Agency Information Collection Activities: Announcement of Board Approval Under Delegated Authority and Submission to OMB, 52279-52282 [2015-21312]

Agencies

• FEDERAL RESERVE SYSTEM

[Federal Register Volume 80, Number 167 (Friday, August 28, 2015)]
[Notices]
[Pages 52279-52282]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-21312]


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FEDERAL RESERVE SYSTEM


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

AGENCY: Board of Governors of the Federal Reserve System.

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

FOR FURTHER INFORMATION CONTACT: Federal Reserve Board Clearance 
Officer--Nuha Elmaghrabi--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.
    OMB Desk Officer--Shagufta Ahmed--Office of Information and 
Regulatory Affairs, Office of Management and Budget, New Executive 
Office Building, Room 10235, 725 17th Street NW., Washington, DC 20503.

Final Approval Under OMB Delegated Authority of the Extension for Three 
Years, With Revision, of the Following Report

    Report title: Recordkeeping and Disclosure Requirements Associated 
with the Consumer Financial Protection Bureau's (CFPB) Regulation E 
(Electronic Fund Transfer Act).
    Agency form number: Reg E.
    OMB control number: 7100-0200.
    Frequency: Event-generated.
    Reporters: State member banks, their subsidiaries, subsidiaries of 
bank holding companies, U.S. branches and agencies of foreign banks 
(other than federal branches, federal agencies, and insured state 
branches of foreign banks), commercial lending companies owned or 
controlled by foreign banks, and organizations operating under section 
25 or 25A of the Federal Reserve Act (12 U.S.C. 601-604a; 611-631).
    Estimated annual reporting hours: Initial disclosures, 6,363 hours; 
Change-in-terms, 5,769 hours; Periodic statements, 15,960 hours; Error 
resolution, 15,270 hours; Gift card exclusion policies and procedures, 
8,144 hours; Gift card policy and procedures, 8,144 hours; Remittance 
transfer disclosures (one-time), 122,160 hours; Remittance transfer 
disclosures (ongoing), 97,728 hours; Error notice from sender 
(consumers)(ongoing), 61,083 hours; Time limits and extent of 
investigation (ongoing), 54,972 hours; Transmitter error resolution 
standards and recordkeeping requirements (one-time), 40,720 hours; 
Transmitter error resolution standards and recordkeeping requirements 
(ongoing), 8,144 hours; Acts of agents (one-time), 40,720 hours; Acts 
of agents (ongoing), 8,144 hours.
    Estimated average hours per response: Initial disclosures, 1.5 
minutes; Change-in-terms, 1 minute; Periodic statements, 7 hours; Error 
resolution, 30 minutes; Gift card exclusion policies and procedures, 8 
hours; Gift card policy and procedures, 8 hours; Remittance transfer 
disclosures (one-time), 120

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hours; Remittance transfer disclosures (ongoing), 8 hours; Error notice 
from sender (consumers)(ongoing), 5 minutes; Time limits and extent of 
investigation (ongoing), 4.5 hours; Transmitter error resolution 
standards and recordkeeping requirements (one-time), 40 hours; 
Transmitter error resolution standards and recordkeeping requirements 
(ongoing), 8 hours; Acts of agents (one-time), 40 hours; Acts of agents 
(ongoing), 8 hours.
    Number of respondents: Initial disclosures, 1,018 respondents; 
Change-in-terms, 1,018 respondents; Periodic statements, 190 
respondents; Error resolution, 1,018 respondents; Gift card exclusion 
policies and procedures, 1,018 respondents; Gift card policy and 
procedures, 1,018 respondents; Remittance transfer disclosures (one-
time), 1,018 respondents; Remittance transfer disclosures (ongoing), 
1,018 respondents; Error notice from sender (consumers)(ongoing), 
733,000 respondents; Time limits and extent of investigation (ongoing), 
1,018 respondents; Transmitter error resolution standards and 
recordkeeping requirements (one-time), 1,018 respondents; Transmitter 
error resolution standards and recordkeeping requirements (ongoing), 
1,018 respondents; Acts of agents (one-time), 1,018 respondents; Acts 
of agents (ongoing), 1,018 respondents.
    General description of report: This information collection is 
mandatory (15 U.S.C. 1693b(a)). The Federal Reserve does not collect 
any information under the CFPB's Regulation E, so no issue of 
confidentially arises. However, in the event the Federal Reserve were 
to obtain this any of the recordkeeping or disclosure documentation 
during the course of an examination, the information may be protected 
from disclosure under exemptions 4, 6, or 8 of the Freedom of 
Information Act (5 U.S.C. 552(b)(4), (6), and (8)).
    Abstract: The EFTA ensures adequate disclosure of basic terms, 
costs, and rights relating to electronic fund transfer (EFT) services 
debiting or crediting a consumer's account. The disclosures required by 
the EFTA are triggered by certain specified events. The disclosures 
inform consumers about the terms of the electronic fund transfer 
service, activity on the account, potential liability for unauthorized 
transfers, and the process for resolving errors. To ease institutions' 
burden and cost of complying with the disclosure requirements of 
Regulation E (particularly for small entities), Regulation E includes 
model forms and disclosure clauses.
    Regulation E applies to all financial institutions. In addition, 
certain provisions in Regulation E apply to entities that are not 
financial institutions, including those that act as service providers 
or automated teller machine (ATM) operators, merchants and other payees 
that engage in electronic check conversion (ECK) transactions, the 
electronic collection of returned item fees, or preauthorized 
transfers, issuers and sellers of gift cards and gift certificates, and 
remittance transfer providers.
    Current Actions: On June 10, 2015, the Federal Reserve published a 
notice in the Federal Register (80 FR 32953) requesting public comment 
for 60 days on the extension, with revision, of the Recordkeeping and 
Disclosure Requirements Associated with the Consumer Financial 
Protection Bureau's (CFPB) Regulation E (Electronic Fund Transfer Act). 
The comment period for this notice expired on August 10, 2015. The 
Federal Reserve did not receive any comments. The revisions will be 
implemented as proposed.

Final Approval Under OMB Delegated Authority of the Extension for Three 
Years, Without Revision, of the Following Reports

    1. Report title: Notice Requirements in Connection with Regulation 
W (12 CFR part 223 Transactions Between Member Banks and Their 
Affiliates).
    Agency form number: Reg W.
    OMB control number: 7100-0304.
    Frequency: Event-generated.
    Reporters: Insured depository institutions and uninsured member 
banks.
    Estimated annual reporting hours: 24 hours.
    Estimated average hours per response: Loan participation renewal 
notice, 2 hours; Acquisition notice, 6 hours; Internal corporate 
reorganization transactions notice, 6 hours; and section 23A additional 
exemption notice, 10 hours.
    Number of respondents: Loan participation renewal notice, 1; 
Acquisition notice, 1; Internal corporate reorganization transactions 
notice, 1; and section 23A additional exemption notice, 1.
    General description of report: This information collection is 
required to evidence compliance with sections 23A and 23B of the 
Federal Reserve Act (12 U.S.C. 371c and 371c-1). Confidential and 
proprietary information collected for the purposes of the Loan 
Participation Renewal notice (12 CFR 223.15(b)(4)) may be protected 
under the authority of section (b)(4) of FOIA (5 U.S.C. 552(b)(4)). 
That section of FOIA exempts commercial or financial information deemed 
competitively sensitive from disclosure. Respondents who desire that 
the information on this notice be kept confidential in accordance with 
section (b)(4) can request confidential treatment under the Board's 
rules at 12 CFR 261.15. In addition, information that is obtained as 
part of an examination of a financial institution is exempt from 
disclosure under exemption (b)(8) of FOIA (5 U.S.C. 552(b)(8)).
    Abstract: On December 12, 2002, the Federal Reserve published a 
Federal Register notice \1\ adopting Regulation W (Reg W) to implement 
sections 23A and 23B. Reg W was effective April 1, 2003. The Board 
issued Reg W for several reasons. First, the regulatory framework 
established by the Gramm-Leach-Bliley Act \2\ emphasized the importance 
of sections 23A and 23B as a means to protect depository institutions 
from losses in transactions with affiliates. Second, adoption of a 
comprehensive rule simplified the interpretation and application of 
sections 23A and 23B, ensured that the statute is consistently 
interpreted and applied, and minimized burden on banking organizations 
to the extent consistent with the statute's goals. Third, issuing a 
comprehensive rule allowed the public an opportunity to comment on 
Federal Reserve interpretations of sections 23A and 23B.
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    \1\ (67 FR 76603).
    \2\ Public Law 106-102, 113 Stat. 1338 (1999).
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    The information collection requirements associated with Regulation 
W comprise four notices: (1) the Loan Participation Renewal notice (12 
CFR 223.15(b)(4)), which is a condition to an exemption for renewals of 
loan participations involving problem loans; (2) the Acquisition notice 
(12 CFR 223.31(d)(4)), which is a condition to an exemption for a 
depository institution's acquisition of an affiliate that becomes an 
operating subsidiary of the institution after the acquisition; (3) the 
Internal Corporate Reorganization Transactions notice (12 CFR 
223.41(d)(2)), which is a condition to an exemption for internal 
corporate reorganization transactions; and (4) the Section 23A 
Additional Exemption notice (12 CFR 223.43(b)),which provides 
procedures for requesting additional exemptions from the requirements 
of section 23A. These notifications are event-generated and must be 
provided to the appropriate federal banking agency and, if applicable, 
the Federal Reserve Board within the time periods established by the 
law and regulation.
    Current Actions: On May 27, 2015, the Federal Reserve published a 
notice in the Federal Register (80 FR 30248)

[[Page 52281]]

requesting public comment for 60 days on the extension, without 
revision, of the Notice Requirements in Connection with Regulation W 
(12 CFR part 223 Transactions Between Member Banks and Their 
Affiliates). The comment period for this notice expired on July 27, 
2015. The Federal Reserve did not receive any comments. The information 
collection will be extended as proposed.
    2. Report title: Prohibition on Funding of Unlawful Internet 
Gambling.
    Agency form number: Reg GG.
    OMB Control Number: 7100-0317.
    Frequency: Annual.
    Reporters: Depository institutions, card system operators, and 
money transmitting business operators that participate in designated 
payment systems.
    Estimated annual reporting hours: 52,808.
    Estimated average hours per response: Ongoing--8 hours; One-time--
100 hours.
    Number of respondents: Depository institutions--3,039; credit 
unions--3,170; card system operators--7; money transmitting business 
operators--10; and new or de novo institutions--3.
    General description of report: Reg GG is a mandatory record 
retention requirement that is authorized under 31 U.S.C. 5364 (a). The 
required policies and procedures are not submitted to the Board so 
normally no confidentiality issues would be implicated. To the extent 
the policies and procedures were obtained by the Board through the 
examination process, they could be afforded confidential treatment (5 
U.S.C. 552(b)(8)).
    Abstract: On November 18, 2008, the Board and the Department of the 
Treasury published a joint notice of final rulemaking in the Federal 
Register (73 FR 69382) adopting a rule on a prohibition on the funding 
of unlawful Internet gambling pursuant to the Act. Identical sets of 
the final joint rule with identically numbered sections were adopted by 
the Board and the Treasury within their respective titles of the Code 
of Federal Regulations (12 CFR part 233 for the Board and 31 CFR part 
132 for the Treasury). The compliance date for the joint rule was June 
1, 2010 (74 FR 62687). The collection of information is set out in 
sections 5 and 6 of the joint rule.\3\ Section 5 of the joint rule, as 
required by the Act, requires all non-exempt participants in designated 
payment systems to establish and implement written policies and 
procedures reasonably designed to identify and block or otherwise 
prevent or prohibit transactions in connection with unlawful Internet 
gambling.\4\ Section 6 of the joint rule provides non-exclusive 
examples of policies and procedures deemed by the two agencies to be 
reasonably designed to identify and block or otherwise prevent or 
prohibit transactions restricted by the Act.
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    \3\ Section 802 of the Act requires the Agencies to prescribe 
joint regulations requiring each designated payment system, and all 
participants in such systems, to identify and block or otherwise 
prevent or prohibit restricted transactions through the 
establishment of policies and procedures reasonably designed to 
identify and block or otherwise prevent or prohibit the acceptance 
of restricted transactions. 31 U.S.C. 5364(a). Section 802 also 
requires the Agencies to include in the joint rule non-exclusive 
examples of reasonably designed policies and procedures. 31 U.S.C. 
5364(b).
    \4\ 12 CFR 233.5 and 233.6; and 31 CFR 132.5 and 132.6.
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    Current Actions: On June 9, 2015 the Board and the Department of 
the Treasury published a joint notice in the Federal Register (80 FR 
32559) requesting public comment for 60 days on the extension, without 
revision, of the Prohibition on Funding of Unlawful Internet Gambling 
information collection. The comment period for this notice expired on 
August 10, 2015. The Board did not receive any comments and therefore 
will proceed with extending the information collection as proposed.
    3. Report title: Basel II Interagency Pillar 2 Supervisory 
Guidance.
    Agency form number: FR 4199.
    OMB control number: 7100-0320.
    Frequency: Annual.
    Reporters: State member banks, bank holding companies (BHCs).
    Estimated annual reporting hours: 5,460.
    Estimated average hours per response: 420.
    Number of respondents: 13.
    General description of report: The Board's Legal Division has 
determined that the FR 4199 is authorized by section 9(6) of the 
Federal Reserve Act and section 5 of the Bank Holding Company Act. 
Section 9(6) of the Federal Reserve Act requires state member banks to 
``comply with the reserve and capital requirements of this chapter'' 
and to make reports of condition ``in such form'' and ``contain[ing] 
such information'' as the Board may require (12 U.S.C. 324). Section 5 
of the Bank Holding Company Act authorizes the Board to ``issue 
regulations and orders relating to the capital requirement for bank 
holding companies'' and requires BHCs to ``keep the Board informed as 
to [their] financial condition, systems for monitoring and controlling 
financial and operating risks. . .'' (12 U.S.C. 1844 (b) and (c)). 
Because the recordkeeping requirements are contained within guidance 
(and not a statute or regulation), they are voluntary. Because the FR 
4199 recordkeeping requirements require that banks and BHCs retain 
their own records, the Freedom of Information Act (FOIA) would only be 
implicated if the Federal Reserve's examiners retained a copy of the 
records as part of an examination or supervision of a bank or BHC. 
However, records obtained as a part of an examination or supervision of 
a bank or BHC are exempt from disclosure under FOIA exemption (b)(8), 
for examination material (5 U.S.C. 552(b)(8)). In addition, the records 
may also be exempt under (b)(4), which exempts from disclosure ``trade 
secrets and commercial or financial information obtained from a person 
and privileged or confidential,'' and under (b)(6) for non-public 
personal information regarding owners, shareholders, directors, 
officers or employees if the disclosure would ``constitute a clearly 
unwarranted invasion of personal privacy'' (5 U.S.C. 552(b)(4) and 
(b)(6)).
    Abstract: The advanced approaches framework requires certain banks 
and BHCs to use an internal ratings-based approach to calculate 
regulatory credit risk capital requirements and advance measurement 
approaches to calculate regulatory operational risk capital 
requirements, and to meet the higher of the minimum requirements under 
the general risk-based capital rules and the minimum requirements under 
the advanced approaches framework.
    A bank is required to comply with the advanced approaches framework 
if it meets either of two independent threshold criteria: (1) 
consolidated total assets of $250 billion or more, as reported on the 
most recent year-end regulatory reports; or (2) consolidated total on-
balance sheet foreign exposure of $10 billion or more at the most 
recent year-end.
    A BHC is required to comply with the advanced approaches framework 
if the BHC has (1) Consolidated total assets (excluding assets held by 
an insurance underwriting subsidiary) of $250 billion or more, as 
reported on the most recent year-end regulatory reports; (2) 
consolidated total on-balance sheet foreign exposure of $10 billion or 
more at the most recent year-end; or (3) a subsidiary depository 
institution (DI) that is meets the criteria to be subject to the 
advanced approaches rule, or elects to adopt the advanced approaches. 
As of September 30, 2014, 13 BHCs meet the

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above criteria and are therefore subject to the advanced approaches 
rule.\5\
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    \5\ Regulation YY permits a bank holding company that is a 
subsidiary of a foreign banking organization to elect not to comply 
with the advanced approaches rule prior to formation of an IHC with 
the prior approval of the Board. 12 CFR 252.153(e)(2)(C).
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    Also, some banks or BHCs may voluntarily decide to adopt the 
advanced approaches framework. Both mandatory and voluntary respondents 
are required to meet certain qualification requirements before they can 
use the advanced approaches framework for risk-based capital purposes.
    The Pillar 2 Guidance sets the expectation that respondents 
maintain certain documentation as described in paragraphs 37, 41, 43, 
and 46 of this portion of the guidance. Details of the expectations for 
each section are provided below.

Setting and Assessing Capital Adequacy Goals that Relate to Risk

    Paragraph 37. In analyzing capital adequacy, a banking organization 
should evaluate the capacity of its capital to absorb losses. Because 
various definitions of capital are used within the banking industry, 
each banking organization should state clearly the definition of 
capital used in any aspect of its internal capital adequacy assessment 
process (ICAAP). \6\ Since components of capital are not necessarily 
alike and have varying capacities to absorb losses, a banking 
organization should be able to demonstrate the relationship between its 
internal capital definition and its assessment of capital adequacy. If 
a banking organization's definition of capital differs from the 
regulatory definition, the banking organization should reconcile such 
differences and provide an analysis to support the inclusion of any 
capital instruments that are not recognized under the regulatory 
definition. Although common equity is generally the predominant 
component of a banking organization's capital structure, a banking 
organization may be able to support the inclusion of other capital 
instruments in its internal definition of capital if it can demonstrate 
a similar capacity to absorb losses. The banking organization should 
document any changes in its internal definition of capital, and the 
reason for those changes.
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    \6\ A bank holding company with total consolidated assets of $50 
billion or more is required to develop and maintain a capital plan, 
which must set forth a capital adequacy process. 76 FR 74631 
(December 1, 2011). ICAAP would constitute an internal capital 
adequacy process for purposes of the final rule, and bank holding 
companies that have a satisfactory ICAAP generally would be 
considered to have a satisfactory internal capital adequacy process 
for purposes of the final rule.
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Ensuring Integrity of Internal Capital Adequacy Assessments

    Paragraph 41. A banking organization should maintain thorough 
documentation of its ICAAP to ensure transparency. At a minimum, this 
should include a description of the banking organization's overall 
capital-management process, including the committees and individuals 
responsible for the ICAAP; the frequency and distribution of ICAAP-
related reporting; and the procedures for the periodic evaluation of 
the appropriateness and adequacy of the ICAAP. In addition, where 
applicable, ICAAP documentation should demonstrate the banking 
organization's sound use of quantitative methods (including model 
selection and limitations) and data-selection techniques, as well as 
appropriate maintenance, controls, and validation. A banking 
organization should document and explain the role of third-party and 
vendor products, services and information--including methodologies, 
model inputs, systems, data, and ratings--and the extent to which they 
are used within the ICAAP. A banking organization should have a process 
to regularly evaluate the performance of third-party and vendor 
products, services and information. As part of the ICAAP documentation, 
a banking organization should document the assumptions, methods, data, 
information, and judgment used in its quantitative and qualitative 
approaches.
    Paragraph 43. The board of directors and senior management have 
certain responsibilities in developing, implementing, and overseeing 
the ICAAP. The board should approve the ICAAP and its components. The 
board or its appropriately delegated agent should review the ICAAP and 
its components on a regular basis, and approve any revisions. That 
review should encompass the effectiveness of the ICAAP, the 
appropriateness of risk tolerance levels and capital planning, and the 
strength of control infrastructures. Senior management should 
continually ensure that the ICAAP is functioning effectively and as 
intended, under a formal review policy that is explicit and well 
documented. Additionally, a banking organization's internal audit 
function should play a key role in reviewing the controls and 
governance surrounding the ICAAP on an ongoing basis.
    Paragraph 46. As part of the ICAAP, the board or its delegated 
agent, as well as appropriate senior management, should periodically 
review the resulting assessment of overall capital adequacy. This 
review, which should occur at least annually, should include an 
analysis of how measures of internal capital adequacy compare with 
other capital measures (such as regulatory, accounting-based or market-
determined). Upon completion of this review, the board or its delegated 
agent should determine that, consistent with safety and soundness, the 
banking organization's capital takes into account all material risks 
and is appropriate for its risk profile. However, in the event a 
capital deficiency is uncovered (that is, if capital is not consistent 
with the banking organization's risk profile or risk tolerance) 
management should consult and adhere to formal procedures to correct 
the capital deficiency.
    Current Actions: On May 28, 2015, the Federal Reserve published a 
notice in the Federal Register (80 FR 30459) requesting public comment 
for 60 days on the extension, without revision, of the FR 4199. The 
comment period for this notice expired on July 27, 2015. The Federal 
Reserve did not receive any comments and therefore will proceed with 
extending the information collection as proposed.

    Board of Governors of the Federal Reserve System, August 25, 
2015.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2015-21312 Filed 8-27-15; 8:45 am]
 BILLING CODE 6210-01-P