Proposed Agency Information Collection Activities; Comment Request, 16560-16567 [2019-07841]

Agencies

• FEDERAL DEPOSIT INSURANCE CORPORATION
• FEDERAL RESERVE SYSTEM
• Office of the Comptroller of the Currency
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 84, Number 76 (Friday, April 19, 2019)]
[Notices]
[Pages 16560-16567]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-07841]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

FEDERAL RESERVE SYSTEM

FEDERAL DEPOSIT INSURANCE CORPORATION


Proposed Agency Information Collection Activities; Comment 
Request

AGENCY: Office of the Comptroller of the Currency (OCC), Treasury; 
Board of Governors of the Federal Reserve System (Board); and Federal 
Deposit Insurance Corporation (FDIC).

ACTION: Joint notice and request for comment.

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SUMMARY: In accordance with the requirements of the Paperwork Reduction 
Act of 1995 (PRA), the OCC, the Board, and the FDIC (the agencies) 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 Federal Financial

[[Page 16561]]

Institutions Examination Council (FFIEC), of which the agencies are 
members, has approved the agencies' publication for public comment of a 
proposal to revise and extend for three years the Consolidated Reports 
of Condition and Income for a Bank with Domestic and Foreign Offices 
(FFIEC 031), the Consolidated Reports of Condition and Income for a 
Bank with Domestic Offices Only (FFIEC 041), and the Consolidated 
Reports of Condition and Income for a Bank with Domestic Offices Only 
and Total Assets Less than $1 Billion (FFIEC 051), which are currently 
approved collections of information. The Consolidated Reports of 
Condition and Income are commonly referred to as Call Reports.
    The proposed revisions in this notice would implement reporting 
changes in the Call Reports consistent with the agencies' proposed rule 
to develop a simplified alternative measure of capital adequacy, the 
community bank leverage ratio, for certain qualifying community banks 
with less than $10 billion in total consolidated assets, consistent 
with section 201 of the Economic Growth, Regulatory Relief, and 
Consumer Protection Act.
    The proposed revisions in this notice would also implement 
reporting changes consistent with the FDIC's proposed rule to amend the 
deposit insurance assessment regulations to apply the community bank 
leverage ratio framework to the deposit insurance assessment system.
    The proposed revisions in this notice would take effect the same 
quarter as the effective date of the forthcoming final rules on the 
community bank leverage ratio and the related deposit insurance 
assessment revisions. At the end of the comment period for this notice, 
the FFIEC and the agencies will review any comments received to 
determine whether to modify the proposal in response to comments. If 
modifications are made to the proposed community bank leverage ratio or 
deposit insurance assessment rules when those rules are adopted in 
final form, the agencies would modify the Call Report proposal to 
incorporate such changes. As required by the PRA, the agencies will 
then publish a second Federal Register notice on the proposal for a 30-
day comment period and submit the final Call Reports to OMB for review 
and approval.

DATES: Comments must be submitted on or before June 18, 2019.

ADDRESSES: Interested parties are invited to submit written comments to 
any or all of the agencies. All comments, which should refer to the 
``CBLR Reporting Revisions,'' will be shared among the agencies.
    OCC: You may submit comments, which should refer to ``CBLR 
Reporting Revisions,'' by any of the following methods:
     Email: [email protected]gov.
     Mail: Chief Counsel's Office, Office of the Comptroller of 
the Currency, Attention: 1557-0081, 400 7th Street SW, Suite 3E-218, 
Washington, DC 20219.
     Hand Delivery/Courier: 400 7th Street SW, Suite 3E-218, 
Washington, DC 20219.
    Instructions: You must include ``OCC'' as the agency name and 
``1557-0081'' in your comment. In general, the OCC will publish 
comments on www.reginfo.gov without change, including any business or 
personal information provided, such as name and address information, 
email addresses, or phone numbers. Comments received, including 
attachments and other supporting materials, are part of the public 
record and subject to public disclosure. Do not include any information 
in your comment or supporting materials that you consider confidential 
or inappropriate for public disclosure.
    You may review comments and other related materials that pertain to 
this information collection beginning on the date of publication of the 
second notice for this collection by any of the following methods:
     Viewing Comments Electronically: Go to www.reginfo.gov. 
Click on the ``Information Collection Review'' tab. Underneath the 
``Currently under Review'' section heading, from the drop-down menu 
select ``Department of Treasury'' and then click ``submit''. This 
information collection can be located by searching by OMB control 
number ``1557-0081'' or ``CBLR Reporting Revisions''. Upon finding the 
appropriate information collection, click on the related ``ICR 
Reference Number.'' On the next screen, select ``View Supporting 
Statement and Other Documents'' and then click on the link to any 
comment listed at the bottom of the screen.
     For assistance in navigating www.reginfo.gov, please 
contact the Regulatory Information Service Center at (202) 482-7340.
     Viewing Comments Personally: You may personally inspect 
comments at the OCC, 400 7th Street SW, Washington, DC. For security 
reasons, the OCC requires that visitors make an appointment to inspect 
comments. You may do so by calling (202) 649-6700 or, for persons who 
are deaf or hearing impaired, TTY, (202) 649-5597. Upon arrival, 
visitors will be required to present valid government-issued photo 
identification and submit to security screening in order to inspect 
comments.
    Board: You may submit comments, which should refer to ``CBLR 
Reporting Revisions,'' by any of the following methods:
     Agency Website: https://www.federalreserve.gov. Follow the 
instructions for submitting comments at: https://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
     Email: [email protected]. Include ``CBLR 
Reporting Revisions'' in the subject line of the message.
     Fax: (202) 452-3819 or (202) 452-3102.
     Mail: Ann E. Misback, Secretary, Board of Governors of the 
Federal Reserve System, 20th Street and Constitution Avenue NW, 
Washington, DC 20551.
    All public comments are available on the Board's website 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 in Room 146, 
1709 New York Avenue NW, Washington, DC 20006, between 9:00 a.m. and 
5:00 p.m. on weekdays. For security reasons, the Board requires that 
visitors make an appointment to inspect comments. You may do so by 
calling (202) 452-3684. Upon arrival, visitors will be required to 
present valid government-issued photo identification and to submit to 
security screening in order to inspect and photocopy comments.
    FDIC: You may submit comments, which should refer to ``CBLR 
Reporting Revisions,'' by any of the following methods:
     Agency Website: https://www.fdic.gov/regulations/laws/federal/. Follow the instructions for submitting comments on the FDIC's 
website.
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: [email protected]. Include ``CBLR Reporting 
Revisions'' in the subject line of the message.
     Mail: Manuel E. Cabeza, Counsel, Attn: Comments, Room MB-
3007, Federal Deposit Insurance Corporation, 550 17th Street NW, 
Washington, DC 20429.
     Hand Delivery: Comments may be hand delivered to the guard 
station at the rear of the 550 17th Street Building (located on F 
Street) on business days between 7:00 a.m. and 5:00 p.m.

[[Page 16562]]

     Public Inspection: All comments received will be posted 
without change to https://www.fdic.gov/regulations/laws/federal/ 
including any personal information provided. Paper copies of public 
comments may be requested from the FDIC Public Information Center by 
telephone at (877) 275-3342 or (703) 562-2200.
    Additionally, commenters may send a copy of their comments to the 
OMB desk officer for the agencies by mail to the Office of Information 
and Regulatory Affairs, U.S. Office of Management and Budget, New 
Executive Office Building, Room 10235, 725 17th Street NW, Washington, 
DC 20503; by fax to (202) 395-6974; or by email to 
[email protected].

FOR FURTHER INFORMATION CONTACT: For further information about the 
proposed revisions to the information collections discussed in this 
notice, please contact any of the agency staff whose names appear 
below. In addition, copies of the Call Report forms can be obtained at 
the FFIEC's website (https://www.ffiec.gov/ffiec_report_forms.htm).
    OCC: Kevin Korzeniewski, Counsel, Chief Counsel's Office, (202) 
649-5490, or for persons who are hearing impaired, TTY, (202) 649-5597.
    Board: Nuha Elmaghrabi, Federal Reserve Board Clearance Officer, 
(202) 452-3884, Office of the Chief Data Officer, Board of Governors of 
the Federal Reserve System, 20th and C Streets NW, Washington, DC 
20551. Telecommunications Device for the Deaf (TDD) users may call 
(202) 263-4869.
    FDIC: Manuel E. Cabeza, Counsel, (202) 898-3767, Legal Division, 
Federal Deposit Insurance Corporation, 550 17th Street NW, Washington, 
DC 20429.

SUPPLEMENTARY INFORMATION:

I. Background

A. Overview of the Proposed Regulatory Capital Rule: Community Bank 
Leverage Ratio for Qualifying Community Banks

    The agencies proposed a rule to provide a simplified alternative 
measure of capital adequacy, the community bank leverage ratio (CBLR), 
for qualifying community banks with less than $10 billion in total 
consolidated assets (CBLR proposed rule),\1\ consistent with section 
201 of the Economic Growth, Regulatory Relief, and Consumer Protection 
Act.\2\
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    \1\ 84 FR 3062 (February 8, 2019).
    \2\ Public Law 115-174, 132 Stat. 1296 (2018).
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    Under the CBLR proposed rule, banks and savings associations 
(collectively, banks) that have less than $10 billion in total 
consolidated assets, meet risk-based qualifying criteria, and have a 
CBLR of greater than 9 percent would be eligible to opt into a 
community bank leverage ratio framework (CBLR framework). A bank that 
opts into the CBLR framework and maintains a CBLR of greater than 9 
percent (CBLR bank) would not be subject to other risk-based and 
leverage capital requirements and, in the case of an insured depository 
institution (IDI), would be considered to have met the well capitalized 
capital ratio requirements for purposes of the agencies' prompt 
corrective action (PCA) framework. As described in the CBLR proposed 
rule, if such CBLR bank's CBLR subsequently falls to 9 percent or less, 
the CBLR bank would become subject to the same restrictions, based on 
its CBLR level, that currently apply to other IDIs in the same PCA 
category. Further, if such CBLR bank's CBLR declines to less than 6 
percent, the institution would be considered significantly 
undercapitalized and required to promptly provide to its appropriate 
regulators information necessary to calculate the tangible equity ratio 
as defined under the existing PCA framework for IDIs. Additionally, 
under the CBLR proposed rule, the appropriate regulators may require 
the information necessary to determine the institution's PCA tangible 
equity ratio at any time.
    Under the CBLR proposed rule, a CBLR bank may opt out of the CBLR 
framework and use the generally applicable capital requirements in the 
agencies' capital rules \3\ by reporting its regulatory capital 
information in Call Report Schedule RC-R, ``Regulatory Capital,'' Parts 
I and II. Additionally, the agencies note that a CBLR bank may opt out 
of the CBLR framework between reporting periods by producing the 
capital ratios under the generally applicable capital requirements to 
its appropriate regulators at the time of opting out.
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    \3\ 12 CFR part 3 (OCC); 12 CFR part 217 (Board); 12 CFR part 
324 (FDIC).
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    As described in the CBLR proposed rule, a bank that no longer meets 
the qualifying criteria for the CBLR framework would be required within 
two consecutive calendar quarters (grace period) either to once again 
satisfy the qualifying criteria or demonstrate compliance with the 
generally applicable capital requirements. The grace period would begin 
as of the end of the calendar quarter in which a bank ceases to satisfy 
the qualifying criteria and end after two consecutive calendar 
quarters. During the grace period, the bank would continue to be 
treated as a CBLR bank and would be required to report CBLR on the CBLR 
reporting schedule described in this notice. A CBLR bank that ceases to 
meet the qualifying criteria as a result of a business combination 
(e.g., a merger) would receive no grace period, and immediately become 
subject to the generally applicable capital requirements.

B. Overview of the Proposed Revisions to the Deposit Insurance 
Assessment Regulations To Incorporate the CBLR Framework

    On February 21, 2019, the FDIC published a proposed rule \4\ (CBLR 
Assessments proposed rule) to amend the deposit insurance assessment 
regulations to incorporate the CBLR framework into the deposit 
insurance assessment system. Under the CBLR Assessments proposed rule, 
the FDIC would assess all IDIs that are CBLR banks as small 
institutions for the purpose of deposit insurance assessments.
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    \4\ 84 FR 5380 (February 21, 2019).
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    For the CBLR, the proposed amendments to the assessment regulations 
would define ``tangible equity'' for deposit insurance assessment 
purposes to mean either CBLR tangible equity or Tier 1 capital, and 
would define the Leverage Ratio that the FDIC uses to calculate a small 
institution's assessment rate as the higher of either the CBLR or the 
Tier 1 leverage ratio.
    The CBLR Assessments proposed rule would clarify that (1) an IDI 
that is a CBLR bank and meets the definition of a custodial bank \5\ 
would have no change to its custodial bank deduction or reporting items 
on Call Report Schedule RC-O, ``Other Data for Deposit Insurance and 
FICO Assessments,'' required to calculate the custodial bank deduction; 
and (2) the assessment regulations would continue to reference the PCA 
regulations for the definitions of capital categories used in the 
deposit insurance assessment system, with technical amendments to align 
with the CBLR proposed rule.
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    \5\ See 12 CFR 327.5(c)(1).
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C. Proposed Reporting Revisions

    In this notice, the agencies are proposing reporting revisions to 
the Call Reports for banks that qualify for and opt into the CBLR 
framework, consistent with the CBLR proposed rule.\6\ The agencies also 
are proposing reporting revisions for such banks that are IDIs for 
purposes of the deposit insurance

[[Page 16563]]

assessment regulations, consistent with the CBLR Assessments proposed 
rule. Any changes to these proposed rules made in final rules that 
affect reporting would be reflected in a subsequent 30-day PRA notice 
related to the CBLR and related assessments reporting revisions that 
would be published in the Federal Register. Interested persons who seek 
to submit comments on the CBLR proposed rule or the CBLR Assessments 
proposed rule should comment on the respective proposed rules, rather 
than on this notice, which only addresses the related reporting 
revisions.
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    \6\ In connection with the CBLR proposed rule, the Federal 
Reserve Board will separately propose to make corresponding 
revisions to the Consolidated Financial Statements for Holding 
Companies (FR Y-9C).
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    The reporting changes proposed in this notice would take effect in 
the same quarter as the effective date of the final rules adopting the 
CBLR framework and the related amendments to the deposit insurance 
assessment regulations.

II. Call Report Overview

    The agencies propose to extend for three years, with revision, the 
FFIEC 031, FFIEC 041, and FFIEC 051 Consolidated Reports of Condition 
and Income.
    Report Title: Consolidated Reports of Condition and Income (Call 
Report).
    Form Numbers: FFIEC 031 (for banks and savings associations with 
domestic and foreign offices or domestic offices only and total 
consolidated assets of $100 billion or more), FFIEC 041 (for banks and 
savings associations with domestic offices only and total consolidated 
assets of less than $100 billion, except those that file the FFIEC 
051), and FFIEC 051 (for banks and savings associations with domestic 
offices only and total assets less than $1 billion).
    Frequency of Response: Quarterly.
    Affected Public: Business or other for-profit.

OCC

    OMB Control No.: 1557-0081.
    Estimated Number of Respondents: 1,178 national banks and federal 
savings associations.
    Estimated Average Burden per Response: 39.62 burden hours per 
quarter to file.
    Estimated Total Annual Burden: 186,689 burden hours to file.

Board

    OMB Control No.: 7100-0036.
    Estimated Number of Respondents: 794 state member banks.
    Estimated Average Burden per Response: 43.54 burden hours per 
quarter to file.
    Estimated Total Annual Burden: 138,283 burden hours to file.

FDIC

    OMB Control No.: 3064-0052.
    Estimated Number of Respondents: 3,483 insured state nonmember 
banks and state savings associations.
    Estimated Average Burden per Response: 38.37 burden hours per 
quarter to file.
    Estimated Total Annual Burden: 534,571 burden hours to file.
    The estimated average burden hours collectively reflect the 
estimates for the FFIEC 031, the FFIEC 041, and the FFIEC 051 reports. 
When the estimates are calculated by type of report across the 
agencies, the estimated average burden hours per quarter are 93.65 
(FFIEC 031), 48.89 (FFIEC 041), and 33.65 (FFIEC 051). The burden hours 
for the currently approved reports are 95.47 (FFIEC 031), 55.71 (FFIEC 
041), and 39.77 (FFIEC 051),\7\ so the revisions in this notice would 
represent a reduction in estimated average burden hours per quarter by 
1.83 (FFIEC 031), 6.82 (FFIEC 041), and 6.12 (FFIEC 051). The reduction 
in average burden hours is significantly less for the FFIEC 031 than 
for the FFIEC 041 or the FFIEC 051 because greater percentages of 
institutions that would be eligible to use the proposed CBLR schedule 
currently file the FFIEC 041 or the FFIEC 051 than the FFIEC 031. The 
estimated burden per response for the quarterly filings of the Call 
Report is an average that varies by agency because of differences in 
the composition of the banks and savings associations under each 
agency's supervision (e.g., size distribution of such institutions, 
types of activities in which they are engaged, and existence of foreign 
offices).
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    \7\ 84 FR 4131 (February 14, 2019).
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    Type of Review: Extension for three years, with revision, of 
currently approved collections.
Statutory Basis and Confidential Treatment
    The Call Report information collections are mandatory: 12 U.S.C. 
161 (for national banks), 12 U.S.C. 324 (for state member banks), 12 
U.S.C. 1817 (for insured state nonmember banks), and 12 U.S.C. 1464 
(for federal and state savings associations). At present, except for 
selected data items and text, these information collections are not 
given confidential treatment.
General Description of Call Reports
    Banks and savings associations submit Call Report data to the 
agencies each quarter for the agencies' use in monitoring the 
condition, performance, and risk profile of individual institutions and 
the industry as a whole. Call Report data serve a regulatory or public 
policy purpose by assisting the agencies in fulfilling their shared 
missions of ensuring the safety and soundness of financial institutions 
and the financial system and protecting consumer financial rights, as 
well as agency-specific missions affecting national and state-chartered 
institutions, such as conducting monetary policy, ensuring financial 
stability, and administering federal deposit insurance. Call Reports 
are the source of the most current statistical data available for 
identifying areas of focus for on-site and off-site examinations. Among 
other purposes, the agencies use Call Report data in evaluating 
institutions' corporate applications, including interstate merger and 
acquisition applications for which the agencies are required by law to 
determine whether the resulting institution would control more than 10 
percent of the total amount of deposits of IDIs in the United States. 
Call Report data also are used to calculate institutions' deposit 
insurance assessments and Financing Corporation assessments and 
national banks' and federal savings associations' semiannual assessment 
fees.

III. Specific Proposed Revisions

A. Proposed Reporting Revisions Related to the Proposed CBLR Rule

1. CBLR Reporting Schedule
    As described in the proposed CBLR rule, a CBLR bank would not be 
required to report its regulatory capital information on Call Report 
Schedule RC-R, Parts I and II. Instead, a CBLR bank would report the 
information necessary for the calculation of the CBLR and the 
qualifying criteria for eligibility for the CBLR framework in a 
proposed new CBLR schedule, which would be added to Schedule RC-R.\8\
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    \8\ Before a bank first files proposed Schedule RC-R, CBLR, as 
part of its Call Report, the bank would need to calculate some of 
the items on proposed Schedule RC-R, CBLR, to determine whether it 
is initially eligible to use the CBLR, and the burden for those 
calculations is included in the agencies' estimates. However, if a 
bank is not eligible to use the CBLR, or is not within the 6-month 
grace period after failing to meet the CBLR criteria (as described 
above), the bank would not report any items on the proposed Schedule 
RC-R, CBLR, and instead would complete Schedule RC-R, Parts I and 
II.
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    Specifically, the agencies propose to add a new CBLR reporting 
schedule as Schedule RC-R, CBLR, which would be included immediately 
preceding Schedule RC-R, Parts I and II. CBLR banks would only be 
required to fill out Schedule RC-R, CBLR. If a CBLR bank chooses to opt 
out of the CBLR framework, it would stop reporting Schedule RC-R, CBLR, 
and instead would complete Schedule RC-R, Parts I and II.

[[Page 16564]]

    The agencies seek comment on the proposed location of Schedule RC-
R, CBLR. The agencies also seek views on any alternatives for CBLR 
reporting within the Call Report forms to ease potential regulatory 
compliance burden.
    The specific wording of the captions for the data items in proposed 
Schedule RC-R, CBLR, and the numbering of these data items should be 
regarded as preliminary.
2. CBLR Numerator
    As provided in the CBLR proposed rule, the numerator of the CBLR 
ratio would be CBLR tangible equity. CBLR tangible equity would be 
calculated as a CBLR bank's total bank equity capital with specific 
adjustments. A CBLR bank would start with its total bank equity capital 
as of the quarter-end report date, determined in accordance with the 
reporting instructions to Schedule RC, item 27.a, of the Call Report. 
The CBLR bank would then adjust total bank equity capital by: 
Neutralizing accumulated other comprehensive income (AOCI); deducting 
all intangible assets (other than mortgage servicing assets (MSAs)); 
and deducting deferred tax assets (DTAs), net of any related valuation 
allowances, that arise from net operating loss and tax credit 
carryforwards, each as of the quarter-end report date.\9\ The CBLR bank 
would report these items to calculate CBLR tangible equity on the 
proposed CBLR Schedule, items 1 through 6.
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    \9\ Solely for purposes of the FDIC's proposed definition of 
CBLR tangible equity, FDIC-supervised institutions that opt into the 
CBLR framework must deduct identified losses as defined in 12 CFR 
324.2 (to the extent that CBLR tangible equity would have been 
reduced if the appropriate accounting entries to reflect the 
identified losses had been recorded on the FDIC-supervised 
institution's books).
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    Specifically, in proposed item 1, a CBLR bank would report its 
total bank equity capital, as it is reported in Schedule RC, item 27.a. 
This amount would not include any equity capital attributable to 
noncontrolling interests in consolidated subsidiaries.
    In proposed item 2, a CBLR bank would report AOCI, as it is 
reported in Schedule RC, item 26.b.
    In proposed item 3, a CBLR bank would report its goodwill, as it is 
reported in Schedule RC-M, item 2.b.
    In proposed item 4, a CBLR bank would report all other intangible 
assets, as they are reported in Schedule RC-M, item 2.c.
    In proposed item 5, a CBLR bank would report the amount of DTAs 
that arise from net operating loss and tax credit carryforwards, net of 
any related valuation allowances. The calculation of these DTAs would 
be consistent with the calculation of the Call Report instructions for 
Schedule RC-R, Part I, item 8, with the exception that deferred tax 
liabilities would not be netted against the DTAs reported in this 
proposed item 5.
    In proposed item 6, a CBLR bank would calculate its CBLR tangible 
equity by subtracting proposed items 2, 3, 4, and 5 from proposed item 
1. Subtracting proposed item 2 (i.e., adding back any AOCI with a 
negative (debit) balance or subtracting any AOCI with a positive 
(credit) balance) would have the effect of neutralizing AOCI for CBLR 
tangible equity purposes.
3. CBLR Denominator
    As provided in the CBLR proposed rule, the denominator of the CBLR 
would be CBLR average total consolidated assets. Specifically, CBLR 
average total consolidated assets would be calculated in accordance 
with the reporting instructions to Schedules RC-K, item 9, on the Call 
Report, less the items deducted from the CBLR numerator, except for the 
AOCI adjustment. CBLR banks would report the items to calculate the 
denominator on proposed Schedule RC-R, CBLR, items 7 through 9.
    In proposed item 7, a CBLR bank would report its average total 
assets, as reported in Schedule RC-K, item 9.
    In proposed item 8, a CBLR bank would report the sum of proposed 
items 3, 4, and 5, described above.
    In proposed item 9, a CBLR bank would calculate its CBLR average 
total consolidated assets by subtracting proposed item 8 from proposed 
item 7.
4. CBLR Ratio
    In proposed item 10, a CBLR bank would calculate its CBLR by 
dividing proposed
    item 6 (CBLR tangible equity) by proposed item 9 (CBLR average 
total consolidated assets). The CBLR ratio would be reported as a 
percentage with four decimal places.
5. Qualifying Criteria for Using the CBLR Framework
    As provided in the CBLR proposed rule, a bank would need to satisfy 
certain qualifying criteria in order to be eligible to opt into the 
CBLR framework. The proposed items identified below would collect 
information necessary to ensure that a bank continuously meets the 
qualifying criteria for using the CBLR framework.
    Specifically, a CBLR bank would be a bank that is not an advanced 
approaches bank \10\ and meets the following qualifying criteria:
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    \10\ In general, an advanced approaches bank, as defined in the 
agencies' capital rule, has consolidated total assets equal to $250 
billion or more, has consolidated total on-balance sheet foreign 
exposure equal to $10 billion or more, is a subsidiary of a 
depository institution or holding company that uses the advanced 
approaches to calculate its total risk-weighted assets, or elects to 
use the advanced approaches to calculate its total risk-weighted 
assets. See 12 CFR 3.100 (OCC); 12 CFR 217.100 (Board); 12 CFR 
324.100 (FDIC).
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     Total consolidated assets of less than $10 billion;
     Total off-balance sheet exposures (excluding derivatives 
other than credit derivatives and unconditionally cancelable 
commitments) of 25 percent or less of total consolidated assets;
     Total trading assets and trading liabilities of 5 percent 
or less of total consolidated assets;
     MSAs of 25 percent or less of CBLR tangible equity; and
     Temporary difference DTAs of 25 percent or less of CBLR 
tangible equity.\11\
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    \11\ As provided in the CBLR proposed rule, the agencies would 
reserve the authority to disallow the use of the CBLR framework by a 
depository institution, based on the risk profile of the bank. This 
authority would be reserved under the general reservation of 
authority included in the capital rule, in which the CBLR framework 
would be codified. See 12 CFR 3.1(d) (OCC); 12 CFR 217.1(d) (Board); 
12 CFR 324.1(d) (FDIC).
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    Accordingly, the agencies propose collecting the items described 
below.
    In proposed item 11, a CBLR bank would report total assets, as it 
is reported in Call Report Schedule RC, item 12.
    In proposed item 12, a CBLR bank would report MSAs from Schedule 
RC-M, item 2.a, in Column B, and as divided by proposed Schedule RC-R, 
CBLR, item 6 (CBLR tangible equity), and expressed as a percentage in 
Column A. As provided in the CBLR proposed rule, a bank would not meet 
the definition of a qualifying community bank for purposes of the CBLR 
framework if this percentage is greater than 25 percent.
    In proposed item 13, a CBLR bank would report DTAs arising from 
temporary differences that the bank could not realize through net 
operating loss carrybacks, net of any related valuation allowances, in 
Column B, and as divided by proposed Schedule RC-R, CBLR, item 6 (CBLR 
tangible equity), and expressed as a percentage in Column A. The 
calculation of these DTAs would be consistent with the calculation of 
these DTAs set forth in the existing Call Report instructions for 
Schedule RC-R, Part I, item 15, with the exception that deferred tax 
liabilities would not be netted against the DTAs

[[Page 16565]]

used in the calculation of this proposed item 13. As discussed in the 
CBLR proposed rule, a bank would not meet the definition of a 
qualifying community bank for purposes of the CBLR framework if the 
percentage to be reported in Column A is greater than 25 percent.
    In proposed item 14, a CBLR bank would report the sum of trading 
assets from Schedule RC, item 5, and trading liabilities from Schedule 
RC, item 15, in Column B. The bank would also report that sum divided 
by total assets from Schedule RC, item 12, and expressed as a 
percentage in Column A. As provided in the CBLR proposed rule, trading 
assets and trading liabilities would be added together, not netted, for 
purposes of this calculation. Also as discussed in the CBLR proposed 
rule, a bank would not meet the definition of a qualifying community 
bank for purposes of the CBLR framework if the percentage to be 
reported in Column A is greater than 5 percent.
    In proposed items 15.a through 15.c, a CBLR bank would report 
information related to commitments and other off-balance sheet 
exposures.
    In proposed item 15.a, a CBLR bank would report the unused portion 
of conditionally cancelable commitments. This amount would be the 
amount of all unused commitments less the amount of unconditionally 
cancelable commitments, as discussed in the CBLR proposed rule and 
defined in the agencies' capital rule.\12\ This item would be 
calculated consistent with the sum of Schedule RC-R, Part II, items 
18.a and 18.b, Column A.
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    \12\ See definition of ``unconditionally cancellable'' in 12 CFR 
3.2 (OCC); 12 CFR 217.2 (Board); 12 CFR 324.2 (FDIC).
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    In proposed item 15.b, a CBLR bank would report total securities 
lent and borrowed, which would be the sum of Schedule RC-L, items 6.a 
and 6.b.
    In proposed item 15.c, a CBLR bank would report the sum of certain 
other off-balance sheet exposures. Specifically, a CBLR bank would 
report the sum of self-liquidating, trade-related contingent items that 
arise from the movement of goods; transaction-related contingent items 
(performance bonds, bid bonds, warranties, and performance standby 
letters of credit); sold credit protection in the form of guarantees 
and credit derivatives; credit-enhancing representations and 
warranties; financial standby letters of credit; forward agreements 
that are not derivative contracts; and off-balance sheet 
securitizations. A CBLR bank would not include derivatives that are not 
credit derivatives, such as foreign exchange swaps and interest rate 
swaps, in this item.
    In proposed item 15.d, a CBLR bank would report the sum of proposed 
items 15.a through 15.c in Column B. The bank would also report that 
sum divided by total assets from Schedule RC, item 12, and expressed as 
a percentage in Column A. As discussed in the CBLR proposed rule, a 
bank would not be eligible to opt into the CBLR framework if this 
percentage is greater than 25 percent.
    In proposed item 16, a CBLR bank would report the total of 
unconditionally cancellable commitments, which would be calculated 
consistent with the instructions for existing Schedule RC-R, Part II, 
item 19. This item is not used specifically to calculate a bank's 
eligibility for the CBLR framework. However, the agencies are 
collecting this information to identify any bank using the CBLR 
framework that may have significant or excessive concentrations in 
unconditionally cancellable commitments that would warrant the 
agencies' use of the reservation of authority in their capital rule to 
direct an otherwise-eligible CBLR bank to report its regulatory capital 
using the generally applicable capital requirements.\13\
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    \13\ Other factors also may lead the agencies to determine that 
the risk profile of an otherwise-eligible CBLR bank would warrant 
the use of the reservation of authority.
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B. Proposed Reporting Revisions Related to the CBLR Assessments 
Proposed Rule

    As described above, under the CBLR Assessments proposed rule, the 
FDIC would assess all IDIs that are CBLR banks as ``small 
institutions'' for the purpose of deposit insurance assessments. The 
FDIC assesses all IDIs an amount for deposit insurance equal to an 
institution's deposit insurance assessment base multiplied by its risk-
based assessment rate. Under the current risk-based deposit insurance 
assessment system, an IDI's assessment base and risk-based assessment 
rate depend in part on the amounts reported in a number of data items 
currently collected from all IDIs on Call Report Schedules RC-O and RC-
R, including Tier 1 capital, the Tier 1 leverage ratio, and certain 
risk-weighted assets.\14\ Under the CBLR proposed rule, a CBLR bank 
would no longer report several of these items on Schedule RC-R, Parts I 
and II, of the Call Reports.
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    \14\ See 12 CFR part 327.
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    For some institutions, the use of the CBLR or CBLR tangible equity 
may result in a higher assessment. To minimize or eliminate any 
resulting increase in assessments that may arise without a change in 
risk, the agencies are proposing amendments to the reporting form and 
corresponding instructions for Call Report Schedule RC-O to allow CBLR 
banks the option to use Tier 1 capital or the Tier 1 leverage ratio for 
deposit insurance assessment purposes. The proposed amendments would 
impact only those IDIs that are CBLR banks, as detailed below.
    IDIs that are not CBLR banks would not be affected by the proposed 
changes described below and would continue reporting their assessment-
related data on Schedule RC-O without any change.
1. Average Tangible Equity for the Calendar Quarter
    Consistent with the CBLR Assessments proposed rule, IDIs that are 
CBLR banks would have the option to use either Tier 1 capital or CBLR 
tangible equity when reporting ``average tangible equity'' on Schedule 
RC-O for purposes of the assessment base calculation. Accordingly, the 
agencies are proposing to retain Schedule RC-O, item 5, ``Average 
tangible equity for the calendar quarter,'' and to amend the 
corresponding instructions and the corresponding footnote on the 
reporting form consistent with the amendment to the definition of 
``average tangible equity'' in the CBLR Assessments proposed rule. The 
amendments to the instructions and corresponding footnote would define 
``average tangible equity'' in Schedule RC-O, item 5, as Tier 1 capital 
as set forth in the agencies' regulatory capital rules and measured in 
accordance with the instructions for Schedule RC-R, Part I, item 26, 
``Tier 1 capital,'' except as otherwise described in the instructions 
for Schedule RC-O, item 5, and except in the case of IDIs that are CBLR 
banks. The instructions would specify that IDIs that are CBLR banks 
have the option of reporting ``average tangible equity'' in Schedule 
RC-O, item 5, using either the Tier 1 capital definition from Schedule 
RC-R, Part I, item 26, or CBLR tangible equity as proposed and in 
accordance with the instructions for the proposed Schedule RC-R, CBLR, 
item 6, except as described in the instructions for Schedule RC-O.
    The instructions for Schedule RC-O, item 5, would further clarify 
that the Call Report changes corresponding to the CBLR proposed rule 
would exempt IDIs that are CBLR banks from the requirement to report on 
the existing Schedule RC-R, Part I, the components of regulatory 
capital used in the calculation of the Tier 1 leverage ratio or risk-
based capital ratios, such as Tier 1 capital or risk weighted assets. 
If an

[[Page 16566]]

IDI that is a CBLR bank elects to use Tier 1 capital for purposes of 
calculating its assessment base in lieu of CBLR tangible equity, the 
IDI would measure Tier 1 capital for purposes of reporting average 
tangible equity in Schedule RC-O, item 5, in accordance with the 
instructions for Schedule RC-R, Part I, item 26, ``Tier 1 capital.''
2. Clarification Pertaining to the Custodial Bank Deduction
    The CBLR Assessments proposed rule would clarify that for any IDI 
that is a CBLR bank and meets the definition of a custodial bank under 
the assessment regulations, there would be no change in the reporting 
on Schedule RC-O that is necessary to calculate and receive the 
custodial bank deduction under the assessment regulations.\15\ A CBLR 
bank that also meets the definition of a custodial bank under the 
assessment regulations would continue to report items related to the 
custodial bank deduction on Schedule RC-O of the Call Report.
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    \15\ See 12 CFR 327.5(c).
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    In Schedule RC-O, item 11.a, ``Custodial bank deduction,'' an 
institution that meets the definition of a custodial bank under the 
assessment regulations reports its custodial bank deduction, which 
equals average qualifying low-risk assets. To receive the custodial 
bank deduction, a CBLR bank that also meets the definition of a 
custodial bank under the assessment regulations would continue to 
report this item, even though it is calculated based on the risk 
weighting of qualifying low-risk liquid assets that the bank would no 
longer be required to report in Schedule RC-R, Part II. The agencies 
propose to amend the instructions for Schedule RC-O, item 11.a, to 
clarify that the FDIC would not require a custodial bank that is a CBLR 
bank to separately report the more detailed schedule of its risk-
weighted assets in Schedule RC-R in order to continue using the 
custodial bank deduction. Such banks would be required to continue to 
maintain proper documentation of their calculation for the custodial 
bank adjustment, and to make that documentation available upon 
request.\16\
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    \16\ See 12 U.S.C. 1817(b)(4).
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3. Tier 1 Leverage Ratio
    The CBLR Assessments proposed rule would provide IDIs that are CBLR 
banks the option to report the Tier 1 leverage ratio in new Call Report 
Schedule RC-O, Memorandum item 5, in addition to reporting the CBLR on 
the proposed Schedule RC-R, CBLR, item 10. Accordingly, the agencies 
propose to create Memorandum item 5 on Schedule RC-O, which would be 
equivalent to Schedule RC-R, Part I, item 44, ``Tier 1 leverage 
ratio,'' and would be reported at the option of IDIs that are CBLR 
banks. An IDI that is a CBLR bank that elects to additionally report 
its Tier 1 leverage ratio for purposes of calculating its assessment 
rate would report that ratio in Memorandum item 5 on Schedule RC-O; 
however, the Call Report instructions would clarify that the IDI would 
not be required to report Schedule RC-R, Part I, item 44, or the 
components of this item in the more detailed Schedule RC-R, Part I, 
pursuant to the CBLR proposal and the related proposed Call Report 
revisions.
    For IDIs that are CBLR banks, the proposed CBLR as reported on the 
proposed Schedule RC-R, CBLR, item 10, would be used to calculate the 
IDI's deposit insurance assessment rate unless an IDI opts to 
additionally report its Tier 1 leverage ratio in Memorandum item 5 on 
Schedule RC-O. If the IDI that is a CBLR bank additionally reports its 
Tier 1 leverage ratio in Schedule RC-O, Memorandum item 5, the FDIC 
would apply the higher value (i.e., the value that results in the lower 
deposit insurance assessment) when calculating the IDI's assessment 
rate. If an IDI that is a CBLR bank opts to leave Schedule RC-O, 
Memorandum item 5, blank, the FDIC would consider the value for the 
Tier 1 leverage ratio to be null and the proposed CBLR would be used to 
calculate the institution's assessment rate.
    Schedule RC-O, Memorandum item 5, would not be applicable to IDIs 
that are not CBLR banks and the FDIC would continue to use the Tier 1 
leverage ratio, as reported in Schedule RC-R, Part I, item 44, to 
calculate such an IDI's assessment rate.
4. Clarification Pertaining to the Definition of ``Small Institution'' 
for Assessment Purposes
    To address the amendment in the CBLR Assessments proposed rule to 
the definition of ``small institution'' to include all IDIs that are 
CBLR banks, even if such IDI would otherwise be classified as a large 
institution under the current assessment regulations, the agencies are 
proposing to amend the general instructions for Schedule RC-O, 
Memorandum items 6 through 18, on forms FFIEC 031 and FFIEC 041.\17\ 
These general instructions currently provide the definition for ``large 
institutions'' and ``highly complex institutions'' required to report 
Memorandum items 6 through 18. The agencies propose to add language to 
these instructions specifying that an IDI that is a CBLR bank shall be 
classified as a small institution, even if that IDI otherwise would be 
classified as a large institution for assessment purposes.
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    \17\ The FFIEC 051 does not include Schedule RC-O, Memorandum 
items 6 through 18, which are tailored specifically to large 
institutions and highly complex institutions. Therefore, the 
proposed clarification of the definition of ``small institution'' in 
the general instructions for Schedule RC-O, Memorandum items 6 
through 18, on forms FFIEC 031 and FFIEC 041 is not applicable to 
the FFIEC 051.
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C. Additional Proposed Reporting Revision

    The agencies currently collect information in Schedule RC-C, Part 
I, ``Loans and Leases,'' Memorandum item 13, from institutions that 
have a significant amount of construction, land development, and other 
land loans with interest reserves in relation to their total regulatory 
capital. At present, total regulatory capital is defined as total 
capital reported on Schedule RC-R, Part I, item 35 (FFIEC 051) or item 
35.a (FFIEC 031 or FFIEC 041). While CBLR banks would no longer report 
their total capital in Schedule RC-R, Part I, the agencies believe it 
is still important to collect this information from CBLR banks that 
have a significant amount of construction, land development, and other 
land loans with interest reserves. Therefore, the agencies propose to 
revise the reporting threshold for Schedule RC-C, Part I, Memorandum 
item 13, to reference either CBLR tangible equity as reported in 
Schedule RC-R, CBLR, item 6, or total capital as reported in Schedule 
RC-R, Part I, item 35 (FFIEC 051) or item 35.a (FFIEC 031 or FFIEC 
041), as applicable.

IV. Request for Comment

    Public comment is requested on all aspects of this joint notice. 
Comment is specifically invited on:
    (a) Related to proposed Call Report Schedule RC-R, CBLR, whether 
the proposed items are clear for purposes of reporting and calculating 
CBLR and whether the proposed Call Report Schedule RC-R, CBLR, could be 
simplified further;
    (b) Related to Call Report Schedule RC-O, item 5, ``Average 
tangible equity for the calendar quarter,'' whether IDIs that are CBLR 
banks should be required to specify whether they are reporting Tier 1 
capital or CBLR tangible equity for deposit insurance assessment 
purposes in a separate new data item in Schedule RC-O;
    (c) Related to Call Report Schedule RC-O, item 11.a, ``Custodial 
bank

[[Page 16567]]

deduction,'' whether an IDI that is a CBLR bank that meets the 
definition of a custodial bank under the assessment regulations should 
be required to report additional items on the Call Report to support 
its calculation of the custodial bank deduction for deposit insurance 
assessment purposes;
    (d) Whether the proposed revisions to the collections of 
information that are the subject of this notice are necessary for the 
proper performance of the agencies' functions, including whether the 
information has practical utility;
    (e) The accuracy of the agencies' estimates of the burden of the 
information collections as they are proposed to be revised, including 
the validity of the methodology and assumptions used;
    (f) Ways to enhance the quality, utility, and clarity of the 
information to be collected;
    (g) Ways to minimize the burden of information collections on 
respondents, including through the use of automated collection 
techniques or other forms of information technology; and
    (h) Estimates of capital or start-up costs and costs of operation, 
maintenance, and purchase of services to provide information.
    Comments submitted in response to this joint notice will be shared 
among the agencies. All comments will become a matter of public record.

    Dated: April 12, 2019.
Theodore J. Dowd,
Deputy Chief Counsel, Office of the Comptroller of the Currency.
    Board of Governors of the Federal Reserve System, April 10, 
2019.
Ann Misback,
Secretary of the Board.
    Dated at Washington, DC, on April 11, 2019.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2019-07841 Filed 4-18-19; 8:45 am]
 BILLING CODE 4810-33-6210-01; 6714-01-P