Agency Information Collection Activities: Proposed Information Collection; Submission for OMB Review, 63470-63474 [2013-25015]

Agencies

• FEDERAL DEPOSIT INSURANCE CORPORATION

[Federal Register Volume 78, Number 206 (Thursday, October 24, 2013)]
[Notices]
[Pages 63470-63474]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-25015]


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FEDERAL DEPOSIT INSURANCE CORPORATION


Agency Information Collection Activities: Proposed Information 
Collection; Submission for OMB Review

AGENCY: Federal Deposit Insurance Corporation.

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

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SUMMARY: The Federal Deposit Insurance Corporation (FDIC), as part of 
its continuing effort to reduce paperwork and respondent burden, 
invites the general public and other Federal agencies to take this 
opportunity to comment on a revision of a continuing information 
collection, as required by the Paperwork Reduction Act of 1995.
    An agency may not conduct or sponsor, and a respondent is not 
required to respond to, an information collection unless it displays a 
currently-valid Office of Management and Budget (OMB) control number. 
The FDIC is soliciting comment concerning its information collection 
titled, ``Annual Stress Test Reporting Template and Documentation for 
Covered Banks with Total Consolidated Assets of $10 Billion to $50 
Billion under the Dodd-Frank Wall Street Reform and Consumer Protection 
Act.''

DATES: Comments must be received by November 25, 2013.

ADDRESSES: You may submit written comments by any of the following 
methods:
     Agency Web site: https://www.fdic.gov/regulations/laws/federal/notices.html. Follow the instructions for submitting comments 
on the FDIC Web site.
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: Comments@FDIC.gov. Include ``Annual Stress Test 
Reporting Template and Documentation'' on the subject line of the 
message.
     Mail: Gary A. Kuiper, Counsel, Executive Secretary 
Section, Attention: Comments, FDIC, 550 17th Street NW., Washington, DC 
20429.
     Hand Delivery/Courier: Guard station at the rear of the 
550 17th Street Building (located on F Street) on business days between 
7 a.m. and 5 p.m.
    Public Inspection: All comments received will be posted without 
change to https://www.fdic.gov/regulations/laws/federal/notices.html 
including any personal information provided.
    Additionally, you may send a copy of your comments to: By mail to 
the U.S. OMB, 725 17th Street NW., 10235, Washington, DC 20503 
or by facsimile to (202) 395-6974, Attention: Federal Banking Agency 
Desk Officer.

FOR FURTHER INFORMATION CONTACT: You can request additional information 
from Gary Kuiper, 202.898.3877, Legal Division, FDIC, 550 17th Street 
NW., NYA-5046, Washington, DC 20429. In addition, copies of the 
templates referenced in this notice can be found on the FDIC's Web site 
(https://www.fdic.gov/regulations/laws/federal/notices.html).

SUPPLEMENTARY INFORMATION: The FDIC is requesting comment on the 
following revision of an information collection:

Annual Stress Test Reporting Template and Documentation for Covered 
Banks With Total Consolidated Assets of $10 Billion to $50 Billion 
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act

    Section 165(i)(2) of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act \1\ (Dodd-Frank Act) requires certain financial 
companies, including state nonmember banks and state savings 
associations, to conduct annual stress tests \2\ and requires the 
primary financial regulatory agency \3\ of those financial companies to 
issue regulations implementing the stress test requirements.\4\ A state 
nonmember bank or state savings association is a ``covered bank'' and 
therefore subject to the stress test requirements if its total 
consolidated assets exceed $10 billion. Under section 165(i)(2), a 
covered bank is required to submit to the Board of Governors of the 
Federal Reserve System (Board) and to its primary financial regulatory 
agency a report at such time, in such form, and containing such 
information as the primary financial regulatory agency may require.\5\ 
On October 15, 2012, the FDIC published in the Federal Register a final 
rule implementing the section 165(i)(2) annual stress test 
requirement.\6\ This notice describes the reports and information 
required to meet the reporting requirements under section 165(i)(2) for 
covered banks with total consolidated assets of $10 billion to $50 
billion. These information collections will be given confidential 
treatment to the extent allowed by law (5 U.S.C. 552(b)(4)).
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    \1\ Public Law 111-203, 124 Stat. 1376 (July 21, 2010).
    \2\ 12 U.S.C. 5365(i)(2)(A).
    \3\ 12 U.S.C. 5301(12).
    \4\ 12 U.S.C. 5365(i)(2)(C).
    \5\ 12 U.S.C. 5365(i)(2)(B).
    \6\ 77 FR 62417 (October 15, 2012).
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    The FDIC intends to use the data collected through these proposed 
templates to assess the reasonableness of the stress test results of 
covered banks and to provide forward-looking information to the FDIC 
regarding a covered bank's capital adequacy. The FDIC also may use the 
results of the stress tests to determine whether additional analytical 
techniques and exercises could be appropriate to identify, measure, and 
monitor risks at the covered bank. The stress test results are expected 
to support ongoing improvement in a covered bank's stress testing 
practices with respect to its internal assessments of capital adequacy 
and overall capital planning.

[[Page 63471]]

    The Dodd-Frank Act stress testing requirements apply to all covered 
banks, but the FDIC recognized that many covered banks with 
consolidated total assets of $50 billion or more have been subject to 
stress testing requirements under the Board's Comprehensive Capital 
Analysis and Review (CCAR). The FDIC also recognized that these banks' 
stress tests will be applied to more complex portfolios and therefore 
warrant a broader set of reports to adequately capture the results of 
the stress tests. These reports will necessarily require more detail 
than would be appropriate for smaller, less complex institutions. 
Therefore, the FDIC decided to specify separate reporting templates for 
covered banks with total consolidated assets between $10 billion and 
$50 billion and for covered banks with total consolidated assets of $50 
billion or more.\7\
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    \7\ See 77 FR 16263 for the Paperwork Reduction Act Notice and 
the FDIC Web site at https://www.fdic.gov/regulations/laws/federal/2013/2013-03-14_notice/templates.html for the reporting templates 
for covered banks with total consolidated assets of $50 billion or 
more.
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    While the general reporting categories are the same (income 
statement, balance sheet, and capital), the level of detail for 
individual reporting items is less for $10 billion to $50 billion 
covered banks. For example, accounting for loss provisions by category 
is not required, and less detail is required for commercial and 
industrial lending. Because smaller banks with assets of $10 billion to 
$50 billion generally have less complex balance sheets, the FDIC 
believes that highly detailed reporting is not warranted, and so the 
FDIC is not requiring supplemental schedules on such areas as retail 
balances, securities and trading, operational risk, and pre-provision 
net revenue (PPNR). The FDIC has worked closely with the Board and the 
Office of the Comptroller of the Currency (OCC) (together ``the 
agencies'') to make the agencies' respective rules implementing annual 
stress testing under the Dodd-Frank Act consistent and comparable by 
requiring similar standards for scope of application, scenarios, data 
collection and reporting forms. The FDIC also has worked to minimize 
any potential duplication of effort related to the annual stress test 
requirements. The FDIC, OCC, and Board coordinated the preparation of 
stress testing templates in order to make the templates as similar as 
possible and thereby minimize the burden on affected institutions. The 
proposed FDIC Dodd-Frank Annual Stress Test (DFAST) reporting templates 
for covered banks with assets of $10 billion to $50 billion or more are 
described below.

Description of Reporting Templates for Banks With $10 Billion to $50 
Billion in Assets

    The ``Annual Stress Test Reporting Template and Documentation for 
Covered Banks with Total Consolidated Assets of $10 Billion to $50 
Billion under the Dodd-Frank Wall Street Reform and Consumer Protection 
Act'' (DFAST 10-50 Results Template) includes data collection 
worksheets necessary for the FDIC to assess the company-run stress test 
results for baseline, adverse, and severely adverse scenarios as well 
as any other scenario specified in accordance with regulations 
specified by the FDIC. The DFAST 10-50 Results Template includes 
worksheets that collect information on the following areas:
    1. Income Statement;
    2. Balance Sheet, and
    3. Capital.
    Each $10 billion to $50 billion covered bank reporting to the FDIC 
using this form will be required to submit worksheets for each scenario 
provided to covered banks in accordance with regulations implementing 
Section 165(i)(2) as specified by the FDIC.

Worksheets: Income Statement

    The income statement worksheet collects data for the quarter 
preceding the planning horizon and for each quarter of the planning 
horizon for the stress test on projected losses and revenues in the 
following categories.
    1. Net charge-offs;
    2. Pre-provision net revenue;
    3. Provision for loan and lease losses;
    4. Realized gains (losses) on held to maturity (HTM) and available-
for-sale (AFS) securities;
    5. All other gains (losses);
    6. Taxes, and
    Memoranda items:
    7. Total other than temporary impairment (OTTI) losses.
    This schedule provides information used to assess losses that 
covered banks can sustain in baseline, adverse, and severely adverse 
stress scenarios.

Worksheets: Balance Sheet

    The balance sheet worksheet collects data for the quarter preceding 
the planning horizon and for each quarter of the planning horizon for 
the stress test on projected equity capital, as well as on assets and 
liabilities in the following categories.
    1. Loans;
    2. HTM securities;
    3. AFS securities;
    4. Trading assets;
    5. Total intangible assets;
    6. Other real estate;
    7. All other assets;
    8. Retail funding (core deposits);
    9. Wholesale funding;
    10. Trading liabilities;
    11. All other liabilities, and
    12. Perpetual preferred stock and related surplus;
    The FDIC intends to use this worksheet to assess the projected 
changes in assets and liabilities that a covered bank can sustain in a 
baseline, adverse, or severely adverse scenario. This worksheet will 
also be used to assess the revenue and loss projections identified in 
the income statement worksheet.

Worksheets: Capital

    The capital worksheet, which is appended to the balance sheet 
worksheet, collects data for the quarter preceding the planning horizon 
and for each quarter of the planning horizon for the stress test on the 
following areas.
    1. Unrealized gains (losses) on AFS securities;
    2. Disallowed deferred tax asset;
    3. Tier 1 capital;
    4. Qualified subordinated debt and redeemable preferred stock;
    5. Allowance includable in Tier 2 capital;
    6. Tier 2 capital;
    7. Total risk-based capital;
    8. Total capital;
    9. Risk weighted assets;
    10. Total assets for leverage purposes;
    11. Tier 1 risk-based capital ratio;
    12. Tier 1 leverage ratio;
    13. Total risk-based capital ratio;
    Memoranda items:
    14. Sale, conversion, acquisition, or retirement of capital stock;
    15. Cash dividends declared on preferred stock, and
    16. Cash dividends declared on common stock.
    In addition to the information collected on the capital worksheet, 
the Summary Schedule captures projections for regulatory capital ratios 
over the planning horizon by scenario.
    The FDIC intends to use these worksheets to assess the impact on 
capital of the projected losses and projected changes in assets that 
the covered bank can sustain in a stressed scenario. In addition to 
reviewing the worksheet in the context of the balance sheet and income 
statement projections, the FDIC also intends to use this worksheet to 
assess the adequacy of capital planning processes for each covered 
bank.

[[Page 63472]]

Description of DFAST 10-50 Scenario Variables Template

    To conduct the stress test required under this rule, a covered bank 
may need to project additional economic and financial variables to 
estimate losses or revenues for some or all of its portfolios. In such 
a case, the covered bank is required to complete a DFAST 10-50 Scenario 
Variables Template worksheet for each scenario where such additional 
variables are used to conduct the stress test. Each scenario worksheet 
collects the variable name (matching that reported on the Scenario 
Variables Template Definitions worksheet), the actual value of the 
variable during the third quarter of the reporting year, and the 
projected value of the variable for nine future quarters.

Description of Supporting Documentation

    Covered banks with total consolidated assets of $10 billion to $50 
billion must submit clear documentation of the projections included in 
the worksheets to support efficient and timely review of annual stress 
test results by the FDIC. The supporting documentation should be 
submitted electronically and is not expected to be reported in the 
workbooks used for required data reporting. This supporting 
documentation must describe the types of risks included in the stress 
test; describe clearly the methodology used to produce the stress test 
projections; describe the methods used to translate the macroeconomic 
factors into a covered bank's projections; and also include an 
explanation of the most significant causes for the changes in 
regulatory capital ratios. The supporting documentation also should 
address the impact of anticipated corporate events, including mergers, 
acquisitions, or divestitures of business lines or entities, and 
changes in strategic direction, and should describe how such changes 
are reflected in stress test results, including the impact on estimates 
of losses, expenses and revenues, net interest margins, non-interest 
income items, and balance sheet amounts.
    Where covered bank-specific assumptions are made that differ from 
the broad macroeconomic assumptions incorporated in stress scenarios 
provided by the FDIC, the documentation must also describe such 
assumptions and how those assumptions relate to reported projections. 
Where historical relationships are relied upon, the covered banks must 
describe the historical data and provide the basis for the expectation 
that these relationships would be maintained in each scenario, 
particularly under adverse and severely adverse conditions.

Comment Summary

    In the Federal Register of March 14, 2013 (77 FR 16263), the FDIC 
published a 60-day notice requesting public comment on the templates 
and the collection of information. The FDIC received two comment 
letters on the proposed implementation of the information collection: 
one from an industry group and one from a financial services consulting 
firm.\8\ The OCC and the Board together, in addition to receiving these 
two comments, also received five comments from individual banking 
organizations.\9\ As noted in the initial Federal Register notice, the 
agencies each developed and requested public comment on very similar 
reporting forms to implement the reporting requirements. The agencies 
coordinated the changes made to each agency's templates in order to 
keep the templates as similar as possible and minimize the burden on 
affected institutions. As part of this coordination, in discussions 
with the other agencies, the FDIC considered these five comments, in 
addition to the two comments it directly received. The FDIC has made 
several changes to the proposed DFAST 10-50 Results Template in light 
of all comments received.
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    \8\ These comment letters may be found at https://www.fdic.gov/regulations/laws/federal/2013/2013-annual_stress_test.html
    \9\ These comments may be found at https://www.regulations.gov
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    Some general comments were received regarding the report format, 
instructions, and timing. However, the majority of the public comments 
focused on specific data items on the results schedules and in some 
cases compared the level of detail required in the proposed DFAST 10-50 
Results Template to the requirements of the Capital Assessments and 
Stress Testing information collection (FR Y-14A/Q/M; OMB No. 7100-0341) 
applicable to bank holding companies with $50 billion or more in total 
assets.\10\ Lastly, one commenter asked for clarification regarding how 
regulatory capital should be calculated over the planning horizon in 
consideration of the phase-in period for the new capital framework that 
implements Basel III standards.
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    \10\ The FR Y-16 reporting requirements are tailored to the $10-
$50 billion institutions and require significantly less granular 
reporting segmentation relative to the FR Y-14A applicable to bank 
holding companies with $50 billion or more in total assets.
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Detailed Discussion of Public Comments

A. General Comments

    Some commenters expressed concern about having to submit stress 
testing results in a Call Report-type format, noting that the existing 
stress testing software of many banks and savings associations was not 
developed with such a format in mind, and asked for less detailed 
reporting forms. These commenters requested that the agencies consider 
further delaying implementation of the reporting requirements and/or 
limiting the report submissions on the DFAST 10-50 Results Template 
Summary Schedule. The FDIC has determined that using reporting 
templates modeled on the Call Report is the best solution because of 
familiarity with this format by the FDIC, covered banks, and the 
public, particularly when mandatory public disclosure of summary 
results under the severely adverse scenario becomes effective in 2015. 
The proposed DFAST 10-50 Results Template, aligned to the Call Report, 
provides a format that is well understood and utilized by the industry. 
Therefore, the FDIC believes that the reporting requirements will not 
place undue burden on the ability of covered banks to report stress 
test results. Using the Call Report format would also ensure a high 
level of consistency across covered banks and facilitate assessment of 
the results. Furthermore, the OCC and the Board are adapting the same 
format for their templates; utilization of the Call Report format by 
covered banks would maintain consistency across agencies and in 
reporting for all covered institutions. Finally, the FDIC has already 
delayed for one year the application of the stress testing rules for 
the $10 billion to $50 billion covered banks, in part so that they 
would have time to create the necessary infrastructure to submit the 
appropriate stress testing results.
    Two commenters expressed concern about the differences among stress 
testing templates used to respond to different stress testing 
requirements and about the burden some banking organizations (companies 
with $50 billion or more in assets that control subsidiaries with $10 
billion to $50 billion in assets) might face in preparing multiple sets 
of templates. The FDIC notes that the final FDIC stress testing rule 
allows such subsidiaries to elect to conduct its stress test and report 
to the FDIC on the same timeline as its parent bank holding company or 
savings and

[[Page 63473]]

loan holding company.\11\ The FDIC has coordinated with the OCC and the 
Board in the development of the stress test templates and has attempted 
to minimize the duplication and reporting burden of holding companies 
subject to the stress test rules which have subsidiaries subject to the 
stress test rules.
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    \11\ See 12 C.F.R. 325.203(d),
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    One commenter suggested allowing covered banks to apply 
generalized, bank-developed loss assumptions for immaterial portfolios. 
The commenter also noted that an immaterial portfolio exception is 
allowed for firms with $50 billion or more assets in stress testing 
submissions. The FDIC has considered the burden of calculating losses 
for immaterial portfolios for covered banks with $10 billion to $50 
billion in assets and determined that providing a safe harbor that 
defines immaterial portfolios would be contrary to the purpose of a 
company-run stress test and could unintentionally mask risk or cause 
institutions to conclude erroneously that the aggregation of immaterial 
portfolios would always pose little or no risk to an institution. 
Although stress testing should be applied to all exposures, the FDIC 
recognizes that the same level of detail and analysis may not be 
necessary for lower-risk, immaterial portfolios. For such portfolios, 
it may be appropriate for a covered bank to use a less sophisticated 
approach for its stress test projections, assuming the results of that 
approach are conservative and well-documented. The FDIC has therefore 
not established a reporting threshold for immaterial portfolios in the 
reporting requirements for the proposed DFAST 10-50 Results Template. 
Covered banks should refer to the proposed interagency supervisory 
guidance on implementing Dodd-Frank Act company-run stress tests for 
banking organizations with total consolidated assets of more than $10 
billion but less than $50 billion for more information on estimates for 
immaterial portfolios.\12\
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    \12\ 78 FR 47217 (August 5, 2013). This guidance is expected to 
be finalized in 2013.
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B. Regulatory Capital

    One commenter asked for clarification regarding the calculation and 
reporting of regulatory capital and risk-weighted assets (RWAs), noting 
the expectation that capital and RWA calculations and definitions would 
change over the planning horizon as new rules are implemented 
(specifically noting new definitions when the Basel III final rule is 
adopted). In addition, this commenter also requested clarification on 
the calculation of tier 1 non-common capital elements.
    There are three line items in the proposed DFAST 10-50 Results 
Template that would be specifically affected by the capital framework 
that implements Basel III standards: tier 1 common equity capital, non-
common capital elements, and RWAs. Common equity tier 1 capital was 
recently defined in the Basel III interim final rule for all 
institutions and does not become effective for institutions with $10-
$50 billion in assets until 2015.\13\ The need to model alternative 
capital calculations more than halfway through the planning horizon for 
these banking organizations adds complexity and increases the potential 
or likelihood of erroneous calculations or assumptions. This complexity 
and increased risk of error could detract from the main purpose of 
conducting a company-run stress test; mainly to make a forward-looking 
assessment of capital planning processes and internal capital needs 
under various scenarios. Lastly, as the first required public 
disclosure will not commence until the 2014 stress test cycle with 
disclosure occurring in June of 2015, the additional burden of 
transitioning to a new capital calculation more than halfway through 
the 2013 stress test planning horizon will not provide the public with 
any insight into a firm's capital adequacy or planning process in this 
instance.
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    \13\ 78 FR 55340 (September 10, 2013).
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    Accordingly, the FDIC removed tier 1 common and non-common capital 
line items, and the associated equity ratios, from the DFAST 10-50 
Results Template for the 2013 stress test cycle. The final template 
allows covered banks to report capital and RWAs for the entire planning 
horizon using the regulatory capital rules and definitions that are 
applicable on the ``as of'' date of each report for this initial 
reporting submission. For example, the initial respondent panel would 
report as of September 30, 2013; therefore, that submission should 
apply capital calculations consistently throughout the planning horizon 
using the capital rules and definitions effective as of September 30, 
2013. The FDIC will provide information regarding the capital and RWA 
calculations in the final interagency guidance and will consider adding 
elements of the Basel III capital requirements in future DFAST 10-50 
Results Template reporting forms and instructions.

C. Data Items--Results Schedule (Balance Sheet Income Statement)

    Two commenters argued that the level of detail demanded by the 
templates was excessive. The commenters stated that separating 1-4 
family construction loans from all other construction loans would 
require more detailed reporting for the DFAST 10-50 Results Template 
than what is required of large bank holding companies subject to the 
Board's CCAR, and firms with $50 billion or more in assets that report 
stress test results using the DFAST 14A form. While the templates for 
firms with $50 billion or more in assets do not segment 1-4 family 
construction loans, large bank holding companies must submit that 
specific data item on both the FR Y-14Q and FR Y-14M reporting forms. 
More importantly, the FDIC believes this data item is particularly 
relevant to covered banks that previously have reported material 
concentrations in this product type and because a significant amount of 
the industry's losses during the most recent economic downturn emanated 
from this product. These data would provide necessary information for 
covered banks to manage risk effectively and appropriately assess and 
plan for their capital needs.
    One commenter also argued that requiring separate line items for 
retail and wholesale funding would add unnecessary complexity and 
burden. The FDIC, however, believes it is necessary to maintain these 
separate items. The breakdown of deposits between retail and wholesale 
is easily facilitated through Call Report data and the proposed DFAST 
10-50 Results Template instructions indicate that covered banks should 
use the Call Report segmentation definitions to project these line 
items. In addition, retail and wholesale funding historically have 
reacted differently under stressed economic conditions. Projecting the 
retail and wholesale deposit structure throughout the planning horizon 
as proposed would provide useful information to a covered bank and the 
FDIC with respect to how a covered bank assesses capital adequacy, 
plans for its capital needs, and manages risk.
    Two commenters stated that gathering AFS and HTM balances for U.S. 
government obligations and obligations of government sponsored entities 
(GSEs) would require more detailed reporting for the DFAST 10-50 
Results Template than what is required for the DFAST 14A. Another 
commenter suggested separating GSE obligations from other government 
obligations on the DFAST 10-50 Results Template Balance Sheet

[[Page 63474]]

consistent with the treatment on the Call Report Income Statement. 
While the DFAST 14A collects only total AFS and HTM balances on the 
balance sheet schedule, this reporting series requires more granular 
data than proposed for the DFAST 10-50 Results Template on government 
securities through other schedules within the DFAST 14A. Similarly, the 
reporting requirements for the Call Report Balance Sheet mandate more 
detailed information on AFS and HTM GSE obligations relative to the 
reporting requirements for the DFAST 10-50 Results Template. Gathering 
AFS and HTM balances for U.S. government obligations and obligations of 
GSEs would provide relevant and required data to project net income and 
regulatory capital over the planning horizon.
    Commenters also favored the elimination of several line items. One 
commenter stated that the level of detail required by the DFAST 10-50 
Results Template Balance Sheet memoranda items was not informative or 
necessary to the loss estimation process, or entailed more detail than 
what is required by the DFAST 14A. Specific memoranda items cited by 
the commenter included troubled debt restructurings and loans secured 
by 1-4 family in foreclosure. Based on this comment, the FDIC also 
evaluated the utility of another Balance Sheet memoranda item: Loans 
and leases guaranteed by either U.S. government or GSE guarantees 
(i.e., non-FDIC loss sharing agreements). The FDIC agrees that these 
memoranda data items are already captured within the proposed DFAST 10-
50 Results Template reporting requirements for loans and leases and 
that eliminating these items from the reporting template would not 
affect an institution's ability to project pre-provision net revenue, 
net income, or regulatory capital in order to assess their capital 
needs under stressed conditions. Therefore, the FDIC eliminated these 
three supplemental Balance Sheet memoranda reporting items.
    Commenters also requested that common stock, retained earnings, 
surplus, and other equity components be reported as a single line item. 
The FDIC agrees with this comment and has combined the aforementioned 
capital components into one line item to be reported as ``equity 
capital.''
    One commenter noted that separately modeling average rates for each 
type of deposit would also involve a significant amount of work and 
potentially affect other company-run models. The FDIC agrees that the 
average rate information is not a data input that a covered bank needs 
to project losses, pre-provision net revenue, or capital. Further, the 
additional burden placed on covered banks to calculate the projected 
average rates could distract unnecessarily from the primary goal of the 
annual company-run stress test--to estimate effectively the possible 
impact of an economic downturn on a covered bank's capital position in 
order to plan for capital needs and to identify and managed risk. 
Therefore, the FDIC has removed all average rate memoranda items on the 
balance sheet.
    Two commenters favored the elimination of the income statement item 
for Gains and Losses on Other Real Estate Owned (OREO). One commenter 
noted that this element could be combined effectively with forecasting 
of other OREO expenses. The other commenter stated that the level of 
detail for this element is more granular that what is required for the 
DFAST 14A templates. The FDIC notes that gains or losses on OREO are 
captured in the pre-provision net revenue metrics worksheet of the 
DFAST 14A templates. Therefore, this requirement would not be more 
burdensome for the $10 billion-$50 billion covered banks. Nevertheless, 
the FDIC has eliminated this item because gains and losses on OREO 
would already be captured within the noninterest income statement 
memoranda item ``itemize and describe amounts greater than 15% of 
noninterest income'' or in the ``itemize and describe amounts greater 
than 15% of noninterest expense'' when the amount meets the 15% 
threshold.

D. Technical Changes/Other Items

    In response to a few technical comments received, the FDIC has 
adjusted the reporting templates and instructions. These changes 
include correction of formulaic errors; correction of MDRM reference 
errors; clarified reporting instructions for income statement memoranda 
items; and more detailed technical reporting instructions, including 
the elimination of the contact information schedule as this information 
would be collected through the DFAST 10-50 Results Template cover sheet 
and related data collection application.

Burden Estimates

    The FDIC estimates the burden of this collection of information as 
follows:
    Estimated Number of Respondents: 22.
    Estimated Annual Burden per Respondent: 464 hours.
    Estimated Total Annual Burden: 10,208 hours.
    The burden for each $10 billion to $50 billion covered bank that 
completes the FDIC DFAST 10-50 Results Template is estimated to be 464 
hours. The burden to complete the FDIC DFAST 10-50 Results Template is 
estimated to be 440 hours, including 20 hours to input these data and 
420 hours for work related to modeling efforts. The burden to complete 
the FDIC DFAST 10-50 Scenario Variables Template is estimated to be 24 
hours. The total burden for all 22 respondents to complete both 
templates is estimated to be 10,208 hours. The start-up burden for each 
new respondent is estimated to be 3,600 hours, a total of 79,200 hours, 
and ongoing revisions for each existing firm is estimated to be 160 
hours, a total of 3,520 hours.
    Comments continue to be invited on:
    (a) Whether the collection of information is necessary for the 
proper performance of the functions of the FDIC, including whether the 
information has practical utility;
    (b) The accuracy of the FDIC's estimate of the burden of the 
collection of information;
    (c) Ways to enhance the quality, utility, and clarity of the 
information to be collected;
    (d) Ways to minimize the burden of the collection on respondents, 
including through the use of automated collection techniques or other 
forms of information technology;
    (e) Estimates of capital or start-up costs and costs of operation, 
maintenance, and purchase of services to provide information; and
    (f) The ability of FDIC-supervised banks and thrifts with assets 
between $10 billion and $50 billion to provide the requested 
information to the FDIC by March 31, 2014.

    Dated at Washington, DC, this 21st day of October 2013.

Federal Deposit Insurance Corporation
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2013-25015 Filed 10-23-13; 8:45 am]
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