Reporting of Data on Loans to Small Businesses and Small Farms, 55687-55690 [2019-22568]
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Federal Register / Vol. 84, No. 201 / Thursday, October 17, 2019 / Notices
DEPARTMENT OF TREASURY
Office of the Comptroller of the
Currency
[Docket ID OCC–2019–0021]
FEDERAL RESERVE SYSTEM
FEDERAL DEPOSIT INSURANCE
CORPORATION
Reporting of Data on Loans to Small
Businesses and Small Farms
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: Request for comment.
AGENCY:
The OCC, the Board, and the
FDIC (collectively, the agencies) are
requesting comment on ways to modify
the current requirements for reporting
data on loans to small businesses and
small farms in the Consolidated Reports
of Condition and Income (Call Report)
so that the reported data better reflect
lending to these sectors of the U.S.
economy.
SUMMARY:
Comments must be received by
the agencies no later than December 16,
2019.
ADDRESSES: Interested parties are
invited to submit written comments to
any or all of the agencies. All comments,
which should refer to ‘‘Loans to Small
Businesses and Small Farms,’’ will be
shared among the agencies.
OCC: Commenters are encouraged to
submit comments through the Federal
eRulemaking Portal or email, if possible.
You may submit comments by any of
the following methods:
• Federal eRulemaking Portal—
Regulations.gov Classic or
Regulations.gov Beta
Regulations.gov Classic: Go to https://
www.regulations.gov/. Enter ‘‘Docket ID
OCC–2019–0021’’ in the Search Box and
click ‘‘Search.’’ Click on ‘‘Comment
Now’’ to submit public comments. For
help with submitting effective
comments please click on ‘‘View
Commenter’s Checklist.’’ Click on the
‘‘Help’’ tab on the Regulations.gov home
page to get information on using
Regulations.gov, including instructions
for submitting public comments.
Regulations.gov Beta: Go to https://
beta.regulations.gov/ or click ‘‘Visit
New Regulations.gov Site’’ from the
Regulations.gov classic homepage. Enter
‘‘Docket ID OCC–2019–0021’’ in the
Search Box and click ‘‘Search.’’ Public
comments can be submitted via the
‘‘Comment’’ box below the displayed
DATES:
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document information or click on the
document title and click the
‘‘Comment’’ box on the top-left side of
the screen. For help with submitting
effective comments please click on
‘‘Commenter’s Checklist.’’ For
assistance with the Regulations.gov Beta
site please call (877) 378–5457 (toll free)
or (703) 454–9859 Monday–Friday, 9
a.m.–5 p.m. ET or email to regulations@
erulemakinghelpdesk.com.
• Email: regs.comments@
occ.treas.gov.
• Mail: Chief Counsel’s Office,
Attention: Comment Processing, Office
of the Comptroller of the Currency, 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 ‘‘Docket
ID OCC–2019–0021’’ in your comment.
In general, the OCC will enter all
comments received into the docket and
publish the comments on the
Regulations.gov website 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
request for comment by any of the
following methods:
• Viewing Comments Electronically—
Regulations.gov Classic or
Regulations.gov Beta
Regulations.gov Classic: Go to https://
www.regulations.gov/. Enter ‘‘Docket ID
OCC–2019–0021’’ in the Search box and
click ‘‘Search.’’ Click on ‘‘Open Docket
Folder’’ on the right side of the screen.
Comments and supporting materials can
be viewed and filtered by clicking on
‘‘View all documents and comments in
this docket’’ and then using the filtering
tools on the left side of the screen. Click
on the ‘‘Help’’ tab on the
Regulations.gov home page to get
information on using Regulations.gov.
The docket may be viewed after the
close of the comment period in the same
manner as during the comment period.
Regulations.gov Beta: Go to https://
beta.regulations.gov/ or click ‘‘Visit
New Regulations.gov Site’’ from the
Regulations.gov classic homepage. Enter
‘‘Docket ID OCC–2019–0021’’ in the
Search Box and click ‘‘Search.’’ Click on
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the ‘‘Comments’’ tab. Comments can be
viewed and filtered by clicking on the
‘‘Sort By’’ drop-down on the right side
of the screen or the ‘‘Refine Results’’
options on the left side of the screen.
Supporting Materials can be viewed by
clicking on the ‘‘Documents’’ tab and
filtered by clicking on the ‘‘Sort By’’
drop-down on the right side of the
screen or the ‘‘Refine Results’’ options
on the left side of the screen.’’ For
assistance with the Regulations.gov Beta
site please call (877) 378–5457 (toll free)
or (703) 454–9859 Monday–Friday, 9
a.m.–5 p.m. ET or email to regulations@
erulemakinghelpdesk.com.
The docket may be viewed after the
close of the comment period in the same
manner as during the comment period.
• Viewing Comments Personally: You
may personally inspect comments at the
OCC, 400 7th Street SW, Washington,
DC 20219. 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 ‘‘Loans to Small
Businesses and Small Farms,’’ 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: regs.comments@
federalreserve.gov. Include ‘‘Loans to
Small Businesses and Small Farms’’ 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
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Federal Register / Vol. 84, No. 201 / Thursday, October 17, 2019 / Notices
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 ‘‘Loans to Small
Businesses and Small Farms,’’ 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: comments@FDIC.gov.
Include ‘‘Loans to Small Businesses and
Small Farms’’ in the subject line of the
message.
• Mail: Manuel E. Cabeza, Counsel,
Attn: Comments, Room MB–3128,
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.
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,
3501 North Fairfax Drive, Arlington, VA
22226, or by telephone at (877) 275–
3342 or (703) 562–2200.
FOR FURTHER INFORMATION CONTACT:
OCC: Cady Codding, Senior Policy
Accountant, Office of the Chief
Accountant, (202) 649–5764; Kevin
Korzeniewski, Counsel, Chief Counsel’s
Office, (202) 649–5490; or for persons
who are deaf or hearing impaired, TTY,
(202) 649–5597.
Board: Douglas Carpenter, Senior
Supervisory Financial Analyst, Division
of Supervision and Regulation, (202)
452–2205, Board of Governors of the
Federal Reserve System, 20th and C
Streets NW, Washington, DC 20551.
FDIC: Shannon Beattie, Chief,
Accounting and Securities Disclosure
Section, Division of Risk Management
Supervision, (202) 898–3952, sbeattie@
fdic.gov; or Michelle Haslett,
Examination Specialist, Division of Risk
Management Supervision, (202) 898–
6923, mhaslett@fdic.gov.
SUPPLEMENTARY INFORMATION:
I. Background, Existing Collection, and
Use of Data
A. History of the Data Collection
Section 122 of the Federal Deposit
Insurance Corporation Improvement Act
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of 1991 1 required the agencies to
establish an annual data collection from
insured depository institutions on
lending to small businesses and small
farms. The agencies implemented the
statute by introducing Schedule RC–C,
Part II, to the Call Report 2 effective June
30, 1993.3 Initially, this schedule was
completed annually as of every June 30.
However, to improve the agencies’
ability to assess the availability of credit
to small businesses and small farms in
the aftermath of the financial crisis, the
agencies changed the reporting
frequency for Schedule RC–C, Part II,
from annually to quarterly beginning
with the March 31, 2010, Call Report.4
In 2017, as part of the Federal Financial
Institutions Examination Council’s Call
Report burden reduction initiative, the
agencies reduced the reporting
frequency of Schedule RC–C, Part II,
from quarterly to semiannually for
institutions that file the FFIEC 051 Call
Report.5 The reporting frequency of
Schedule RC–C, Part II, remains
quarterly for institutions that file the
FFIEC 031 and the FFIEC 041 Call
Report.6
B. Data Currently Collected
The current data collection in
Schedule RC–C, Part II, generally
requests information on (i) loans to
small businesses, which are defined as
loans with original amounts of $1
million or less that are reported as
‘‘Loans secured by nonfarm
nonresidential properties’’ or
‘‘Commercial and industrial loans’’ (in
domestic offices) in Call Report
Schedule RC–C, Part I, items 1.e and 4;
and (ii) loans to small farms, which are
defined as loans with original amounts
of $500,000 or less that are reported as
‘‘Loans secured by farmland (including
farm residential and other
improvements)’’ and ‘‘Loans to finance
agricultural production and other loans
1 12
U.S.C. 1817 note.
‘‘Call Report’’ consists of 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 $5 Billion (FFIEC 051). U.S.
branches and agencies of foreign banks file the
Report of Assets and Liabilities of U.S. Branches
and Agencies of Foreign Banks (FFIEC 002). The
FFIEC 002 includes Schedule C, Part II, Loans to
Small Businesses and Small Farms, which is
collected only from insured U.S. branches of foreign
banks and parallels Call Report Schedule RC–C,
Part II.
3 57 FR 54235 (November 17, 1992).
4 74 FR 68322 (December 23, 2009).
5 82 FR 2444 (January 9, 2017).
6 In the FFIEC 002, Schedule C, Part II, is
collected annually as of June 30 from insured U.S.
branches of foreign banks.
2 The
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to farmers’’ (in domestic offices) in Call
Report Schedule RC–C, Part I, items 1.b
and 3. The agencies currently request
the total number and total amount
outstanding for each of these four
categories of loans, which are stratified
into three segments based on the
original amounts of the loans. For loans
to small businesses, the stratifications
are original amounts of $100,000 or less,
original amounts of more than $100,000
through $250,000, and original amounts
of more than $250,000 through $1
million. For loans to small farms, the
stratifications are original amounts of
less than $100,000, original amounts of
more than $100,000 through $250,000,
and original amounts of more than
$250,000 through $500,000.
Institutions that do not hold loans
that meet the definition of small
business or small farm loans do not
need to provide data in Schedule RC–
C, Part II, for that particular type of loan.
Institutions that file the FFIEC 041 or
the FFIEC 051 Call Report and hold
small business or small farm loans
predominantly in original amounts of
$100,000 or less report only the total
number of the loans in each loan
category within that particular type of
loan, and do not need to provide the full
stratification. Further details about the
collection of loans to small businesses
and small farms are provided in the
applicable Call Report instructions
(FFIEC 031, FFIEC 041, or FFIEC 051).7
C. Uses of the Data
Among the agencies, the Board is the
primary user of the data collected on
loans to small businesses and small
farms.8 Collection of these data
improves the Board’s ability to monitor
credit conditions facing small
businesses and small farms and
significantly contributes to its ability to
develop policies intended to address
any problems that arise in credit
markets. The institution-level Call
Report data provide information that
cannot be obtained from other
indicators of small business and small
farm credit conditions. For example,
during a period of credit contraction,
the Call Report data can be used to
identify which types of institutions are
reducing the volume of their loans to
small businesses and small farms.
Having detailed data on the
characteristics of affected institutions is
crucial to building a sufficiently
informative picture of the strength of
economic activity.
Monetary policymaking benefits
importantly from timely information on
7 https://www.ffiec.gov/ffiec_report_forms.htm.
8 See
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82 FR 2444, 2454 (January 9, 2017).
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small business credit conditions and
flows. To determine how best to adjust
the federal funds rate over time, the
Board must continuously assess the
prospects for real economic activity and
inflation in coming quarters. Credit
conditions have an important bearing on
the evolution of those prospects over
time, and so the Board pays close
attention to data from Call Reports. In
trying to understand the implications of
aggregate credit data for the
macroeconomic outlook, it is helpful for
the Board to be able to distinguish
between conditions facing small firms
and those affecting other businesses for
several reasons. First, small businesses
comprise a substantial portion of the
nonfinancial business sector, and so
their hiring and investment decisions
have an important influence on overall
real activity. Second, because small
businesses tend to depend more heavily
on depository institutions for external
financing, they likely experience
material swings in their ability to obtain
credit relative to larger firms. Third, the
relative opacity of small businesses and
their consequent need to provide
collateral for loans is thought to create
a ‘‘credit’’ channel for monetary policy
to influence real activity. Specifically,
changes in monetary policy may alter
the value of assets used as collateral for
loans, thereby affecting the ability of
small businesses to obtain credit,
abstracting from the effects of any
changes in loan rates. Finally, the credit
conditions facing small businesses and
small farms differ substantially from
those facing large businesses, making it
necessary to collect indicators that are
specific to these borrowers. Large
businesses may access credit from a
number of different sources, including
the corporate bond market and the
commercial paper market. In contrast,
small businesses and small farms rely
more heavily on credit provided
through depository institutions. The
dependence of small businesses and
small farms on lending by depository
institutions—particularly from smaller
institutions—highlights the importance
of the Call Report data reported in
Schedule RC–C, Part II.
II. Current Actions
A. GAO Report
The U.S. Government Accountability
Office (GAO) reviewed the data
collected on Call Report Schedule RC–
C, Part II, Loans to Small Businesses and
Small Farms, as part of a study of the
effect of regulations on small business
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lending.9 In summarizing its findings
with respect to the Call Report data on
loans to small businesses, the GAO
stated that
[t]he data community banks report to
regulators do not accurately capture lending
to small businesses because the data exclude
some loans to small businesses. Specifically,
the definition of small business loans used
for banks’ reporting excludes loans greater
than $1 million and has not been adjusted for
inflation since 1992. In addition, the data
capture loans by their size rather than the
size of the borrowing entity, and therefore
could include small loans to large businesses.
These limitations hamper regulators’ and
policymakers’ ability to assess actual changes
in banks’ small business lending, including
any effect of regulation.
At the conclusion of this study, which
was published in August 2018, the GAO
recommended that the agencies should
collaborate to reevaluate, and modify as
needed, the requirements for the data
banks report in the Call Report to better
reflect lending to small businesses.
In response to this recommendation,
the agencies are reviewing the data
currently collected on small business
and small farm loans on Schedule RC–
C, Part II, in the Call Report to identify
options for improving the usefulness of
the data reported on these loans so that
the data will better reflect lending to
small businesses and small farms.
The agencies also recognize that
institutions already have processes in
place that enable them to report their
small business and small farm lending
data in the Call Report in accordance
with the reporting instructions for
Schedule RC–C, Part II, which generally
have not been revised since the
implementation of Schedule RC–C, Part
II, in 1993. Thus, introducing revisions
to the reporting requirements and the
instructions for Schedule RC–C, Part II,
could affect the burden of the collection
of small business and small farm
lending data on institutions. Certain
options for revisions may change
burden in differing ways, particularly if
the options are not aligned with how
institutions currently identify loans to
small businesses and small farms and
then collect and report data on these
loans to their managements or internal
purposes. The agencies are interested in
learning what data institutions collect
and maintain on small business and
small farm loans in their loan systems
and other automated systems for
internal purposes in addition to the data
required to be reported on these loans
in Call Report Schedule RC–C, Part II,
9 See Community Banks: Effect of Regulations on
Small Business Lending and Institutions Appears
Modest, but Lending Data Could Be Improved
(GAO–18–312).
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55689
and how institutions are using these
data internally, to identify which
options may improve the usefulness of
the Call Report data collection while
considering the burden impact of any
adjustments to the current reporting
requirements for Schedule RC–C, Part II.
The agencies will use the feedback
received in response to this request for
comment to assess what steps they
should take in response to the
recommendation from the GAO. After
considering the feedback, if the agencies
determine that a change to the existing
collection of small business and small
farm lending data in Schedule RC–C,
Part II, is warranted, the agencies would
seek further comment on a specific
proposal to revise this Call Report
schedule in accordance with the
Paperwork Reduction Act.10
B. Request for Comment
General Questions on Data
1. How do institutions internally
report on their small business and small
farm loan portfolios? What key
indicator(s) do institutions use to define
and monitor small business and small
farm loan originations each quarter? Do
institutions further subcategorize these
loan portfolios based on initial loan size
or other factors (such as the borrower’s
gross annual revenue or the borrower’s
number of employees)? In responding to
these questions, commenters from banks
and savings associations are encouraged
to describe the internal reporting
practices, key indicator(s), and any
subcategorization at their individual
institution.
2. What data do institutions regularly
collect from small businesses and small
farms related to outstanding loans or
commitments (such as gross annual
revenues or asset size)? In responding to
this question, commenters from banks
and savings associations are encouraged
to identify the data their institution
regularly collects.
Questions Related to the Current
Collection
3. As described in Section I.B. above,
the agencies’ collection classifies and
stratifies loans as small business or
small farm loans based on the original
amounts of the loans. The maximum
original amounts used to determine this
classification have not changed since
Schedule RC–C, Part II, took effect in
1993.
a. Should the agencies consider
increasing the maximum original loan
amounts for the reporting of loans to
small businesses and small farms
10 44
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U.S.C. chapter 35.
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(currently $1 million and $500,000,
respectively)? If so, what would be
appropriate maximum original amounts
for each type of loan?
b. Should the agencies continue to
require loan stratification by original
loan amount or just collect total
amounts for small business and small
farm loans without stratification? If the
former and the maximum original loan
amounts were increased, what would be
appropriate original loan amounts for
stratification?
c. Should the agencies incorporate an
automatic or periodic adjustment for
inflation for the maximum original loan
amounts going forward?
4. Should the agencies raise the
original amount threshold (currently
$100,000) for identifying institutions
that hold small business or small farm
loans with original amounts
predominantly below that threshold that
would not need to complete the full
stratification in Schedule RC–C, Part II?
5. Should the agencies exempt
institutions that hold less than a certain
number or total amount of small
business or small farm loans from
reporting data on these loans in
Schedule RC–C, Part II? If so, what
would be an appropriate threshold for
exemption and why?
Questions on Alternate Approaches
6. Should the agencies consider using
other business and farm size indicators
to identify or stratify loans, e.g., the
borrower’s gross annual revenues or
asset size, or should the agencies
combine original loan amounts with one
or more of these other indicators to
identify or stratify loans?
a. Would other indicators provide a
better measure to identify small
business and small farm loans than the
original loan amount? If so, which
indicators?
b. Are such indicator data available
back to the origination dates of existing
loans? If so, are the data available in
your institution’s automated loan
systems or in manual form, e.g., in
individual borrowers’ loan files?
c. If only current indicator data are
available, would the current data
generally be representative of what the
indicator data would have been at
origination? Are the current indicator
data available in your institution’s
automated loan systems or in manual
form?
7. Should the agencies consider
referencing other recognized standards
for small business classification, such as
the U.S. Small Business
Administration’s size thresholds for
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small businesses, as a way to identify or
stratify loans? 11
8. Should the agencies consider
collecting data only on new loans made
during the reporting period (i.e.,
originations) instead of data on total
loans outstanding as of the end of the
reporting period regardless of when
originated?
9. Are there other approaches the
agencies should consider for the
identification of, and the collection of
information on, small business or small
farm loans?
Questions on Potential Challenges and
Burden
10. What provisions of the existing
Schedule RC–C, Part II, instructions,
including the definitions of loans to
small businesses and loans to small
farms, create difficulties for your
institution in reporting in this schedule
today? How might the agencies address
these issues to reduce reporting burden?
11. What challenges or burden would
your institution experience under each
of the various options to revise the
collection of small business and small
farm loan data (i.e., raise existing
original amount thresholds; use new
indicators to identify small business and
small farm loans outstanding as of the
end of the reporting period regardless of
when the loans were acquired
(originated or purchased); use a
combination of existing or higher
original amount thresholds and new
indicators for identifying and stratifying
loans outstanding as of the end of the
reporting period; collect data only on
loan originations during the reporting
period rather than total loans
outstanding as of the end of the
reporting period)?
a. How would burden be affected if a
revised method for identifying and
reporting small business and small farm
loans applies only to loans acquired
after the date the revised method takes
effect and the collection of data
excludes loans held when the revised
method takes effect?
b. How would burden be affected if
loans acquired after the date the revised
method takes effect are reported under
a revised method while loans held when
the revised method takes effect continue
to be reported under the existing
Schedule RC–C, Part II, framework, i.e.,
only by original loan amount?
c. If a revised method were to be used
for identifying loans to be reported in
Schedule RC–C, Part II, how much lead
time would your institution need before
you would be prepared to begin
reporting under this revised method?
11 See
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How would lead times differ for the
various options referenced above in this
question?
Dated: October 10, 2019.
Morris R. Morgan,
First Deputy Comptroller, Comptroller of the
Currency.
Board of Governors of the Federal Reserve
System, October 7, 2019.
Ann Misback,
Secretary of the Board.
Federal Deposit Insurance Corporation.
Dated at Washington, DC, on October 8,
2019.
Annmarie H. Boyd,
Assistant Executive Secretary.
[FR Doc. 2019–22568 Filed 10–16–19; 8:45 am]
BILLING CODE 4810–33–P; 6210–01–P; 6714–01–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
Proposed Collection; Comment
Request for Form Project
Internal Revenue Service (IRS),
Treasury.
ACTION: Notice and request for
comments.
AGENCY:
The Internal Revenue Service,
as part of its continuing effort to reduce
paperwork and respondent burden,
invites the general public and other
Federal agencies to take this
opportunity to comment on continuing
information collections, as required by
the Paperwork Reduction Act of 1995.
The IRS is soliciting comments
concerning gas guzzler tax.
DATES: Written comments should be
received on or before December 16, 2019
to be assured of consideration.
ADDRESSES: Direct all written comments
to Dr. Philippe Thomas, Internal
Revenue Service, Room 6529, 1111
Constitution Avenue NW, Washington,
DC 20224.
FOR FURTHER INFORMATION CONTACT:
Requests for additional information or
copies of the form should be directed to
Kerry Dennis, at (202) 317–5751 or
Internal Revenue Service, Room 6529,
1111 Constitution Avenue NW,
Washington, DC 20224, or through the
internet, at Kerry.Dennis@irs.gov.
SUPPLEMENTARY INFORMATION:
Title: Gas Guzzler Tax.
OMB Number: 1545–0242.
Form Number: Form 6197.
Abstract: Internal Revenue Code
section 4064 imposes a gas guzzler tax
on the sale, use, or first lease by a
manufacturer or first lease by a
manufacturer or importer of
automobiles whose fuel economy does
SUMMARY:
E:\FR\FM\17OCN1.SGM
17OCN1
]]>Agencies
[Federal Register Volume 84, Number 201 (Thursday, October 17, 2019)]
[Notices]
[Pages 55687-55690]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-22568]
[[Page 55687]]
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DEPARTMENT OF TREASURY
Office of the Comptroller of the Currency
[Docket ID OCC-2019-0021]
FEDERAL RESERVE SYSTEM
FEDERAL DEPOSIT INSURANCE CORPORATION
Reporting of Data on Loans to Small Businesses and Small Farms
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: Request for comment.
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SUMMARY: The OCC, the Board, and the FDIC (collectively, the agencies)
are requesting comment on ways to modify the current requirements for
reporting data on loans to small businesses and small farms in the
Consolidated Reports of Condition and Income (Call Report) so that the
reported data better reflect lending to these sectors of the U.S.
economy.
DATES: Comments must be received by the agencies no later than December
16, 2019.
ADDRESSES: Interested parties are invited to submit written comments to
any or all of the agencies. All comments, which should refer to ``Loans
to Small Businesses and Small Farms,'' will be shared among the
agencies.
OCC: Commenters are encouraged to submit comments through the
Federal eRulemaking Portal or email, if possible. You may submit
comments by any of the following methods:
Federal eRulemaking Portal--Regulations.gov Classic or
Regulations.gov Beta
Regulations.gov Classic: Go to https://www.regulations.gov/. Enter
``Docket ID OCC-2019-0021'' in the Search Box and click ``Search.''
Click on ``Comment Now'' to submit public comments. For help with
submitting effective comments please click on ``View Commenter's
Checklist.'' Click on the ``Help'' tab on the Regulations.gov home page
to get information on using Regulations.gov, including instructions for
submitting public comments.
Regulations.gov Beta: Go to https://beta.regulations.gov/ or click
``Visit New Regulations.gov Site'' from the Regulations.gov classic
homepage. Enter ``Docket ID OCC-2019-0021'' in the Search Box and click
``Search.'' Public comments can be submitted via the ``Comment'' box
below the displayed document information or click on the document title
and click the ``Comment'' box on the top-left side of the screen. For
help with submitting effective comments please click on ``Commenter's
Checklist.'' For assistance with the Regulations.gov Beta site please
call (877) 378-5457 (toll free) or (703) 454-9859 Monday-Friday, 9
a.m.-5 p.m. ET or email to [email protected].
Email: [email protected].
Mail: Chief Counsel's Office, Attention: Comment
Processing, Office of the Comptroller of the Currency, 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
``Docket ID OCC-2019-0021'' in your comment. In general, the OCC will
enter all comments received into the docket and publish the comments on
the Regulations.gov website 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 request for comment by any of the following methods:
Viewing Comments Electronically--Regulations.gov Classic
or Regulations.gov Beta
Regulations.gov Classic: Go to https://www.regulations.gov/. Enter
``Docket ID OCC-2019-0021'' in the Search box and click ``Search.''
Click on ``Open Docket Folder'' on the right side of the screen.
Comments and supporting materials can be viewed and filtered by
clicking on ``View all documents and comments in this docket'' and then
using the filtering tools on the left side of the screen. Click on the
``Help'' tab on the Regulations.gov home page to get information on
using Regulations.gov. The docket may be viewed after the close of the
comment period in the same manner as during the comment period.
Regulations.gov Beta: Go to https://beta.regulations.gov/ or click
``Visit New Regulations.gov Site'' from the Regulations.gov classic
homepage. Enter ``Docket ID OCC-2019-0021'' in the Search Box and click
``Search.'' Click on the ``Comments'' tab. Comments can be viewed and
filtered by clicking on the ``Sort By'' drop-down on the right side of
the screen or the ``Refine Results'' options on the left side of the
screen. Supporting Materials can be viewed by clicking on the
``Documents'' tab and filtered by clicking on the ``Sort By'' drop-down
on the right side of the screen or the ``Refine Results'' options on
the left side of the screen.'' For assistance with the Regulations.gov
Beta site please call (877) 378-5457 (toll free) or (703) 454-9859
Monday-Friday, 9 a.m.-5 p.m. ET or email to
[email protected].
The docket may be viewed after the close of the comment period in
the same manner as during the comment period.
Viewing Comments Personally: You may personally inspect
comments at the OCC, 400 7th Street SW, Washington, DC 20219. 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 ``Loans to
Small Businesses and Small Farms,'' 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 ``Loans
to Small Businesses and Small Farms'' 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
[[Page 55688]]
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 ``Loans to
Small Businesses and Small Farms,'' 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 ``Loans to Small
Businesses and Small Farms'' in the subject line of the message.
Mail: Manuel E. Cabeza, Counsel, Attn: Comments, Room MB-
3128, 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.
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, 3501 North Fairfax
Drive, Arlington, VA 22226, or by telephone at (877) 275-3342 or (703)
562-2200.
FOR FURTHER INFORMATION CONTACT:
OCC: Cady Codding, Senior Policy Accountant, Office of the Chief
Accountant, (202) 649-5764; Kevin Korzeniewski, Counsel, Chief
Counsel's Office, (202) 649-5490; or for persons who are deaf or
hearing impaired, TTY, (202) 649-5597.
Board: Douglas Carpenter, Senior Supervisory Financial Analyst,
Division of Supervision and Regulation, (202) 452-2205, Board of
Governors of the Federal Reserve System, 20th and C Streets NW,
Washington, DC 20551.
FDIC: Shannon Beattie, Chief, Accounting and Securities Disclosure
Section, Division of Risk Management Supervision, (202) 898-3952,
[email protected]; or Michelle Haslett, Examination Specialist,
Division of Risk Management Supervision, (202) 898-6923,
[email protected].
SUPPLEMENTARY INFORMATION:
I. Background, Existing Collection, and Use of Data
A. History of the Data Collection
Section 122 of the Federal Deposit Insurance Corporation
Improvement Act of 1991 \1\ required the agencies to establish an
annual data collection from insured depository institutions on lending
to small businesses and small farms. The agencies implemented the
statute by introducing Schedule RC-C, Part II, to the Call Report \2\
effective June 30, 1993.\3\ Initially, this schedule was completed
annually as of every June 30. However, to improve the agencies' ability
to assess the availability of credit to small businesses and small
farms in the aftermath of the financial crisis, the agencies changed
the reporting frequency for Schedule RC-C, Part II, from annually to
quarterly beginning with the March 31, 2010, Call Report.\4\ In 2017,
as part of the Federal Financial Institutions Examination Council's
Call Report burden reduction initiative, the agencies reduced the
reporting frequency of Schedule RC-C, Part II, from quarterly to
semiannually for institutions that file the FFIEC 051 Call Report.\5\
The reporting frequency of Schedule RC-C, Part II, remains quarterly
for institutions that file the FFIEC 031 and the FFIEC 041 Call
Report.\6\
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\1\ 12 U.S.C. 1817 note.
\2\ The ``Call Report'' consists of 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 $5 Billion (FFIEC 051). U.S.
branches and agencies of foreign banks file the Report of Assets and
Liabilities of U.S. Branches and Agencies of Foreign Banks (FFIEC
002). The FFIEC 002 includes Schedule C, Part II, Loans to Small
Businesses and Small Farms, which is collected only from insured
U.S. branches of foreign banks and parallels Call Report Schedule
RC-C, Part II.
\3\ 57 FR 54235 (November 17, 1992).
\4\ 74 FR 68322 (December 23, 2009).
\5\ 82 FR 2444 (January 9, 2017).
\6\ In the FFIEC 002, Schedule C, Part II, is collected annually
as of June 30 from insured U.S. branches of foreign banks.
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B. Data Currently Collected
The current data collection in Schedule RC-C, Part II, generally
requests information on (i) loans to small businesses, which are
defined as loans with original amounts of $1 million or less that are
reported as ``Loans secured by nonfarm nonresidential properties'' or
``Commercial and industrial loans'' (in domestic offices) in Call
Report Schedule RC-C, Part I, items 1.e and 4; and (ii) loans to small
farms, which are defined as loans with original amounts of $500,000 or
less that are reported as ``Loans secured by farmland (including farm
residential and other improvements)'' and ``Loans to finance
agricultural production and other loans to farmers'' (in domestic
offices) in Call Report Schedule RC-C, Part I, items 1.b and 3. The
agencies currently request the total number and total amount
outstanding for each of these four categories of loans, which are
stratified into three segments based on the original amounts of the
loans. For loans to small businesses, the stratifications are original
amounts of $100,000 or less, original amounts of more than $100,000
through $250,000, and original amounts of more than $250,000 through $1
million. For loans to small farms, the stratifications are original
amounts of less than $100,000, original amounts of more than $100,000
through $250,000, and original amounts of more than $250,000 through
$500,000.
Institutions that do not hold loans that meet the definition of
small business or small farm loans do not need to provide data in
Schedule RC-C, Part II, for that particular type of loan. Institutions
that file the FFIEC 041 or the FFIEC 051 Call Report and hold small
business or small farm loans predominantly in original amounts of
$100,000 or less report only the total number of the loans in each loan
category within that particular type of loan, and do not need to
provide the full stratification. Further details about the collection
of loans to small businesses and small farms are provided in the
applicable Call Report instructions (FFIEC 031, FFIEC 041, or FFIEC
051).\7\
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\7\ https://www.ffiec.gov/ffiec_report_forms.htm.
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C. Uses of the Data
Among the agencies, the Board is the primary user of the data
collected on loans to small businesses and small farms.\8\ Collection
of these data improves the Board's ability to monitor credit conditions
facing small businesses and small farms and significantly contributes
to its ability to develop policies intended to address any problems
that arise in credit markets. The institution-level Call Report data
provide information that cannot be obtained from other indicators of
small business and small farm credit conditions. For example, during a
period of credit contraction, the Call Report data can be used to
identify which types of institutions are reducing the volume of their
loans to small businesses and small farms. Having detailed data on the
characteristics of affected institutions is crucial to building a
sufficiently informative picture of the strength of economic activity.
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\8\ See 82 FR 2444, 2454 (January 9, 2017).
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Monetary policymaking benefits importantly from timely information
on
[[Page 55689]]
small business credit conditions and flows. To determine how best to
adjust the federal funds rate over time, the Board must continuously
assess the prospects for real economic activity and inflation in coming
quarters. Credit conditions have an important bearing on the evolution
of those prospects over time, and so the Board pays close attention to
data from Call Reports. In trying to understand the implications of
aggregate credit data for the macroeconomic outlook, it is helpful for
the Board to be able to distinguish between conditions facing small
firms and those affecting other businesses for several reasons. First,
small businesses comprise a substantial portion of the nonfinancial
business sector, and so their hiring and investment decisions have an
important influence on overall real activity. Second, because small
businesses tend to depend more heavily on depository institutions for
external financing, they likely experience material swings in their
ability to obtain credit relative to larger firms. Third, the relative
opacity of small businesses and their consequent need to provide
collateral for loans is thought to create a ``credit'' channel for
monetary policy to influence real activity. Specifically, changes in
monetary policy may alter the value of assets used as collateral for
loans, thereby affecting the ability of small businesses to obtain
credit, abstracting from the effects of any changes in loan rates.
Finally, the credit conditions facing small businesses and small farms
differ substantially from those facing large businesses, making it
necessary to collect indicators that are specific to these borrowers.
Large businesses may access credit from a number of different sources,
including the corporate bond market and the commercial paper market. In
contrast, small businesses and small farms rely more heavily on credit
provided through depository institutions. The dependence of small
businesses and small farms on lending by depository institutions--
particularly from smaller institutions--highlights the importance of
the Call Report data reported in Schedule RC-C, Part II.
II. Current Actions
A. GAO Report
The U.S. Government Accountability Office (GAO) reviewed the data
collected on Call Report Schedule RC-C, Part II, Loans to Small
Businesses and Small Farms, as part of a study of the effect of
regulations on small business lending.\9\ In summarizing its findings
with respect to the Call Report data on loans to small businesses, the
GAO stated that
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\9\ See Community Banks: Effect of Regulations on Small Business
Lending and Institutions Appears Modest, but Lending Data Could Be
Improved (GAO-18-312).
[t]he data community banks report to regulators do not
accurately capture lending to small businesses because the data
exclude some loans to small businesses. Specifically, the definition
of small business loans used for banks' reporting excludes loans
greater than $1 million and has not been adjusted for inflation
since 1992. In addition, the data capture loans by their size rather
than the size of the borrowing entity, and therefore could include
small loans to large businesses. These limitations hamper
regulators' and policymakers' ability to assess actual changes in
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banks' small business lending, including any effect of regulation.
At the conclusion of this study, which was published in August
2018, the GAO recommended that the agencies should collaborate to
reevaluate, and modify as needed, the requirements for the data banks
report in the Call Report to better reflect lending to small
businesses.
In response to this recommendation, the agencies are reviewing the
data currently collected on small business and small farm loans on
Schedule RC-C, Part II, in the Call Report to identify options for
improving the usefulness of the data reported on these loans so that
the data will better reflect lending to small businesses and small
farms.
The agencies also recognize that institutions already have
processes in place that enable them to report their small business and
small farm lending data in the Call Report in accordance with the
reporting instructions for Schedule RC-C, Part II, which generally have
not been revised since the implementation of Schedule RC-C, Part II, in
1993. Thus, introducing revisions to the reporting requirements and the
instructions for Schedule RC-C, Part II, could affect the burden of the
collection of small business and small farm lending data on
institutions. Certain options for revisions may change burden in
differing ways, particularly if the options are not aligned with how
institutions currently identify loans to small businesses and small
farms and then collect and report data on these loans to their
managements or internal purposes. The agencies are interested in
learning what data institutions collect and maintain on small business
and small farm loans in their loan systems and other automated systems
for internal purposes in addition to the data required to be reported
on these loans in Call Report Schedule RC-C, Part II, and how
institutions are using these data internally, to identify which options
may improve the usefulness of the Call Report data collection while
considering the burden impact of any adjustments to the current
reporting requirements for Schedule RC-C, Part II. The agencies will
use the feedback received in response to this request for comment to
assess what steps they should take in response to the recommendation
from the GAO. After considering the feedback, if the agencies determine
that a change to the existing collection of small business and small
farm lending data in Schedule RC-C, Part II, is warranted, the agencies
would seek further comment on a specific proposal to revise this Call
Report schedule in accordance with the Paperwork Reduction Act.\10\
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\10\ 44 U.S.C. chapter 35.
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B. Request for Comment
General Questions on Data
1. How do institutions internally report on their small business
and small farm loan portfolios? What key indicator(s) do institutions
use to define and monitor small business and small farm loan
originations each quarter? Do institutions further subcategorize these
loan portfolios based on initial loan size or other factors (such as
the borrower's gross annual revenue or the borrower's number of
employees)? In responding to these questions, commenters from banks and
savings associations are encouraged to describe the internal reporting
practices, key indicator(s), and any subcategorization at their
individual institution.
2. What data do institutions regularly collect from small
businesses and small farms related to outstanding loans or commitments
(such as gross annual revenues or asset size)? In responding to this
question, commenters from banks and savings associations are encouraged
to identify the data their institution regularly collects.
Questions Related to the Current Collection
3. As described in Section I.B. above, the agencies' collection
classifies and stratifies loans as small business or small farm loans
based on the original amounts of the loans. The maximum original
amounts used to determine this classification have not changed since
Schedule RC-C, Part II, took effect in 1993.
a. Should the agencies consider increasing the maximum original
loan amounts for the reporting of loans to small businesses and small
farms
[[Page 55690]]
(currently $1 million and $500,000, respectively)? If so, what would be
appropriate maximum original amounts for each type of loan?
b. Should the agencies continue to require loan stratification by
original loan amount or just collect total amounts for small business
and small farm loans without stratification? If the former and the
maximum original loan amounts were increased, what would be appropriate
original loan amounts for stratification?
c. Should the agencies incorporate an automatic or periodic
adjustment for inflation for the maximum original loan amounts going
forward?
4. Should the agencies raise the original amount threshold
(currently $100,000) for identifying institutions that hold small
business or small farm loans with original amounts predominantly below
that threshold that would not need to complete the full stratification
in Schedule RC-C, Part II?
5. Should the agencies exempt institutions that hold less than a
certain number or total amount of small business or small farm loans
from reporting data on these loans in Schedule RC-C, Part II? If so,
what would be an appropriate threshold for exemption and why?
Questions on Alternate Approaches
6. Should the agencies consider using other business and farm size
indicators to identify or stratify loans, e.g., the borrower's gross
annual revenues or asset size, or should the agencies combine original
loan amounts with one or more of these other indicators to identify or
stratify loans?
a. Would other indicators provide a better measure to identify
small business and small farm loans than the original loan amount? If
so, which indicators?
b. Are such indicator data available back to the origination dates
of existing loans? If so, are the data available in your institution's
automated loan systems or in manual form, e.g., in individual
borrowers' loan files?
c. If only current indicator data are available, would the current
data generally be representative of what the indicator data would have
been at origination? Are the current indicator data available in your
institution's automated loan systems or in manual form?
7. Should the agencies consider referencing other recognized
standards for small business classification, such as the U.S. Small
Business Administration's size thresholds for small businesses, as a
way to identify or stratify loans? \11\
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\11\ See 13 CFR 121.201.
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8. Should the agencies consider collecting data only on new loans
made during the reporting period (i.e., originations) instead of data
on total loans outstanding as of the end of the reporting period
regardless of when originated?
9. Are there other approaches the agencies should consider for the
identification of, and the collection of information on, small business
or small farm loans?
Questions on Potential Challenges and Burden
10. What provisions of the existing Schedule RC-C, Part II,
instructions, including the definitions of loans to small businesses
and loans to small farms, create difficulties for your institution in
reporting in this schedule today? How might the agencies address these
issues to reduce reporting burden?
11. What challenges or burden would your institution experience
under each of the various options to revise the collection of small
business and small farm loan data (i.e., raise existing original amount
thresholds; use new indicators to identify small business and small
farm loans outstanding as of the end of the reporting period regardless
of when the loans were acquired (originated or purchased); use a
combination of existing or higher original amount thresholds and new
indicators for identifying and stratifying loans outstanding as of the
end of the reporting period; collect data only on loan originations
during the reporting period rather than total loans outstanding as of
the end of the reporting period)?
a. How would burden be affected if a revised method for identifying
and reporting small business and small farm loans applies only to loans
acquired after the date the revised method takes effect and the
collection of data excludes loans held when the revised method takes
effect?
b. How would burden be affected if loans acquired after the date
the revised method takes effect are reported under a revised method
while loans held when the revised method takes effect continue to be
reported under the existing Schedule RC-C, Part II, framework, i.e.,
only by original loan amount?
c. If a revised method were to be used for identifying loans to be
reported in Schedule RC-C, Part II, how much lead time would your
institution need before you would be prepared to begin reporting under
this revised method? How would lead times differ for the various
options referenced above in this question?
Dated: October 10, 2019.
Morris R. Morgan,
First Deputy Comptroller, Comptroller of the Currency.
Board of Governors of the Federal Reserve System, October 7,
2019.
Ann Misback,
Secretary of the Board.
Federal Deposit Insurance Corporation.
Dated at Washington, DC, on October 8, 2019.
Annmarie H. Boyd,
Assistant Executive Secretary.
[FR Doc. 2019-22568 Filed 10-16-19; 8:45 am]
BILLING CODE 4810-33-P; 6210-01-P; 6714-01-P
