
Originated Deposits: Interest Expense for Other Brokered Deposits'', 
DI544 for ``Average Daily Deposit Totals: Fully Insured Brokered Time 
Deposits'', and DI545 for ``Average Daily Deposit Totals: Other 
Brokered Time Deposits''.

E. Change in Reporting Frequency for Schedule SB--Consolidated Small 
Business Loans

    OTS received a comment that the reporting frequency be changed to 
semi-annual instead of the proposed quarterly reporting frequency for 
thrifts with over $1 billion in total assets and annually for others. 
Small financial institutions play a key role in lending to small 
businesses and farms; therefore, following the proposed comment would 
significantly reduce the value of the data to policymakers. The TFR 
data provides information that cannot be obtained from other indicators 
of small business conditions; therefore, Schedule SB will be required 
quarterly starting in March 2010 as proposed.
    Section 122 of the Federal Deposit Insurance Corporation 
Improvement Act requires the federal banking agencies to collect from 
insured institutions annually the information the agencies ``may need 
to assess the availability of credit to small businesses and small 
farms.'' The OTS meets this requirement through Schedule SB that 
requests information on the number and amount currently outstanding of 
``loans to small businesses'' and ``loans to small farms,'' as defined 
in the TFR instructions, which all thrift institutions must report 
annually as of June 30.
    With the United States now more than a year into a recession, the 
current administration ``firmly believes that economic recovery will be 
driven in large part by America's small businesses,'' but ``small 
business owners are finding it harder to get the credit necessary to 
stay in business.'' \2\ Because ``[c]redit is essential to economic 
recovery,'' Treasury Secretary Geithner stated on March 16, 2009, ``we 
need our nation's banks to go the extra mile in keeping credit lines in 
place on reasonable terms for viable businesses.'' \3\ Accordingly, 
Secretary Geithner asked the Federal banking agencies ``to call for 
quarterly, as opposed to annual reporting of small business loans, so 
that we can carefully monitor the degree that credit is flowing to our 
nation's entrepreneurs and small business owners.'' \4\ In response to 
Secretary Geithner's request and to improve the agencies' own ability 
to assess the availability of credit to small businesses and small 
farms, the OTS proposes to change the frequency with which thrifts must 
submit TFR Schedule SB from annually to quarterly beginning March 31, 
2010. OTS is not proposing to revise the information that thrifts are 
required to report on this schedule. The other federal banking agencies 
are proposing a similar change in reporting frequency with which banks 
must submit Call Report Schedule RC-C, Part II.
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    \2\ http://www.financialstability.gov/roadtostability/smallbusinesscommunity.html.
    \3\ http://www.financialstability.gov/latest/tg58-remarks.html.
    \4\ Ibid.
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F. New Proposed Annual Schedule for December 2010: Reverse Mortgage 
Data

    Reverse mortgages are complex loan products that leverage equity in 
homes to provide lump sum cash payments or lines of credit to 
borrowers. These products are typically marketed to senior citizens who 
own homes. Access to data regarding loan volumes, dollar amounts 
outstanding, and the institutions offering reverse mortgages or 
participating in reverse mortgage activity is severely limited. 
Therefore, OTS is currently unable to effectively identify and monitor 
institutions that offer these products due to a lack of reverse 
mortgage data.
    The reverse mortgage market currently consists of two basic types 
of products: A federally-insured product known as a Home Equity 
Conversion Mortgage (HECM) and proprietary products designed and 
originated by financial institutions (Non-HECM). Some reverse mortgages 
provide for a lump sum payment to the borrower at closing, with no 
ability for the borrower to receive additional funds under the mortgage 
later. Other reverse mortgages are structured like home equity lines of 
credit in that they provide the borrower with additional funds after 
closing, either as fixed monthly payments, under a line of credit, or 
both. There are also reverse mortgages that provide a combination of a 
lump sum payment to the borrower at closing and additional payments to 
the borrower after the closing of the loan.
    The volume of reverse mortgage activity is expected to increase 
dramatically in the coming years as the U.S. population ages. A number 
of consumer protection related risk and safety and soundness related 
risks are associated with these products and OTS needs to collect 
information from thrift institutions involved in reverse mortgage 
activities to monitor and mitigate these risks. For example, 
proprietary reverse mortgages structured as lines of credit, which are 
not insured by the federal government, expose borrowers to the risk 
that the lender will be unwilling or unable to meet its obligation to 
make payments due to the borrower. Additionally, in those circumstances 
in which housing prices are declining, there is the risk that the 
reverse mortgage loan balance may exceed the value of the underlying 
collateral value of the home.
    OTS proposes that a new schedule designated as ``Schedule RM'' 
consisting of sixteen line items be added to the Thrift Financial 
Report to collect reverse mortgage data on an annual basis beginning on 
December 31, 2010. Collecting this information will provide OTS with 
the necessary information for policy development and the management of 
risk exposures posed by thrifts involvement with reverse mortgages. In 
this new Schedule, thrifts would separately report the amount of their 
outstanding HECM reverse mortgages and proprietary reverse mortgages as 
shown below in the sixteen line items:
    1. RM110: Amount of Home Equity Conversion Mortgage Loans 
Outstanding.
    2. RM112: Amount of Proprietary (Non-HECM) Reverse Mortgage Loans 
Outstanding.
    3. RM310: Annual Interest Income from Home Equity Conversion 
Mortgage Loans.
    4. RM312: Annual Interest Income from Proprietary (Non-HECM) 
Reverse Mortgage Loans.
    5. RM330: Number of referrals to another lender during the calendar 
year from whom you received compensation for services performed for the 
lender in connection with the lender's origination of a Home Equity 
Conversion Mortgage.
    6. RM332: Number of referrals to another lender during the calendar 
year

[[Page 68330]]

from whom you received compensation for services performed for the 
lender in connection with the lender's origination of a Proprietary 
(Non-HECM) Reverse Mortgage.
    7. RM420: Annual Origination Fee Income from Home Equity Conversion 
Mortgage Loans.
    8. RM422: Annual Origination Fee Income from Proprietary (Non-HECM) 
Reverse Mortgage Loans.
    9. RM510: Commitments Outstanding to Originate Mortgages Secured by 
Home Equity Conversion Mortgage Loans.
    10. RM512: Commitments Outstanding to Originate Mortgages Secured 
by Proprietary (Non-HECM) Reverse Mortgage Loans.
    11. RM610: Amount of Home Equity Conversion Mortgages originated 
for the calendar year.
    12. RM612: Amount of Proprietary (Non-HECM) Reverse Mortgage Loans 
originated for the calendar year.
    13. RM620: Annual Loans and Participations Purchased Secured By 
Home Equity Conversion Mortgage Loans.
    14. RM622: Annual Loans and Participations Purchased Secured By 
Proprietary (Non-HECM) Reverse Mortgage Loans.
    15. RM630: Annual Loans and Participations Sold Secured By Home 
Equity Conversion Mortgage Loans.
    16. RM632: Annual Loans and Participations Sold Secured By 
Proprietary (Non-HECM) Reverse Mortgage Loans.

OTS received a comment that, overall, the organization had no concerns 
with this new schedule, except for the items relating to the reporting 
of the estimated number of fee-paid referrals. The organization asked 
OTS to reconsider this reporting requirement because it may require 
thrifts to report information that is inconsistent with the legal 
requirements of the Real Estate Settlement Procedures Act (RESPA). OTS 
has reviewed the proposed reporting of data on reverse mortgage 
referrals and acknowledges that its description of this proposed 
reporting requirement could be viewed in this manner. Under RESPA and 
its implementing regulations, a mortgage lender may pay fees or 
compensation to another party, such as a financial institution that has 
referred a customer to the mortgage lender, only for services actually 
performed by that party. Accordingly, to avoid possible 
misinterpretation or misunderstanding, OTS is revising its proposed 
annual data items for the reporting of the number of fee-paid referrals 
during the year. As revised, thrifts would annually report the number 
of reverse mortgage loan referrals to other lenders during the year 
from whom they have received any compensation for services performed in 
connection with the origination of reverse mortgages. The revised 
referral data items would be implemented beginning December 31, 2010. 
The other proposed reverse mortgage data items would be implemented as 
proposed beginning on the same date.

G. Assets Covered by FDIC Loss-Sharing Agreements

    The commenter requested that the OTS and other federal banking 
agencies revise the TFR and the Call Report to collect information on 
loss-sharing agreements with the FDIC even though this had not been 
proposed by the agencies. The organization noted that there is 
currently no guidance on how a financial institution that acquires a 
failed financial institution should report any loss-sharing agreement 
in the TFR or Call Report. It also stated that the TFR and Call Report 
do not provide users with a ``readily accessible summary of the bank's 
net exposures on assets that are subject to loss-share agreements. The 
organization observed that ``[t]his will become an increasingly 
important long-term and more common reporting issue as additional 
failed banks are acquired from the FDIC under a loss-share agreement.''
    Under loss sharing, the FDIC agrees to absorb a portion of the loss 
on a specified pool of a failed institution's assets in order to 
maximize asset recoveries and minimize the FDIC's losses. In general, 
the FDIC will reimburse 80 percent of losses incurred by an acquiring 
institution on covered assets over a specified period of time up to a 
stated threshold amount, with the acquirer absorbing 20 percent. Any 
losses above the stated threshold amount will be reimbursed by the FDIC 
at 95 percent of the losses booked by the acquirer. Over the past year, 
the FDIC has entered into loss-sharing agreements with acquiring 
institutions in connection with approximately 80 failed bank and thrift 
acquisitions. Some acquiring institutions have been involved in 
multiple failed institution acquisitions. Continued use of loss-sharing 
agreements is expected in connection with the resolution of failures of 
insured institutions by the FDIC. Assets covered by loss-sharing 
agreements include, but are not limited to, loans, other real estate, 
and debt securities.
    As the bankers' organization indicated, the TFR and Call Report do 
not include a ``readily accessible summary'' of assets that reporting 
banks have acquired from failed institutions that are covered by FDIC 
loss-sharing agreements. Any covered loans and leases that are past due 
30 days or more or are in nonaccrual status are reportable in items 
PD195, PD295, and PD395 of the TFR and in items 10 and 10.a of Call 
Report Schedule RC-N, Past Due and Nonaccrual Loans, Leases, and Other 
Assets, as loans and leases that are wholly or partially guaranteed by 
the U.S. Government. However, these items would also include loans and 
leases guaranteed by other U.S. Government agencies (such as the Small 
Business Administration and the Federal Housing Administration) that 
are past due 30 days or more or are in nonaccrual status and they would 
exclude loans and leases covered by FDIC loss-sharing agreements that 
do not meet these past due or nonaccrual reporting conditions as of the 
report date. Thus, the amount of covered loans and leases is not 
readily identifiable from the TFR or Call Report and the amount of 
other covered assets cannot be determined at all from the TFR or Call 
Report.
    The agencies agree with the bankers' organization that the 
reporting of summary data on covered assets would be beneficial to TFR 
and Call Report users and to the institutions holding covered assets. 
Therefore, OTS proposes to add the following four line items to the TFR 
as of March 31, 2010:
    1. SI770: Carrying amount of loans and leases covered by FDIC loss 
sharing agreements;
    2. SI772: Carrying amount of real estate owned covered by FDIC loss 
sharing agreements;
    3. SI774: Carrying amount of debt securities covered by FDIC loss 
sharing agreements; and
    4. SI776: Carrying amount of other assets covered by FDIC loss 
sharing agreements.

The other federal banking agencies will add such a summary to Call 
Report Schedule RC-M, Memoranda, effective March 31, 2010. In this 
summary, banks that have entered into loss-sharing agreements with the 
FDIC would separately report the carrying amounts of (1) loans and 
leases, (2) other real estate owned, (3) debt securities, and (4) other 
assets covered by such agreements. The federal banking agencies will 
also consider whether the collection of additional information 
concerning covered assets would be warranted and, if so, it would be 
incorporated into a formal proposal that the agencies would publish 
with a request for comment in accordance with

[[Page 68331]]

the requirements of the Paperwork Reduction Act of 1995.

    Dated: December 18, 2009.
Ira L. Mills,
OTS Clearance Officer, Office of Thrift Supervision.
[FR Doc. E9-30490 Filed 12-22-09; 8:45 am]
BILLING CODE 6720-01-P