Agency Information Collection Activities: Announcement of Board Approval Under Delegated Authority and Submission to OMB, 19264-19267 [2013-07272]

Download as PDF 19264 Federal Register / Vol. 78, No. 61 / Friday, March 29, 2013 / Notices incentives for or do not deter higher costs should be avoided. mstockstill on DSK4VPTVN1PROD with NOTICES Approach to Certain Lender Placed Insurance Practices For mortgages that the Enterprises purchase or guarantee, FHFA anticipates that the Enterprises will put in place restriction on lender placed insurance practices enumerated below. Before any such restrictions take effect, FHFA seeks input from the public and interested parties for 60 days from the publication of this Notice. After considering input received, FHFA will determine what elements of the restrictions may or may not be maintained, amended or revised in its direction to the Enterprises. Four months subsequent to the receipt of such input, and in consultation with the Conservator, Fannie Mae and Freddie Mac will provide aligned guidance to sellers and servicers, including implementation schedules related to these particular lender placed insurance practices.2 The specific practices related to lender placed insurance that FHFA has determined pose risks to the Enterprises or run contrary to the duties of the Conservator and for which actions are specified are practices where there are concerns regarding conflicts between parties to the insurance agreement, including: 1. Certain Sales Commissions. The Enterprises shall prohibit sellers and servicers from receiving, directly or indirectly, remuneration associated with placing coverage with or maintaining placement with particular insurance providers. 2. Certain Reinsurance Activities. The Enterprises shall prohibit sellers and servicers from receiving, directly or indirectly, remuneration associated with an insurance provider ceding premiums to a reinsurer that is owned by, affiliated with or controlled by the sellers or servicer. Input FHFA invites input from any person with views on the planned practice limitations set forth above. FHFA also invites input on enhancing the transparency and consumer and investor protections related to lender placed insurance as well as regarding other practices that may operate to the detriment of the Enterprises operating in conservatorships. Further, FHFA is interested in whether there is data or information that would run contrary to 2 Actions by the Enterprises only affect loans that they purchase or guarantee; their seller-servicer guides have no effect on practices of insurers except for dealings with the Enterprises. VerDate Mar<15>2010 17:34 Mar 28, 2013 Jkt 229001 the intended results sought by FHFA. Finally, FHFA is interested in the amount of time and difficulties associated with altering contracts between contractors and Enterprise servicers as would result from the planned approach. FHFA will accept public input through its Office of Housing and Regulatory Policy (OHRP), no later than May 28, 2013, as the agency moves forward with its deliberations on appropriate action. Communications may be addressed to Federal Housing Finance Agency, OHRP, Constitution Center, 400 Seventh Street SW., Ninth Floor, Washington, DC 20024, or emailed to LPIinput@fhfa.gov. Communications to FHFA may be made public and posted without change on the FHFA Web site at http:// www.fhfa.gov, and would include any personal information provided, such as name, address (mailing and email), and telephone numbers. Dated: March 25, 2013. Edward J. DeMarco, Acting Director, Federal Housing Finance Agency. [FR Doc. 2013–07338 Filed 3–28–13; 8:45 am] BILLING CODE 8070–01–P FEDERAL RESERVE SYSTEM Agency Information Collection Activities: Announcement of Board Approval Under Delegated Authority and Submission to OMB Board of Governors of the Federal Reserve System. SUMMARY: Notice is hereby given of the final approval of a proposed information collection by the Board of Governors of the Federal Reserve System (Board) under OMB delegated authority, as per 5 CFR 1320.16 (OMB Regulations on Controlling Paperwork Burdens on the Public). Board-approved collections of information are incorporated into the official OMB inventory of currently approved collections of information. Copies of the Paperwork Reduction Act Submission, supporting statements and approved collection of information instrument(s) are placed into OMB’s public docket files. The Federal Reserve may not conduct or sponsor, and the respondent is not required to respond to, an information collection that has been extended, revised, or implemented on or after October 1, 1995, unless it displays a currently valid OMB control number. FOR FURTHER INFORMATION CONTACT: Federal Reserve Board Clearance Officer, Cynthia Ayouch, Division of AGENCY: PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 Research and Statistics, Board of Governors of the Federal Reserve System, Washington, DC 20551 (202) 452–3829. Telecommunications Device for the Deaf (TDD) users may contact (202) 263–4869, Board of Governors of the Federal Reserve System, Washington, DC 20551. OMB Desk Officer, Shagufta Ahmed, Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street NW., Washington, DC 20503. Final approval under OMB delegated authority to revise the following report: Report title: Capital Assessments and Stress Testing information collection. Agency form number: FR Y–14A/Q/ M. OMB Control number: 7100–0341. Effective Dates: March 31, 2013 and June 30, 2013. Frequency: Annually, semi-annual, quarterly, and monthly. Reporters: Large banking organizations that meet an annual threshold of $50 billion or more in total consolidated assets (large Bank Holding Companies or large BHCs), as defined by the Capital Plan rule (12 CFR 225.8).1 Estimated annual reporting hours: FR Y–14A: Summary, 50,160 hours; Macro scenario, 1,860 hours; Counterparty credit risk (CCR), 2,292 hours; Basel III/ Dodd-Frank, 600 hours; and Regulatory capital, 600 hours. FR Y–14 Q: Securities risk, 1,200 hours; Retail risk, 1,920 hours; Pre-provision net revenue (PPNR), 75,000 hours; Wholesale corporate loans, 6,720 hours; Wholesale commercial real estate (CRE) loans, 6,480 hours; Trading risk, 41,280 hours; Basel III/Dodd-Frank, 2,400 hours; Regulatory capital, 4,800 hours; and Operational risk, 3,360 hours; and Mortgage Servicing Rights (MSR) Valuation, 864 hours; Supplemental, 960 hours; and Retail Fair Value Option/Held for Sale (Retail FVO/HFS), 1,216 hours. FR Y–14M: Retail 1st lien mortgage, 153,000 hours; Retail home equity, 146,880 hours; and Retail credit card, 91,800 hours. FR Y–14 Implementation and On-Going Automation: Start-up for new respondents, 79,200 hours; and Ongoing revisions for existing respondents, 9,120 hours. Estimated average hours per response: FR Y–14A: Summary, 836 hours; Macro scenario, 31 hours; CCR, 382 hours; Basel III/Dodd-Frank, 20 hours; and 1 The Capital Plan rule applies to every top-tier large BHC. This asset threshold is consistent with the threshold established by section 165 of the Dodd-Frank Act relating to enhanced supervision and prudential standards for certain BHCs. E:\FR\FM\29MRN1.SGM 29MRN1 mstockstill on DSK4VPTVN1PROD with NOTICES Federal Register / Vol. 78, No. 61 / Friday, March 29, 2013 / Notices Regulatory capital, 20 hours. FR Y–14Q: Securities risk, 10 hours; Retail risk, 16 hours; PPNR, 625 hours; Wholesale corporate loans, 60 hours; Wholesale CRE loans, 60 hours; Trading risk, 1,720 hours; Basel III/Dodd-Frank, 20 hours; Regulatory capital, 40 hours; Operational risk, 28 hours, MSR Valuation, 24 hours; Supplemental, 8 hours; and Retail FVO/HFS, 16 hours. FR Y–14M: Retail 1st lien mortgage, 510 hours; Retail home equity, 510 hours; and Retail credit card, 510 hours. FR Y– 14 Implementation and On-Going Automation: Start-up for new respondents, 7,200 hours; and On-going revisions for existing respondents, 480 hours. Number of respondents: 30. General description of report: The FR Y–14 series of reports are authorized by section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), which requires the Federal Reserve to ensure that certain BHCs and nonbank financial companies supervised by the Federal Reserve are subject to enhanced riskbased and leverage standards in order to mitigate risks to the financial stability of the United States (12 U.S.C. 5365). Additionally, section 5 of the BHC Act authorizes the Board to issue regulations and conduct information collections with regard to the supervision of BHCs (12 U.S.C. 1844). As these data are collected as part of the supervisory process, they are subject to confidential treatment under exemption 8 of the Freedom of Information Act (FOIA) (5 U.S.C. 552(b)(8)). In addition, commercial and financial information contained in these information collections may be exempt from disclosure under FOIA exemption 4 U.S.C. 552(b)(4)). Such exemptions would be made on a case-by-case basis. Abstract: The data collected through the FR Y–14A/Q/M schedules provide the Federal Reserve with the additional information and perspective needed to help ensure that large BHCs have strong, firm-wide risk measurement and management processes supporting their internal assessments of capital adequacy and that their capital resources are sufficient given their business focus, activities, and resulting risk exposures. The annual Comprehensive Capital Analysis and Review (CCAR) exercise is also complemented by other Federal Reserve supervisory efforts aimed at enhancing the continued viability of large BHCs, including (1) continuous monitoring of BHCs’ planning and management of liquidity and funding resources and (2) regular assessments of credit, market and operational risks, and associated risk management practices. VerDate Mar<15>2010 17:34 Mar 28, 2013 Jkt 229001 Information gathered in this data collection is also used in the supervision and regulation of these financial institutions. In order to fully evaluate the data submissions, the Federal Reserve may conduct follow up discussions with or request responses to follow up questions from respondents, as needed. The annual FR Y–14A collects large BHCs’ quantitative projections of balance sheet, income, losses, and capital across a range of macroeconomic scenarios and qualitative information on methodologies used to develop internal projections of capital across scenarios.2 The quarterly FR Y–14Q collects granular data on BHCs’ various asset classes and PPNR for the reporting period, which are used to support supervisory stress test models and for continuous monitoring efforts. The monthly FR Y–14M comprises three loan- and portfolio-level collections, and one detailed address matching collection to supplement two of the loan- and portfolio-level collections for first lien mortgages and home equity mortgages. On October 12, 2012, the Federal Reserve published two final rules in the Federal Register (77 FR 62409) with stress testing requirements for certain bank holding companies, state member banks, and savings and loan holding companies. The final rules implement sections 165(i)(1) and (i)(2) of the DoddFrank Act. Section 165(i)(1) of the Dodd-Frank Act requires the Board to conduct an annual stress test of each covered company 3 to evaluate whether the covered company has sufficient capital, on a total consolidated basis, to absorb losses as a result of adverse economic conditions (supervisory stress tests). Section 165 (i)(2) requires the Board to issue regulations that require covered companies to conduct stress tests semi-annually and require financial companies with total consolidated assets of more than $10 billion that are not covered companies and for which the Federal Reserve is the primary federal financial regulatory agency to conduct stress tests on an annual basis (collectively, company-run stress tests). Current actions: On December 20, 2012, the Federal Reserve published a notice in the Federal Register (77 FR 75434) requesting public comment for 2 BHCs that must re-submit their capital plan generally also must provide a revised FR Y–14A in connection with their resubmission. 3 See 12 U.S.C. 5365(a). A ‘‘covered company’’ includes any bank holding company with total consolidated assets of $50 billion or more and each nonbank financial company that the Council has designated for supervision by the Board. PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 19265 60 days on the revision of the FR Y–14 information collection. The Federal Reserve proposed revisions to the monthly FR Y–14M schedules and modifications to the frequency for certain FR Y–14A and FR Y–14Q schedules, effective March 31, 2013, to help refine supervisory stress tests and better evaluate BHCs’ stress tests results. Revisions to the FR Y–14M schedules included: (1) Adding data items to all three loan- and portfolio-level collections, and the address matching collection, (2) clarifying several data items currently collected, and (3) deleting data items that are no longer needed. The comment period expired on February 19, 2013. The Federal Reserve received eleven comment letters regarding the proposed changes: eight from BHCs, two from private companies, and one from a group of trade associations.4 All substantive comments are summarized and addressed below. Summary of Comments Most of the comments received requested clarification of the instructions for the information to be reported, or were technical in nature. These comments will be addressed in the final FR Y–14 reporting instructions. The Federal Reserve also received three comments not directly related to the proposed revisions to the FR Y–14 information collection regarding suggestions to (1) improve the current Frequently Asked Questions process, (2) prioritize collected data items in order of importance to the Federal Reserve, and (3) provide feedback to the midcycle company run stress test in a timely manner. Federal Reserve plans to take these comments under consideration and address them at a later date, as appropriate. The following is a detailed discussion of aspects of the proposed FR Y–14 collection for which the Federal Reserve received one or more substantive comments and an evaluation of, and responses to the comments received. A. General In general, commenters expressed concerns about the overall expansion of the information collection, the ongoing frequency of modifications to the reporting forms, and the increased burden those modifications will cause to reporters. Specifically, several commenters noted that the proposal substantially increases the number of data items on the FR Y–14M schedules, leaving BHCs insufficient time to make 4 Three trade associations submitted a joint comment letter. E:\FR\FM\29MRN1.SGM 29MRN1 mstockstill on DSK4VPTVN1PROD with NOTICES 19266 Federal Register / Vol. 78, No. 61 / Friday, March 29, 2013 / Notices appropriate changes to their models, modify reporting systems, and integrate these systems with their internal controls structure. These commenters also requested delayed implementation of the revisions and guidance for BHCs and recommended developing a ‘‘best efforts standard’’ for missing or incomplete data. The Federal Reserve weighed the potential increase in respondent burden against the need to collect additional information to enhance the Federal Reserve’s ability to conduct effective supervisory stress testing, and made certain modifications to the proposal in response to the comments received. Specifically, the Federal Reserve will eliminate 12 proposed and 2 existing data items from the FR Y–14M schedules and delay the effective date until June 30, 2013 for most of the data items being added to the FR Y–14M schedules (except for the 8 proposed Basel II items on the FR Y–14M firstlien and home equity schedules).5 Additional details on the items being eliminated are provided below. Furthermore, the Federal Reserve agrees that changes to the reporting forms should be less frequent and substantive to allow for the development of mature systems and processes and is working towards minimizing changes to the FR Y–14 reporting forms going forward. Regarding the comment that a ‘‘best efforts standard’’ be applied, one commenter requested that such a standard be applied to data items that must be obtained from third parties. Other commenters noted particular data items that are difficult to obtain because of their historical nature or because they are part of portfolios that have been acquired. Firms are expected to comply with all regulatory reporting requirements and firms that have completed a merger or acquisition have requested and been granted extensions to allow additional time to reach full compliance. However, the Federal Reserve understands the difficulty in obtaining certain data items, particularly those obtained from third parties, and will investigate providing additional instructions regarding a ‘‘best efforts standard.’’ Regarding the reporting forms, one commenter suggested modifying the FR Y–14 reporting forms to clearly distinguish between the reporting of 5 There are four Basel II items being added to both the First Lien Closed-End 1–4 Family Residential Loan Schedule and the Domestic Home Equity Loan and Home Equity Line Schedule: Basel II— Probability of Default (PD), Basel II—Loss Given Default (LGD), Basel II—Expected Loss Given Default (ELGD), and Basel II—Exposure at Default (EAD). VerDate Mar<15>2010 17:34 Mar 28, 2013 Jkt 229001 retail loans secured by 1–4 family residential properties from commercial loans secured by similar collateral. The Federal Reserve recognizes this distinction in loan classification but needs additional time to understand the extent of this issue and will make this distinction in a future proposal, if appropriate. Additionally, one commenter suggested that the formulas in the FR Y–14A Summary Schedule be modified to allow a firm to make one submission for both the supervisory baseline scenario and the BHC baseline scenario if a firm uses the supervisory baseline scenario as the BHC baseline scenario. The Federal Reserve understands the potential reduction in burden of allowing one submission, but believes additional investigation into the effect this change may have on the next annual Comprehensive Capital Analysis and Review and Dodd-Frank Act (DFA) stress test is warranted, and will consider issuing further guidance to address this comment. Several commenters requested that the Federal Reserve attempt to minimize duplicative reporting requirements among the Federal Reserve’s reporting forms and between the Federal Reserve’s and other agencies’ reporting forms. One commenter expressed concern over similar elements between the Consolidated Financial Statements for Bank Holding Companies (FR Y–9C; OMB No. 7100–0128), FR Y–14A, and FR Y–14Q and suggested the reporting forms be changed to eliminate duplication. While the Federal Reserve recognizes that the aforementioned reporting forms contain similar elements, their differing frequencies, data items, and levels of granularity prevent consolidation of similar elements on any one reporting form. Another commenter suggested that better alignment should be achieved between the FR Y–14 and similar reporting requirements of other banking agencies. The Federal Reserve coordinates closely with other federal banking agencies that collect similar information and is working to eliminate duplicative requirements; however, other agencies have independent authority to collect such information. The timing of reporting form submissions to the Federal Reserve and communication issued by the Federal Reserve was noted as an issue by several commenters. It was suggested by one commenter that the reporting timeline for the FR Y–14M should match the reporting timeline for the FR Y–14Q/FR Y–9C. Another commenter suggested that the submission deadlines for both the FR Y–14Q and FR Y–14M should be five days after the deadline for the FR PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 Y–9C to provide more time for reconciliation between reporting forms. The Federal Reserve notes that all filers to date have largely complied with the reporting submission deadlines, which have been in place since the creation of the aforementioned reporting forms. The Federal Reserve needs to retain the current submission deadlines in order to allow sufficient time to conduct supervisory responsibilities. Numerous comments were received inquiring whether firms are required to submit historical data for new data items on the FR Y–14M schedules. The Federal Reserve generally notes that unless a reporting form specifically requests historical data, respondents are not required to provide the Federal Reserve with historical data for any new data items. Several commenters raised concerns regarding the mid-cycle DFA company run stress tests. One commenter suggested reducing the burden on reporters for the mid-cycle DFA company run stress test by both limiting the requirements for supporting documentation (as stated in the instructions to the FR Y–14A) and creating an abbreviated version of the FR Y–14A Summary Schedule. While the Federal Reserve agrees that limiting the supporting documentation for the mid-cycle submission may effectively reduce burden, creating an abbreviated version of the FR Y–14A Summary Schedule may prevent the Federal Reserve from conducting a complete analysis consistent with the annual stress test. B. FR Y–14M Credit Card Schedule In the December 20th proposal, the Federal Reserve proposed adding 65 new data items to the FR Y–14M Credit Card schedule: 46 data items to the account level and 19 items to the portfolio level. Additionally, the Federal Reserve proposed to revise the reporting of 11 existing account level data items from optional to mandatory. After careful consideration of comments and reporting burden, the Federal Reserve will adopt a final schedule with 59 of the proposed new data items: 40 data items to the account level and 19 items to the portfolio level. The majority of comments received requested clarification of item definitions and will be addressed in the final instructions. Some comments, however, suggested significant modification to data items and are addressed below. Several commenters noted a lack of clarity among the possible selections for Month-End and Cycle-End Account Status items, especially regarding charged-off accounts and accounts in E:\FR\FM\29MRN1.SGM 29MRN1 Federal Register / Vol. 78, No. 61 / Friday, March 29, 2013 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES collection stage. Specifically, commenters expressed confusion about which option should be applied to charged-off accounts and how the Federal Reserve defines an account being in the collections stage. The Federal Reserve will revise the proposed selection options to be more specific. Several commenters requested additional guidance regarding generating the information requested in the revised Customer ID item and the proposed new Co-borrower ID, Corporate ID and Trade Key items, because they are to be populated ‘‘using the algorithm provided by the Federal Reserve Board or its agent.’’ After consideration of the new definitions, the Federal Reserve believes that such an algorithm is unnecessary and will revert to the existing definition of Customer ID and remove Co-Borrower ID and Trade Key from the final schedule. Questions related to generating the Corporate ID would be directed to the Federal Reserve’s data aggregator. Several commenters stated that they do not store census tract information in their internal data management systems. Therefore, the Federal Reserve will remove data items for Account Billing Address—Census Tract, Account Billing Address—Street Address, and Account Billing Address—City. Several commenters suggested adding a third response of ’’Other’’ to the proposed data item Updated Income Source to account for sources that do not qualify as ’’Household’’ or ’’Individual.’’ The Federal Reserve will add a third response of ‘‘Other.’’ Several commenters requested clarification regarding what to report if one Annual Percentage Rate (APR) is to be reported but several APRs existed in the reporting period. The Federal Reserve will clarify the instructions to state that firms should report a weighted average of APRs throughout the reporting period. C. FR Y–14M First Lien Closed-End 1– 4 Family Residential Loan Schedule In the December 20th proposal, the Federal Reserve proposed adding 40 new data items to the loan-level table of the First Lien schedule. Additionally, the Federal Reserve proposed removing three existing data items from the same table. After consideration of comments and reporting burden, the Federal Reserve will revise the final schedule adding 36 of the proposed new data items to the loan-level table and removing 2 existing data items. With respect to the final list of proposed items, the Federal Reserve did not receive substantive comments on most of the proposed items. Most of the VerDate Mar<15>2010 19:06 Mar 28, 2013 Jkt 229001 comments received required only clarification to definitions, which will be provided in the final instructions. The Federal Reserve proposed to eliminate the Home Affordable Refinance Flag item, because it had appeared, based on a preliminary analysis, that the information reflected in this data item could be derived from other data items. However, after further consideration and analysis, the Federal Reserve has determined that the information reflected in the Home Affordable Refinance Flag data item cannot be derived from other data items. In addition, several commenters suggested that the Federal Reserve work with other agencies to better align the FR Y–14M schedules with data collections by other agencies in order to reduce the burden on reporters. Retaining the Home Affordable Refinance Flag would facilitate greater consistency with other agencies’ data collections and, accordingly, retaining this item may reduce the burden on FR Y–14M reporters. Therefore the Federal Reserve will retain the Home Affordable Refinance Flag data item in the final schedule. One commenter suggested that the data item Product Type should include an option for 10 year fixed-rate loans. The Federal Reserve has observed many instances of 10 year fixed-rate loans and will add an option for such loans. Similarly to the Credit Card schedule, several commenters requested additional guidance regarding the Customer ID and the Co-borrower ID items. After consideration of comments and additional burden to reporters of these proposed items, the Federal Reserve will remove the items CoBorrower ID and Customer ID. In an effort to additionally minimize reporting burden, the proposed items Prepayment Penalty Waived This Month and Reason for Default will also be eliminated. D. FR Y–14M Domestic Home Equity Loan and Home Equity Line Schedule The Federal Reserve proposed adding 27 new data items to the Loan/Line Level Table and 1 new data item to the Portfolio Level Table. Additionally, the Federal Reserve proposed to delete 1 existing data item from the Loan/Line Level Table. After consideration of comments and reporting burden, the final schedule will add 25 and eliminate 1 of the proposed new data items and eliminate 1 existing data item from the Loan/Line Level Table. Most of the comments received required only clarification to definitions, which will be provided in the final instructions. Similarly to the First Lien schedule, several commenters requested PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 19267 additional guidance regarding the Customer ID and the Co-borrower ID items. After consideration of comments and additional burden to reporters of these proposed items, the Federal Reserve will remove the items CoBorrower ID and Customer ID. In an effort to additionally minimize reporting burden, the proposed items Escrow Amount at Origination and Remodified Flag will also be eliminated as well as the existing item Escrow Amount Current. Board of Governors of the Federal Reserve System. March 25, 2013. Robert deV. Frierson, Secretary of the Board. [FR Doc. 2013–07272 Filed 3–28–13; 8:45 am] BILLING CODE 6210–01–P FEDERAL RESERVE SYSTEM Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding Company The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board’s Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)). The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than April 15, 2013. A. Federal Reserve Bank of Richmond (Adam M. Drimer, Assistant Vice President) 701 East Byrd Street, Richmond, Virginia 23261–4528: 1. Olivia Britton Holding, Raleigh, North Carolina; to retain voting shares of First Citizens BancShares, Inc., and thereby indirectly retain voting shares of First-Citizens Bank & Trust Company, both in Raleigh, North Carolina. 2. Frank Brown Holding, Jr., Raleigh, North Carolina; to retain voting shares of First Citizens BancShares, Inc., and thereby indirectly retain voting shares of First-Citizens Bank & Trust Company, both in Raleigh, North Carolina. B. Federal Reserve Bank of Dallas (E. Ann Worthy, Vice President) 2200 North Pearl Street, Dallas, Texas 75201– 2272: E:\FR\FM\29MRN1.SGM 29MRN1

Agencies

[Federal Register Volume 78, Number 61 (Friday, March 29, 2013)]
[Notices]
[Pages 19264-19267]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-07272]


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FEDERAL RESERVE SYSTEM


Agency Information Collection Activities: Announcement of Board 
Approval Under Delegated Authority and Submission to OMB

AGENCY: Board of Governors of the Federal Reserve System.
SUMMARY: Notice is hereby given of the final approval of a proposed 
information collection by the Board of Governors of the Federal Reserve 
System (Board) under OMB delegated authority, as per 5 CFR 1320.16 (OMB 
Regulations on Controlling Paperwork Burdens on the Public). Board-
approved collections of information are incorporated into the official 
OMB inventory of currently approved collections of information. Copies 
of the Paperwork Reduction Act Submission, supporting statements and 
approved collection of information instrument(s) are placed into OMB's 
public docket files. The Federal Reserve may not conduct or sponsor, 
and the respondent is not required to respond to, an information 
collection that has been extended, revised, or implemented on or after 
October 1, 1995, unless it displays a currently valid OMB control 
number.

FOR FURTHER INFORMATION CONTACT:

Federal Reserve Board Clearance Officer, Cynthia Ayouch, Division of 
Research and Statistics, Board of Governors of the Federal Reserve 
System, Washington, DC 20551 (202) 452-3829. Telecommunications Device 
for the Deaf (TDD) users may contact (202) 263-4869, Board of Governors 
of the Federal Reserve System, Washington, DC 20551.
OMB Desk Officer, Shagufta Ahmed, Office of Information and Regulatory 
Affairs, Office of Management and Budget, New Executive Office 
Building, Room 10235, 725 17th Street NW., Washington, DC 20503.

    Final approval under OMB delegated authority to revise the 
following report:
    Report title: Capital Assessments and Stress Testing information 
collection.
    Agency form number: FR Y-14A/Q/M.
    OMB Control number: 7100-0341.
    Effective Dates: March 31, 2013 and June 30, 2013.
    Frequency: Annually, semi-annual, quarterly, and monthly.
    Reporters: Large banking organizations that meet an annual 
threshold of $50 billion or more in total consolidated assets (large 
Bank Holding Companies or large BHCs), as defined by the Capital Plan 
rule (12 CFR 225.8).\1\
---------------------------------------------------------------------------

    \1\ The Capital Plan rule applies to every top-tier large BHC. 
This asset threshold is consistent with the threshold established by 
section 165 of the Dodd-Frank Act relating to enhanced supervision 
and prudential standards for certain BHCs.
---------------------------------------------------------------------------

    Estimated annual reporting hours: FR Y-14A: Summary, 50,160 hours; 
Macro scenario, 1,860 hours; Counterparty credit risk (CCR), 2,292 
hours; Basel III/Dodd-Frank, 600 hours; and Regulatory capital, 600 
hours. FR Y-14 Q: Securities risk, 1,200 hours; Retail risk, 1,920 
hours; Pre-provision net revenue (PPNR), 75,000 hours; Wholesale 
corporate loans, 6,720 hours; Wholesale commercial real estate (CRE) 
loans, 6,480 hours; Trading risk, 41,280 hours; Basel III/Dodd-Frank, 
2,400 hours; Regulatory capital, 4,800 hours; and Operational risk, 
3,360 hours; and Mortgage Servicing Rights (MSR) Valuation, 864 hours; 
Supplemental, 960 hours; and Retail Fair Value Option/Held for Sale 
(Retail FVO/HFS), 1,216 hours. FR Y-14M: Retail 1st lien mortgage, 
153,000 hours; Retail home equity, 146,880 hours; and Retail credit 
card, 91,800 hours. FR Y-14 Implementation and On-Going Automation: 
Start-up for new respondents, 79,200 hours; and On-going revisions for 
existing respondents, 9,120 hours.
    Estimated average hours per response: FR Y-14A: Summary, 836 hours; 
Macro scenario, 31 hours; CCR, 382 hours; Basel III/Dodd-Frank, 20 
hours; and

[[Page 19265]]

Regulatory capital, 20 hours. FR Y-14Q: Securities risk, 10 hours; 
Retail risk, 16 hours; PPNR, 625 hours; Wholesale corporate loans, 60 
hours; Wholesale CRE loans, 60 hours; Trading risk, 1,720 hours; Basel 
III/Dodd-Frank, 20 hours; Regulatory capital, 40 hours; Operational 
risk, 28 hours, MSR Valuation, 24 hours; Supplemental, 8 hours; and 
Retail FVO/HFS, 16 hours. FR Y-14M: Retail 1st lien mortgage, 510 
hours; Retail home equity, 510 hours; and Retail credit card, 510 
hours. FR Y-14 Implementation and On-Going Automation: Start-up for new 
respondents, 7,200 hours; and On-going revisions for existing 
respondents, 480 hours.
    Number of respondents: 30.
    General description of report: The FR Y-14 series of reports are 
authorized by section 165 of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act of 2010 (Dodd-Frank Act), which requires the 
Federal Reserve to ensure that certain BHCs and nonbank financial 
companies supervised by the Federal Reserve are subject to enhanced 
risk-based and leverage standards in order to mitigate risks to the 
financial stability of the United States (12 U.S.C. 5365). 
Additionally, section 5 of the BHC Act authorizes the Board to issue 
regulations and conduct information collections with regard to the 
supervision of BHCs (12 U.S.C. 1844).
    As these data are collected as part of the supervisory process, 
they are subject to confidential treatment under exemption 8 of the 
Freedom of Information Act (FOIA) (5 U.S.C. 552(b)(8)). In addition, 
commercial and financial information contained in these information 
collections may be exempt from disclosure under FOIA exemption 4 U.S.C. 
552(b)(4)). Such exemptions would be made on a case-by-case basis.
    Abstract: The data collected through the FR Y-14A/Q/M schedules 
provide the Federal Reserve with the additional information and 
perspective needed to help ensure that large BHCs have strong, 
firm[hyphen]wide risk measurement and management processes supporting 
their internal assessments of capital adequacy and that their capital 
resources are sufficient given their business focus, activities, and 
resulting risk exposures. The annual Comprehensive Capital Analysis and 
Review (CCAR) exercise is also complemented by other Federal Reserve 
supervisory efforts aimed at enhancing the continued viability of large 
BHCs, including (1) continuous monitoring of BHCs' planning and 
management of liquidity and funding resources and (2) regular 
assessments of credit, market and operational risks, and associated 
risk management practices. Information gathered in this data collection 
is also used in the supervision and regulation of these financial 
institutions. In order to fully evaluate the data submissions, the 
Federal Reserve may conduct follow up discussions with or request 
responses to follow up questions from respondents, as needed.
    The annual FR Y-14A collects large BHCs' quantitative projections 
of balance sheet, income, losses, and capital across a range of 
macroeconomic scenarios and qualitative information on methodologies 
used to develop internal projections of capital across scenarios.\2\ 
The quarterly FR Y-14Q collects granular data on BHCs' various asset 
classes and PPNR for the reporting period, which are used to support 
supervisory stress test models and for continuous monitoring efforts. 
The monthly FR Y-14M comprises three loan- and portfolio-level 
collections, and one detailed address matching collection to supplement 
two of the loan- and portfolio-level collections for first lien 
mortgages and home equity mortgages.
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    \2\ BHCs that must re-submit their capital plan generally also 
must provide a revised FR Y-14A in connection with their 
resubmission.
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    On October 12, 2012, the Federal Reserve published two final rules 
in the Federal Register (77 FR 62409) with stress testing requirements 
for certain bank holding companies, state member banks, and savings and 
loan holding companies. The final rules implement sections 165(i)(1) 
and (i)(2) of the Dodd-Frank Act. Section 165(i)(1) of the Dodd-Frank 
Act requires the Board to conduct an annual stress test of each covered 
company \3\ to evaluate whether the covered company has sufficient 
capital, on a total consolidated basis, to absorb losses as a result of 
adverse economic conditions (supervisory stress tests). Section 165 
(i)(2) requires the Board to issue regulations that require covered 
companies to conduct stress tests semi-annually and require financial 
companies with total consolidated assets of more than $10 billion that 
are not covered companies and for which the Federal Reserve is the 
primary federal financial regulatory agency to conduct stress tests on 
an annual basis (collectively, company-run stress tests).
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    \3\ See 12 U.S.C. 5365(a). A ``covered company'' includes any 
bank holding company with total consolidated assets of $50 billion 
or more and each nonbank financial company that the Council has 
designated for supervision by the Board.
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    Current actions: On December 20, 2012, the Federal Reserve 
published a notice in the Federal Register (77 FR 75434) requesting 
public comment for 60 days on the revision of the FR Y-14 information 
collection. The Federal Reserve proposed revisions to the monthly FR Y-
14M schedules and modifications to the frequency for certain FR Y-14A 
and FR Y-14Q schedules, effective March 31, 2013, to help refine 
supervisory stress tests and better evaluate BHCs' stress tests 
results. Revisions to the FR Y-14M schedules included: (1) Adding data 
items to all three loan- and portfolio-level collections, and the 
address matching collection, (2) clarifying several data items 
currently collected, and (3) deleting data items that are no longer 
needed. The comment period expired on February 19, 2013. The Federal 
Reserve received eleven comment letters regarding the proposed changes: 
eight from BHCs, two from private companies, and one from a group of 
trade associations.\4\ All substantive comments are summarized and 
addressed below.
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    \4\ Three trade associations submitted a joint comment letter.
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Summary of Comments

    Most of the comments received requested clarification of the 
instructions for the information to be reported, or were technical in 
nature. These comments will be addressed in the final FR Y-14 reporting 
instructions. The Federal Reserve also received three comments not 
directly related to the proposed revisions to the FR Y-14 information 
collection regarding suggestions to (1) improve the current Frequently 
Asked Questions process, (2) prioritize collected data items in order 
of importance to the Federal Reserve, and (3) provide feedback to the 
mid-cycle company run stress test in a timely manner. Federal Reserve 
plans to take these comments under consideration and address them at a 
later date, as appropriate. The following is a detailed discussion of 
aspects of the proposed FR Y-14 collection for which the Federal 
Reserve received one or more substantive comments and an evaluation of, 
and responses to the comments received.

A. General

    In general, commenters expressed concerns about the overall 
expansion of the information collection, the ongoing frequency of 
modifications to the reporting forms, and the increased burden those 
modifications will cause to reporters. Specifically, several commenters 
noted that the proposal substantially increases the number of data 
items on the FR Y-14M schedules, leaving BHCs insufficient time to make

[[Page 19266]]

appropriate changes to their models, modify reporting systems, and 
integrate these systems with their internal controls structure. These 
commenters also requested delayed implementation of the revisions and 
guidance for BHCs and recommended developing a ``best efforts 
standard'' for missing or incomplete data.
    The Federal Reserve weighed the potential increase in respondent 
burden against the need to collect additional information to enhance 
the Federal Reserve's ability to conduct effective supervisory stress 
testing, and made certain modifications to the proposal in response to 
the comments received. Specifically, the Federal Reserve will eliminate 
12 proposed and 2 existing data items from the FR Y-14M schedules and 
delay the effective date until June 30, 2013 for most of the data items 
being added to the FR Y-14M schedules (except for the 8 proposed Basel 
II items on the FR Y-14M first-lien and home equity schedules).\5\ 
Additional details on the items being eliminated are provided below. 
Furthermore, the Federal Reserve agrees that changes to the reporting 
forms should be less frequent and substantive to allow for the 
development of mature systems and processes and is working towards 
minimizing changes to the FR Y-14 reporting forms going forward.
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    \5\ There are four Basel II items being added to both the First 
Lien Closed-End 1-4 Family Residential Loan Schedule and the 
Domestic Home Equity Loan and Home Equity Line Schedule: Basel II--
Probability of Default (PD), Basel II--Loss Given Default (LGD), 
Basel II--Expected Loss Given Default (ELGD), and Basel II--Exposure 
at Default (EAD).
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    Regarding the comment that a ``best efforts standard'' be applied, 
one commenter requested that such a standard be applied to data items 
that must be obtained from third parties. Other commenters noted 
particular data items that are difficult to obtain because of their 
historical nature or because they are part of portfolios that have been 
acquired. Firms are expected to comply with all regulatory reporting 
requirements and firms that have completed a merger or acquisition have 
requested and been granted extensions to allow additional time to reach 
full compliance. However, the Federal Reserve understands the 
difficulty in obtaining certain data items, particularly those obtained 
from third parties, and will investigate providing additional 
instructions regarding a ``best efforts standard.''
    Regarding the reporting forms, one commenter suggested modifying 
the FR Y-14 reporting forms to clearly distinguish between the 
reporting of retail loans secured by 1-4 family residential properties 
from commercial loans secured by similar collateral. The Federal 
Reserve recognizes this distinction in loan classification but needs 
additional time to understand the extent of this issue and will make 
this distinction in a future proposal, if appropriate. Additionally, 
one commenter suggested that the formulas in the FR Y-14A Summary 
Schedule be modified to allow a firm to make one submission for both 
the supervisory baseline scenario and the BHC baseline scenario if a 
firm uses the supervisory baseline scenario as the BHC baseline 
scenario. The Federal Reserve understands the potential reduction in 
burden of allowing one submission, but believes additional 
investigation into the effect this change may have on the next annual 
Comprehensive Capital Analysis and Review and Dodd-Frank Act (DFA) 
stress test is warranted, and will consider issuing further guidance to 
address this comment.
    Several commenters requested that the Federal Reserve attempt to 
minimize duplicative reporting requirements among the Federal Reserve's 
reporting forms and between the Federal Reserve's and other agencies' 
reporting forms. One commenter expressed concern over similar elements 
between the Consolidated Financial Statements for Bank Holding 
Companies (FR Y-9C; OMB No. 7100-0128), FR Y-14A, and FR Y-14Q and 
suggested the reporting forms be changed to eliminate duplication. 
While the Federal Reserve recognizes that the aforementioned reporting 
forms contain similar elements, their differing frequencies, data 
items, and levels of granularity prevent consolidation of similar 
elements on any one reporting form. Another commenter suggested that 
better alignment should be achieved between the FR Y-14 and similar 
reporting requirements of other banking agencies. The Federal Reserve 
coordinates closely with other federal banking agencies that collect 
similar information and is working to eliminate duplicative 
requirements; however, other agencies have independent authority to 
collect such information.
    The timing of reporting form submissions to the Federal Reserve and 
communication issued by the Federal Reserve was noted as an issue by 
several commenters. It was suggested by one commenter that the 
reporting timeline for the FR Y-14M should match the reporting timeline 
for the FR Y-14Q/FR Y-9C. Another commenter suggested that the 
submission deadlines for both the FR Y-14Q and FR Y-14M should be five 
days after the deadline for the FR Y-9C to provide more time for 
reconciliation between reporting forms. The Federal Reserve notes that 
all filers to date have largely complied with the reporting submission 
deadlines, which have been in place since the creation of the 
aforementioned reporting forms. The Federal Reserve needs to retain the 
current submission deadlines in order to allow sufficient time to 
conduct supervisory responsibilities.
    Numerous comments were received inquiring whether firms are 
required to submit historical data for new data items on the FR Y-14M 
schedules. The Federal Reserve generally notes that unless a reporting 
form specifically requests historical data, respondents are not 
required to provide the Federal Reserve with historical data for any 
new data items.
    Several commenters raised concerns regarding the mid-cycle DFA 
company run stress tests. One commenter suggested reducing the burden 
on reporters for the mid-cycle DFA company run stress test by both 
limiting the requirements for supporting documentation (as stated in 
the instructions to the FR Y-14A) and creating an abbreviated version 
of the FR Y-14A Summary Schedule. While the Federal Reserve agrees that 
limiting the supporting documentation for the mid-cycle submission may 
effectively reduce burden, creating an abbreviated version of the FR Y-
14A Summary Schedule may prevent the Federal Reserve from conducting a 
complete analysis consistent with the annual stress test.

B. FR Y-14M Credit Card Schedule

    In the December 20th proposal, the Federal Reserve proposed adding 
65 new data items to the FR Y-14M Credit Card schedule: 46 data items 
to the account level and 19 items to the portfolio level. Additionally, 
the Federal Reserve proposed to revise the reporting of 11 existing 
account level data items from optional to mandatory. After careful 
consideration of comments and reporting burden, the Federal Reserve 
will adopt a final schedule with 59 of the proposed new data items: 40 
data items to the account level and 19 items to the portfolio level. 
The majority of comments received requested clarification of item 
definitions and will be addressed in the final instructions. Some 
comments, however, suggested significant modification to data items and 
are addressed below.
    Several commenters noted a lack of clarity among the possible 
selections for Month-End and Cycle-End Account Status items, especially 
regarding charged-off accounts and accounts in

[[Page 19267]]

collection stage. Specifically, commenters expressed confusion about 
which option should be applied to charged-off accounts and how the 
Federal Reserve defines an account being in the collections stage. The 
Federal Reserve will revise the proposed selection options to be more 
specific.
    Several commenters requested additional guidance regarding 
generating the information requested in the revised Customer ID item 
and the proposed new Co-borrower ID, Corporate ID and Trade Key items, 
because they are to be populated ``using the algorithm provided by the 
Federal Reserve Board or its agent.'' After consideration of the new 
definitions, the Federal Reserve believes that such an algorithm is 
unnecessary and will revert to the existing definition of Customer ID 
and remove Co-Borrower ID and Trade Key from the final schedule. 
Questions related to generating the Corporate ID would be directed to 
the Federal Reserve's data aggregator.
    Several commenters stated that they do not store census tract 
information in their internal data management systems. Therefore, the 
Federal Reserve will remove data items for Account Billing Address--
Census Tract, Account Billing Address--Street Address, and Account 
Billing Address--City.
    Several commenters suggested adding a third response of ''Other'' 
to the proposed data item Updated Income Source to account for sources 
that do not qualify as ''Household'' or ''Individual.'' The Federal 
Reserve will add a third response of ``Other.''
    Several commenters requested clarification regarding what to report 
if one Annual Percentage Rate (APR) is to be reported but several APRs 
existed in the reporting period. The Federal Reserve will clarify the 
instructions to state that firms should report a weighted average of 
APRs throughout the reporting period.

C. FR Y-14M First Lien Closed-End 1-4 Family Residential Loan Schedule

    In the December 20th proposal, the Federal Reserve proposed adding 
40 new data items to the loan-level table of the First Lien schedule. 
Additionally, the Federal Reserve proposed removing three existing data 
items from the same table. After consideration of comments and 
reporting burden, the Federal Reserve will revise the final schedule 
adding 36 of the proposed new data items to the loan-level table and 
removing 2 existing data items. With respect to the final list of 
proposed items, the Federal Reserve did not receive substantive 
comments on most of the proposed items. Most of the comments received 
required only clarification to definitions, which will be provided in 
the final instructions.
    The Federal Reserve proposed to eliminate the Home Affordable 
Refinance Flag item, because it had appeared, based on a preliminary 
analysis, that the information reflected in this data item could be 
derived from other data items. However, after further consideration and 
analysis, the Federal Reserve has determined that the information 
reflected in the Home Affordable Refinance Flag data item cannot be 
derived from other data items. In addition, several commenters 
suggested that the Federal Reserve work with other agencies to better 
align the FR Y-14M schedules with data collections by other agencies in 
order to reduce the burden on reporters. Retaining the Home Affordable 
Refinance Flag would facilitate greater consistency with other 
agencies' data collections and, accordingly, retaining this item may 
reduce the burden on FR Y-14M reporters. Therefore the Federal Reserve 
will retain the Home Affordable Refinance Flag data item in the final 
schedule.
    One commenter suggested that the data item Product Type should 
include an option for 10 year fixed-rate loans. The Federal Reserve has 
observed many instances of 10 year fixed-rate loans and will add an 
option for such loans.
    Similarly to the Credit Card schedule, several commenters requested 
additional guidance regarding the Customer ID and the Co-borrower ID 
items. After consideration of comments and additional burden to 
reporters of these proposed items, the Federal Reserve will remove the 
items Co-Borrower ID and Customer ID. In an effort to additionally 
minimize reporting burden, the proposed items Prepayment Penalty Waived 
This Month and Reason for Default will also be eliminated.

D. FR Y-14M Domestic Home Equity Loan and Home Equity Line Schedule

    The Federal Reserve proposed adding 27 new data items to the Loan/
Line Level Table and 1 new data item to the Portfolio Level Table. 
Additionally, the Federal Reserve proposed to delete 1 existing data 
item from the Loan/Line Level Table. After consideration of comments 
and reporting burden, the final schedule will add 25 and eliminate 1 of 
the proposed new data items and eliminate 1 existing data item from the 
Loan/Line Level Table. Most of the comments received required only 
clarification to definitions, which will be provided in the final 
instructions.
    Similarly to the First Lien schedule, several commenters requested 
additional guidance regarding the Customer ID and the Co-borrower ID 
items. After consideration of comments and additional burden to 
reporters of these proposed items, the Federal Reserve will remove the 
items Co-Borrower ID and Customer ID. In an effort to additionally 
minimize reporting burden, the proposed items Escrow Amount at 
Origination and Remodified Flag will also be eliminated as well as the 
existing item Escrow Amount Current.

    Board of Governors of the Federal Reserve System.

    March 25, 2013.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2013-07272 Filed 3-28-13; 8:45 am]
BILLING CODE 6210-01-P