Proposed Agency Information Collection Activities; Comment Request-Thrift Financial Report, 6191-6196 [2011-2348]

Agencies

• DEPARTMENT OF THE TREASURY
• Office of Thrift Supervision

[Federal Register Volume 76, Number 23 (Thursday, February 3, 2011)]
[Notices]
[Pages 6191-6196]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-2348]


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DEPARTMENT OF THE TREASURY

Office of Thrift Supervision


Proposed Agency Information Collection Activities; Comment 
Request--Thrift Financial Report

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

ACTION: Notice of information collection to be submitted to OMB for 
review and approval under the Paperwork Reduction Act of 1995.

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SUMMARY: In accordance with the requirements of the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3507), the 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 October 5, 2010, the OTS requested public 
comment for 60 days (75 FR 61563) \1\ on a proposal to extend, with 
revisions, the Thrift Financial Report (TFR), which is currently an 
approved collection of information. On November 17, 2010, the OTS 
published an amended notice to correct an error in the initial notice 
(75 FR 70355).\2\ These notices described regulatory reporting 
revisions proposed for the TFR. After considering the comments received 
on the proposal, the OTS will proceed with most, but not all, of the 
reporting changes that had been proposed and will also revise two other 
TFR items in response to commenters' recommendations. For some of the 
reporting changes that the OTS plans to implement, limited 
modifications have been made to the original proposals in response to 
the comments. All proposed changes to the TFR for 2011 that would 
increase the differences between the TFR and the Call Report have been 
eliminated. Proposed changes to the TFR for 2011, announced on October 
5, 2010 (75 FR 61563), included changes that parallel proposed changes 
to the Call Report as well as changes unique to the TFR. Proposed 
changes unique to the TFR included proposed data collections for 
classified assets by major loan category and loan loss allowances by 
major loan category. The OTS will curtail all proposed TFR changes that 
increase differences with the Call Report in an effort to reduce the 
initial burden of converting to the Call Report. The changes are 
proposed to become effective in March 2011.
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    \1\ Link to October 5, 2010 proposal published at 75 FR 61563: 
https://edocket.access.gpo.gov/2010/pdf/2010-24883.pdf.
    \2\ Link to November 17, 2010 proposal published at 75 FR 70355: 
https://edocket.access.gpo.gov/2010/pdf/2010-29004.pdf.

DATES: Submit written comments on or before March 7, 2011. The 
regulatory reporting revisions described herein take effect on March 
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31, 2011.

ADDRESSES: Send comments, referring to the collection by ``1550-0023 
(TFR Revisions--2011)'', 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. or 
hand deliver comments to the Guard's Desk, east lobby entrance, 1700 G 
Street, NW., on business days between 9 a.m. and 4 p.m. All comments 
should refer to ``TFR Revisions--2011, OMB No. 1550-0023.'' OTS will 
post comments and the related index on the OTS Internet Site at https://www.ots.treas.gov. In addition, interested persons may inspect comments 
at the Public Reading Room, 1700 G Street, NW., 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 2011 Thrift Financial Report forms 
from the OTS Web site at https://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: 
    Report Title: Thrift Financial Report.
    OMB Number: 1550-0023.
    Form Number: OTS 1313.
    Statutory Requirement: 12 U.S.C. 1464(v) imposes reporting 
requirements 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: 741.
    Estimated Burden Hours per Respondent: 60.2 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: 186,360 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. Savings associations 
submit TFR data to the OTS each calendar quarter or less frequently if 
so stated. Except for selected items, these information collections are 
not given confidential treatment.
    OTS uses TFR data in monitoring the condition, performance, and 
risk profile of individual institutions and systemic risk among groups 
of institutions and the industry as a whole. 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 OTS

[[Page 6192]]

uses 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. TFR 
data are also used to calculate institutions' deposit insurance and 
Financing Corporation assessments and semiannual assessment fees.

Current Actions

I. Overview

    On October 5, 2010, the OTS requested comment on proposed revisions 
to the TFR (75 FR 61563). On November 17, 2010, the OTS published an 
amended notice to correct an error in the initial notice (75 FR 70355). 
The OTS proposed to implement certain changes to the TFR requirements 
as of March 31, 2011, to provide data needed for reasons of safety and 
soundness or other public purposes. The proposed revisions would assist 
the OTS in gaining a better understanding of savings associations' 
credit and liquidity risk exposures, primarily through enhanced data on 
lending and securitization activities and sources of deposits.
    The OTS received comments from 3 respondents: A savings 
association, a bankers' association, and a U.S. government agency. 
Respondents tended to comment on one or more specific aspects of the 
proposal rather than addressing each individual proposed TFR revision. 
The bankers' association reported that its ``members have expressed no 
concerns with many of the OTS's proposed revisions,'' but it suggested 
that the OTS make several changes to the revisions. The savings 
association was opposed to the OTS proposal to collect data on deposits 
obtained through deposit listing services. The U.S. government agency 
expressed support for the collection of data in TFR Schedules SO and DI 
which it uses for economic and statistical analysis.
    The following section of this notice describes the proposed TFR 
changes and discusses the OTS's evaluation of the comments received on 
the proposed changes, including modifications that the OTS has decided 
to implement in response to those comments. The following section also 
addresses the OTS's response to the comments from the bankers' 
association concerning the definition of core deposits, which was not 
an element of the OTS's October 5, 2010, TFR proposal.
    In summary, after considering the comments received on the proposed 
TFR revisions, the OTS plans to move forward as of the March 31, 2011, 
report date with fewer of the proposed reporting changes after making 
certain modifications in response to the comments. All proposed changes 
to the TFR for 2011 that would increase the differences between the TFR 
and the Call Report have been eliminated. Accordingly, the OTS will not 
implement the items for automobile loans as had been proposed. The OTS 
will not add items to Schedule SC for additional detail on commercial 
mortgage-backed securities issued or guaranteed by U.S. government 
agencies and sponsored agencies. In addition, the OTS has decided not 
to add the proposed breakdown of deposits into deposits of individuals 
and deposits of partnerships and corporations. The proposed breakdown 
of life insurance assets into general and separate account assets will 
not be added to the TFR. The OTS will not add the additional items for 
trust preferred securities. The OTS will not implement the detailed 
breakdown of general, specific, and total valuation allowances by major 
loan type. The proposed breakdown of classified assets by major loan 
type will not be implemented.
    Furthermore, the specific wording of the captions for the new or 
revised TFR data items and the numbering of these data items discussed 
in this notice should be regarded as preliminary.
    Type of Review: Revision and extension of currently approved 
collections.

II. Discussion of Proposed TFR Revisions

    The OTS received comments expressing support for, or no comments 
specifically addressing, the following revisions, and therefore these 
revisions will be implemented effective March 31, 2011, as proposed:
     Breakdowns of the existing items for loans and real estate 
owned (REO) covered by FDIC loss-sharing agreements by loan and REO 
category in Schedule SI--Consolidated Supplemental Information, along 
with a breakdown of the existing items in Schedule PD--Consolidated 
Past Due and Nonaccrual, for reporting past due and nonaccrual U.S. 
Government-guaranteed loans to segregate those covered by FDIC loss-
sharing agreements (which would be reported by loan category) from 
other guaranteed loans. The categories of covered loans to be reported 
would be (1) 1-4 family residential construction loans, (2) Other 
construction loans and all land development and other land loans, (3) 
Loans secured by farmland, (4) Revolving, open-end loans secured by 1-4 
family residential properties and extended under lines of credit, (5) 
Closed-end loans secured by first liens on 1-4 family residential 
properties, (6) Closed-end loans secured by junior liens on 1-4 family 
residential properties, (7) Loans secured by multifamily (5 or more) 
residential properties, (8) Loans secured by owner-occupied nonfarm 
nonresidential properties, (9) Loans secured by other nonfarm 
nonresidential properties, (10) Commercial and industrial loans, (11) 
Consumer credit cards, (12) Consumer automobile loans, (13) Other 
consumer loans, and (14) All other loans and all leases (including 
loans to finance agricultural production and other loans to farmers).
     New items for the total assets of captive insurance and 
reinsurance subsidiaries in Schedule SI--Consolidated Supplemental 
Information;
     A new item in Schedule SO for service charges on deposit 
accounts;
     A new item in Schedule CCR for qualifying noncontrolling 
(minority) interests in consolidated subsidiaries; and
     A change in reporting frequency from annual to quarterly 
for the data reported in Schedule FS, Fiduciary and Related Services, 
on collective investment funds and common trust funds for those banks 
that currently report fiduciary assets and income quarterly, i.e., 
banks with fiduciary assets greater than $250 million or gross 
fiduciary income greater than 10 percent of bank revenue.
    The OTS received one or more comments specifically addressing or 
otherwise relating to each of the following proposed revisions:
     A breakdown by loan category of the existing items in TFR 
Schedule VA that are troubled debt restructurings with valuation 
allowances added during the quarter or that are in compliance with 
their modified terms as well as a breakdown by loan category of the 
existing items in TFR Schedule PD that are troubled debt restructurings 
and are past due 30-89 days, 90 days or more, or in nonaccrual status;
     New items for the estimated amount and daily average of 
nonbrokered deposits obtained through the use of deposit listing 
service companies in Schedule DI;
     A breakdown of the existing items for deposits of 
individuals, partnerships, and corporations between deposits of 
individuals and deposits of partnerships and corporations in Schedule 
DI;

[[Page 6193]]

     A breakdown of general, specific, and total valuation 
allowances by major loan type in Schedule VA;
     A new Schedule VIE, Variable Interest Entities, for 
reporting the categories of assets of consolidated variable interest 
entities (VIEs) that can be used only to settle the VIEs' obligations, 
the categories of liabilities of consolidated VIEs without recourse to 
the savings association's general credit, and the total assets and 
total liabilities of other consolidated VIEs included in the savings 
association's total assets and total liabilities, with these data 
reported separately for securitization trusts, asset-backed commercial 
paper conduits, and other VIEs.
    The comments related to each of these proposed revisions are 
discussed in Sections II.A. through II.D. of this notice along with the 
OTS's response to these comments.
A. Troubled Debt Restructurings
    The OTS proposed that savings association report additional detail 
on loans that have undergone troubled debt restructurings in Schedules 
VA and PD. More specifically, in Schedule VA total troubled debt 
restructured during the quarter and the amount of total troubled debt 
restructured in Schedule SC in compliance with modified terms, and in 
Schedule PD that is past due by 30 to 89 days or 90 days or more or in 
nonaccrual status, would be broken out to provide information on 
restructured troubled loans for many of the loan categories reported in 
Schedule SC.
    In the aggregate, troubled debt restructurings for all insured 
institutions have grown from $6.9 billion at year-end 2007, to $24.0 
billion at year-end 2008, to $58.1 billion at year-end 2009, with a 
further increase to $80.3 billion as of September 30, 2010. The 
proposed additional detail on troubled debt restructurings in Schedules 
VA and PD would enable the OTS to better understand the level of 
restructuring activity at savings associations, the categories of loans 
involved in this activity, and, therefore, whether savings associations 
are working with their borrowers to modify and restructure loans.
    It is also anticipated that the various loan categories will 
experience continued workout activity in the coming months given that 
most asset classes have been adversely impacted by the recent 
recession. This impact is evidenced by the increase in past due and 
nonaccrual assets across virtually all asset classes during the past 
two to three years.
    The TFR data for troubled debt restructurings are intended to 
capture data on loans that have undergone troubled debt restructurings 
as that term is defined in U.S. generally accepted accounting 
principles (GAAP).
    The OTS received comments from a bankers' association on the 
proposed additional detail on loans that have undergone troubled debt 
restructurings. The commenter recommended the OTS defer the proposed 
troubled debt restructuring revisions, including the new breakdowns by 
loan category, until the FASB finalizes proposed clarifications to its 
standards for accounting for troubled debt restructurings by 
creditors.\3\
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    \3\ FASB Proposed Accounting Standards Update (ASU): Receivables 
(Topic 310), Clarifications to Accounting for Troubled Debt 
Restructurings by Creditors.
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    The accounting standards for troubled debt restructurings are set 
forth in ASC Subtopic 310-40, Receivables--Troubled Debt Restructurings 
by Creditors (formerly FASB Statement No. 15, ``Accounting by Debtors 
and Creditors for Troubled Debt Restructurings,'' as amended by FASB 
Statement No. 114, ``Accounting by Creditors for Impairment of a 
Loan''). ASC Subtopic 310-40 is the accounting basis for the current 
reporting of restructured troubled loans in existing Schedules VA and 
PD. To the extent the clarifications emanating from the FASB proposed 
accounting standards update may result in savings associations having 
to report certain loans as troubled debt restructurings that had not 
previously been identified as such, this accounting outcome will arise 
irrespective of the proposed breakdown of the loan categories in 
Schedules VA and PD. Therefore, the OTS will implement the new 
breakdown for the reporting of troubled debt restructurings modified to 
reflect the breakdown to be added to the Call Report effective with the 
March 2011 reporting period.
    Specifically, the OTS will add the breakdown by loan category in 
Schedule VA for loans restructured in troubled debt restructurings that 
are in compliance with their modified terms (included in Schedule SC 
and not reported as past due or nonaccrual in Schedule PD) for loans 
secured by (1) Construction, land development, and other land loans for 
1-4 family residential construction loans, (2) Other construction loans 
and all land development and other land loans, (3) 1-4 family 
residential properties, (4) Multifamily (5 or more) residential 
properties, (5) Owner-occupied nonfarm residential properties, (6) 
Other nonfarm residential properties, (7) Commercial and industrial 
loans, and (8) All other loans.
B. Nonbrokered Deposits Obtained Through the Use of Deposit Listing 
Service Companies
    In its semiannual report to the Congress covering October 1, 2009, 
through March 31, 2010, the FDIC's Office of Inspector General 
addressed causes of bank failures and material losses and noted that 
``[f]ailed institutions often exhibited a growing dependence on 
volatile, non-core funding sources, such as brokered deposits, Federal 
Home Loan Bank advances, and Internet certificates of deposit.'' \4\ At 
present, savings associations report in Schedule DI information on 
their funding in the form of brokered deposits. Data on Federal Home 
Loan Bank advances are reported in Schedule SC. These data are an 
integral component of OTS's analyses of an individual institution's 
liquidity and funding, including the institution's reliance on non-core 
sources to fund its activities.
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    \4\ https://www.fdicig.gov/semi-reports/sar2010mar/OIGSar2010.pdf.
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    Deposit brokers have traditionally provided intermediary services 
for financial institutions and investors. However, the Internet, 
deposit listing services, and other automated services now enable 
investors who focus on yield to easily identify high-yielding deposit 
sources. Such customers are highly rate sensitive and can be a less 
stable source of funding than deposit customers with a more typical 
relationship to the institution. Because they often have no other 
relationship with the bank, these customers may rapidly transfer funds 
to other institutions if more attractive returns become available.
    The OTS expects each institution to establish and adhere to a sound 
liquidity and funds management policy. The institution's board of 
directors, or a committee of the board, also should ensure that senior 
management takes the necessary steps to monitor and control liquidity 
risk. This process includes establishing procedures, guidelines, 
internal controls, and limits for managing and monitoring liquidity and 
reviewing the institution's liquidity position, including its deposit 
structure, on a regular basis. A necessary prerequisite to sound 
liquidity and funds management decisions is a sound management 
information system, which provides certain basic information including 
data on non-relationship funding programs, such as brokered deposits, 
deposits obtained through the

[[Page 6194]]

Internet or other types of advertising, and other similar rate 
sensitive deposits. Thus, an institution's management should be aware 
of the number and magnitude of such deposits.
    To improve the OTS's ability to monitor potentially volatile 
funding sources, the OTS proposed to close a gap in the information 
currently available through the TFR by adding two new items to Schedule 
DI in which savings associations would report the estimated amount and 
average daily balances of deposits obtained through the use of deposit 
listing services that are not brokered deposits.
    A deposit listing service is a company that compiles information 
about the interest rates offered on deposits, such as certificates of 
deposit, by insured depository institutions. A particular company could 
be a deposit listing service (compiling information about certificates 
of deposits) as well as a deposit broker (facilitating the placement of 
certificates of deposit). According to FDIC Advisory Opinion 04-04 
dated July 28, 2004,\5\ a deposit listing service is not a deposit 
broker if all of the following four criteria are met:
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    \5\ https://www.fdic.gov/regulations/laws/rules/4000-10280.html.
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    (1) The person or entity providing the listing service is 
compensated solely by means of subscription fees (i.e., the fees paid 
by subscribers as payment for their opportunity to see the rates 
gathered by the listing service) and/or listing fees (i.e., the fees 
paid by depository institutions as payment for their opportunity to 
list or ``post'' their rates). The listing service does not require a 
depository institution to pay for other services offered by the listing 
service or its affiliates as a condition precedent to being listed.
    (2) The fees paid by depository institutions are flat fees: They 
are not calculated on the basis of the number or dollar amount of 
deposits accepted by the depository institution as a result of the 
listing or ``posting'' of the depository institution's rates.
    (3) In exchange for these fees, the listing service performs no 
services except (A) the gathering and transmission of information 
concerning the availability of deposits; and/or (B) the transmission of 
messages between depositors and depository institutions (including 
purchase orders and trade confirmations). In publishing or displaying 
information about depository institutions, the listing service must not 
attempt to steer funds toward particular institutions (except that the 
listing service may rank institutions according to interest rates and 
also may exclude institutions that do not pay the listing fee). 
Similarly, in any communications with depositors or potential 
depositors, the listing service must not attempt to steer funds toward 
particular institutions.
    (4) The listing service is not involved in placing deposits. Any 
funds to be invested in deposit accounts are remitted directly by the 
depositor to the insured depository institution and not, directly or 
indirectly, by or through the listing service.
    The OTS received two comments (from one savings association and one 
bankers' association) that addressed the proposed collection of the 
estimated amount of deposits obtained through the use of deposit 
listing services that are not brokered deposits. Both commenters were 
opposed to the proposal. The savings association recommended the OTS 
withdraw this proposal because not all listing services serve the same 
types of customers; not all listing service deposits can be easily 
tracked and controlled; not all listing services represent a source of 
high-yield deposits; and the collection of the proposed items may 
dissuade bank examiners from appropriately evaluating the volatility 
and rate sensitivity of deposits reported in the items. The bankers' 
association that objected to the proposed item cited the difficulty in 
identifying and tracking deposits obtained from listing services.
    The OTS acknowledges that, unless a deposit listing service offers 
deposit tracking to its savings association customers, the precise 
amount of deposits obtained through the use of listing services is not 
readily determinable. It was for this reason that the OTS specifically 
proposed that savings associations report the estimated amount of 
listing service deposits.
    In its comment, the savings association expressed concern that the 
addition of the proposed items to the TFR may cause examiners to label 
all deposits reported in the new item as high-risk, high-volatility 
funding. OTS notes, however, that the estimated amounts of deposits 
obtained through deposit listing services, and how the estimated 
amounts change over time, will serve as additional data points for 
examiners as they begin their comprehensive fact-specific evaluations 
of the stability of savings associations' deposit bases. The collection 
of the proposed item is not intended to eliminate examiners' 
assessments of depositors' characteristics, and examiners will continue 
to make a thorough analysis of the risk factors associated with a 
savings association's depositors and how savings association management 
identifies, measures, manages, and controls these risks. Information on 
the level and trend of an individual savings association's deposits 
obtained through the use of listing services also will assist examiners 
in planning how they will evaluate liquidity and funds management 
during examinations of the savings association. From a surveillance 
perspective, significant changes in a savings association's use of 
listing service deposits may trigger supervisory follow-up prior to the 
next planned examination.
    After considering the comments on its proposal, the OTS has decided 
to proceed with the proposed new item for the estimated amount of 
deposits obtained through the use of deposit listing services, but will 
eliminate the proposed new line for the average daily deposits of 
deposits obtained through the use of deposit listing services. This is 
consistent with the new item to be added to the Call Report for banks 
effective as of the March 31, 2011 reporting period. As mentioned 
above, the new item is not intended to capture all deposits obtained 
through the Internet. For example, it would not capture deposits that a 
savings association receives because a person or entity has seen the 
rates the savings association has posted on its own Web site. It also 
would not capture deposits received because a person or entity has seen 
rates on a rate-advertising Web site that has picked up and posted the 
savings association's rates on its site without the savings 
association's authorization. Accordingly, the final instructions will 
state that the objective of the item is to collect the estimated amount 
of deposits obtained as a result of action taken by the savings 
association to have its deposit rates listed by a listing service, and 
the listing service is compensated for this listing either by the 
savings association whose rates are being listed or by the persons or 
entities who view the listed rates. However, the final instructions for 
the item also will indicate that the actual amount of nonbrokered 
listing service deposits, rather than an estimate, should be reported 
for those deposits acquired through the use of a service that offers 
deposit tracking. A savings association should establish a reasonable 
and supportable estimation process for identifying listing service 
deposits that meets these reporting parameters and apply this process 
consistently over time.

[[Page 6195]]

C. Deposits of Individuals, Partnerships, and Corporations
    Savings associations reporting through the TFR do not currently 
report separate breakdowns of their transaction and nontransaction 
accounts by category of depositor. The recent crisis has demonstrated 
that business depositors' behavioral characteristics are significantly 
different than the behavioral characteristics of individuals. Thus, 
separate reporting of deposits of individuals versus deposits of 
partnerships and corporations would enable the OTS to better assess the 
liquidity risk profile of institutions given differences in the 
relative stability of deposits from these two sources.
    As proposed, two items would be added to Schedule DI for deposits 
of individuals and deposits of partnerships and corporations. Under 
this proposal, a savings association should treat accounts currently 
reported in total deposits on Schedule SC as deposits of individuals if 
the depositor's taxpayer identification number, as maintained on the 
account in the savings association's records, is a Social Security 
number (or an Individual Taxpayer Identification number \6\) should be 
treated as deposits of individuals. In general, all other accounts 
should be treated as deposits of partnerships and corporations.
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    \6\ An Individual Taxpayer Identification number is a tax 
processing number only available for certain nonresident and 
resident aliens, their spouses, and dependents who cannot get a 
Social Security number. It is a 9-digit number, beginning with the 
number ``9,'' in a format similar to a Social Security number.
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    The OTS received one comment from a bankers' association on the 
proposal for separate reporting of deposits of individuals versus 
deposits of partnerships and corporations. The commenter suggested the 
proposed change would be too labor intensive for some savings 
associations and asked that the OTS not implement the change. The 
commenter indicated that if the new deposit breakdown were adopted, it 
should be deferred until March 31, 2012, to allow time for savings 
associations to make the necessary systems changes. The bankers' 
association also recommended that all certified and official checks be 
reported together in one of the two depositor categories.
    The OTS has reconsidered its proposal for savings associations to 
report deposits of individuals separately from deposits of partnerships 
and corporations in Schedule DI. Although the OTS continues to believe 
that information distinguishing between deposits of individuals and 
deposits of partnerships and corporations would enhance the OTS's 
ability to assess the liquidity risk profile of institutions, it 
acknowledges the proposed reporting revision could necessitate 
extensive programming changes and impose significant reporting burden. 
As a result of this reevaluation, the OTS has decided not to implement 
this proposed TFR revision.
D. Variable Interest Entities
    In June 2009, the FASB issued accounting standards that have 
changed the way entities account for securitizations and special 
purpose entities. ASU No. 2009-16 (formerly FAS 166) revised ASC Topic 
860, Transfers and Servicing, by eliminating the concept of a 
``qualifying special-purpose entity'' (QSPE) and changing the 
requirements for derecognizing financial assets. ASU No. 2009-17 
(formerly FAS 167) revised ASC Topic 810, Consolidation, by changing 
how a bank or other company determines when an entity that is 
insufficiently capitalized or is not controlled through voting or 
similar rights, i.e., a ``variable interest entity'' (VIE), should be 
consolidated. For most banks and savings associations, ASU Nos. 2009-16 
and 2009-17 took effect January 1, 2010.
    Under ASC Topic 810, as amended, determining whether a savings 
association is required to consolidate a VIE depends on a qualitative 
analysis of whether that savings association has a ``controlling 
financial interest'' in the VIE and is therefore the primary 
beneficiary of the VIE. The analysis focuses on the savings 
association's power over and interest in the VIE. With the removal of 
the QSPE concept from generally accepted accounting principles that was 
brought about in amended ASC Topic 860, a savings association that 
transferred financial assets to an SPE that met the definition of a 
QSPE before the effective date of these amended accounting standards 
was required to evaluate whether, pursuant to amended ASC Topic 810, it 
must begin to consolidate the assets, liabilities, and equity of the 
SPE as of that effective date. Thus, when implementing amended ASC 
Topics 860 and 810 at the beginning of 2010, savings associations began 
to consolidate certain previously off-balance sheet securitization 
vehicles, asset-backed commercial paper conduits, and other structures. 
Going forward, savings associations with variable interests in new VIEs 
must evaluate whether they have a controlling financial interest in 
these entities and, if so, consolidate them. In addition, savings 
associations must continually reassess whether they are the primary 
beneficiary of VIEs in which they have variable interests.
    The OTS's TFR instructional guidance advises savings associations 
that must consolidate VIEs to report the assets and liabilities of 
these VIEs on the TFR balance sheet (Schedule SC) in the balance sheet 
category appropriate to the asset or liability. However, ASC paragraph 
810-10-45-25 \7\ requires a reporting entity to present ``separately on 
the face of the statement of financial position: a. Assets of a 
consolidated variable interest entity (VIE) that can be used only to 
settle obligations of the consolidated VIE [and] b. Liabilities of a 
consolidated VIE for which creditors (or beneficial interest holders) 
do not have recourse to the general credit of the primary 
beneficiary.'' This requirement has been interpreted to mean that 
``each line item of the consolidated balance sheet should differentiate 
which portion of those amounts meet the separate presentation 
conditions.'' \8\ In requiring separate presentation for these assets 
and liabilities, the FASB agreed with commenters on its proposed 
accounting standard on consolidation that ``separate presentation * * * 
would provide transparent and useful information about an enterprise's 
involvement and associated risks in a variable interest entity.'' \9\ 
The OTS concurs that separate presentation would provide similar 
benefits to it and other TFR users.
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    \7\ Formerly paragraph 22A of FIN 46(R), as amended by FAS 167.
    \8\ Deloitte & Touche LLP, ``Back on-balance sheet: Observations 
from the adoption of FAS 167,'' May 2010, page 4 (https://www.deloitte.com/view/en_US/us/Services/audit-enterprise-risk-services/Financial-Accounting-Reporting/f3a70ca28d9f8210VgnVCM200000bb42f00aRCRD.htm).
    \9\ See paragraphs A80 and A81 of FAS 167.
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    Consistent with the presentation requirements discussed above and 
with the proposal of the other Federal banking agencies for the Call 
Report, the OTS proposed to add a new Schedule VIE, Variable Interest 
Entities, to the TFR. In Schedule VIE savings associations would report 
a breakdown of the assets of consolidated VIEs that can be used only to 
settle obligations of the consolidated VIEs and liabilities of 
consolidated VIEs for which creditors do not have recourse to the 
general credit of the reporting savings association. The following 
proposed categories for these assets and liabilities would include some 
of the same categories presented on the TFR balance sheet (Schedule 
SC): Cash and balances due from depository institutions, Held-to-
maturity securities; Available-for-sale securities; Securities 
purchased under agreements to resell, Loans and leases held for sale; 
Loans and leases, net of

[[Page 6196]]

unearned income; Allowance for loan and lease losses; Trading assets 
(other than derivatives); Derivative trading assets; Other real estate 
owned; Other assets; Securities sold under agreements to repurchase; 
Derivative trading liabilities; Other borrowed money (other than 
commercial paper); Commercial paper; and Other liabilities. These 
assets and liabilities would be presented separately for securitization 
vehicles, asset-backed commercial paper conduits, and other VIEs.
    In addition, the OTS proposed to include two separate items in new 
Schedule VIE in which savings associations would report the total 
amounts of all other assets and all other liabilities of consolidated 
VIEs (i.e., all assets of consolidated VIEs that are not dedicated 
solely to settling obligations of the VIE and all liabilities of 
consolidated VIEs for which creditors have recourse to the general 
credit of the reporting savings association). The collection of this 
information would help the OTS understand the total magnitude of 
consolidated VIEs. These assets and liabilities also would be reported 
separately for securitization vehicles, asset-backed commercial paper 
conduits, and other VIEs.
    The asset and liability information collected in Schedule VIE would 
represent amounts included in the reporting savings association's 
consolidated assets and liabilities reported on Schedule SC after 
eliminating intercompany transactions.
    The OTS received one comment from a bankers' association that 
addressed proposed Schedule VIE. The bankers' association asked that 
the OTS consider the burden this new reporting schedule would impose on 
smaller savings associations and asked that the OTS consider some 
relief from compliance for smaller savings associations to lessen their 
burden.
    Because the TFR balance sheet is completed on a consolidated basis, 
the VIE amounts that savings associations would report in new Schedule 
VIE are amounts that, through the consolidation process, already must 
be reported in the appropriate balance sheet asset and liability 
categories. These balance sheet categories, generally, have been 
carried over into Schedule VIE. Schedule VIE distinguishes between 
assets of consolidated VIEs that can be used only to settle obligations 
of the consolidated VIEs and assets not meeting this condition as well 
as liabilities of consolidated VIEs for which creditors do not have 
recourse to the general credit of the reporting bank and liabilities 
not meeting this condition. This distinction is based on existing 
disclosure requirements applicable to financial statements prepared in 
accordance with U.S. GAAP. Savings associations likely to have material 
amounts of consolidated VIE assets and liabilities to report have been 
subject to these disclosure requirements for one year. Thus, these 
savings associations should have a process in place, even if manual, 
for segregating VIE assets and liabilities based on this distinction.
    The OTS recognizes that the proposed separate reporting of 
consolidated VIE assets and liabilities by the type of VIE activity, 
i.e., securitization vehicles, ABCP conduits, and other VIEs, goes 
beyond the disclosure requirements in U.S. GAAP. Otherwise, the 
proposed data requirements for Schedule VIE have been based purposely 
on the GAAP framework. Thus, the OTS has concluded that it would be 
appropriate to proceed with the introduction of a new Schedule VIE in 
March 2011. The new Schedule VIE will be consistent with the new 
Schedule RC-V proposed to be adopted in March 2011 by the other Federal 
banking agencies.

Request for Comment

    Public comment is requested on all aspects of this notice. Comments 
are invited on:
    (a) Whether the proposed revisions to the collections of 
information that are the subject of this notice are necessary for the 
proper performance of the OTS's functions, including whether the 
information has practical utility;
    (b) The accuracy of the OTS's estimates of the burden of the 
information collections as they are proposed to be revised, including 
the validity of the methodology and assumptions used;
    (c) Ways to enhance the quality, utility, and clarity of the 
information to be collected;
    (d) Ways to minimize the burden of information collections on 
respondents, including through the use of automated collection 
techniques or other forms of information technology; and
    (e) Estimates of capital or start up costs and costs of operation, 
maintenance, and purchase of services to provide information.
    All comments will become a matter of public record.

    Dated: January 28, 2011.
Ira L. Mills,
Clearance Officer, Office of Chief Counsel, Office of Thrift 
Supervision.
[FR Doc. 2011-2348 Filed 2-2-11; 8:45 am]
BILLING CODE 6720-01-P