Proposed Agency Information Collection Activities; Comment Request, 41276-41283 [2014-16443]

Agencies

• FEDERAL RESERVE SYSTEM

[Federal Register Volume 79, Number 135 (Tuesday, July 15, 2014)]
[Notices]
[Pages 41276-41283]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-16443]


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FEDERAL RESERVE SYSTEM


Proposed Agency Information Collection Activities; Comment 
Request

AGENCY: Board of Governors of the Federal Reserve System.
SUMMARY: On June 15, 1984, the Office of Management and Budget (OMB) 
delegated to the Board of Governors of the Federal Reserve System 
(Board) its approval authority under the Paperwork Reduction Act (PRA), 
pursuant to 5 CFR 1320.16, to approve of and assign OMB control numbers 
to collection of information requests and requirements conducted or 
sponsored by the Board under conditions set forth in 5 CFR 1320 
Appendix A.1. Board-approved collections of information are 
incorporated into the official OMB inventory of currently approved 
collections of information. Copies of the

[[Page 41277]]

Paperwork Reduction Act Submission, supporting statements and approved 
collection of information instruments are placed into OMB's public 
docket files. The Federal Reserve may not conduct or sponsor, and the 
respondent is not required to respond to, an information collection 
that has been extended, revised, or implemented on or after October 1, 
1995, unless it displays a currently valid OMB control number.

DATES: Comments must be submitted on or before September 15, 2014.

ADDRESSES: You may submit comments, identified by FR Y-14A, FR Y-14Q, 
FR Y-14M or FR Y-16, by any of the following methods:
     Agency Web site: https://www.federalreserve.gov. Follow the 
instructions for submitting comments at https://www.federalreserve.gov/apps/foia/proposedregs.aspx.
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: regs.comments@federalreserve.gov. Include OMB 
number 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/apps/foia/proposedregs.aspx 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.
    Additionally, commenters may send a copy of their comments to the 
OMB Desk Officer--Shagufta Ahmed--Office of Information and Regulatory 
Affairs, Office of Management and Budget, New Executive Office 
Building, Room 10235 725 17th Street NW., Washington, DC 20503 or by 
fax to (202) 395-6974.

FOR FURTHER INFORMATION CONTACT: A copy of the PRA OMB submission, 
including the proposed reporting form and instructions, supporting 
statement, and other documentation will be placed into OMB's public 
docket files, once approved. These documents will also be made 
available on the Federal Reserve Board's public Web site at: https://www.federalreserve.gov/apps/reportforms/review.aspx or may be requested 
from the agency clearance officer, whose name appears below.
    Federal Reserve Board Clearance Officer--Cynthia Ayouch--Office of 
the Chief Data Officer, Board of Governors of the Federal Reserve 
System, Washington, DC 20551 (202) 452-3829. Telecommunications Device 
for the Deaf (TDD) users may contact (202) 263-4869, Board of Governors 
of the Federal Reserve System, Washington, DC 20551.

SUPPLEMENTARY INFORMATION:

Request for Comment on Information Collection Proposals

    The following information collections, which are being handled 
under this delegated authority, have received initial Board approval 
and are hereby published for comment. At the end of the comment period, 
the proposed information collections, along with an analysis of 
comments and recommendations received, will be submitted to the Board 
for final approval under OMB delegated authority. Comments are invited 
on the following:
    a. Whether the proposed collection of information is necessary for 
the proper performance of the Federal Reserve's functions; including 
whether the information has practical utility;
    b. The accuracy of the Federal Reserve's estimate of the burden of 
the proposed information collection, including the validity of the 
methodology and assumptions used;
    c. Ways to enhance the quality, utility, and clarity of the 
information to be collected;
    d. Ways to minimize the burden of information collection on 
respondents, including through the use of automated collection 
techniques or other forms of information technology; and
    e. Estimates of capital or start up costs and costs of operation, 
maintenance, and purchase of services to provide information.

Proposal To Approve Under OMB Delegated Authority the Extension for 
Three Years, With Revision, of the Following Reports

    1. Report title: Capital Assessments and Stress Testing information 
collection.
    Agency form number: FR Y-14A/Q/M.
    OMB control number: 7100-0341.
    Effective Date: September 30, 2014, and December 31, 2014.
    Frequency: Annually, semi-annually, quarterly, and monthly.
    Reporters: Any top-tier bank holding company (BHC) (other than a 
foreign banking organization), that has $50 billion or more in total 
consolidated assets, as determined based on: (i) the average of the 
BHC's total consolidated assets in the four most recent quarters as 
reported quarterly on the BHC's Consolidated Financial Statements for 
Bank Holding Companies (FR Y-9C) (OMB No. 7100-0128); or (ii) the 
average of the BHC's total consolidated assets in the most recent 
consecutive quarters as reported quarterly on the BHC's FR Y-9Cs, if 
the BHC has not filed an FR Y-9C for each of the most recent four 
quarters. Reporting is required as of the first day of the quarter 
immediately following the quarter in which it meets this asset 
threshold, unless otherwise directed by the Federal Reserve.
    Estimated annual reporting hours: FR Y-14A: Summary, 67,848 hours; 
Macro scenario, 2,046 hours; Operational Risk, 396 hours; Regulatory 
capital transitions, 759; and Regulatory capital instruments, 660 
hours. FR Y-14Q: Securities risk, 1,584 hours; Retail risk, 2,112 
hours; Pre-provision net revenue (PPNR), 93,852 hours; Wholesale 
corporate loans, 8,556 hours; Wholesale commercial real estate (CRE) 
loans, 8,280 hours; Trading risk, 69,336 hours; Regulatory capital 
transitions, 3,036 hours; Regulatory capital instruments, 5,280 hours; 
Operational risk, 6,600 hours; Mortgage Servicing Rights (MSR) 
Valuation, 1,152 hours; Supplemental, 528 hours; and Retail Fair Value 
Option/Held for Sale (Retail FVO/HFS), 1,408 hours; Counterparty credit 
risk (CCR), 16,632 hours; and Balances, 2,112 hours; FR Y-14M: Retail 
1st lien mortgage, 171,360 hours; Retail home equity, 165,240 hours; 
and Retail credit card, 110,160 hours. FR Y-14 Implementation, 21,600 
hours; and On-Going Automation for existing respondents, 14,400 hours.
    Estimated average hours per response: FR Y-14A: Summary, 1,028 
hours; Macro scenario, 31 hours; Operational Risk, 12 hours; Regulatory 
capital transitions, 23; and Regulatory capital instruments, 20 hours. 
FR Y-14Q: Securities risk, 12 hours; Retail risk, 16 hours; PPNR, 711 
hours; Wholesale corporate loans, 69 hours; Wholesale CRE loans, 69 
hours; Trading risk, 1,926 hours; Regulatory capital transitions, 23 
hours; Regulatory capital instruments, 40 hours; Operational risk, 50 
hours; MSR Valuation, 24 hours; Supplemental, 4 hours; and Retail FVO/
HFS, 16 hours; CCR, 462 hours; and Balances, 16 hours; FR Y-14M: Retail 
1st lien mortgage, 510 hours; Retail home equity, 510 hours; and Retail 
credit card, 510 hours. FR Y-14 Implementation, 7,200 hours; and On-
Going Automation for existing respondents, 480 hours.

[[Page 41278]]

    Number of respondents: 33.
    General description of report: The FR Y-14 series of reports are 
authorized by section 165 of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act (Dodd-Frank Act), which requires the Federal 
Reserve to establish prudential standards for BHCs with total 
consolidated assets of $50 billion or more and nonbank financial 
companies supervised by the Federal Reserve in order to mitigate risks 
to the financial stability of the United States (12 U.S.C. 5365). 
Additionally, section 5 of the BHC Act authorizes the Board to issue 
regulations and conduct information collections with regard to the 
supervision of BHCs (12 U.S.C. 1844).
    As these data are collected as part of the supervisory process, 
they are subject to confidential treatment under exemption 8 of the 
Freedom of Information Act (FOIA) (5 U.S.C. 552(b)(8)). In addition, 
commercial and financial information contained in these information 
collections may be exempt from disclosure under exemption 4 of FOIA (5 
U.S.C. 552(b)(4)). Such exemptions would be made on a case-by-case 
basis.
    Abstract: The data collected through the FR Y-14A/Q/M schedules 
provide the Federal Reserve with the additional information and 
perspective needed to help ensure that large BHCs have strong, 
firm[hyphen]wide risk measurement and management processes supporting 
their internal assessments of capital adequacy and that their capital 
resources are sufficient given their business focus, activities, and 
resulting risk exposures. The annual Comprehensive Capital Analysis and 
Review (CCAR) exercise is also complemented by other Federal Reserve 
supervisory efforts aimed at enhancing the continued viability of large 
BHCs, including continuous monitoring of BHCs' planning and management 
of liquidity and funding resources and regular assessments of credit, 
market and operational risks, and associated risk management practices. 
Information gathered in this data collection is also used in the 
supervision and regulation of these financial institutions. In order to 
fully evaluate the data submissions, the Federal Reserve may conduct 
follow up discussions with or request responses to follow up questions 
from respondents, as needed.
    The semi-annual FR Y-14A collects large BHCs' quantitative 
projections of balance sheet, income, losses, and capital across a 
range of macroeconomic scenarios and qualitative information on 
methodologies used to develop internal projections of capital across 
scenarios.\1\ The quarterly FR Y-14Q collects granular data on BHCs' 
various asset classes and PPNR for the reporting period. The monthly FR 
Y-14M comprises three loan- and portfolio-level collections, and one 
detailed address matching collection to supplement two of the portfolio 
and loan-level collections. Both the FR Y-14Q and the FR Y-14M are used 
to support supervisory stress test models and for continuous monitoring 
efforts.
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    \1\ BHCs that must re-submit their capital plan generally also 
must provide a revised FR Y-14A in connection with their 
resubmission.
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    Current Actions: The Federal Reserve proposes revising several 
schedules of the FR Y-14A/Q/M reports as well as expanding the 
reporting panel. Most revisions would be effective September 30, 2014, 
and some would be effective December 31, 2014, as noted. Many of the 
proposed changes would affect the schedules of the FR Y-14A, including 
increasing the reporting frequency of two schedules. To allow the 
Federal Reserve to enhance supervisory models and ongoing supervision, 
the collection of the CCR and portions of the Operational Risk 
schedules would be changed from annual to quarterly frequency. 
Additionally, both collections would be expanded to gain greater 
clarity and insight into these risk areas and to improve supervisory 
modeling. Both the Summary and Regulatory Capital Transitions schedules 
would be revised to be consistent with schedule HC-R of the FR Y-9C. 
This would include the addition, deletion, and modification of items 
primarily related to changes to standardized approach risk-weighted 
asset (RWAs) components that are currently being considered for the FR 
Y-9C.
    The FR Y-14Q (quarterly collection) would be revised to (1) add 
items to and modify items on the Regulatory Transitions schedule 
consistent with the changes to the FR Y-14A Regulatory Capital 
Transitions schedule; (2) add a schedule that would collect as-of date 
balance information for 26 loan and lease items, as well as 20 items 
that provide sub-categorization of FR Y-9C items and eight items 
related to the unpaid principal balance of loan and leases; (3) add six 
and modify three items of the Corporate Loan schedule; (4) add seven 
and modify six items of the CRE schedule; (5) add a securities 
identifier and security type to the Securities schedule as well as an 
additional table that collects information related to cash flow and 
fair value hedges, (6) expand the Operational Risk schedule with 
information from the FR Y-14A Operational Risk schedule that is being 
changed from annual to quarterly frequency, (7) add the CCR schedule 
that is being changed from annual to quarterly frequency and (8) expand 
the collection of subordinated debt on the Regulatory Capital 
Instruments schedule to include subordinated debt instruments that do 
not qualify as regulatory capital.
    The FR Y-14M (monthly collection) would be revised to (1) add two 
items to the Domestic First Lien Closed-end 1-4 Family Residential Loan 
(First Lien) schedule and (2) add one item to the Domestic Home Equity 
Loan and Home Equity Line (Home Equity) schedule.
    The data are used to assess the capital adequacy of large BHCs 
using forward-looking projections of revenue and losses, to support 
supervisory stress test models and continuous monitoring efforts, as 
well as to inform the Federal Reserve's operational decision-making as 
it continues to implement the Dodd-Frank Act.

Proposed Revision to the Reporting Panel

    The reporting panel would be revised to include BHCs that are 
relying on Supervision and Regulation Letter SR 01-01, effective 
September 30, 2014.

Proposed Revision to the FR Y-14A

    The proposed revisions to the FR Y-14A consist of clarifying 
instructions, adding data items, deleting data items, and redefining 
existing data items. These proposed changes would (1) increase 
consistency between the FR Y-14A and FR Y-9C as well as between the FR 
Y-14A and the FR Y-14Q, (2) improve the scope of supervisory models, 
(3) provide additional information to greatly enhance the ability of 
the Federal Reserve to analyze the validity and integrity of firms' 
projections, and (4) be responsive to industry comments. The Federal 
Reserve has conducted a thorough review of proposed changes and 
believes that the incremental burden of these changes is justified 
given the need for these data to properly conduct the Federal Reserve's 
supervisory responsibilities related to the stress testing and CCAR 
process as well as ongoing supervisory activity as described in more 
detail below.

Summary Schedule

    Revisions to Income Statement Sub-Schedule (A.1a) Respondents have 
noted a definitional difference between the realized gains (losses) on 
available-for-sale (AFS) and held-to-maturity

[[Page 41279]]

(HTM) securities reported on the Income Statement (items 127 and 128) 
and the AFS and HTM totals computed on sub-schedule A.3.c (Projected 
Other-Than-Temporary Impairment (OTTI) for AFS and HTM Securities by 
Portfolio), resulting from the Revised Capital Framework. In order to 
accurately collect information for the Income Statement, The Federal 
Reserve proposes changing items 127 and 128 to be reported items 
instead of being equal to the total amounts on sub-schedule A.3.c. 
Additionally, for consistency with changes proposed to sub-schedule A.5 
(Counterparty Risk) described below, items 59 and 62 (Trading 
Incremental Default Losses and Other CCR Losses) would be modified to 
be Trading Issuer Default Losses and CCR Losses, and line item 61 
(Counterparty Incremental Default Losses) would be removed.
    Revisions to RWA and Capital Sub-Schedules (A.1.c.1 and A.1.d) \2\ 
To better align the collection of regulatory capital components with 
schedule HC-R of the FR Y-9C, the definitions of the items on schedule 
A.1.d (Capital) have been modified to refer to or mirror the 
definitions that appear on the FR Y-9C. Furthermore, in order to ensure 
comparability among respondents and that transition provisions are 
being accurately and consistently applied, respondents would be 
required to apply the appropriate transition provisions to all 
transition-affected items of schedule A.1.d per the revised regulatory 
capital rule. With regard to the RWA sub-schedules, the standardized 
approach RWA and market RWA items of schedule A.1.c.1 (General RWA) 
have been changed in accordance with modifications to schedule HC-R of 
the FR Y-9C that are currently being considered, and moved to a 
separate schedule A.1.c.2 (Standardized RWA). These changes include 
both the modification and addition of items, for an overall addition of 
12 items. Additionally, the computed items one through five of the 
current sub-schedule A.1.c.2 (Advanced RWA) would be removed. Despite 
the alignment of these schedules with the FR Y-9C, the column of actual 
values has not been removed because the values reported on these 
schedules are assumed to have completed the transition schedule 
outlined in the Revised Capital Framework, whereas values reported on 
the FR Y-9C follow the transition schedule.
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    \2\ The Federal Reserve may modify the proposed revisions to the 
FR Y-14 report prior to finalization of this proposal as appropriate 
and consistent to align with any additional changes being considered 
to the FR Y-9C report.
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    Revisions to Retail Repurchase Sub-Schedule (A.2.b) Due to recent 
activity by respondents involving settlements related to their 
representation & warranty (R&W) liabilities, additional detail would be 
collected about the R&W liabilities. Specifically, line items would be 
added that collect the unpaid principal balance (UPB) of loans covered 
by completed settlements for which liability remains and for which no 
liability remains by vintage beginning with 2004, as well as total 
settlement across vintages, for the following categories of loans: 
loans sold to Fannie Mae, loans sold to Freddie Mac, loans insured by 
the U.S. government, loans securitized with monoline insurance, loans 
secured without monoline insurance, and whole loans sold.
    Revisions to Securities Sub-Schedule (A.3) Because covered bonds 
are a material exposure of BHCs that have unique characteristics 
relative to other asset categories currently on this sub-schedule, the 
Federal Reserve would add a covered bond category to sub-schedules 
A.3.b, A.3.c, A.3.d, and A.3.e in order to appropriately and separately 
evaluate respondents' projections of these assets. Additionally, two 
columns would be added to collect information for each of the asset 
categories of sub-schedule A.3.d that would allow changes in market 
value to be distinguished from changes in portfolio allocation for each 
projected quarter: Beginning Fair Market Value and Fair Value Rate of 
Change, which is the weighted average percent change in fair value over 
the quarter. Finally, to reduce reporting burden and increase 
efficiency in reporting, the nine sub-asset categories of Domestic Non-
Agency Residential Mortgage-Backed Securities (RMBS) would be removed 
from the same sub-schedules, and the AFS and HTM portions of sub-
schedule A.3.c would be combined with the addition of a column to 
identify AFS amounts versus HTM amounts.
    Revisions to Trading Sub-Schedule (A.4) Because credit valuation 
adjustment (CVA) losses are modeled separately from trading portfolio 
losses, the Federal Reserve proposes that the profit (loss) amount 
related to CVA hedges be reported separately from other trading 
activity.
    Revisions to Counterparty Risk Sub-Schedule (A.5) In order to allow 
respondents to use alternative methodologies for estimating losses 
related to the default of issuers and counterparties, the requirement 
of using the incremental default risk (IDR) methodology would be 
removed. Accordingly, line items 1, 1a and 1b (Trading Incremental 
Default Losses, Trading Incremental Default Losses from securitized 
products, and Trading Incremental Default Losses from other credit 
sensitive instruments) would be modified to be Trading Issuer Default 
Losses. Additionally, line items 3 (Counterparty Incremental Default 
Losses) and 3a (Impact of CCR IDR Hedges) would be removed, line item 4 
(Other CCR Losses) would be modified to be CCR Losses, and the line 
item Effect of CCR Hedges would be added.

Regulatory Capital Instruments Schedule

    Proposed changes to the Regulatory Capital Instruments schedule 
would be responsive to industry feedback and ensure that information is 
being accurately captured. Specifically, the Federal Reserve proposes 
(1) adding an item that collects employee stock compensation to the 
four quarterly redemption/repurchase and issuance activity sub-
sections; (2) adding 18 items to the general risk-based capital rules 
section and 28 items to the revised regulatory capital section that 
collect activity other than issuances or repurchases for each 
instrument in the section, because respondents adding this activity to 
other items; and (3) changing the capital balance items in the general 
risk-based capital rules section and the revised regulatory capital 
section from reported items to formulas, since they would be able to be 
computed using the items proposed above.

Regulatory Capital Transitions Schedule

    Similar to the changes proposed to be made to the RWA and Capital 
sub-schedules of the Summary schedule, proposed changes to the 
Regulatory Capital Transitions schedule would be made to better align 
the collection of regulatory capital components with schedule HC-R of 
the FR Y-9C, which are currently being considered. The Federal Reserve 
proposes (1) aligning the definitions of the items on the Capital 
Composition sub-schedule to be consistent with schedule HC-R; (2) 
modifying the RWA General sub-schedule to align with proposed revisions 
to schedule HC-R, including changing the name to Standardized RWA and 
modifying, removing and adding items for a net increase of 15 items; 
(3) modifying, adding and removing items of the Advanced RWA sub-
schedule to align with schedule A.1.c.2 (Advanced RWA on the Summary 
schedule), for a net increase of 21 items; and (4) revising the

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Leverage Ratio sub-schedule in accordance with the supplementary 
leverage ratio rulemaking proposal,\3\ for a net increase of ten items. 
Despite the alignment of these schedules with the FR Y-9C, the column 
of actual values has not been removed because the values reported on 
these schedules are assumed to have completed the transition schedule 
outlined in the Revised Capital Framework, whereas values reported on 
the FR Y-9C follow the transition schedule.
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    \3\ Proposed changes to 12 CFR parts 208 and 217.
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Operational Risk Schedule

    Proposed changes to the Operational Risk schedule would provide 
greater insight into the types and frequency of operational risk 
expenses incurred by respondents, which would improve both supervisory 
modeling and ongoing supervisory activities.
    The Federal Reserve proposes adding a data item for firms to 
voluntarily disclose how much of their mortgage related litigation 
reserve is attributable to contractual representation and warranty 
claims.
    Additionally, effective December 31, 2014, the Federal Reserve 
proposes (1) changing the collection of the annual Legal Reserve 
information to be part of the quarterly Operational Risk collection as 
a separate sub-schedule; (2) adding columns to collect Gross Increase 
and Decrease to Reserves to better track the flow of legal reserves; 
and (3) requiring that the 20 previous quarters of data be submitted 
upon initial submission and four quarters of data thereafter.

Counterparty Credit Risk Schedule

    Significant additions would be made to the CCR schedule in order to 
more adequately and accurately capture exposure information related to 
derivatives and securities financing transactions (SFTs) used in 
supervisory loss estimates and supervisory activities. These additions 
would remediate deficiencies discovered in the current collection 
related to exposure, including a lack of information regarding 
collateral, asset types, and total exposure to a given counterparty, 
and have been carefully evaluated internally and vetted with 
respondents.
    The Federal Reserve proposes (1) changing the collection of CCR 
information from annual to quarterly frequency to capture the 
fluctuations in counterparty risk and exposure (from schedule F of the 
FR Y-14A to schedule L of the FR Y-14Q); (2) adding a sub-schedule that 
collects the derivative exposures at a legal-entity netting-agreement 
level for the top 25 non-central clearing counterparty (non-CCP) and 
non-G-7 counterparties, as well as all CCPs and the G-7 counterparties 
that includes a breakout of collateral into cash and non-cash, and 
exposures into 14 asset categories; (3) changing current the SFT sub-
schedule to collect exposures and collateral separately at a 
counterparty legal-entity netting-agreement level for the top 25 non-
CCP and non-G-7 counterparties as well as all CCPs and the G-7 and 
adding asset sub-categories for a total of 30 specific asset types; (4) 
removing all columns with the BHC specification of margin period of 
risk (MPOR) under the global market shocks from sub-schedules F.1.a-
F.1.e and F.2; (5) removing the column LGD Derived from Unstressed PD 
on F.2; and (6) adding columns to worksheet F.1.e to collect both gross 
and net stressed and unstressed current exposure to central clearing 
counterparties.

Proposed Revision to the FR Y-14Q

    The proposed revisions to the FR Y-14Q consist of clarifying 
instructions, adding a schedule, and adding, deleting and redefining 
existing data items. These proposed changes would be responsive to 
industry comments and provide additional information to enhance 
supervisory models. The Federal Reserve has conducted a thorough review 
of proposed changes and believes that because the proposed item 
additions and modifications to the FR Y-14Q request information 
currently collected by respondents in their regular course of business 
reporting burden will be minimized. A summary of the proposed changes 
by schedule is provided below.

Proposed Balances Schedule

    As part of revisions to the FR Y-14A/Q/M announced September 30, 
2013 (see 78 FR 59934), the Federal Reserve removed the as-of column 
from schedule A.1.b of the FR Y-14A (Balance Sheet) in an effort to 
reduce burden and avoid duplicative reporting. However, this removal 
has caused numerous issues related to both reporting and analysis that 
have been raised by respondents.
    The proposed schedule would collect the information required to 
eliminate these issues and provide a clear reconciliation between the 
FR Y-14 and FR Y-9C reporting forms. Specifically, the schedule would 
collect as-of balance information for 26 loan and lease items, as well 
as 20 FR Y-9C reconciliation items and eight unpaid principal balance 
items related to loan and leases.

Supplemental Schedule

    The Federal Reserve proposes removing columns H through N and P 
through R, because this information would be collected on the proposed 
FR Y-14Q Balances schedule.

Commercial Real Estate Schedule

    The Federal Reserve proposes (1) modifying item 20 (Amortization) 
to capture non-standard amortization schedule by allowing banks to 
report `-1' in response to industry comments; (2) adding an option to 
current item 21 (Recourse) that indicates partial recourse and 
modifying option 1 to indicate full recourse in order to capture the 
level of recourse; (3) modifying current item 25 (Loan Purpose) to 
include an option for Mini-perm to identify short-term loans on 
recently constructed buildings because of their unique credit risk; (4) 
modify current item 39 (Property Size) in the CRE schedule to only 
capture credit facilities secured by one property of one type to 
simplify the collection; (5) removing current item 48 (Fair Value 
Adjustment) and replacing it with three items that provide additional 
detail on the drawn and undrawn portions of the facilities and the 
respondent's methodology of computation, both of which are key factors 
for understanding the adjustment made: Fair Value Committed Exposure, 
Fair Value Adjustment Drawn, and Lower of Cost or Market Flag to 
capture the breakdown of adjustments between the drawn and undrawn 
portions and the approach used to calculate the adjustment; (6) adding 
an item to collect the date on which current occupancy was determined 
in order to track this information over time; (7) adding an item that 
collects the Current Value Basis, which provides a more accurate 
understanding of the property valuation; and (8) adding an item that 
captures the credit facility currency in order to evaluate exchange 
rate risk.
    Additionally, effective December 31, 2014, the Federal Reserve 
proposes: (1) expanding the required respondents for the Basel II 
probability of default (PD), loss given default (LGD), and exposure at 
default (EAD) items to include all respondents but giving the option to 
non-advanced approaches respondents to report an internal metric, which 
would support ongoing supervisory activities as well as provide more 
detail on internal credit processes; (2) adding an item that collects 
the date that a credit facility has been renewed in order to 
distinguish between new money and renewals and to be able better to 
track the loans over time; (3) adding an item to collect the Shared 
National Credit

[[Page 41281]]

(SNC) Internal Credit ID, which would greatly enhance the ability to 
monitor credit risk of reported loans; and (4) adding an item that is a 
flag to indicate prepayment penalties to be able to account for the 
behavioral changes from such penalties.

Corporate Loan Schedule

    The Federal Reserve proposes (1) additionally excluding the 
reporting of obligor financial data for offices of bank holding 
companies, because this information is no longer relevant; (2) 
replacing current item 29 (FVA) with three items (Fair Value Committed 
Exposure, Fair Value Adjustment Drawn, Lower of Cost or Market Flag), 
similar to the CRE schedule; (3) adding an item that captures the 
credit facility currency in order to evaluate exchange rate risk; and 
(4) adding an item to collect the industry code for the entity that is 
the primary source of the repayment for the credit facility in order to 
capture instances in which the primary source of repayment is not the 
obligor.
    Additionally, effective December 31, 2014, the Federal Reserve 
proposes: (1) replacing current field 17 (Credit Facility Internal Risk 
Rating) in Corporate Schedule with three items adding three items: PD, 
LGD, and EAD, which would be required by all respondents, but giving 
the option to non-advanced approaches respondents to report an internal 
metric in order to support ongoing supervisory activities as well as 
provide more detail on internal credit processes; (2) adding an item 
that collects the date on which a credit facility has been renewed in 
order to distinguish between new money and renewals and to be able 
better to track the loans over time; (3) adding an item that is a flag 
to indicate prepayment penalties, similar to the CRE schedule; (4) 
adding an item to collect the SNC Internal Credit ID, also similar to 
the CRE schedule; and (5) adding an item that captures the market value 
of collateral in order to incorporate the collateral requirements of 
individual loans.

All Retail Schedules (A.1 to A.10)

    The Federal Reserve proposes redefining items related to charge-
offs and recoveries to be consistent with charge-offs and recoveries as 
defined in the FR Y-9C.

International Credit Cards Schedule

    The Federal Reserve proposes modifying the third option (Other) of 
the Product Type segment variable to be Corporate and Small- and 
Medium-Sized Enterprise SME Cards to more accurately align the segments 
with respondents' international credit card portfolios.

International Auto Schedule

    The Federal Reserve proposes removing the item Basel II EAD and 
replacing it with RWA per the most recent capital framework, which is a 
more meaningful item for closed-end loans such as auto loans.

U.S. Auto Schedule

    The Federal Reserve proposes (1) modifying the LTV segmentation 
variable to be based on the wholesale value of the vehicle instead of 
the retail value and adding the segmentation ``N/A'' for any missing 
data in order to better align reporting with respondents' internal 
records; (2) removing the item Basel II EAD and replacing it with RWA 
per the most recent capital framework, which is a more meaningful item 
for closed-end loans such as auto loans; and (3) adding two variables 
related to LGD, which would include the collection of historical data, 
in order to capture key components of LGD: Unpaid Principal Balance at 
Charge-off and Percent Loss Severity (3 month Lagged).

Trading Schedule

    The Federal Reserve proposes to collect the sensitivities related 
to CVA hedges separately from all other trading activity in order to 
accurately separate the two exposures.

Securities Schedule

    The Federal Reserve proposes (1) adding a sub-schedule that 
collects the identifier and amounts of each investment security for 
which the respondent has established a qualifying hedging relationship 
(cash flow hedge or fair value hedge, as defined according to Generally 
Accepted Accounting Principles (GAAP) in order to capture the effect on 
Other Comprehensive Income (OCI) attributable to changes in the 
unrealized gains and losses of AFS securities hedged; (2) adding an 
item that indicates positions that are private placements; (3) adding a 
security category for Covered Bonds, which have been found to be a 
major portion of the securities reported in the Other category; (4) 
requiring additional descriptive information on municipal bonds in the 
Description 2 column in order to collect specific information for 
instances in which the CUSIP (Committee on Uniform Securities 
Identification Procedures) number is unavailable; (5) adding a column 
that collects the currency denomination of the reported bonds in order 
to account for changes in exchange rates; (6) requiring additional 
information for mutual fund categories in the Description 2 column in 
order to collect specific information for instances in which the CUSIP 
is unavailable; and (7) adding an item that collects a unique 
identifier for each unique record.

Operational Risk Schedule

    The Federal Reserve proposes (1) adding a Unique Identifier item 
for each row in order to clearly identify record submissions with the 
same information that are unique records; and, effective December 31, 
2014, (2) for each closed/settled legal event above 250k adding (i) 
date of awareness, (ii) date on which a claim was filed, proceedings 
were instituted, or settlement negotiations began, (iii) date of 
settlement, fine, or final judgment, (iv) cause of action, (v) the 
reserve history, and (vi) terminal outcome, which would all provide 
greater insight into reserving practices and changes in reserves.

Regulatory Capital Transitions Schedule

    The Federal Reserve proposes revising this schedule in accordance 
with proposed changes to the FR Y-14A Regulatory Capital Transitions 
schedule.

Regulatory Capital Instruments Schedule

    In order to better understand the characteristics of subordinated 
debt instruments, the collection would be expanded to include all 
subordinated debt instruments, not only those that qualify as 
regulatory capital. Additionally, a one-time collection of the items 
from schedule C.3 (Issuances During Quarter) for all subordinated debt 
instruments as of quarter end would be required for the Q3 2014 as of 
period for respondents that are currently reporting the schedule, or 
the initial submission for respondents that begin reporting the 
schedule after the Q3 2014 as of period.

Proposed Revisions to the FR Y-14M

Domestic First Lien Closed-end 1-4 Family Residential Loan Schedule

    The Federal Reserve proposes (1) adding an item that is a flag that 
indicates if the first lien is a home equity loan in order to ensure 
the most appropriate risk characteristics are associated with these 
loans, (2) adding an item that collects the date that the credit score 
of the borrower was refreshed so this information can be tracked over 
time, and (3) adding an option to the Loan Purpose item that identifies 
reverse mortgages.

[[Page 41282]]

Domestic Home Equity Loan and Home Equity Line Schedule

    The Federal Reserve proposes (1) adding an item that collects the 
date that the credit score of the borrower was refreshed, similar to 
the First Lien schedule, and (2) adding an option to the Loan Purpose 
item that identifies reverse mortgages.
    2. Report title: Annual Company-Run Stress Test information 
collection.
    Agency form number: FR Y-16.
    OMB control number: 7100-0356.
    Effective Date: March 31, 2015.
    Frequency: Annually.
    Reporters: BHCs, savings and loan holding companies (SLHCs) \4\ 
with average total consolidated assets of greater than $10 billion but 
less than $50 billion, and any affiliated or unaffiliated state member 
bank (SMB) with average total consolidated assets of more than $10 
billion but less than $50 billion excluding SMB subsidiaries of covered 
companies.\5\
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    \4\ SLHCs are not subject to Dodd-Frank Act annual company-run 
stress testing requirements until the calendar year after SLHCs 
become subject to regulatory capital requirements. All SLHCs except 
those substantially engaged in insurance underwriting or commercial 
activities are subject to capital requirements beginning in 2015. 
These ``covered SLHCs'' are required to report using the FR Y-16 in 
March 2017 (stress test as-of date September 30, 2016).
    \5\ ``Covered companies'' are defined as BHCs with at least $50 
billion in total consolidated assets and nonbank systemically 
important financial institutions, subject to annual supervisory 
stress tests and semi-annual company-run stress tests.
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    Estimated annual reporting hours: 38,623 hours.
    Estimated average hours per response: 469 hours; 3,600 hours, one-
time implementation.
    Number of respondents: BHCs, 46; SLHCs, 11; SMBs, 10; and one-time 
implementation, 2.
    General description of report: This information collection is 
authorized pursuant Section 165(i)(2) of the Dodd-Frank Act that 
specifically authorizes the Board to issue regulations implementing the 
annual stress testing requirements for its supervised institutions. 12 
U.S.C. 5365(i)(2)(C). More generally, with respect to BHCs, Section 
5(c) of the Bank Holding Company Act, 12 U.S.C. 1844(c), authorizes the 
Board to require a BHC and any subsidiary ``to keep the Board informed 
as to--(i) its financial condition, [and] systems for monitoring and 
controlling financial and operating risks. . . .'' Section 9(6) of the 
Federal Reserve Act, 12 U.S.C. 324, requires SMBs to make reports of 
condition to their supervising Reserve Bank in such form and containing 
such information as the Board may require. Finally, with respect to 
SLHCs, under Section 312 of the Dodd-Frank Act, 12 U.S.C. 5412, the 
Board succeeded to all powers and authorities of the OTS and its 
Director, including the authority to require SLHCs to ``file . . . such 
reports as may be required . . . in such form and for such periods as 
the [agency] may prescribe.'' 12 U.S.C. 1467a(b)(2).
    Obligation to Respond is Mandatory: Section 165(i)(2)(A) provides 
that ``financial companies that have total consolidated assets [meeting 
the asset thresholds] . . . and are regulated by a primary Federal 
financial regulatory agency shall conduct annual stress tests.'' 
Section 165(i)(2)(B) provides that a company required to conduct annual 
stress tests ``shall submit a report to the Board of Governors and to 
its primary financial regulatory agency at such time, in such form, and 
containing such information as the primary financial regulatory agency 
shall require.'' 12 U.S.C. 5365(i)(2)(B).
    Confidentiality: As noted under Section 165(i)(2)(C)(iv), companies 
conducting annual stress tests under these provisions are ``require[d] 
. . . to publish a summary of the results of the required stress 
tests.'' 12 U.S.C. 5365(i)(2)(C)(iv). Regarding the information 
collected by the Board, however, as such information will be collected 
as part of the Board's supervisory process, it may be accorded 
confidential treatment under Exemption 8 of the Freedom of Information 
Act (FOIA), 5 U.S.C. 552(b)(8). This information also is the type of 
confidential commercial and financial information that may be withheld 
under Exemption 4 of FOIA, 5 U.S.C. 552(b)(4). As required information, 
it may be withheld under Exemption 4 only if public disclosure could 
result in substantial competitive harm to the submitting institution, 
under National Parks & Conservation Ass'n v. Morton, 498 F.2d 765 (D.C. 
Cir. 1974).
    Abstract: The annual FR Y-16 report collects quantitative 
projections of income, losses, assets, liabilities, and capital across 
three scenarios provided by the Board (baseline, adverse, and severely 
adverse) and qualitative supporting information on the methodologies 
and processes used to develop these internal projections.
    Current Actions: The Federal Reserve proposes the following 
revisions and clarifications to the FR Y-16 report for the report 
submission due annually beginning on March 31, 2015: (1) add common 
equity tier 1 capital as a data item, (2) add common equity tier 1 risk 
based capital ratio as a data item, and (3) modify the reporting 
instructions to clarify a number of items.
    On July 2, 2013, the Board approved revised risk based and leverage 
capital requirements for banking organizations that implement the Basel 
III regulatory capital reforms and certain changes required by the 
Dodd-Frank Act (revised capital framework).\6\ The revised capital 
framework introduces the new common equity tier 1 capital component and 
a new common equity tier 1 risk based capital ratio, changes the 
definition of regulatory capital items, and changes the calculation of 
risk-weighted assets. All banking organizations that are not subject to 
the advanced approaches rule must begin to comply with the revised 
capital framework beginning on January 1, 2015.\7\ Under the Board's 
rules implementing the stress tests established by the Dodd-Frank 
Act,\8\ banking organizations would be required to reflect the new 
capital rules, including the new common equity tier 1 capital component 
and ratio, in their company-run stress test planning horizon as the 
revised capital framework becomes applicable. However, on September 30, 
2013, the Board provided BHCs and SMBs with total consolidated assets 
of more than $10 but less than $50 billion (other than state member 
banks that are subsidiaries of BHCs with total consolidated assets of 
$50 billion or more) with a one-year transition period to incorporate 
the revised capital framework into their company-run stress tests.\9\ 
Therefore, the FR Y-16 did not include the effects of the revised 
capital framework for the initial 2014 stress test cycle.
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    \6\ See Regulatory Capital Rules: Regulatory Capital, 
Implementation of Basel III, Capital Adequacy, Transition 
Provisions, Prompt Corrective Action, Standardized Approach for 
Risk-weighted Assets, Market Discipline and Disclosure Requirements, 
Advanced Approaches Risk-Based Capital Rule, and Market Risk Capital 
Rule (July 2, 2013), available at: https://www.federalreserve.gov/newsevents/press/bcreg/20130702a.htm (Revised capital framework).
    \7\ A banking organization is subject to the advanced approaches 
rule if it has consolidated assets greater than or equal to $250 
billion, if it has total consolidated on-balance sheet foreign 
exposures of at least $10 billion, or if it elects to apply the 
advanced approaches rule.
    \8\ See 77 FR 62378 (October 12, 2012) (codified at 12 CFR part, 
252 subpart H) (stress test rule).
    \9\ See 78 FR 59791 (September 30, 2013).
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    The Federal Reserve proposes to revise the FR Y-16 by adding a 
common equity tier 1 capital data item to the Balance Sheet Schedule 
and a common equity tier 1 risk based capital ratio data item to the 
Summary Schedule and Balance Sheet Schedule in order to reflect the 
requirements of the revised capital framework. These revisions would be 
effective for the 2015 stress test cycle (with reporting in March 
2015). In addition, the Federal Reserve

[[Page 41283]]

proposes to clarify the FR Y-16 instructions to emphasize that 
companies should transition to the revised capital framework 
requirements in its company-run stress test projections in the quarter 
in which the requirements become effective. Specifically, companies 
would be required to transition to the revised capital framework and 
begin including the common equity tier 1 capital data item and common 
equity tier 1 risk based capital ratio data item in projected quarter 
two (1st quarter 2015) through projected quarter nine (4th quarter 
2016) for each supervisory scenario for the 2015 stress test cycle.
    The Federal Reserve also proposes several clarifications to the FR 
Y-16 report instructions, including: indicating that the Scenario 
Variables Schedule would be collected as a reporting form in the 
Reporting Central application (instead of as a file submitted in Adobe 
Acrobat PDF format); clarifying that covered SLHCs will begin reporting 
in March 2017; clarifying what BHCs and SLHCs should include in Balance 
Sheet Schedule line items 32 and 33 (retail and wholesale funding); and 
finally clarifying how the supporting qualitative information should be 
organized.

    Board of Governors of the Federal Reserve System, July 9, 2014.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2014-16443 Filed 7-14-14; 8:45 am]
BILLING CODE 6210-01-P