Supervision and Regulation Assessments for Bank Holding Companies and Savings and Loan Holding Companies With Total Consolidated Assets of $50 Billion or More and Nonbank Financial Companies Supervised by the Federal Reserve, 23162-23171 [2013-09061]

Agencies

• FEDERAL RESERVE SYSTEM

[Federal Register Volume 78, Number 75 (Thursday, April 18, 2013)]
[Proposed Rules]
[Pages 23162-23171]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-09061]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 78, No. 75 / Thursday, April 18, 2013 / 
Proposed Rules

[[Page 23162]]



FEDERAL RESERVE SYSTEM

12 CFR Part 246

[Regulation TT; Docket No. R-1457]
RIN 7100-AD-95


Supervision and Regulation Assessments for Bank Holding Companies 
and Savings and Loan Holding Companies With Total Consolidated Assets 
of $50 Billion or More and Nonbank Financial Companies Supervised by 
the Federal Reserve

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Proposed rule.

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SUMMARY: The Board of Governors of the Federal Reserve System (Board) 
is inviting comments on a proposed rule to implement section 318 of the 
Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank 
Act), which directs the Board to collect assessments, fees, or other 
charges equal to the total expenses the Board estimates are necessary 
or appropriate to carry out the supervisory and regulatory 
responsibilities of the Board for bank holding companies and savings 
and loan holding companies with total consolidated assets of $50 
billion or more and nonbank financial companies designated for Board 
supervision by the Financial Stability Oversight Council (Council).

DATES: Comments should be received by June 15, 2013.

ADDRESSES: You may submit comments, identified by Docket No. 1457 and 
RIN 7100-AD-95, 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.
     Email: regs.comments@federalreserve.gov. Include docket 
and RIN numbers in the subject line of the message.
     FAX: (202) 452-3819 or (202) 452-3102.
     Mail: Robert deV. Frierson, 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 form in Room MP-
500 of the Board's Martin Building (20th and C Streets NW.) between 
9:00 a.m. and 5:00 p.m. on weekdays.

FOR FURTHER INFORMATION CONTACT: Mark Greiner (202-452-5290), Nancy 
Perkins (202-973-5006), or William Spaniel (202-452-3469), Division of 
Banking Supervision and Regulation; Laurie Schaffer, Associate General 
Counsel (202-452-2272) or Michelle Moss Kidd, Attorney (202-736-5554), 
Legal Division; Board of Governors of the Federal Reserve System, 20th 
and C Streets NW., Washington, DC 20551. Users of Telecommunication 
Device for the Deaf (TTD) only, contact (202) 263-4869.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Overview of Proposed Rule
II. Description of the Proposal
    A. Key Definitions
    1. Assessed Companies
    2. Total Assessable Assets
    3. Assessment Periods
    4. Assessment Basis
    B. Apportioning the Assessment Basis to Assessed Companies
    1. Apportionment Based on Size
    2. Assessment Formula
    C. Collection Procedures
    1. Notice of Assessment and Appeal Procedure
    2. Collection of Assessments
    D. Revisions to the FR Y-7Q
III. Administrative Law Matters
    A. Solicitation of Comments and Use of Plain Language
    B. Paperwork Reduction Act Analysis
    C. Regulatory Flexibility Act Analysis

I. Overview of Proposed Rule

    Section 318 of the Dodd-Frank Act directs the Board to collect 
assessments, fees, or other charges (assessments) from bank holding 
companies and savings and loan holding companies with $50 billion or 
more in total consolidated assets, and nonbank financial companies 
designated by the Council pursuant to section 113 of the Dodd-Frank Act 
for supervision by the Board \1\ (collectively, assessed companies) 
equal to the expenses the Board estimates are necessary or appropriate 
to carry out its supervision and regulation of those companies. This 
proposed rule outlines the Board's assessment program, including how 
the Board would: (a) Determine which companies would be subject to an 
assessment for each calendar-year assessment period, (b) estimate the 
total expenses that are necessary or appropriate to carry out the 
supervisory and regulatory responsibilities to be covered by the 
assessment, (c) determine the assessment for each of these companies, 
and (d) bill for and collect the assessment from these companies.
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    \1\ To date, the Council has not designated any nonbank 
financial company for Board supervision under section 113 of the 
Dodd-Frank Act.
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    Under the proposal, each calendar year would be an assessment 
period. Companies would be covered by this rule if the total 
consolidated assets for the company meets or exceeds $50 billion or the 
company has been designated for Board supervision by the Council during 
the assessment period. The Board proposes to notify those companies of 
the amount of their assessment no later than July 15 of the year 
following each assessment period. After an opportunity for appeal, 
assessed companies would be required to pay their assessments by 
September 30 of the year following the assessment period. The Board is 
proposing to collect assessments beginning with the 2012 assessment 
period. The Board believes that initiating the assessment program with 
the 2012 assessment period is appropriate as the Board has completed 
the development of a framework for the estimation of appropriate 
expenses and the collection of assessments. Additionally, the 2012 
assessment period would be the first full calendar-year assessment 
period subsequent to the effective date of section 318 of Dodd-Frank.
    The Board is inviting comments on all aspects of this proposed 
rulemaking.

[[Page 23163]]

II. Description of the Proposal

A. Key Definitions

1. Assessed Companies
    The Board would make the determination for each calendar-year 
period (the assessment period) that a company is a bank holding company 
or savings and loan holding company with total consolidated assets 
equal to or exceeding $50 billion, or a nonbank financial company 
designated for Board supervision by the Council, based on information 
reported by the company on regulatory or other reports as determined by 
the Board.\2\ In general, for each assessment period, the proposal 
would identify assessed companies as:

    \2\ All organizational structure and financial information that 
the Board would use for the purpose of determining whether a company 
is an assessed company, including information with respect to 
whether a company has control over a U.S. bank or savings 
association, must have been received by the Board on or before June 
30 following that assessment period and must reflect events that 
were effective on or before December 31 of the assessment period.

     A company that, on December 31 of the assessment 
period, is a top-tier bank holding company, other than a foreign 
bank holding company, as defined in section 2 of the Bank Holding 
Company Act,\3\ that has total consolidated assets of $50 billion or 
more as determined based on the average of the bank holding 
company's total consolidated assets reported for the assessment 
period on its Schedule HC--Consolidated Balance Sheet of the bank 
holding company's Consolidated Financial Statements for Bank Holding 
Companies (FR Y-9C) forms;
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    \3\ 12 U.S.C. 1841(a).
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     A company that, on December 31 of the assessment 
period, is a top-tier savings and loan holding company, other than a 
foreign savings and loan holding company, as defined in section 10 
of the Home Owners' Loan Act,\4\ that has total consolidated assets 
of $50 billion or more as determined based on the average of the 
savings and loan holding company's total consolidated assets 
reported for the assessment period on the savings and loan holding 
company's FR Y-9C forms, or in column B (consolidated) of the 
savings and loan holding company's Quarterly Savings and Loan 
Holding Company Report (FR 2320) forms, as applicable; \5\
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    \4\ 12 U.S.C. 1467.
    \5\ Generally, for multi-tiered bank holding companies and 
multi-tiered savings and loan holding companies in which a holding 
company owns or controls, or is owned or controlled by, other 
holding companies, the assessed company would be the top-tier, 
regulated holding company. If a U.S.-domiciled company does not 
report total consolidated assets in its public reports or uses a 
financial reporting methodology other than U.S. GAAP, the Board may 
use, at its discretion, any comparable financial information that 
the Board may require from the company for this determination. In 
situations where two or more unaffiliated companies control the same 
U.S. bank or savings association and each company has average total 
consolidated assets of $50 billion or more, each of the unaffiliated 
companies would be designated an assessed company. Generally, a 
company has control over a bank, savings association, or company if 
the company has (a) ownership, control, or power to vote 25 percent 
or more of the outstanding shares of any class of voting securities 
of the bank, savings association, or company, directly or indirectly 
or acting through one or more other persons; (b) control in any 
manner over the election of a majority of the directors or trustees 
of the bank, savings association, or company; or (c) the Board 
determines the company exercises, directly or indirectly, a 
controlling influence over the management or policies of the bank, 
savings association, or company. See 12 U.S.C. 1841(a)(2) (bank 
holding companies) and 12 U.S.C. 1467a(a)(2) (savings and loan 
holding companies).
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     A foreign company that, on December 31 of the 
assessment period, is a top-tier bank holding company that has total 
consolidated assets of $50 billion or more as determined based on 
the average of the foreign banking organization's total consolidated 
assets reported for the assessment period on the Capital and Asset 
Report for Foreign Banking Organizations (FR Y-7Q) submissions; \6\
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    \6\ For annual filers of the FR Y-7Q, the total consolidated 
assets would be determined from the foreign banking organization's 
FR Y-7Q annual submission for the calendar year of the assessment 
period.
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     A foreign company that, on December 31 of the 
assessment period, is a savings and loan holding company that has 
total consolidated assets of $50 billion or more as determined based 
on the average of the foreign savings and loan holding company's 
total consolidated assets reported for the assessment period on 
regulatory reporting forms required for the foreign savings and loan 
holding company; \7\ and
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    \7\ At present, there are no foreign savings and loan holding 
companies.
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     A company that is a nonbank financial company 
designated for supervision by the Board under section 113 of the 
Dodd-Frank Act on December 31 of the assessment period.

Relying on the average assets reported in the financial reports 
submitted over the entire yearly assessment period, where available, 
would reduce volatility in an assessed company's assets over the year 
and avoid overreliance on any particular quarter.\8\
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    \8\ A four-quarter average of a company's total consolidated 
assets also has been proposed for the definition of a covered 
company in the notice of proposed rulemaking for ``Enhanced 
Prudential Standards and Early Remediation Requirements for Covered 
Companies'' published in the Federal Register 77 FR 594 (January 5, 
2012). If an assessed company has not reported its total 
consolidated assets to the Board pursuant to one of the reporting 
forms named above, the Board may also use, at its discretion, other 
financial or annual reports filed by the company to determine a 
company's total consolidated assets. For example, the Board may use 
the Savings Association Holding Company Report (FR H-(b)11), or any 
filing filed with the Securities and Exchange Commission (SEC).
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    Question 1: What alternative decision criteria or procedures should 
the Board consider for determining whether a company is an assessed 
company, such as considering a greater or lesser number of regulatory 
reports, and why?
2. Total Assessable Assets
    The term ``total assessable assets'' means the amount of assets 
that will be used to calculate an assessed company's assessment. In 
order to collect assessments that reflect the Board's role as the 
consolidated supervisor of assessed companies, further described in 
Section A.4, total assessable assets would include total assets for all 
activities subject to the Board's supervisory authority as the 
consolidated supervisor. For a U.S.-domiciled assessed company, total 
assessable assets would be the company's total consolidated assets of 
its entire worldwide operations, determined by using an average of the 
total consolidated asset amounts reported in applicable regulatory 
reports for the assessment period.\9\ For a nonbank financial company 
supervised by the Board, total assessable assets would be the average 
of the nonbank financial company's total consolidated assets as 
reported during the assessment period on such regulatory or other 
reports as determined by the Board.\10\ Similarly, at such time as any 
foreign savings and loan holding company becomes an assessed company, 
total assessable assets would be the average of the foreign savings and 
loan holding company's total combined assets of U.S. operations as 
reported during the assessment period on such regulatory reports as are 
applicable to the foreign savings and loan holding company.\11\
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    \9\ For assessed companies that are grandfathered unitary 
savings and loan holding companies, the Board would only include 
assets associated with its savings association subsidiary and its 
other financial activities.
    \10\ If the nonbank financial company supervised by the Board 
under section 113 of the Dodd-Frank Act is a foreign company, its 
assessable assets would be the average of the foreign nonbank 
financial company's U.S. assets as reported during the assessment 
period. As the Council begins to designate nonbank financial 
companies under section 113, the Board's methodology for determining 
the assessments for these companies would be reviewed and, as 
needed, revised.
    \11\ If any foreign savings and loan holding company becomes an 
assessed company, the Board's methodology for determining the 
assessments for these companies would be reviewed and, as needed, 
revised.
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    For a foreign bank holding company, total assessable assets would 
be equal to the company's total combined assets of U.S. operations,\12\ 
including U.S. branches and agencies, as the Board has supervisory and 
regulatory responsibilities for the company's U.S. activities. Foreign 
bank holding companies do not currently submit a

[[Page 23164]]

single regulatory reporting form that reports the total combined assets 
of their U.S. operations for which the Board has supervisory and 
regulatory authority.\13\ In order to determine a foreign bank holding 
company's total assessable assets for the 2012 and 2013 assessment 
periods, a foreign bank holding company's total assessable assets would 
be the average of the total combined assets of U.S. operations, net of 
U.S. intercompany balances and transactions (as allowed \14\), from the 
stand alone regulatory reporting form for, specifically: \15\
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    \12\ A foreign bank holding company's total assessable assets 
would not include the assets of section 2(h)(2) companies as defined 
in section 2(h)2 of the Bank Holding Company Act (12 U.S.C. 
1841(h)(2)).
    \13\ Currently, foreign bank holding companies, as foreign 
banking organizations, report total consolidated assets of worldwide 
operations on the FR Y-7Q, which the proposal would use for 
determining whether a foreign bank holding company is an assessed 
company.
    \14\ Net intercompany balances and transactions between a U.S. 
entity and a foreign affiliate would not be eliminated, as such 
balances and transactions would not result in double counting of 
assets on a U.S.-combined basis. If any standalone regulatory 
reporting form does not itemize intercompany balances and 
transactions between U.S.-domiciled affiliates, branches or 
agencies, this proposal would not eliminate intercompany balances 
and transactions reported on that form from the calculation of total 
assessable assets. For regulatory reporting forms that do not 
distinguish between (i) balances and transactions between U.S. 
affiliates, and (ii) balances and transactions between a U.S 
affiliate and a foreign affiliate, the Board would not eliminate any 
such balances or transactions between affiliates reported on the 
form because it would be impossible to distinguish between assets 
that would result in double counting and assets that would not 
result in double counting.
    \15\ The proposed approach would exclude from the sum the assets 
of entities for which a stand-alone regulatory report has been 
filed, but whose assets are reflected in the consolidated balance 
sheet of a U.S.-domiciled higher-tier regulatory reporting form 
filer.

     A top-tier, U.S.-domiciled bank holding company or 
U.S.-domiciled savings and loan holding company; \16\
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    \16\ Total assets for each U.S.-domiciled, top-tier bank holding 
company or savings and loan holding company would be the company's 
total assets as reported on line item 12, Schedule HC of the FR Y-
9C, or as reported on line item 1, column B, of the FR 2320, as 
applicable.
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     U.S. branches and agencies; \17\
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    \17\ Total assets for each branch or agency would be calculated 
as total claims of nonrelated parties (line item 1.i from column A 
on Schedule RAL) plus due from related institutions in foreign 
countries (line items 2.a, 2.b(1), 2.b(2), and 2.c from column A, 
part 1 on Schedule M), as reported on the Report of Assets and 
Liabilities of U.S. Branches and Agencies of Foreign Banks (FFIEC 
002). Note that due from head office of parent bank (line item 2.a, 
column A, part 1 on Schedule M) would be included net of due to head 
office of parent bank (line item 2.a, column B, part 1 on Schedule 
M) when there is a net due from position reported for line item 2.a. 
A net due to position for line item 2.a would result in no addition 
to total assets with respect to line item 2.a, part 1 on Schedule M.
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     U.S.-domiciled nonbank subsidiaries; \18\
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    \18\ For quarterly Financial Statements of U.S. Nonbank 
Subsidiaries Held by Foreign Banking Organizations (FR Y-N) filers, 
total assets for each nonbank subsidiary would be calculated as 
total assets (line item 10, Schedule BS), minus balances due from 
related institutions located in the United States, gross (line item 
4.a of Schedule BS-M) of the FR Y-7N. For annual Abbreviated 
Financial Statements of U.S. Nonbank Subsidiaries Held by Foreign 
Banking Organizations (FR Y-NS) filers, total assets for each 
nonbank subsidiary would be as reported on line item 2 of the FR Y-
7NS. Until foreign assessed companies report on the revised form FR 
Y-7Q described in this proposal, the Board would only include the 
assets of affiliates for which the foreign assessed company is the 
majority owner, as the Board would not have sufficient information 
to accurately account for non-majority-owned affiliates.
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     Edge Act and Agreement Corporations; \19\ U.S. banks 
and U.S. savings associations; \20\ and broker-dealers that are not 
reflected in the assets of a U.S. domiciled parent's regulatory 
reporting form submission.\21\
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    \19\ Total assets for each Edge Act or agreement corporation 
would be the sum of claims on nonrelated organizations (line item 9, 
``consolidated total'' column on Schedule RC of the Consolidated 
Report of Condition and Income for Edge Act and agreement 
corporations (FR 2886b)), and claims on related organizations 
domiciled outside the United States (line items 2.a and 2.b, column 
A on Schedule RC-M), as reported on FR 2886b.
    \20\ Total assets for each bank or savings association that is 
not a subsidiary of a U.S.-domiciled bank holding company or savings 
and loan holding company would be the bank's or savings 
association's total assets as reported on line item 12, Schedule RC 
of the Balance Sheet of the Consolidated Reports of Condition and 
Income (FFIEC 031 or FFIEC 041, as applicable).
    \21\ Total assets for each broker-dealer would be the broker-
dealer's total assets as reported on the statement of financial 
condition of the SEC's FOCUS Report, Part II (Form X-17A-5), FOCUS 
Report, Part IIa (Form X-17A-5), or FOCUS Report, Part II CSE (Form 
X-17A-5).

    For assessment periods after 2013, the Board proposes to modify the 
FR Y-7Q by adding a line item for reporting the total combined assets 
of a foreign banking organization's U.S. operations, consistent with 
the Board's supervisory and regulatory authority over foreign banking 
organizations' U.S. operations.
    Question 2: What, if any, challenges does the proposed approach 
present for determining the total assessable assets of an assessed 
company, foreign or domestic?
    Question 3: What, if any, specific concerns arise for assessed 
companies that are primarily non-depository firms, and what method of 
determining total assessable assets should be considered for those 
companies and why?
3. Assessment Periods
    Under the proposed rule, each calendar year would be an assessment 
period. For each assessment period, the Board would make a 
determination as to whether an entity is an assessed company for that 
assessment period. The Board anticipates that the population of 
assessed companies will be relatively stable, and it is likely that an 
entity that is an assessed company during one assessment period will be 
an assessed company for following assessment periods. Nevertheless, 
some entities with average total consolidated assets near the $50 
billion threshold might be included in one assessment period and not in 
another.
    The Board would determine which companies, as of December 31 of the 
prior calendar year, (i) were of the types of entities enumerated in 
the rule (i.e., a bank holding company, savings and loan holding 
company, or designated nonbank financial company subject to Board 
supervision) and (ii) had average total consolidated assets equal to or 
exceeding the $50 billion threshold, as reported on the relevant 
reporting form(s) or based on other information as the Board may 
consider. The Board would notify each company that it is an assessed 
company by July 15 of each calendar year following the assessment 
period.
    Question 4: What, if any, burdens are created for assessed 
companies by the Board's use of December 31 as the ``as of'' date for 
determining assessed companies and notifying assessed companies on July 
15 of the following year? What alternative dates or methodologies 
should the Board consider and why?
    Question 5: For companies near $50 billion in total consolidated 
assets, what, if any, concerns are associated with not being certain 
whether the company would be an assessed company from one assessment 
period to another and what alternatives might mitigate those concerns?
4. Assessment Basis
    The assessment basis means the applicable estimated expenses \22\ 
of the Board and the Reserve Banks (to which the Board has delegated 
supervisory responsibility) as consolidated supervisor of assessed 
companies. The assessment basis would include necessary or appropriate 
expenses associated with consolidated regulation and supervision of all 
assessed companies. In order to determine the assessment basis, the 
Board would estimate its aggregate expenses for activities related to 
the supervision and regulation of the entire population of assessed 
companies. These expenses include, but are not limited to: conducting 
onsite and offsite examinations, inspections, visitations and reviews; 
providing ongoing supervision; meeting and corresponding regarding 
supervision matters; conducting stress tests; assessing resolution 
plans; developing, administering, interpreting and

[[Page 23165]]

explaining regulations, laws, and supervisory guidance adopted by the 
Board; engaging in enforcement actions; processing and analyzing 
applications and notices, including conducting competitive analyses and 
financial stability analyses of proposed bank and bank holding company 
mergers, acquisitions, and other similar transactions; processing 
consumer complaints; and implementing a macro-prudential supervisory 
approach.\23\ In addition, the estimated expenses for the assessment 
basis would include a share of expenses associated with activities that 
are integral to carry out the supervisory and regulatory 
responsibilities of the Board, even when those expenses are not 
directly attributable to specific companies.\24\ For those activities, 
the Board would calculate the relative proportion of expenses that are 
attributable to assessed companies divided by expenses for those 
activities that are attributable to all companies and entities 
supervised by the Board, and apply that proportion to the shared 
expenses.
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    \22\ Expenses include all direct operating expenses, including 
support, overhead, and pension expenses.
    \23\ The Board's costs with respect to supervising state member 
banks and branches and agencies of foreign banking organizations are 
excluded from the assessment basis because such costs are not 
attributable to the Board's role as consolidated supervisor of the 
parent company. However, as such assets and the assets of the 
company's other depository institutions, nonbank subsidiaries, and 
other similar entities contribute to the costs incurred by the Board 
as the consolidated supervisor, such assets are therefore included 
in total assessable assets.
    \24\ These activities include (i) the Shared National Credit 
(SNC) Program, which the Board and the other federal banking 
agencies established in 1977 to promote the efficient and consistent 
review and classification of shared national credits; (ii) the 
training of staff in the supervision function; (iii) research, 
analysis, and development of supervisory and regulatory policies, 
procedures, and products of the Board; and (iv) collecting, 
receiving, and processing regulatory reports received from 
institutions supervised and regulated by the Board.
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    For each assessment period, the Board's assessment basis would be 
the Board's estimate of the total expenses necessary or appropriate to 
carry out the supervisory and regulatory responsibilities of the Board 
with respect to the population of assessed companies, based on an 
average of estimated expenses over the current and prior two assessment 
periods. For the 2012 assessment period, the Board estimates that the 
assessment basis would be approximately $440 million. Thereafter, to 
mitigate volatility in assessments and provide a more stable basis from 
year to year, the Board would calculate a three-year average of its 
estimated expenses, and would determine assessments for each year based 
on that three-year average. Thus, as an example, the assessment basis 
for 2015 would be the average of the Board's estimated expenses 
relating to assessed companies from calendar years 2013, 2014, and 
2015. For the assessment bases for calendar years 2012, 2013, and 2014, 
the Board would use the estimate of its expenses for 2012, the first 
year for which it will collect assessments.\25\ The Board expects to 
evaluate the volatility in assessment fees resulting from its 
methodology for determining the assessment basis on an ongoing basis 
and may refine its methodology as appropriate through the rulemaking 
process.
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    \25\ As explained further in section B.2, the Board would also 
use the 2012 assessment rate to calculate each assessed company's 
assessment in 2013 and 2014.
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B. Apportioning the Assessment Basis to Assessed Companies

1. Apportionment Based On Size
    In general, total expenses relating to the supervision of a company 
are a function of the size and associated complexity of the company. 
For example, for companies with assets of $50 billion or more, 
supervision typically consists of onsite teams with a continuous 
presence at the firm, offsite surveillance and monitoring, and a series 
of targeted onsite examinations conducted throughout the year that 
focus on individual areas of operations and risk. Larger companies are 
often more complex companies, with associated risks that play a large 
role in determining the supervisory resources needed for that company. 
The largest companies, because of their increased complexity, risk and 
geographic footprints, usually receive more supervisory attention. For 
example, a number of regulations in development to implement provisions 
of the Dodd-Frank Act are directed at financial institutions with total 
consolidated assets of $50 billion or more and nonbank companies 
designated for supervision by the Board, and some of these regulations 
are tailored further based on the size of a company.\26\
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    \26\ See, e.g., ``Capital Plans,'' final rule published in the 
Federal Register 76 FR 231 (Dec. 1, 2011), ``Credit Risk 
Retention,'' proposal published in the Federal Register 76 FR 83 
(April 29, 2011), and ``Enhanced Prudential Standards and Early 
Remediation Requirements for Covered Companies,'' proposal published 
in the Federal Register 77 FR 594 (January 5, 2012).
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    Apportioning the assessment basis based on the total consolidated 
asset size of the assessed companies is generally reflective of the 
amount of supervisory and regulatory expenses associated with a 
particular company, and generally is information that is well 
understood, objective, transparent, readily available, and comparable 
among all types of assessed companies. As a result, the Board proposes 
to determine assessments based on the assessed companies' total 
assessable assets for the assessment period.
    Question 6: What, if any, alternatives to a total consolidated 
assets measure should the Board consider for apportioning the 
assessment basis among assessed companies and why?
2. Assessment Formula
    The proposal would apportion the assessment basis among assessed 
companies by means of an assessment formula that uses the total 
assessable asset size of each assessed company. For each assessment 
period, the assessment formula applied to the assessed companies is 
proposed to be:

Assessment = $50,000 + (Assessed Company's Total Assessable Assets x 
Assessment Rate).

    Each company's assessment would be computed using a base amount of 
$50,000 for each assessed company. The Board believes that including 
this base amount in each assessment is appropriate to ensure that the 
nominal expenses related to the Board's supervision and regulation of 
such companies, particularly for those companies that are near the $50 
billion threshold, are covered. The ``assessment rate'' would be 
determined each assessment period according to this formula:
[GRAPHIC] [TIFF OMITTED] TP18AP13.002


[[Page 23166]]


The assessment rate would be determined by dividing the assessment 
basis (minus the base amount that covers nominal expenses times the 
number of assessed companies) by the total assessable assets of all 
assessed companies to determine a ratio of Board expenses to total 
assets for each assessment period, and then multiplies an assessed 
company's total assessable assets by the resulting assessment rate. 
Thus, a company with higher total assessable assets would be charged a 
higher assessment than a company with lower total assessable assets, 
which generally reflects the greater supervisory and regulatory 
attention and associated workloads and expenses associated with larger 
companies. The assessment represents a cost to the assessed companies. 
This cost, however, as mandated by section 318 of the Dodd-Frank Act, 
is for the purpose of collecting the estimated expenses of supervising 
and regulating assessed companies.
    Over the first three years of the program, the assessment rate 
would be fixed. After the Board determines the assessment rate for 
2012, it would use that assessment rate for calculating the assessment 
for the following two assessment periods, ending with the assessments 
for 2014. Thereafter, for each assessment period, the Board would 
calculate an assessment rate by averaging the Board's relevant expenses 
for the past three years. Keeping the same assessment rate for the 
first three years and the subsequent three-year average would reduce 
year-to-year fluctuations in assessments.
Assessment Calculation Example
    For purposes of illustration, using the methodologies set forth in 
this proposal and based on information as of the date of this notice of 
proposed rulemaking, the Board estimates that for 2012 there would be 
approximately 70 assessed companies with aggregate total assessable 
assets of about $20 trillion and that the assessment basis would be 
about $440 million. Using these figures, a company with total 
assessable assets of $50 billion \27\ would be required to pay an 
assessment of approximately $1 million and a company with total 
assessable assets of $1 trillion would be required to pay an assessment 
of approximately $22 million.
---------------------------------------------------------------------------

    \27\ Total assessable assets could be less than $50 billion for 
foreign companies with total consolidated worldwide assets of $50 
billion or more, but total combined U.S. assets of less than $50 
billion.
---------------------------------------------------------------------------

    Question 7: What alternatives should the Board consider for 
differentiating assessments among assessed companies (for example, a 
tiered fee structure), and why?
    Question 8: What alternative approaches to the three-year average 
should the Board consider for reducing volatility in assessments for 
assessed companies, and why?
    Question 9: Does the Board's proposal to use the same assessment 
rate for the first three years permit adequate preparation for assessed 
companies, and if not, what should the Board consider in initiating its 
assessments system?

C. Collection Procedures

1. Notice of Assessment and Appeal Procedure
    Under the proposal, the Board would send a notice of assessment to 
each assessed company no later than July 15 of the year following the 
assessment period stating that the Board had determined the company to 
be an assessed company for the prior calendar year, stating the amount 
of the company's total assessable assets and the amount the assessed 
company must pay by September 30. The Board would also, no later than 
July 15, publish on its Web site the assessment formula for that 
assessment period. For the 2012 assessment period, the notice of 
assessment and the date on which the assessment is due may be adjusted 
depending on the date of the issuance of the final regulation.
    Companies identified as assessed companies would have 30 calendar 
days from July 15 to appeal the Board's determination of the company as 
an assessed company or the Board's determination of the company's total 
assessable assets. Under the proposal, companies choosing to appeal 
must submit a request for redetermination in writing and include all 
the pertinent facts the company believes would be relevant for the 
Board to consider. Grounds for appeal would be limited to (i) whether 
the assessed company was not properly considered an assessed company 
(i.e., it is not a bank holding company, savings and loan holding 
company, or nonbank financial company designated by the Council as of 
December 31 of the assessment period), or (ii) review of the Board's 
determination of the assessed company's total assessable assets. The 
Board would consider the company's request and respond within 15 
calendar days from the end of the appeal period with the results of its 
review of any properly filed appeal. A successful appeal would not 
change the assessment for any other company.
2. Collection of Assessments
    Under the proposal, each assessed company would pay its assessments 
using the Fedwire Funds Service (Fedwire) to the Federal Reserve Bank 
of Richmond. The assessments will then be transferred to the U.S. 
Treasury's General Account. Assessments must be credited to the Board 
by September 30 of the year following the assessment period.\28\ In the 
event that the Board does not receive the full amount of an assessed 
company's assessment by the payment date for any reason that is not 
attributable to an action of the Board, the assessment would be 
considered delinquent and the Board would charge interest on the 
delinquent assessment until the assessment and interest, calculated 
daily from the collection date and based on the U.S. Treasury 
Department's current value of funds rate percentage, is paid.
---------------------------------------------------------------------------

    \28\ As stated above, this date may be adjusted for the 2012 
assessment period to accommodate the final rulemaking.
---------------------------------------------------------------------------

    Question 10: What alternative approaches or additional factors 
should the Board consider for the billing and collection of assessments 
and why?
Revisions to the FR Y-7Q
    The FR Y-7Q requires each top-tier foreign banking organization to 
file asset and capital information. Currently, Part 1 of the report 
requires the filing of capital and asset information for the top-tier 
foreign banking organization,\29\ while Part 2 requires capital and 
asset information for lower-tier foreign banking organizations 
operating a branch or an agency, or owning an Edge Act or Agreement 
Corporation, a commercial lending company, or a commercial bank 
domiciled in the United States.\30\ As explained in the reporting 
instructions for the FR Y-7Q, both Part 1 and Part 2 of the reporting 
form collect capital and asset information with respect to the foreign 
banking organization's worldwide operations. However, neither Part 1 or 
Part 2 collects capital and asset information with respect to only the

[[Page 23167]]

foreign banking organization's U.S. operations.
---------------------------------------------------------------------------

    \29\ This form is reported annually by each top-tier foreign 
banking organization if it or any foreign banking organization in 
its tiered structure has not elected to be a financial holding 
company, and is reported quarterly by each top-tier foreign banking 
organization if it or any foreign banking organization in its tiered 
structure has elected to be a financial holding company.
    \30\ Reported quarterly by each lower-tier foreign banking 
organization (where applicable) operating a branch or an agency, or 
owning an Edge Act or Agreement corporation, a commercial lending 
company, or a commercial bank domiciled in the United States, if it 
or any foreign banking organization in its tiered structure has 
financial holding company status.
---------------------------------------------------------------------------

    For the purpose of determining a foreign assessed company's total 
assessable assets, the Board believes that combining the assets of the 
foreign assessed company's U.S. branches and agencies with the total 
assets of all U.S. domiciled affiliates reported on other regulatory 
reports on a standalone basis would likely not yield a result that is 
comparable to the consolidated approach required of U.S.-domiciled 
assessed companies, which report total consolidated assets on Schedule 
HC of FR Y-9C according to standard rules of consolidation. That is, 
not all standalone reports itemize separately the intercompany balances 
and transactions between only U.S. affiliates that would be netted out 
on a U.S. consolidated basis. Therefore, in order to improve parity 
among all assessed companies with respect to the determination of total 
assessable assets, the Board is proposing to revise Part 1 of the FR Y-
7Q to collect the top-tier foreign banking organization's total 
combined assets of U.S. operations,\31\ net of intercompany balances 
and transactions between U.S. domiciled affiliates, branches and 
agencies.\32\ The instructions for the amended FR Y-7Q will closely 
parallel, to all practicable extents, the instructions for the FR Y-9C 
for consolidating assets of U.S. operations, including for accounting 
for less-than-majority-owned affiliates.
---------------------------------------------------------------------------

    \31\ For purposes of the amended FR Y-7Q, total combined assets 
would not include the assets of section 2(h)(2) companies as defined 
in section 2(h)(2) of the Bank Holding Company Act (12 U.S.C. 
1841(h)(2)).
    \32\ For purposes of FR Y-7Q reporting, U.S.-domiciled 
affiliates would be defined as subsidiaries, associated companies, 
and entities treated as associated companies (e.g., corporate joint 
ventures) as defined in the FR Y-9C.
---------------------------------------------------------------------------

    In addition, the Board is proposing to revise Part 1 of the FR Y-7Q 
to collect information about certain foreign banking organizations more 
frequently. As mentioned above, only top-tier foreign banking 
organizations with financial holding company status file Part 1 of the 
FR Y-7Q quarterly, while a top-tier foreign banking organization would 
report annually if the foreign banking organization, or any foreign 
banking organization in its tiered structure, has not effectively 
elected to be a financial holding company. Accordingly, for purposes of 
determining whether a foreign banking organization is an assessed 
company and the amount of a foreign assessed company's total assessable 
assets more frequent than annually, the Board is proposing to revise 
the FR Y-7Q quarterly reporting requirements for Part 1 to include all 
top-tier foreign banking organizations, regardless of financial holding 
company designation, with total consolidated worldwide assets of $50 
billion or more as reported on Part 1 of the FR Y-7Q. Once a foreign 
banking organization has total consolidated assets of $50 billion or 
more and begins to report quarterly, the foreign banking organization 
must continue to report Part 1 quarterly unless and until the foreign 
banking organization has reported total consolidated assets of less 
than $50 billion for each of all four quarters in a full calendar year. 
Thereafter, the foreign banking organization may revert to annual 
reporting, in accordance with the FR Y-7Q reporting form's instructions 
for annual reporting of Part 1. If at any time, after reverting to 
annual reporting, a foreign banking organization has total consolidated 
assets of $50 billion or more, the FBO must return to quarterly 
reporting of Part 1. Regardless of size, all top-tier foreign banking 
organizations that have elected to be financial holding companies at 
the foreign banking organization's top tier or tiered structure would 
continue to report quarterly.
    Question 11: What changes, if any, should be made to the proposal 
to ensure consistency and accuracy of determining foreign bank holding 
company assets in a manner that is most comparable to U.S.-domiciled 
bank holding companies?
    Question 12: The Board requests comment on all aspects of the 
proposed rule. Specifically, what aspects of the proposed rule present 
implementation challenges and why? What, if any, alternative approaches 
should the Board consider? Responses should be detailed as to the 
nature and impact of these challenges and should address whether the 
Board should consider implementing additional transitional arrangements 
in the rule to address these challenges.

III. Administrative Law Matters

A. Solicitation of Comments and Use of Plain Language

    Section 722 of the Gramm-Leach-Bliley Act (Pub. L. 106-102, 113 
Stat. 1338, 1471, 12 U.S.C. 4809) requires the Federal banking agencies 
to use plain language in all proposed and final rules published after 
January 1, 2000. The Board invites comment on how to make the proposed 
rule easier to understand. For example:

     Is the material organized to suit your needs? If not, 
how could the Board present the rule more clearly?
     Are the requirements in the rule clearly stated? If 
not, how could the rule be more clearly stated?
     Do the regulations contain technical language or jargon 
that is not clear? If so, which language requires clarification?
     Would a different format (grouping and order of 
sections, use of headings, paragraphing) make the regulation easier 
to understand? If so, what changes would achieve that?
     Is this section format adequate? If not, which of the 
sections should be changed and how?
     What other changes can the agencies incorporate to make 
the regulation easier to understand?

B. Paperwork Reduction Act Analysis

    In accordance with the Paperwork Reduction Act of 1995 (PRA) (44 
U.S.C. 3506; 5 CFR 1320 Appendix A.1), the Board reviewed the proposed 
rule under the authority delegated to the Board by Office of Management 
and Budget (OMB). The Board may not conduct or sponsor, and a 
respondent is not required to respond to, an information collection 
unless it displays a currently valid OMB control number.
    The proposed rule contains requirements subject to the PRA. The 
reporting requirements are found in sections 246.3(e)(3) and 246.5(b).
1. Reporting Requirements in 246.3(e)(3)
    Section 318 of the Dodd-Frank Act directs the Board to collect 
assessments, fees, or other charges, from assessed companies equal to 
the expenses the Board estimates would be necessary and appropriate to 
carry out its supervision and regulation of those companies. Section 
318 describes these companies as (1) a bank holding company (BHC) 
(other than a foreign bank holding company) with total consolidated 
assets of $50 billion or more determined based on the average of the 
BHC's total consolidated assets reported during the assessment period 
on its Schedule HC--Consolidated Balance Sheet of the BHC's 
Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) 
(OMB No. 7100-0128) forms; (2) a savings and loan holding company 
(SLHC) (other than a foreign savings and loan holding company) with 
total consolidated assets of $50 billion or more, (3) a foreign company 
that is a BHC or SLHC with $50 billion or more in total consolidated 
assets determined based on the average of the foreign company's total 
consolidated assets reported during the assessment period on the 
Capital and Asset Report for Foreign Banking Organizations (FR Y-7Q; 
OMB No. 7100-0125) and (4) a nonbank financial company designated for 
supervision by the Board under section 113 of the Dodd-Frank Act. In

[[Page 23168]]

order to improve parity among all assessed companies with respect to 
the determination of total assessable assets, the Board proposes to 
revise Part 1 of the FR Y-7Q to collect a new data item from top-tier 
FBO's--Total combined assets of U.S. operations, net of intercompany 
balances and transactions between U.S. domiciled affiliates, branches 
and agencies. In addition, the Board proposes to revise the reporting 
panel for Part 1 of the FR Y-7Q to collect information about certain 
FBOs more frequently (from annual reporting to quarterly reporting) for 
purposes of determining whether a FBO is an assessed company. All top-
tier FBOs, regardless of financial holding company designation, with 
total consolidated worldwide assets of $50 billion or more as reported 
on Part 1 of the FR Y-7Q would be required to submit data quarterly. 
The Board estimates that 71 FBOs would initially be required to change 
from annual reporting to quarterly reporting.\33\ The Board estimates 
that, upon implementation of the new data item, 109 FBOs would 
initially submit the FR Y-7Q on a quarterly basis. In addition, the 
Board estimates that 43 FBOs would initially submit the FR Y-7Q on an 
annual basis upon implementation of the new data item. The Board 
estimates that it would take, on average, 15 minutes per submission to 
report the new data item. The total annual reporting burden associated 
with the revisions to the FR Y-7Q is estimated to be 393 hours.
---------------------------------------------------------------------------

    \33\ Once an FBO reports total consolidated assets of $50 
billion or more and begins to report quarterly, the FBO must 
continue to report Part 1 quarterly unless and until the FBO has 
reported total consolidated assets of less than $50 billion for each 
of all four quarters in a full calendar year. Thereafter, the FBO 
may revert to annual reporting.
---------------------------------------------------------------------------

2. Reporting Requirements in 246.5(b)
    Under section 246.5(b) upon the Federal Reserve issuing the notice 
of assessment to each assessed company, the company would have 30 
calendar days to submit a written statement to appeal the Board's 
determination of the company as (i) a BHC, SLHC, foreign bank holding 
company, or nonbank financial company supervised by the Board; (ii) the 
Board's determination of the company's total consolidated assets, or 
(iii) the Board's determination of the company's total assessable 
assets, as set forth in 246.4(e) of this rule. This new collection 
would be titled the Dodd-Frank Act Assessment Fees Request for 
Redetermination (FR 4030; OMB No. 7100--to be assigned).
    The Board estimates that 7 assessed companies would submit a 
written request for appeal annually. The Board estimates that these 
assessed companies would take, on average, 40 hours (one business week) 
to write and submit the written request. The total annual PRA burden 
for the new FR 4030 information collection is estimated to be 280 
hours.
    Comments are invited on: (1) Whether the proposed collection of 
information is necessary for the proper performance of the Board's 
functions, including whether the information has practical utility; (2) 
the accuracy of the Board's estimate of the burden of the proposed 
information collection, including the cost of compliance; (3) ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and (4) ways to minimize the burden of information 
collection on respondents, including through the use of automated 
collection techniques or other forms of information technology. 
Comments on the collection of information should be sent to Cynthia 
Ayouch, Federal Reserve Board Clearance Officer, Division of Research 
and Statistics, Mail Stop 95-A, Board of Governors of the Federal 
Reserve System, Washington, DC 20551. Copies of such comments may also 
be submitted to the Office of Management and Budget, 725 17th St. NW., 
10235 (Docket FRB Docket No. R-1457), Washington, DC 20503, 
Attn: Federal Reserve Desk Officer.

C. Regulatory Flexibility Act

    In accordance with Section 3(a) of the Regulatory Flexibility Act, 
5 U.S.C. 601 et seq. (``RFA''), the Board is publishing an initial 
regulatory flexibility analysis for the proposed rule. The RFA requires 
an agency to provide an initial regulatory flexibility analysis with 
the proposed rule or to certify that the proposed rule will not have a 
significant economic impact on a substantial number of small entities.
    Based on its analysis and for the reasons stated below, the Board 
believes that this proposed rule would not have a significant economic 
impact on a substantial number of small entities. A final regulatory 
flexibility analysis will be conducted after consideration of comments 
received during the public comment period if the Board determines that 
the rule will have a significant economic impact on a substantial 
number of small entities.
    1. Statement of the objectives of the proposal. As required by 
section 318 of the Dodd-Frank Act, the Board is proposing a rule to 
assess bank holding companies and savings and loan holding companies 
with assets of equal to or greater than $50 billion and nonbank 
financial companies supervised by the Board for the total expenses the 
Board estimates are necessary or appropriate to carry out the 
supervisory and regulatory responsibilities of the Board with respect 
to such companies.
    2. Small entities affected by the proposal. Under regulations 
issued by the Small Business Administration, a banking entity is 
considered ``small'' if it has $175 million or less in assets for banks 
and other depository institutions; and $7 million or less in revenues 
for nonbank mortgage lenders.\34\ The proposed rule, by definition, 
will affect bank holding companies and savings and loan holding 
companies with assets of equal to or greater than $50 billion. The 
proposed rule also will affect nonbank financial companies supervised 
by the Board under section 113 of the Dodd-Frank Act but it is unlikely 
that such an institution would be considered ``small'' by the Small 
Business Administration. The Board invites comment on the effect of the 
proposed rule on small entities.
---------------------------------------------------------------------------

    \34\ 13 CFR 121.201.
---------------------------------------------------------------------------

    3. Recordkeeping, reporting, and compliance requirements. The 
Board's proposed rule is unlikely to impose any new recordkeeping, 
reporting, or compliance requirements. As stated above, a small banking 
entity is unlikely to be affected by the proposed rule. The Board seeks 
information and comment on any changes in recordkeeping, reporting, and 
compliance requirements arising from the application of the proposed 
rule to small entities.
    4. Other Federal rules. The Board has not identified any Federal 
rules that duplicate, overlap, or conflict with the proposed revisions 
of the proposed rule.
    5. Significant alternatives to the proposed revisions. The Board 
believes that no alternatives to the proposed rule are available for 
consideration. The Board nevertheless welcomes comments on any 
significant alternatives, consistent with the requirements of the Dodd-
Frank Act that would minimize the impact of the proposed rule on small 
entities.

List of Subjects in 12 CFR Part 246

    Administrative practice and procedure, Assessments, Banks, Banking, 
Holding companies, Nonbank financial companies, Reporting and 
recordkeeping requirements.

    For the reasons stated in the preamble, the Board proposes to amend 
12 CFR chapter II as follows:

0
1. Add new Part 246 to read as follows:

[[Page 23169]]

PART 246--SUPERVISION AND REGULATION ASSESSMENTS OF FEES 
(REGULATION TT)

Sec.
246.1 Authority, purpose and scope.
246.2 Definitions.
246.3 Assessed Companies.
246.4 Assessments.
246.5 Notice of Assessment and Appe
246.6 Collection of Assessments; Payment of Interest.

    Authority: Pub. L. 111-203, 124 Stat. 1376, 1526, and section 
11(s) of the Federal Reserve Act (12 U.S.C. 248(s)).

Part A--In General


Sec.  246.1  Authority, purpose and scope.

    (a) Authority. This part (Regulation TT) is issued by the Board of 
Governors of the Federal Reserve System (Board) under section 318 of 
Title III of the Dodd-Frank Wall Street Reform and Consumer Protection 
Act (the Dodd-Frank Act) (Pub. L. 111-203, 124 Stat. 1376, 1423-32, 12 
U.S.C. 5365 and 5366) and section 11(s) of the Federal Reserve Act (12 
U.S.C. 248(s)).
    (b) Scope. This part applies to:
    (1) Any bank holding company having total consolidated assets of 
$50 billion or more, as defined below;
    (2) Any savings and loan holding company having total consolidated 
assets of $50 billion or more, as defined below; and
    (3) Any nonbank financial company supervised by the Board, as 
defined below.
    (c) Purpose. This part implements provisions of section 318 of the 
Dodd-Frank Act that direct the Board to collect assessments, fees, or 
other charges from companies identified in subsection (b) that are 
equal to the total expenses the Board estimates are necessary or 
appropriate to carry out the supervisory and regulatory 
responsibilities of the Board with respect to these assessed companies.


Sec.  246.2  Definitions.

    (a) Bank holding company is defined as in section 2 of the Bank 
Holding Company Act, as amended (12 U.S.C. Sec.  1841), and the Board's 
Regulation Y (12 CFR part 225).
    (b) Company means a corporation, partnership, limited liability 
company, depository institution, business trust, special purpose 
entity, association, or similar organization.
    (c) Council means the Financial Stability Oversight Council 
established by section 111 of the Dodd-Frank Act (12 U.S.C. Sec.  
5321).
    (d) Foreign bank holding company means a foreign bank or company 
that is a bank holding company.
    (e) Foreign savings and loan holding company means a foreign bank 
or foreign company that is a savings and loan holding company.
    (f) Grandfathered unitary savings and loan holding company means a 
savings and loan holding company described in section 10(c)(9)(C) of 
the Home Owners' Loan Act (``HOLA'') (12 U.S.C. Sec.  1467a(c)(9)(C).
    (g) Notice of assessment means the notice in which the Board 
informs a company that it is an assessed company and states the 
assessed company's total assessable assets and the amount of its 
assessment.
    (h) Savings and loan holding company is defined as in section 10 of 
HOLA (12 U.S.C. Sec.  1467a).
    (i) Savings association means a savings association, as defined in 
12 U.S.C. Sec.  1813 of this title.


Sec.  246.3  Assessed Companies

    (a) Assessed companies. An assessed company is any company that:
    (1) is a top-tier company that, on December 31 of the assessment 
period:
    (i) is a bank holding company, other than a foreign bank holding 
company, with $50 billion or more in total consolidated assets, as 
determined based on the average of the bank holding company's total 
consolidated assets reported for the assessment period on the Federal 
Reserve's Form FR Y-9C (``FR Y-9C''),
    (ii) is a savings and loan holding company, other than a foreign 
savings and loan holding company, with $50 billion or more in total 
consolidated assets, as determined based on the average of the savings 
and loan holding company's total consolidated assets as reported for 
the assessment period on the FR Y-9C or on column B of the Quarterly 
Savings and Loan Holding Company Report (FR 2320), as applicable,
    (2) is a top-tier foreign bank holding company on December 31 of 
the assessment period, with $50 billion or more in total consolidated 
assets, as determined based on the average of the foreign bank holding 
company's total consolidated assets reported for the assessment period 
on the Federal Reserve's Form FR Y-7Q (``FR Y-7Q''),
    (3) is a top-tier foreign savings and loan holding company on 
December 31 of the assessment period, with $50 billion or more in total 
consolidated assets, as determined based on the average of the foreign 
savings and loan holding company's total consolidated assets reported 
for the assessment period on the reporting forms applicable during the 
assessment period, or
    (4) the Council has determined under section 113 of the Dodd-Frank 
Act (12 U.S.C. Sec.  5323) to be supervised by the Board and for which 
such determination is in effect as of December 31 of the assessment 
period.
    (b) Assessment period means January 1 through December 31 of each 
calendar year.


Sec.  246.4  Assessments.

    (a) Assessment. Each assessed company shall pay to the Board an 
assessment for any assessment period for which the Board determines the 
company to be an assessed company.
    (b) Assessment formula. The assessment will be calculated according 
to the Assessment Formula, as follows:

----------------------------------------------------------------------------------------------------------------
      Column A                        Column B                       Column C                      Column D
----------------------------------------------------------------------------------------------------------------
                                  (Total assessable
     Base amount          +            assets            x       Assessment rate)      =          Assessment
----------------------------------------------------------------------------------------------------------------
          $50,000         +                   ($B        x                     C)      =                   $D
----------------------------------------------------------------------------------------------------------------


The assessed company's assessment would be comprised of the base 
amount, plus the amount of the assessed company's total assessable 
assets in Column B times the assessment rate in Column C.
    (c) Assessment rate. Assessment rate means, with regard to a given 
assessment period, the rate published by the Board for the calculation 
of assessments for that period.
    (1) The assessment rate will be calculated according to this 
formula:

[[Page 23170]]

[GRAPHIC] [TIFF OMITTED] TP18AP13.003

    (2) For the calculation set forth in (1), above, the number of 
assessed companies and the total assessable assets of all assessed 
companies will each be that of the relevant assessment period, 
provided, however, that for the assessment periods corresponding to 
2012, 2013 and 2014, the Board shall use the number of assessed 
companies and the total assessable assets of the 2012 assessment period 
to calculate the assessment rate.
    (d) Assessment basis. Assessment basis means:
    (1) For the 2012, 2013, and 2014 assessment periods, the assessment 
basis is the amount of total expenses the Board estimates is necessary 
or appropriate to carry out the supervisory and regulatory 
responsibilities of the Board with respect to assessed companies for 
2012.
    (2) For the 2015 assessment period and for each assessment period 
thereafter, the assessment basis is the average of the amount of total 
expenses the Board estimates is necessary or appropriate to carry out 
the supervisory and regulatory responsibilities of the Board with 
respect to assessed companies for that assessment period and the two 
prior assessment periods.
    (e) Total assessable assets. Total assessable assets are calculated 
in accordance with this section as follows:
    (1) Bank holding companies. For any bank holding company, other 
than a foreign bank holding company, total assessable assets will be 
determined by the average of the bank holding company's total 
consolidated assets as reported for the assessment period on the bank 
holding company's FR Y-9C or such other reports as determined by the 
Board as applicable to the bank holding company,
    (2) Foreign bank holding companies and foreign savings and loan 
holding companies.
    (i) In general. For any foreign bank holding company or for any 
foreign savings and loan holding company, with the exception of the 
2012 and 2013 assessment periods, this amount will be the average of 
the foreign bank holding company's or savings and loan holding 
company's total combined assets of U.S. operations, net of intercompany 
balances and transactions between U.S. domiciled affiliates, branches 
and agencies, as reported for the assessment period on the Part 1 of 
the FR Y-7Q or such other reports as determined by the Board as 
applicable to the foreign bank holding company or foreign savings and 
loan holding company,
    (ii) 2012 and 2013 assessment periods. For the 2012 and 2013 
assessment periods, for any foreign bank holding company, total 
assessable assets will be the average of the sum of the respective line 
items reported quarterly, plus any line items reported annually for the 
assessment period on an applicable regulatory reporting form for the 
assessment period for all majority-owned U.S.-domiciled affiliates, 
branches and agencies of the foreign bank holding company, as set forth 
in this section:
    (A) Top-tier, U.S.-domiciled bank holding companies and savings and 
loan holding companies,
    (1) Total assets (line item 12) as reported on Schedule HC of the 
FR Y-9C, as applicable, and
    (2) Total assets (line item 1, column B) as reported on FR 2320.
    (B) Related branches and agencies in the United States (line items 
1.i, column A, on Schedule RAL of Report of Assets and Liabilities of 
U.S. Branches and Agencies of Foreign Banks (FFIEC 002) plus due from 
related institutions in foreign countries (line items 2.a, 2.b(1), 
2.b(2), and 2.c from column A, part 1 on Schedule M), as reported on 
FFIEC 002, provided however that due from head office of parent bank 
(line item 2.a, column A, part 1 on Schedule M of FFIEC 002) would be 
included net of due to head office of parent bank (line item 2.a, 
column B, part 1 on Schedule M of FFIEC 002) when there is a net due 
from position reported for line item 2.a., while a net due to position 
for line item 2.a would result in no addition to total assets with 
respect to line item 2.a, part 1 on Schedule M of FFIEC 002.
    (C) U.S.-domiciled nonbank subsidiaries:
    (1) For FR Y-7N filers: total assets (line item 10) as reported for 
each nonbank subsidiary reported on Schedule BS--Balance Sheet of the 
Financial Statements of U.S. Nonbank Subsidiaries Held by Foreign 
Banking Organizations (FR Y-7N); less balances due from related 
institutions located in the United States, gross (line item 4.a), as 
reported on Schedule BS-M--Memoranda.
    (2) For FR Y-7NS (annual) filers: total assets (line item 2) as 
reported for each nonbank subsidiary reported on abbreviated financial 
statements (page 3) of the Abbreviated Financial Statements of U.S. 
Nonbank Subsidiaries Held by Foreign Banking Organizations (FR Y-7NS).
    (D) For Edge Act and agreement corporations that are not reflected 
in the assets of a U.S.-domiciled parent's regulatory reporting form 
submission, claims on nonrelated organizations (line item 9, 
``consolidated total'' column on Schedule RC of the Consolidated Report 
of Condition and Income for Edge and Agreement Corporations (FR 
2886b)), plus claims on related organizations domiciled outside the 
United States (line items 2.a and 2.b, column A on Schedule RC-M), as 
reported on FR 2886b.
    (E) For banks and savings associations that are not reflected in 
the assets of a U.S.-domiciled parent's regulatory reporting form 
submission, total assets (line item 12) as reported on Schedule RC--
Balance Sheet of the Consolidated Reports of Condition and Income for a 
Bank with Domestic and Foreign Offices (FFIEC 031), or total assets 
(line item 12) as reported on Schedule RC--Balance Sheet of the 
Consolidated Reports of Condition and Income for a Bank with Domestic 
Offices Only (FFIEC 041), as applicable.
    (F) For broker-dealers that are not reflected in the assets of a 
U.S.-domiciled parent's regulatory reporting form submission, total 
assets (line item 16, ``total'' column) as reported on statement of 
financial condition of the Securities and Exchange Commission's Form X-
17A-5 (FOCUS REPORT), Part II, Part IIa, or Part II CSE, as applicable.
    (4) Savings and loan holding companies. For any savings and loan 
holding company, other than a foreign savings and loan holding company, 
total assessable assets will be determined by the average of the 
savings and loan holding company's total consolidated assets as 
reported for the assessment period on the regulatory reports on the 
savings and loan holding company's Form FR Y-9C, column B of the 
Quarterly Savings and Loan Holding Company Report (FR 2320), or other 
reports as determined by the Board as applicable to the savings and 
loan holding company. If the savings and loan holding company is a 
grandfathered unitary savings and loan holding company, total 
assessable assets will only include the assets associated with its 
savings association subsidiary and its other financial activities.
    (5) Nonbank financial companies supervised by the Board. For a 
nonbank financial company supervised by the

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Board, if the company is a U.S. company, this amount will be the 
average of the nonbank financial company's total consolidated assets as 
reported for the assessment period on such regulatory or other reports 
as are applicable to the nonbank financial company determined by the 
Board; if the company is a foreign company, this amount will be the 
average of the nonbank financial company's total combined assets of 
U.S. operations, net of intercompany balances and transactions between 
U.S. domiciled affiliates, branches and agencies, as reported for the 
assessment period on such regulatory or other reports as determined by 
the Board as applicable to the nonbank financial company.


Sec.  246.5  Notice of Assessment and Appeal

    (a) Notice of Assessment. The Board shall issue a notice of 
assessment to each assessed company no later than July 15 of each 
calendar year following the assessment period.
    (b) Appeal Period.
    (1) Each assessed company will have thirty calendar days from July 
15 to submit a written statement to appeal the Board's determination 
(i) that the company is an assessed company; or (ii) of the company's 
total assessable assets.
    (2) The Board will respond with the results of its consideration to 
an assessed company that has submitted a written appeal within 15 
calendar days from the end of the appeal period.


Sec.  246.6  Collection of Assessments; Payment of Interest.

    (a) Collection date. Each assessed company shall remit to the 
Federal Reserve the amount of its assessment using the Fedwire Funds 
Service by September 30 of the calendar year following the assessment 
period.
    (b) Payment of interest.
    (1) If the Board does not receive the total amount of an assessed 
company's assessment by the collection date for any reason not 
attributable to the Board, the assessment will be delinquent and the 
assessed company shall pay to the Board interest on any sum owed to the 
Board according to this rule (delinquent payments).
    (2) Interest on delinquent payments will be assessed beginning on 
the first calendar day after the collection date, and on each calendar 
day thereafter up to and including the day payment is received. 
Interest will be simple interest, calculated for each day payment is 
delinquent by multiplying the daily equivalent of the applicable 
interest rate by the amount delinquent. The rate of interest will be 
the United State Treasury Department's current value of funds rate (the 
``CVFR percentage''); issued under the Treasury Fiscal Requirements 
Manual and published quarterly in the Federal Register. Each delinquent 
payment will be charged interest based on the CVFR percentage 
applicable to the quarter in which all or part of the assessment goes 
unpaid.

    By order of the Board of Governors of the Federal Reserve 
System, April 12, 2013.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2013-09061 Filed 4-17-13; 8:45 am]
BILLING CODE P