Proposed Agency Information Collection Activities; Comment Request, 44987-45004 [2011-19021]

Agencies

• FEDERAL DEPOSIT INSURANCE CORPORATION
• FEDERAL RESERVE SYSTEM
• Office of the Comptroller of the Currency
• DEPARTMENT OF THE TREASURY
• Office of Thrift Supervision

[Federal Register Volume 76, Number 144 (Wednesday, July 27, 2011)]
[Notices]
[Pages 44987-45004]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-19021]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

FEDERAL RESERVE SYSTEM

FEDERAL DEPOSIT INSURANCE CORPORATION

DEPARTMENT OF THE TREASURY

Office of Thrift Supervision


Proposed Agency Information Collection Activities; Comment 
Request

AGENCIES: Office of the Comptroller of the Currency (OCC), Treasury; 
Board of Governors of the Federal Reserve System (Board); Federal 
Deposit Insurance Corporation (FDIC); and Office of Thrift Supervision 
(OTS), Treasury.

ACTION: Joint notice and request for comment.

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SUMMARY: In accordance with the requirements of the Paperwork Reduction 
Act (PRA) of 1995 (44 U.S.C. chapter 35), the OCC, the Board, the FDIC, 
and the OTS (the ``agencies'') may not conduct or sponsor, and the 
respondent is not required to respond to, an information collection 
unless it displays a currently valid Office of Management and Budget 
(OMB) control number. On June 17, 2011, OMB approved the agencies' 
emergency clearance requests to implement assessment-related reporting 
revisions to the Consolidated Reports of Condition and Income (Call 
Report) for banks, the Thrift Financial Report (TFR) for savings 
associations, the Report of Assets and Liabilities of U.S. Branches and 
Agencies of Foreign Banks (FFIEC 002), and the Report of Assets and 
Liabilities of a Non-U.S. Branch that is Managed or Controlled by a 
U.S. Branch or Agency of a Foreign (Non-U.S.) Bank (FFIEC 002S), all of 
which currently are approved collections of information, effective as 
of the June 30, 2011, report date. Because the assessment-related 
reporting revisions will need to remain in effect beyond the limited 
approval period associated with an emergency clearance request, the 
agencies, under the auspices of the Federal Financial Institutions 
Examination Council (FFIEC), are requesting public comment on a 
proposal to extend, with revision, the collections of information 
identified above. At the end of the comment period, the comments and 
recommendations received will be analyzed to determine the extent to

[[Page 44988]]

which the FFIEC and the agencies should modify the proposed revisions 
prior to giving final approval. The agencies will then submit the 
revisions to OMB for review and approval.

DATES: Comments must be submitted on or before September 26, 2011.

ADDRESSES: Interested parties are invited to submit written comments to 
any or all of the agencies. All comments, which should refer to the OMB 
control number(s), will be shared among the agencies. However, Title II 
of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the 
Dodd-Frank Act), which was signed into law on July 21, 2010,\1\ 
abolishes the OTS, provides for its integration with the OCC effective 
as of July 21, 2011, and transfers the OTS's functions to the OCC, the 
Board, and the FDIC. Hence, comments submitted in response to this 
proposal on or after July 21, 2011, should be addressed to any or all 
of the agencies other than the OTS.
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    \1\ Public Law 111-203, 124 Stat. 1376 (July 21, 2010).
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    OCC: You should direct all written comments to: Communications 
Division, Office of the Comptroller of the Currency, Mailstop 2-3, 
Attention: 1557-0081, 250 E Street, SW., Washington, DC 20219. In 
addition, comments may be sent by fax to (202) 874-5274, or by 
electronic mail to regs.comments@occ.treas.gov. You may personally 
inspect and photocopy comments at the OCC, 250 E Street, SW., 
Washington, DC 20219. For security reasons, the OCC requires that 
visitors make an appointment to inspect comments. You may do so by 
calling (202) 874-4700. Upon arrival, visitors will be required to 
present valid government-issued photo identification and to submit to 
security screening in order to inspect and photocopy comments.
    Board: You may submit comments, which should refer to 
``Consolidated Reports of Condition and Income (FFIEC 031 and 041)'' or 
``Report of Assets and Liabilities of U.S. Branches and Agencies of 
Foreign Banks (FFIEC 002) and Report of Assets and Liabilities of a 
Non-U.S. Branch that is Managed or Controlled by a U.S. Branch or 
Agency of a Foreign (Non-U.S.) Bank (FFIEC 002S),'' by any of the 
following methods:
     Agency Web Site: https://www.federalreserve.gov. Follow the 
instructions for submitting comments at: https://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: regs.comments@federalreserve.gov. Include 
reporting form number in the subject line of the message.
     FAX: (202) 452-3819 or (202) 452-3102.
     Mail: Jennifer J. Johnson, Secretary, Board of Governors 
of the Federal Reserve System, 20th Street and Constitution Avenue, 
NW., Washington, DC 20551.

All public comments are available from the Board's Web site at https://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, 
unless modified for technical reasons. Accordingly, your comments will 
not be edited to remove any identifying or contact information. Public 
comments may also be viewed electronically or in paper in Room MP-500 
of the Board's Martin Building (20th and C Streets, NW.) between 9 a.m. 
and 5 p.m. on weekdays.
    FDIC: You may submit comments, which should refer to ``Consolidated 
Reports of Condition and Income, 3064-0052,'' by any of the following 
methods:
     Agency Web Site: https://www.fdic.gov/regulations/laws/federal/propose.html. Follow the instructions for submitting comments 
on the FDIC Web site.
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: comments@FDIC.gov. Include ``Consolidated Reports 
of Condition and Income, 3064-0052'' in the subject line of the 
message.
     Mail: Gary A. Kuiper, (202) 898-3877, Counsel, Attn: 
Comments, Room F-1086, Federal Deposit Insurance Corporation, 550 17th 
Street, NW., Washington, DC 20429.
     Hand Delivery: Comments may be hand delivered to the guard 
station at the rear of the 550 17th Street Building (located on F 
Street) on business days between 7 a.m. and 5 p.m.
    Public Inspection: All comments received will be posted without 
change to https://www.fdic.gov/regulations/laws/federal/propose.html 
including any personal information provided. Comments may be inspected 
at the FDIC Public Information Center, Room E-1002, 3501 Fairfax Drive, 
Arlington, VA 22226, between 9 a.m. and 5 p.m. on business days.
    OTS: You may submit comments, identified by ``1550-0023 (TFR: 
Schedule DI Revisions),'' by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail address: infocollection.comments@ots.treas.gov. 
Please include ``1550-0023 (TFR: Schedule DI Revisions)'' in the 
subject line of the message and include your name and telephone number 
in the message.
     Mail: Information Collection Comments, Chief Counsel's 
Office, Office of Thrift Supervision, 1700 G Street, NW., Washington, 
DC 20552, Attention: ``1550-0023 (TFR: Schedule DI Revisions).''
     Hand Delivery/Courier: Guard's Desk, East Lobby Entrance, 
1700 G Street, NW., from 9 a.m. to 4 p.m. on business days, Attention: 
Information Collection Comments, Chief Counsel's Office, Attention: 
``1550-0023 (TFR: Schedule DI Revisions).''
    Instructions: All submissions received must include the agency name 
and OMB Control Number for this information collection.
    Additionally, commenters may send a copy of their comments to the 
OMB desk officer for the agencies by mail to the Office of Information 
and Regulatory Affairs, U.S. Office of Management and Budget, New 
Executive Office Building, Room 10235, 725 17th Street, NW., 
Washington, DC 20503, or by fax to (202) 395-6974.

FOR FURTHER INFORMATION CONTACT: For further information about the 
revisions discussed in this notice, please contact any of the agency 
clearance officers whose names appear below. In addition, copies of the 
Call Report, FFIEC 002, and FFIEC 002S forms can be obtained at the 
FFIEC's Web site (https://www.ffiec.gov/ffiec_report_forms.htm). 
Copies of the TFR can be obtained from the OTS's Web site (https://www.ots.treas.gov/main.cfm?catNumber=2&catParent=0).
    OCC: Mary Gottlieb, OCC Clearance Officer, (202) 874-5090, 
Legislative and Regulatory Activities Division, Office of the 
Comptroller of the Currency, 250 E Street, SW., Washington, DC 20219.
    Board: Cynthia Ayouch, Acting Federal Reserve Board Clearance 
Officer, (202) 452-3829, Division of Research and Statistics, Board of 
Governors of the Federal Reserve System, 20th and C Streets, NW., 
Washington, DC 20551. Telecommunications Device for the Deaf (TDD) 
users may call (202) 263-4869.
    FDIC: Gary A. Kuiper, Counsel, (202) 898-3877, Legal Division, 
Federal Deposit Insurance Corporation, 550 17th Street, NW., 
Washington, DC 20429.
    OTS: Ira L. Mills, OTS Clearance Officer, at 
Ira.Mills@ots.treas.gov, (202) 906-6531, Regulations and Legislation 
Division, Chief Counsel's Office, Office of Thrift Supervision, 1700 G 
Street, NW., Washington, DC 20552.

[[Page 44989]]


SUPPLEMENTARY INFORMATION: The agencies are proposing to revise and 
extend for three years the Call Report, the TFR, the FFIEC 002, and the 
FFIEC 002S, which currently are approved collections of information.\2\
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    \2\ The proposed changes to the Call Report, the TFR, and the 
FFIEC 002/002S that are the subject of this notice have been 
approved by OMB on an emergency clearance basis and took effect June 
30, 2011. OMB's emergency approval for these reports expires 
December 31, 2011. The agencies have also proposed to require 
savings associations currently filing the TFR to convert to filing 
the Call Report beginning as of the March 31, 2012, report date (76 
FR 39981, July 7, 2011).
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    1. Report Title: Consolidated Reports of Condition and Income (Call 
Report).
    Form Number: Call Report: FFIEC 031 (for banks with domestic and 
foreign offices) and FFIEC 041 (for banks with domestic offices only).
    Frequency of Response: Quarterly.
    Affected Public: Business or other for-profit.
    OCC:
    OMB Number: 1557-0081.
    Estimated Number of Respondents: 1,427 national banks.
    Estimated Time per Response: 53.38 burden hours.
    Estimated Total Annual Burden: 304,693 burden hours.
    Board:
    OMB Number: 7100-0036.
    Estimated Number of Respondents: 826 state member banks.
    Estimated Time per Response: 55.47 burden hours.
    Estimated Total Annual Burden: 183,273 burden hours.
    FDIC:
    OMB Number: 3064-0052.
    Estimated Number of Respondents: 4,687 insured state nonmember 
banks.
    Estimated Time per Response: 40.47 burden hours.
    Estimated Total Annual Burden: 758,732 burden hours.
    The estimated times per response shown above for the Call Report 
represent the estimated ongoing reporting burden associated with the 
preparation of this report after institutions make the necessary 
recordkeeping and systems changes to enable them to generate the data 
required to be reported in the assessment-related data items that are 
the subject of this proposal. The estimated time per response is an 
average that varies by agency because of differences in the composition 
of the institutions under each agency's supervision (e.g., size 
distribution of institutions, types of activities in which they are 
engaged, and existence of foreign offices). These factors determine the 
specific Call Report data items in which an individual institution will 
have data it must report. The average ongoing reporting burden for the 
Call Report is estimated to range from 17 to 700 hours per quarter, 
depending on an individual institution's circumstances.
    2. Report Title: Thrift Financial Report (TFR).
    Form Number: OTS 1313 (for savings associations).
    Frequency of Response: Quarterly; Annually.
    Affected Public: Business or other for-profit.
    OTS:
    OMB Number: 1550-0023.
    Estimated Number of Respondents: 724 savings associations.
    Estimated Time per Response: 60.3 hours average for quarterly 
schedules and 1.6 hours average for schedules required only annually 
plus recordkeeping of an average of one hour per quarter.
    Estimated Total Annual Burden: 182,166 burden hours.
    3. Report Titles: Report of Assets and Liabilities of U.S. Branches 
and Agencies of Foreign Banks; Report of Assets and Liabilities of a 
Non-U.S. Branch that is Managed or Controlled by a U.S. Branch or 
Agency of a Foreign (Non-U.S.) Bank
    Form Numbers: FFIEC 002; FFIEC 002S
    Board:
    OMB Number: 7100-0032
    Frequency of Response: Quarterly
    Affected Public: U.S. branches and agencies of foreign banks
    Estimated Number of Respondents: FFIEC 002-236; FFIEC 002S-57
    Estimated Time per Response: FFIEC 002-25.43 hours; FFIEC 002S-6 
hours
    Estimated Total Annual Burden: FFIEC 002-24,003 hours; FFIEC 002S-
1,368 hours
    As previously stated with respect to the Call Report, the burden 
estimates shown above are for the quarterly filings of the Call Report, 
the TFR, and the FFIEC 002/002S reports. The initial burden arising 
from implementing recordkeeping and systems changes to enable insured 
depository institutions to report the applicable assessment-related 
data items that have been added to these regulatory reports will vary 
significantly. For the vast majority of the nearly 7,600 insured 
depository institutions, including the smallest institutions, this 
initial burden will be nominal because only three of the new data items 
will be relevant to them and the amounts to be reported can be carried 
over from amounts reported elsewhere in the report.
    At the other end of the spectrum, many of the new data items are 
applicable only to about 110 large and highly complex institutions (as 
defined in the FDIC's assessment regulations). To achieve consistency 
in reporting across this group of institutions, the instructions for 
these new data items, which are drawn directly from definitions 
contained in the FDIC's assessment regulations (as amended in February 
2011), are prescriptive. Transition guidance has been provided for the 
two categories of higher-risk assets (subprime and leveraged loans) for 
which large and highly complex institutions have indicated that their 
data systems do not currently enable them to identify individual assets 
meeting the FDIC's definitions that will be used for assessment 
purposes only. The transition guidance provides time for large and 
highly complex institutions to revise their data systems to support the 
identification and reporting of assets in these two categories on a 
going-forward basis. The guidance also permits these institutions to 
use existing internal methodologies developed for supervisory purposes 
to identify existing assets (and, in general, assets acquired during 
the transition period) that would be reportable in these higher-risk 
asset categories on an ongoing basis.
    Before the agencies submitted emergency clearance requests to OMB 
for approval of the assessment-related reporting revisions that are the 
subject to this notice, the agencies had published an initial PRA 
notice on March 16, 2011, requesting comment on these revisions. 
Comments submitted in response to the agencies' initial PRA notice that 
addressed the initial burden that large and highly complex institutions 
would incur to identify assets meeting the definitions of subprime and 
leveraged loans in the FDIC's assessment regulations were written in 
the context of applying these definitions to all existing loans. The 
transition guidance created for these loans is intended to mitigate the 
initial data capture and systems burden that institutions would 
otherwise incur. Thus, the initial burden associated with implementing 
the recordkeeping and systems changes necessary to identify assets 
reportable in these two higher-risk asset categories will be 
significant for the approximately 110 large and highly complex 
institutions, but the agencies are currently unable to estimate the 
amount of this initial burden. Large and highly complex institutions 
will also experience additional initial burden in connection with 
implementing systems changes to support their ability to report the 
other new assessment-related items applicable

[[Page 44990]]

to such institutions. However, given their focus on subprime and 
leveraged loans, respondents to the agencies' initial PRA notice 
offered limited comments about the burden of the other new items for 
large and highly complex institutions.

General Description of Reports

    These information collections are mandatory: 12 U.S.C. 161 (for 
national banks), 12 U.S.C. 324 (for state member banks), 12 U.S.C. 1817 
(for insured state nonmember commercial and savings banks), 12 U.S.C. 
1464 (for savings associations), and 12 U.S.C. 3105(c)(2), 1817(a), and 
3102(b) (for U.S. branches and agencies of foreign banks). Except for 
selected data items, including several of the new data items for large 
and highly complex institutions that are part of this proposal, the 
Call Report, the TFR, and the FFIEC 002 are not given confidential 
treatment. The FFIEC 002S is given confidential treatment [5 U.S.C. 
552(b)(4)].

Abstracts

    Call Report and TFR: Institutions submit Call Report and TFR data 
to the agencies each quarter for the agencies' use in monitoring the 
condition, performance, and risk profile of individual institutions and 
the industry as a whole. Call Report and TFR data provide the most 
current statistical data available for evaluating institutions' 
corporate applications, identifying areas of focus for both on-site and 
off-site examinations, and monetary and other public policy purposes. 
The agencies use Call Report and TFR data in evaluating interstate 
merger and acquisition applications to determine, as required by law, 
whether the resulting institution would control more than ten percent 
of the total amount of deposits of insured depository institutions in 
the United States. Call Report and TFR data also are used to calculate 
all institutions' deposit insurance and Financing Corporation 
assessments, national banks' semiannual assessment fees, and the OTS's 
assessments on savings associations.
    FFIEC 002 and FFIEC 002S: On a quarterly basis, all U.S. branches 
and agencies of foreign banks are required to file the FFIEC 002, which 
is a detailed report of condition with a variety of supporting 
schedules. This information is used to fulfill the supervisory and 
regulatory requirements of the International Banking Act of 1978. The 
data also are used to augment the bank credit, loan, and deposit 
information needed for monetary policy and other public policy 
purposes. The FFIEC 002S is a supplement to the FFIEC 002 that collects 
information on assets and liabilities of any non-U.S. branch that is 
managed or controlled by a U.S. branch or agency of the foreign bank. 
Managed or controlled means that a majority of the responsibility for 
business decisions (including, but not limited to, decisions with 
regard to lending or asset management or funding or liability 
management) or the responsibility for recordkeeping in respect of 
assets or liabilities for that foreign branch resides at the U.S. 
branch or agency. A separate FFIEC 002S must be completed for each 
managed or controlled non-U.S. branch. The FFIEC 002S must be filed 
quarterly along with the U.S. branch or agency's FFIEC 002. The data 
from both reports are used for: (1) Monitoring deposit and credit 
transactions of U.S. residents; (2) monitoring the impact of policy 
changes; (3) analyzing structural issues concerning foreign bank 
activity in U.S. markets; (4) understanding flows of banking funds and 
indebtedness of developing countries in connection with data collected 
by the International Monetary Fund and the Bank for International 
Settlements that are used in economic analysis; and (5) assisting in 
the supervision of U.S. offices of foreign banks. The Federal Reserve 
System collects and processes these reports on behalf of the OCC, the 
Board, and the FDIC.
    Type of Review: Revision and extension of currently approved 
collections of information.

Current Actions

I. Overview

    Section 331(b) of the Dodd-Frank Act, which was signed into law on 
July 21, 2010, required the FDIC to amend its regulations to redefine 
the assessment base used for calculating deposit insurance assessments 
as average consolidated total assets minus average tangible equity. 
Under prior law, the assessment base has been defined as domestic 
deposits minus certain allowable exclusions, such as pass-through 
reserve balances. In general, the intent of Congress in changing the 
assessment base was to shift a greater percentage of overall total 
assessments away from community banks and toward the largest 
institutions, which rely less on domestic deposits for their funding 
than do smaller institutions.
    In May 2010, prior to the enactment of the Dodd-Frank Act, the FDIC 
published a Notice of Proposed Rulemaking (NPR) to revise the 
assessment system applicable to large insured depository 
institutions.\3\ The proposed amendments to the FDIC's assessment 
regulations (12 CFR part 327) were designed to better differentiate 
large institutions by taking a more forward-looking view of risk and 
better take into account the losses that the FDIC will incur if an 
institution fails. The comment period for the May 2010 NPR ended July 
2, 2010, and most commenters requested that the FDIC delay the 
implementation of the rulemaking until the effects of the then pending 
Dodd-Frank legislation were known.
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    \3\ See 75 FR 23516, May 3, 2010, at https://www.fdic.gov/regulations/laws/federal/2010/10proposead57.pdf.
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    On November 9, 2010, the FDIC Board approved the publication of two 
NPRs, one that proposed to redefine the assessment base as prescribed 
by the Dodd-Frank Act \4\ and another that proposed revisions to the 
large institution assessment system while also factoring in the 
proposed redefinition of the assessment base as well as comments 
received on the May 2010 NPR.\5\ After revising the proposals where 
appropriate in response to the comments received on the two November 
2010 NPRs, the FDIC Board adopted a final rule on February 7, 2011, 
amending the FDIC's assessment regulations to redefine the assessment 
base used for calculating deposit insurance assessments for all 7,500 
insured depository institutions and revise the assessment system for 
approximately 110 large institutions.\6\ This final rule took effect 
for the quarter beginning April 1, 2011, and will be reflected for the 
first time in the invoices for deposit insurance assessments due 
September 30, 2011, using data reported in the Call Reports, the TFRs, 
and the FFIEC 002/002S reports for June 30, 2011.
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    \4\ See 75 FR 72582, November 24, 2010, at  https://www.fdic.gov/regulations/laws/federal/2010/10proposeAD66.pdf.
    \5\ See 75 FR 72612, November 24, 2010, at  https://www.fdic.gov/regulations/laws/federal/2010/10proposeAD66LargeBank.pdf.
    \6\ See 76 FR 10672, February 25, 2011, at https://www.fdic.gov/regulations/laws/federal/2011/11FinalFeb25.pdf.
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    The FDIC further notes that the definitions of subprime loans, 
leveraged loans, and nontraditional mortgage loans in its February 2011 
final rule (the FDIC assessment definitions) are applicable only for 
purposes of deposit insurance assessments. The FDIC assessment 
definitions are not identical to the definitions included in existing 
supervisory guidance pertaining to these types of loans.\7\ Rather, the 
FDIC

[[Page 44991]]

assessment definitions are more prescriptive and less subjective than 
those contained in the applicable supervisory guidance. The final rule 
includes prescriptive definitions to ensure that large and highly 
complex institutions apply a uniform and consistent approach to the 
identification of loans to be reported as higher-risk assets for 
assessment purposes and to be used as inputs to the scorecards that 
determine these institutions' initial base assessment rates.
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    \7\ Interagency Expanded Guidance for Subprime Lending Programs, 
issued in January 2001 (https://www.fdic.gov/news/news/press/2001/pr0901a.html); Comptroller's Handbook: Leveraged Loans, issued in 
February 2008 (https://www.occ.gov/static/publications/handbook/leveragedlending.pdf); and Interagency Guidance on Nontraditional 
Mortgage Product Risks, issued in October 2006 (https://www.fdic.gov/regulations/laws/federal/2006/06NoticeFINAL.html).
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    Given the specific and limited purpose for which the definitions of 
subprime loans, leveraged loans, and nontraditional mortgage loans in 
the FDIC's final rule on assessments will be used, these definitions 
will not be applied for supervisory purposes. Therefore, the 
definitions of these three types of loans in the FDIC's final rule on 
assessments do not override or supersede any existing interagency or 
individual agency guidance and interpretations pertaining to subprime 
lending, leveraged loans, and nontraditional mortgage loans that have 
been issued for supervisory purposes or for any other purpose other 
than deposit insurance assessments. In this regard, the addition of 
data items to the Call Report and TFR deposit insurance assessment 
schedules for these three higher-risk asset categories, the definitions 
for which are taken directly from the FDIC's final rule (subject to the 
transition guidance discussed in Section II below), represents the 
outcome of decisions by the FDIC in its assessment rulemaking process 
rather than a collective decision of the agencies through interagency 
supervisory policy development activities.
    On March 16, 2011, the agencies published an initial PRA Federal 
Register notice under normal PRA clearance procedures in which they 
requested comment on proposed revisions to the Call Reports, the TFRs, 
and the FFIEC 002/002S reports that would provide the data needed by 
the FDIC to implement the provisions of its February 2011 final rule 
beginning with the June 30, 2011, report date.\8\ The new data items 
proposed in the initial PRA notice were linked to specific requirements 
in the FDIC's assessment regulations as amended by the final rule. The 
draft instructions for these proposed new items incorporated the 
definitions in and other provisions of the FDIC's amended assessment 
regulations. Accordingly, the FDIC did not anticipate receiving 
material comments on the reporting changes proposed in the March 2011 
initial PRA notice because the FDIC's February 2011 final rule on 
assessments had taken into account the comments received on the two 
November 2010 NPRs as well as the earlier May 2010 NPR. Thus, the 
agencies expected to continue following normal PRA clearance procedures 
and publish a final PRA Federal Register notice for the proposed 
reporting changes and submit these changes to OMB for review soon after 
the close of the comment period for the initial PRA notice on May 16, 
2011.
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    \8\ See 76 FR 14460, March 16, 2011, at https://www.fdic.gov/regulations/laws/federal/2011/11noticeMar16.pdf.
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    The agencies collectively received comments from 19 respondents on 
their initial PRA notice on the proposed assessment-related reporting 
changes published on March 16, 2011. Of these 19 respondents, 17 
addressed the new data items for subprime and leveraged loans that are 
inputs to the revised assessment system for large institutions.\9\ More 
specifically, these commenters stated that institutions generally do 
not maintain data on these loans in the manner in which these two loan 
categories are defined for assessment purposes in the FDIC's final rule 
or do not have the ability to capture the prescribed data to enable 
them to identify these loans in time to file their regulatory reports 
for the June 30, 2011, report date. These data availability concerns, 
particularly as they related to institutions' existing loan portfolios, 
had not been raised as an issue during the rulemaking process for the 
revised large institution assessment system, which included the FDIC's 
publication of two NPRs in 2010.\10\
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    \9\ In contrast, only four respondents commented on other 
aspects of the overall reporting proposal.
    \10\ In response to the November 2010 NPR on the revised large 
institution assessment system, the FDIC received a number of 
comments recommending changes to the definitions of subprime and 
leveraged loans, which the FDIC addressed in its February 2011 final 
rule amending its assessment regulations. For example, several 
commenters on the November 2010 NPR indicated that regular 
(quarterly) updating of data to evaluate loans for subprime or 
leveraged status would be burdensome and costly and, for certain 
types of retail loans, would not be possible because existing loan 
agreements do not require borrowers to routinely provide updated 
financial information. In response to these comments, the FDIC's 
February 2011 final rule stated that large institutions should 
evaluate loans for subprime or leveraged status upon origination, 
refinance, or renewal. However, no comments were received on the 
November 2010 NPR indicating that large institutions would not be 
able to identify and report subprime or leveraged loans in 
accordance with the definitions proposed for assessment purposes in 
their Call Reports and TFRs beginning as of June 30, 2011. These 
data availability concerns were first expressed in comments on the 
March 2011 initial PRA notice.
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    This unanticipated outcome at the end of the public comment process 
for the agencies' March 2011 initial PRA notice required the FDIC to 
consider possible reporting approaches that would address institutions' 
concerns about their ability to identify loans meeting the subprime and 
leveraged loan definitions in the FDIC's assessments final rule while 
also meeting the objectives of the revised large institution assessment 
system. However, as a consequence of the unexpected need to develop and 
reach agreement on a workable transition approach for identifying loans 
that are to be reported as subprime or leveraged for assessment 
purposes,\11\ the agencies concluded that they should follow emergency 
rather than normal PRA clearance procedures to request approval from 
OMB for the assessment-related reporting changes to the Call Report, 
the TFR, and the FFIEC 002/002S reports. The use of emergency clearance 
procedures was intended to provide certainty to institutions on a 
timely basis concerning the initial collection of the new assessment 
data items as of the June 30, 2011, report date as called for under the 
FDIC's final rule.
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    \11\ The FDIC presented this transition approach to large 
institutions during a conference call on June 7, 2011, that all 
large institutions had been invited to attend. Several institutions 
offered favorable comments about the transition approach during this 
call.
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    On June 17, 2011, OMB approved the agencies' emergency clearance 
requests to implement the assessment-related reporting revisions to the 
Call Report, the TFR, and the FFIEC 002/002S reports effective as of 
the June 30, 2011, report date. Because the assessment-related 
reporting revisions will need to remain in effect beyond the limited 
approval period associated with an emergency clearance request, the 
agencies, under the auspices of the FFIEC, are beginning normal PRA 
clearance procedures anew and are requesting public comment on the 
assessment-related reporting revisions to the Call Report, the TFR, and 
the FFIEC 002/002S reports that took effect June 30, 2011.

II. March 2011 Initial PRA Federal Register Notice

    On March 16, 2011, the agencies published an initial PRA Federal 
Register notice in which they requested comment on proposed revisions 
to their regulatory reports: the Call Report, the

[[Page 44992]]

TFR, the FFIEC 002/002S reports.\12\ The agencies proposed to implement 
certain changes to these reports as of June 30, 2011, to provide data 
needed by the FDIC to implement amendments to its assessment 
regulations (12 CFR part 327) that were adopted by the FDIC Board of 
Directors in a final rule on February 7, 2011.\13\ The final rule took 
effect for the quarter beginning April 1, 2011, and will be reflected 
for the first time in the invoices for assessments due September 30, 
2011, using data reported in institutions' regulatory reports for June 
30, 2011. The assessment-related reporting changes were designed to 
enable the FDIC to calculate (1) the assessment bases for insured 
depository institutions as redefined in accordance with section 331(b) 
of the Dodd-Frank Act and the FDIC's final rule, and (2) the assessment 
rates for ``large institutions'' and ``highly complex institutions'' 
using a scorecard set forth in the final rule that combines CAMELS 
ratings and certain forward-looking financial measures to assess the 
risk such institutions pose to the Deposit Insurance Fund (DIF).
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    \12\ See 76 FR 14460, March 16, 2011, at https://www.fdic.gov/regulations/laws/federal/2011/11noticeMar16.pdf.
    \13\ See 76 FR 10672, February 25, 2011, at  https://www.fdic.gov/regulations/laws/federal/2011/11FinalFeb25.pdf.
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    The assessment-related reporting revisions proposed in the March 
2011 initial PRA notice included the deletion of existing data items 
for the total daily averages of deposit liabilities before exclusions, 
allowable exclusions, and foreign deposits and the addition of new 
items, which are summarized as follows:
     Average consolidated total assets, generally as defined 
for Call Report Schedule RC-K, Quarterly Averages, and calculated using 
a daily averaging method. Institutions with less than $1 billion in 
assets (other than newly insured institutions) may report using a 
weekly averaging method unless they opt to report daily averages on a 
permanent basis. Institutions would report the averaging method used, 
i.e., daily or weekly.
     Average tangible equity capital, with tangible equity 
capital defined as Tier 1 capital (or for insured branches, generally 
defined as eligible assets less liabilities), and calculated as a 
monthly average. Institutions with less than $1 billion in assets 
(other than newly insured institutions) may report the quarter-end 
amount of Tier 1 capital unless they opt to report monthly averages on 
a permanent basis.
     For qualifying banker's banks and qualifying custodial 
banks, as defined in the FDIC's final rule, assessment base deductions 
for certain low-risk assets and deduction limits derived from certain 
balance sheet amounts calculated on a daily or weekly average basis.
     The amount of the reporting institution's holdings of 
long-term unsecured debt issued by other insured depository 
institutions. In general, unsecured debt would be considered long-term 
if it has a remaining maturity of at least one year.
     For large and highly complex institutions, other real 
estate owned and certain categories of loans wholly or partially 
guaranteed by the U.S. Government (excluding other real estate and 
loans covered by FDIC loss-sharing agreements), unfunded real estate 
construction and development loans, and nonbrokered time deposits of 
more than $250,000.
     For both large and highly complex institutions, 
``nontraditional mortgage loans,'' ``subprime consumer loans,'' and 
``leveraged loans,'' all as defined for assessment purposes only in the 
FDIC's regulations, as well as criticized and classified items, all of 
which would be accorded confidential treatment.
     For highly complex institutions only, the top 20 
counterparty exposures and the largest counterparty exposure, both of 
which would be accorded confidential treatment.
     New TFR data items for savings associations that are large 
institutions (or report $10 billion or more in total assets in their 
June 30, 2011, or a subsequent TFR) that would provide data used in the 
scorecards for large institutions that are not currently reported in 
the TFR by savings associations, but are reported in the Call Report by 
banks.
    The agencies also proposed an instructional change to the existing 
Call Report and TFR data items for ``Unsecured `Other borrowings' '' 
and ``Subordinated notes and debentures'' with a remaining maturity of 
one year or less, which would require debt instruments redeemable at 
the holder's option within one year to be included in these data items.
    For a more detailed discussion of the proposed reporting revisions 
associated with the redefined deposit insurance assessment base, see 
pages 14463-14465 of the agencies' March 2011 initial PRA notice.\14\ 
For a more detailed discussion of the proposed reporting revisions 
associated with the revised large institutions assessment system, see 
pages 14466-14470 of the agencies' March 2011 initial PRA notice.\15\ 
These assessment-related reporting revisions, as modified in response 
to the comments received on the agencies' initial PRA notice (which are 
discussed hereafter in this notice), were approved by OMB under 
emergency clearance procedures on June 17, 2011, and took effect in the 
Call Report, the TFR, and the FFIEC 002/002S reports effective as of 
the June 30, 2011, report date. Accordingly, the purpose of this notice 
is to enable the agencies to undertake normal clearance procedures 
under the PRA and request comment on the assessment-related reporting 
revisions that are now in effect as a result of OMB's emergency 
approval.
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    \14\ See 76 FR 14463-14465, March 16, 2011, at https://www.fdic.gov/regulations/laws/federal/2011/11noticeMar16.pdf.
    \15\ See 76 FR 14466-14470, March 16, 2011, at https://www.fdic.gov/regulations/laws/federal/2011/11noticeMar16.pdf.
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    The agencies collectively received comments from 19 respondents on 
their initial PRA notice on the proposed assessment-related reporting 
requirements published on March 16, 2011. Comments were received from 
fourteen depository institutions, four bankers' organizations, and one 
government agency. Three of the bankers' organizations commented on 
certain aspects of the proposed reporting requirements associated with 
the redefined assessment base, with one of these organizations 
welcoming the proposed reporting changes and deeming them ``reasonable 
and practical.'' Seventeen of the 19 respondents (all of the depository 
institutions and three of the bankers' organizations) addressed the 
reporting requirements proposed for large institutions, with specific 
concerns raised by all 17 about the definitions of subprime consumer 
loans and leveraged loans in the FDIC's final rule, which were carried 
directly into the draft reporting instructions for these two proposed 
data items, and large institutions' ability to report the amount of 
subprime consumer loans and leveraged loans in accordance with the 
final rule's definitions, particularly beginning as of the June 30, 
2011, report date. The comments the agencies received about the 
reporting of subprime consumer loans and leveraged loans are more fully 
discussed later in this notice. Nevertheless, a number of respondents 
expressed support for the concept of applying risk-based evaluation 
tools in the determination of deposit insurance assessments, which is 
an objective of the large institution assessment system under the 
FDIC's final rule.

[[Page 44993]]

    One bankers' organization offered a general comment about the draft 
instructions for the proposed new assessment-related data items, 
recommending that these items ``should include references to other 
related Call Report [, TFR, and FFIEC 002] schedule items, as 
appropriate'' to assist ``banks with the edit checks'' for the report. 
Although many of the proposed new data items include such references, 
others did not. The agencies have reviewed the draft instructions and 
added relevant references to data items in other schedules.
    The following two sections of this notice describe the proposed 
reporting changes related to the redefined assessment base and the 
revised large institution assessment system, respectively, and discuss 
the agencies' evaluation of the comments received on the changes 
proposed in their March 2011 initial PRA notice. The following sections 
also explain the modifications that the agencies made to the March 2011 
reporting proposal in response to these comments, which were 
incorporated into the agencies' June 16, 2011, emergency clearance 
requests to OMB for approval to implement the assessment-related 
reporting revisions as of the June 30, 2011, report date.
    In this regard, as mentioned above, 17 of the 19 respondents on the 
March 2011 initial PRA notice raised data availability concerns about 
the proposed new data items in which large and highly complex 
institutions would report the amounts of their subprime consumer loans 
and leveraged loans in accordance with the FDIC's assessment 
definitions. Accordingly, in recognition of these concerns, the 
agencies decided to provide transition guidance for reporting subprime 
consumer and leveraged loans originated or purchased prior to October 
1, 2011, and securities where the underlying loans were originated 
predominantly prior to October 1, 2011. This transition guidance was an 
integral part of the agencies' emergency clearance requests that were 
submitted to OMB on June 16, 2011.
    The transition guidance provides that for such pre-October 1, 2011, 
loans and securities, if a large or highly complex institution does not 
have within its data systems the information necessary to determine 
subprime consumer or leveraged status in accordance with the 
definitions of these two higher-risk asset categories set forth in the 
FDIC's final rule, the institution may use its existing internal 
methodology for identifying subprime consumer or leveraged loans and 
securities as the basis for reporting these assets for deposit 
insurance assessment purposes in its Call Reports or TFRs. Institutions 
that do not have an existing internal methodology in place to identify 
subprime consumer or leveraged loans \16\ may, as an alternative to 
applying the definitions in the FDIC's final rule to pre-October 1, 
2011, loans and securities, apply existing guidance provided by their 
primary federal regulator, the agencies' 2001 Expanded Guidance for 
Subprime Lending Programs,\17\ or the February 2008 Comptroller's 
Handbook on Leveraged Lending \18\ for purposes of identifying subprime 
consumer and leveraged loans originated or purchased prior to October 
1, 2011, and subprime consumer and leveraged securities where the 
underlying loans were originated predominantly prior to October 1, 
2011. All loans originated on or after October 1, 2011, and all 
securities where the underlying loans were originated predominantly on 
or after October 1, 2011, must be reported as subprime consumer or 
leveraged loans and securities according to the definitions of these 
higher-risk asset categories set forth in the FDIC's final rule.\19\
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    \16\ A large or highly complex institution may not have an 
existing internal methodology in place because it is not required to 
report on these exposures to its primary federal regulator for 
examination or other supervisory purposes or did not measure and 
monitor loans and securities with these characteristics for internal 
risk management purposes.
    \17\ https://www.fdic.gov/news/news/press/2001/pr0901a.html.
    \18\ https://www.occ.gov/static/publications/handbook/
LeveragedLending.pdf.
    \19\ For loans purchased on or after October 1, 2011, large and 
highly complex institutions may apply the transition guidance to 
loans originated prior to that date. Loans purchased on or after 
October 1, 2011, that also were originated on or after that date 
must be reported as subprime or leveraged according to the 
definitions of these higher-risk asset categories set forth in the 
FDIC's final rule.
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    Large and highly complex institutions may need to revise their data 
systems to support the reporting of newly originated or purchased 
subprime consumer and leveraged loans and securities in accordance with 
the FDIC's assessment definitions on a going-forward basis beginning no 
later than October 1, 2011. Large and highly complex institutions 
relying on the transition guidance described above for reporting pre-
October 1, 2011, subprime consumer and leveraged loans and securities 
will be expected to provide the FDIC qualitative descriptions of how 
the characteristics of the assets reported using their existing 
internal methodologies for identifying loans and securities in these 
higher-risk asset categories differ from those specified in the 
subprime consumer and leveraged loan definitions in the FDIC's final 
rule, including the principal areas of difference between these two 
approaches for each higher-risk asset category. The FDIC may review 
these descriptions of differences and assess the extent to which 
institutions' existing internal methodologies align with the applicable 
supervisory policy guidance for categorizing these loans. Any 
departures from such supervisory policy guidance discovered in these 
reviews, as well as institutions' progress in planning and implementing 
necessary data systems changes, will be considered when forming 
supervisory strategies for remedying departures from existing 
supervisory policy guidance and exercising deposit insurance pricing 
discretion for individual large and highly complex institutions.

III. Redefined Assessment Base

    As mentioned above in Section I, on February 7, 2011, the FDIC 
Board of Directors adopted a final rule that implements the 
requirements of section 331(b) of the Dodd-Frank Act by amending part 
327 of the FDIC's regulations to redefine the assessment base used for 
calculating deposit insurance assessments effective April 1, 2011.\20\ 
In general, the FDIC's final rule defines the assessment base as 
average consolidated total assets during the assessment period less 
average tangible equity capital during the assessment period. Under the 
final rule, average consolidated total assets are defined in accordance 
with the Call Report instructions for Schedule RC-K, Quarterly 
Averages, and are measured using a daily averaging method. However, 
institutions with less than $1 billion in assets (other than newly 
insured institutions) may use a weekly averaging method for average 
consolidated total assets unless they opt to report daily averages on a 
permanent basis. Tangible equity capital is defined in the final rule 
as Tier 1 capital \21\ and average tangible equity will be calculated 
using a monthly averaging method, but institutions with less than $1 
billion in assets (other than newly insured institutions) may report on 
an end-of-quarter basis unless they opt to report monthly averages on a 
permanent basis. Institutions that are parents of

[[Page 44994]]

other insured institutions will make certain adjustments when measuring 
average consolidated total assets and average tangible equity 
separately from their subsidiary institutions. For banker's banks and 
custodial banks, as defined in the final rule, the FDIC will deduct the 
average amount of certain low-risk liquid assets from their assessment 
base. All insured institutions are potentially subject to an increase 
in assessment rates for their holdings of long-term unsecured debt 
issued by another insured institution.
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    \20\ See 76 FR 10672, February 25, 2011, at https://www.fdic.gov/regulations/laws/federal/2011/11FinalFeb25.pdf.
    \21\ For an insured branch, tangible equity is defined as 
eligible assets (determined in accordance with section 347.210 of 
the FDIC's regulations) less the book value of liabilities 
(exclusive of liabilities due to the foreign bank's head office, 
other branches, agencies, offices, or wholly owned subsidiaries).
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Proposed Regulatory Reporting Changes for the Redefined Assessment Base

    The implementation of the redefined assessment base requires the 
collection of some information from insured institutions that was not 
collected on the Call Report, the TFR, or the FFIEC 002 report prior to 
June 30, 2011. Following OMB's approval of the agencies' emergency 
clearance requests on June 17, 2011, these reporting changes took 
effect as of the June 30, 2011, report date, which was the first 
quarter-end report date after the April 1, 2011, effective date of the 
FDIC's final rule amending its assessment regulations. However, the 
burden of requiring these new data items has been partly offset by the 
elimination of some assessment data items that had been collected in 
these regulatory reports for report dates prior to June 30, 2011.
    The agencies received no comments specifically addressing the 
following assessment-base-related revisions, which were implemented in 
the Call Report, the TFR, and the FFIEC 002 effective June 30, 2011, as 
proposed in the March 2011 initial PRA notice:
     The proposed deletion of the existing data items for the 
total daily averages of deposit liabilities before exclusions, 
allowable exclusions, and foreign deposits.\22\
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    \22\ The specific items being deleted were, in the Call Report, 
existing items 4, 5, and 6 in Schedule RC-O--Other Data for Deposit 
Insurance and FICO Assessments; in the TFR, existing line items 
DI540, DI550, and DI560 in Schedule DI--Consolidated Deposit 
Information; and in the FFIEC 002 report, existing items 4, 5, and 6 
in Schedule O--Other Data for Deposit Insurance Assessments.
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     The proposed addition of a new data item for reporting 
average consolidated total assets, which should be calculated using the 
institution's total assets, as defined for Call Report balance sheet 
(Schedule RC) purposes, except that the calculation should incorporate 
all debt securities (not held for trading) at amortized cost, equity 
securities with readily determinable fair values at the lower of cost 
or fair value, and equity securities without readily determinable fair 
values at historical cost.\23\
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    \23\ For an insured branch, average consolidated total assets is 
calculated using the total assets of the branch (including net due 
from related depository institutions), as defined for purposes of 
Schedule RAL--Assets and Liabilities of the FFIEC 002 report, but 
with debt and equity securities measured in the same manner as for 
other insured institutions.
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     The proposed addition of a new data item for reporting 
average tangible equity, which is defined as Tier 1 capital.\24\
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    \24\ For an insured branch, tangible equity is defined as 
eligible assets (determined in accordance with section 347.210 of 
the FDIC's regulations) less the book value of liabilities 
(exclusive of liabilities due to the foreign bank's head office, 
other branches, agencies, offices, or wholly owned subsidiaries).
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     The proposed adjustments to the calculation of average 
consolidated total assets and average tangible equity for insured 
depository institutions with consolidated insured depository 
subsidiaries and for insured depository institutions involved in 
mergers and consolidations during the quarter.
     The proposed addition of a yes/no banker's bank 
certification question to Call Report Schedule RC-O and TFR Schedule DI 
and, for a qualifying banker's bank, new data items for reporting the 
average amounts of its banker's bank assessment base deduction (i.e., 
the sum of the averages of its balances due from the Federal Reserve 
and its federal funds sold) and its banker's bank deduction limit 
(i.e., the sum of the averages of its deposit balances due to 
commercial banks and other depository institutions in the United States 
and its federal funds purchased).
     The proposed addition of a yes/no custodial bank 
certification question to Call Report Schedule RC-O and TFR Schedule DI 
and, for a qualifying custodial bank, a new data item for reporting the 
average amount of its custodial bank assessment base deduction (i.e., 
the average portion of its cash and balances due from depository 
institutions, held-to-maturity securities, available-for-sale 
securities, federal funds sold, and securities purchased under 
agreements to resell that have a zero percent risk weight for risk-
based capital purposes plus 50 percent of the portion of these same 
five types of assets that have a 20 percent risk weight \25\).
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    \25\ For all insured institutions, the definitions of these five 
types of assets are found in the instructions for Call Report 
Schedule RC--Balance Sheet, items 1, 2.a, 2.b, 3.a, and 3.b. In the 
Call Report, these types of assets are included, as of quarter-end, 
in items 34 through 37, columns C (zero percent risk weight) and D 
(20 percent risk weight), of Schedule RC-R--Regulatory Capital. In 
the TFR, these types of assets are included, as of quarter-end, in 
line items CCR400, CCR405, CCR409, and CCR 415 (zero percent risk 
weight) and in line items CCR430, CCR435, CCR440, CCR445, and CCR450 
(20 percent risk weight) of Schedule CCR--Consolidated Capital 
Requirement.
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     The proposed instructional change to the existing Call 
Report and TFR data items for ``Unsecured `Other borrowings' '' and 
``Subordinated notes and debentures'' with a remaining maturity of one 
year or less,\26\ which would require debt instruments redeemable at 
the holder's option within one year to be included in these data items, 
which are used in the determination of the unsecured debt adjustment 
when calculating an insured institution's assessment rate.
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    \26\ In the Call Report, Schedule RC-O, items 7.a and 8.a, 
respectively. In the TFR, Schedule DI, line items DI645 and DI655, 
respectively.
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    In response to their March 2011 initial PRA notice, the agencies 
received comments on the following four matters pertaining to the 
proposed changes to the Call Report, the TFR, and the FFIEC 002 
associated with the redefined assessment base: The averaging method to 
be used for reporting average consolidated total assets, the 
measurement of tangible equity at month-ends other than quarter-end, 
the types of assets reportable as long-term unsecured debt issued by 
other insured depository institutions, and the types of deposit 
accounts included in the custodial bank deduction limit. These comments 
are discussed in Sections III.A through III.D below.
    A. Averaging Method for Average Consolidated Total Assets--The 
FDIC's final rule requires average consolidated total assets to be 
calculated on a daily average basis by institutions with $1 billion or 
more in total assets, all newly insured institutions, and institutions 
with less than $1 billion in total assets that elect to do so. 
Institutions with less than $1 billion in total assets (that are not 
newly insured) that do not elect to measure average consolidated total 
assets on a daily average basis must calculate the average on a weekly 
average basis.\27\ To determine the averaging method used by an 
institution and its appropriateness under the final rule, the agencies 
proposed to add a new data item to Call Report Schedule RC-O, TFR 
Schedule DI, and FFIEC 002 Schedule O in which institutions would 
report the averaging method used to measure average consolidated total 
assets, i.e., daily or weekly.
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    \27\ Under the FDIC's final rule, banker's banks and custodial 
banks must calculate their respective assessment base deductions and 
deduction limits using the same averaging method, daily or weekly, 
used to calculate average consolidated total assets. Thus, the 
discussion of averaging methods also applies to these deductions and 
deduction limits.

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[[Page 44995]]

    Under the FDIC's final rule, average consolidated total assets is 
defined for all insured institutions in accordance with the 
instructions for item 9, ``Total assets,'' of Call Report Schedule RC-
K--Quarterly Averages. These instructions provide that the averages 
reported in Schedule RC-K, including the average for consolidated total 
assets, must be calculated as daily or weekly averages. Similarly, the 
instructions for reporting quarterly averages in FFIEC 002 Schedule K 
require daily or weekly average calculations. In contrast, the 
instructions for reporting quarterly averages in TFR Schedule SI--
Supplemental Information, including the average for consolidated total 
assets, permit the use of month-end averaging as an alternative to 
daily or weekly averaging when reporting average total assets in line 
item SI870.
    One bankers' organization recommended in its comment letter that 
insured institutions with less than $1 billion in total assets be 
permitted to report average consolidated total assets as a monthly 
average as an alternative to daily or weekly averaging. The 
organization stated that this would minimize the burden placed on some 
institutions and accommodate institutions with information systems 
capable of generating only monthly average balances. The agencies note 
that the averaging method prescribed in the proposed revised 
assessment-related reporting requirements is driven by the FDIC's final 
rule under which monthly average reporting is not permissible for 
institutions with less than $1 billion in total assets.\28\ In 
addition, as mentioned above, all insured commercial banks, state-
chartered savings banks, and U.S. branches of foreign banks are 
currently required to calculate quarterly averages for regulatory 
reporting purposes on a daily or weekly average basis. Only insured 
savings associations, which constitute less than 10 percent of insured 
institutions with less than $1 billion in total assets, have the option 
to calculate averages on a monthly, weekly, or daily basis for 
regulatory reporting purposes. Given the constraints of the FDIC's 
final rule, the agencies retained the daily and weekly averaging 
methods for reporting average consolidated total assets for assessment 
purposes for institutions (that are not newly insured) with less than 
$1 billion in total assets and also implemented as of June 30, 2011, 
the proposed new item in which an institution would report the 
averaging method it has used.
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    \28\ See 76 FR 10676-10678, February 25, 2011, for the FDIC's 
discussion of average consolidated total assets for purposes of the 
final rule.
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    B. Measurement of Average Tangible Equity--Under the FDIC's final 
rule, tangible equity is defined as Tier 1 capital.\29\ Because the 
final rule redefines the deposit insurance assessment base as average 
consolidated total assets minus average tangible equity, the agencies 
proposed to add a new item to Call Report Schedule RC-O, TFR Schedule 
DI, and FFIEC 002 Schedule O for average tangible equity. The final 
rule requires average tangible equity to be calculated on a monthly 
average basis by institutions with $1 billion or more in total assets, 
all newly insured institutions, and institutions with less than $1 
billion in total assets that elect to do so. For institutions with less 
than $1 billion in total assets (that are not newly insured) that do 
not elect to calculate average tangible equity on a monthly average 
basis, ``average'' tangible equity would be based on quarter-end Tier 1 
capital.
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    \29\ For an insur