Treatment of Certain Emergency Facilities in the Regulatory Capital Rule and the Liquidity Coverage Ratio Rule, 68243-68249 [2020-21894]

Agencies

• FEDERAL DEPOSIT INSURANCE CORPORATION
• FEDERAL RESERVE SYSTEM
• Department of Treasury
• Office of the Comptroller of the Currency

[Federal Register Volume 85, Number 209 (Wednesday, October 28, 2020)]
[Rules and Regulations]
[Pages 68243-68249]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-21894]


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DEPARTMENT OF TREASURY

Office of the Comptroller of the Currency

12 CFR Parts 3 and 50

[Docket ID OCC-2020-0017]
RIN 1557-AE89; 1557-AE90; 1557-AE92]

FEDERAL RESERVE SYSTEM

12 CFR Parts 217 and 249

[Docket Nos. R-1711; 1712; and 1717]
RIN 7100-AF85; 7100-AF86: 7100-AF90

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Parts 324 and 329

RIN 3064-AF41; 3064-AF49; 3064-AF51


Treatment of Certain Emergency Facilities in the Regulatory 
Capital Rule and the Liquidity Coverage Ratio Rule

AGENCY: The Office of the Comptroller of the Currency, Department of 
the Treasury; the Board of Governors of the Federal Reserve System; and 
the Federal Deposit Insurance Corporation.

ACTION: Final rule.

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SUMMARY: The Office of the Comptroller of the Currency, the Board of 
Governors of the Federal Reserve System, and the Federal Deposit 
Insurance Corporation are adopting as final the revisions to the 
regulatory capital rule and the liquidity coverage ratio (LCR) rule 
made under three interim final rules published in the Federal Register 
on March 23, April 13, and May 6, 2020. The agencies are adopting these 
interim final rules as final with no changes. Under this final rule, 
banking organizations may continue to neutralize the regulatory capital 
effects of participating in the Money Market Mutual Fund Liquidity 
Facility (MMLF) and the Paycheck Protection Program Liquidity Facility 
(PPPLF), and are required to continue to neutralize the LCR effects of 
participating in the MMLF and the PPPLF. In addition, Paycheck 
Protection Program loans will receive a zero percent risk weight under 
the agencies' regulatory capital rules.

DATES: The final rule is effective December 28, 2020.

[[Page 68244]]


FOR FURTHER INFORMATION CONTACT: 
    OCC: Andrew Tschirhart, Risk Expert, Capital and Regulatory Policy, 
(202) 649-6370; James Weinberger, Technical Expert, Treasury & Market 
Risk Policy, (202) 649-6360; Henry Barkhausen, Counsel, Kevin 
Korzeniewski, Counsel, Rima Kundnani, Senior Attorney, or Daniel Perez, 
Senior Attorney, Chief Counsel's Office, (202) 649-5490, for persons 
who are deaf or hearing impaired, TTY, (202) 649-5597, Office of the 
Comptroller of the Currency, 400 7th Street SW, Washington, DC 20219.
    Board: Anna Lee Hewko, Associate Director, (202) 530-6360; 
Constance M. Horsley, Deputy Associate Director, (202) 452-5239; Juan 
Climent, Assistant Director, (202) 872-7526; Kathryn Ballintine, 
Manager, (202) 452-2555; Kevin Littler, Lead Financial Institution 
Policy Analyst, (202) 475-6677; Devyn Jeffereis, Senior Financial 
Institution Policy Analyst, (202) 365-2467; or Brendan Rowan, Senior 
Financial Institution Policy Analyst, (202) 475-6685, Division of 
Supervision and Regulation; or Benjamin W. McDonough, Assistant General 
Counsel, (202) 452-2036; David W. Alexander, Senior Counsel, (202) 452-
2877; Steve Bowne, Senior Counsel, (202) 452-3900; Jason Shafer, Senior 
Counsel, (202) 728-5811; Laura Bain, Counsel (202) 736-5546; or Jeffery 
Zhang, Attorney, (202) 736-1968, Legal Division, Board of Governors of 
the Federal Reserve System, 20th Street and Constitution Avenue NW, 
Washington, DC 20551. Users of Telecommunication Device for the Deaf 
(TDD) only, call (202) 263-4869.
    FDIC: Bobby R. Bean, Associate Director, [email protected]; Benedetto 
Bosco, Chief, Capital Policy Section, [email protected]; Noah Cuttler, 
Senior Policy Analyst, [email protected]; Eric Schatten, Senior Policy 
Analyst, [email protected]; Andrew Carayiannis, Senior Policy Analyst, 
[email protected]; [email protected]; Capital Markets 
Branch, Division of Risk Management Supervision, (202) 898-6888; or 
Michael Phillips, Counsel, [email protected]; Catherine Wood, Counsel, 
[email protected]; Sue Dawley, Counsel, [email protected]; Gregory Feder, 
Counsel, [email protected]; Andrew B. Williams, II, Counsel, 
[email protected]; Supervision and Legislation Branch, Legal 
Division, Federal Deposit Insurance Corporation, 550 17th Street NW, 
Washington, DC 20429. For the hearing impaired only, Telecommunication 
Device for the Deaf (TDD), (800) 925-4618.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
    A. Capital Rule
    B. LCR Rule
II. Overview of the Interim Final Rules and Public Comments
    A. MMLF Capital Interim Final Rule
    B. PPPLF Capital Interim Final Rule
    C. LCR Interim Final Rule
    D. Public Comments
III. Summary of the Final Rule
IV. Administrative Law Matters
    A. Congressional Review Act
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Riegle Community Development and Regulatory Improvement Act 
of 1994
    E. Use of Plain Language
    F. OCC Unfunded Mandates Reform Act of 1995

I. Background

    In light of recent disruptions in economic conditions caused by the 
outbreak of the coronavirus disease 2019 and the stress in U.S. 
financial markets, the Board of Governors of the Federal Reserve System 
(Board), with the approval of the U.S. Secretary of the Treasury, 
established certain liquidity facilities pursuant to section 13(3) of 
the Federal Reserve Act.\1\
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    \1\ 12 U.S.C. 343(3).
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    In order to prevent disruptions in the money markets from 
destabilizing the financial system, the Board authorized the Federal 
Reserve Bank of Boston to establish the Money Market Mutual Fund 
Liquidity Facility (MMLF). Under the MMLF, the Federal Reserve Bank of 
Boston may extend non-recourse loans to eligible borrowers to purchase 
assets from money market mutual funds. Assets purchased from money 
market mutual funds are posted as collateral to the Federal Reserve 
Bank of Boston.
    In order to provide liquidity to small business lenders and the 
broader credit markets, and to help stabilize the financial system, the 
Board authorized each of the Federal Reserve Banks to extend credit 
under the Paycheck Protection Program Liquidity Facility (PPPLF).\2\ 
Under the PPPLF, each of the Federal Reserve Banks may extend non-
recourse loans to institutions that are eligible to make Paycheck 
Protection Program (PPP) covered loans as defined in section 7(a)(36) 
of the Small Business Act.\3\ Under the PPPLF, only PPP covered loans 
that are guaranteed by the Small Business Administration (SBA) with 
respect to both principal and accrued interest and that are originated 
by an eligible institution may be pledged as collateral to the Federal 
Reserve Banks. The maturity date of the extension of credit under the 
PPPLF equals the maturity date of the PPP covered loans pledged to 
secure the extension of credit.\4\
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    \2\ The Paycheck Protection Program Liquidity Facility was 
previously known as the Paycheck Protection Program Lending 
Facility.
    \3\ Congress created the PPP as part of the Coronavirus Aid, 
Relief, and Economic Security Act and in recognition of the exigent 
circumstances faced by small businesses. PPP covered loans are fully 
guaranteed as to principal and accrued interest by the Small 
Business Administration (SBA) and also afford borrower forgiveness 
up to the principal amount and accrued interest of the PPP covered 
loan, if the proceeds of the PPP covered loan are used for certain 
expenses. Under the PPP, eligible borrowers generally include 
businesses with fewer than 500 employees or that are otherwise 
considered to be small by the SBA. The SBA reimburses PPP lenders 
for any amount of a PPP covered loan that is forgiven. In general, 
PPP lenders are not held liable for any representations made by PPP 
borrowers in connection with a borrower's request for PPP covered 
loan forgiveness. For more information on the Paycheck Protection 
Program, see https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program-ppp.
    \4\ The maturity date of the loan made under the PPPLF will be 
accelerated if the underlying PPP covered loan goes into default and 
the eligible borrower sells the PPP covered loan to the Small 
Business Administration (SBA) to realize the SBA guarantee. The 
maturity date of the loan made under the PPPLF also will be 
accelerated to the extent of any PPP covered loan forgiveness 
reimbursement received by the eligible borrower from the SBA.
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    Eligible borrowers from the MMLF and PPPLF and holders of PPP 
covered loans include banking organizations supervised by the Office of 
the Comptroller of the Currency (OCC), the Board, and the Federal 
Deposit Insurance Corporation (FDIC) (together, the agencies) that are 
subject to the agencies' regulatory capital rule (capital rule) \5\ and 
that may be subject to the liquidity coverage ratio (LCR) rule.\6\ To 
facilitate the use of the MMLF and the PPPLF, the agencies adopted 
three interim final rules (interim final rules) to address the capital 
treatment of participation in the MMLF (MMLF capital interim final 
rule),\7\ the capital treatment of participation in the PPPLF (PPPLF 
capital interim final rule),\8\ and the LCR treatment of participation 
in the

[[Page 68245]]

MMLF and the PPPLF (LCR interim final rule),\9\ respectively.
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    \5\ Banking organizations subject to the capital rule include 
national banks, state member banks, state nonmember banks, savings 
associations, and top-tier bank holding companies and savings and 
loan holding companies domiciled in the United States not subject to 
the Board's Small Bank Holding Company Policy Statement (12 CFR part 
225, appendix C), but exclude certain savings and loan holding 
companies that are substantially engaged in insurance underwriting 
or commercial activities or that are estate trusts, and bank holding 
companies and savings and loan holding companies that are employee 
stock ownership plans. See 12 CFR part 3 (OCC); 12 CFR part 217 
(Board); and 12 CFR part 324 (FDIC).
    \6\ See 12 CFR part 50 (OCC); 12 CFR part 249 (Board); and 12 
CFR part 329 (FDIC).
    \7\ 85 FR 16232 (Mar. 23, 2020).
    \8\ 85 FR 20387 (Apr. 13, 2020).
    \9\ 85 FR 26835 (May 6, 2020).
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A. Capital Rule

    The capital rule requires banking organizations to comply with 
risk-based and leverage capital requirements, which are expressed as a 
ratio of regulatory capital to assets and certain other exposures. 
Risk-based capital requirements are based on risk-weighted assets, 
whereas leverage capital requirements are based on a measure of average 
total consolidated assets or total leverage exposure. Participation in 
the MMLF or the PPPLF affects the balance sheet of a banking 
organization. To participate in the MMLF, a banking organization must 
acquire and hold assets (that is, eligible collateral pledged to the 
Federal Reserve Bank of Boston) on its balance sheet. Similarly, to 
participate in the PPPLF, a banking organization must hold PPP covered 
loans on its balance sheet. As a result, without the agencies' issuance 
of the MMLF capital and PPPLF capital interim final rules, a banking 
organization that participates in either facility could have been 
required to maintain increased regulatory capital.

B. LCR Rule

    The LCR rule requires covered companies \10\ to calculate and 
maintain an amount of high-quality liquid assets (HQLA) sufficient to 
cover their total net cash outflows over a 30-day stress period. A 
covered company's LCR is the ratio of its HQLA amount divided by its 
total net cash outflow amount. The total net cash outflow amount is 
calculated as the difference between outflow and inflow amounts, which 
are determined by applying a standardized set of outflow and inflow 
rates to the cash flows of various assets and liabilities, together 
with off-balance sheet items, as specified in sections __.32 and __.33 
of the LCR rule.\11\
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    \10\ The applicability of the LCR rule is described in 12 CFR 
50.1 (OCC); 12 CFR 249.1 (Board); and 12 CFR 329.1 (FDIC).
    \11\ See 12 CFR 50.32 and 50.33 (OCC); 12 CFR 249.32 and 249.33 
(Board); and 12 CFR 329.32 and 329.33 (FDIC). Section __.30 of the 
LCR rule also requires a covered company, as applicable, to include 
in its total net cash outflow amount a maturity mismatch add-on, 
which is calculated as the difference (if greater than zero) between 
the covered company's largest net cumulative maturity outflow amount 
for any of the 30 calendar days following the calculation date and 
the net day 30 cumulative maturity outflow amount. See 12 CFR 50.30 
(OCC); 12 CFR 249.30 (Board); and 12 CFR 329.30 (FDIC).
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    Absent changes to the LCR rule, covered companies would have been 
required to recognize outflows for MMLF and PPPLF advances with a 
remaining maturity of 30 days or less and inflows for certain assets 
securing the MMLF and PPPLF advances. As a result, a covered company's 
participation in the MMLF or PPPLF could have affected its total net 
cash outflow amount, which potentially could have resulted in an 
inconsistent, unpredictable, and more volatile calculation of LCR 
requirements across covered companies.

II. Overview of the Interim Final Rules and Public Comments

A. MMLF Capital Interim Final Rule

    On March 23, 2020, the agencies published in the Federal Register 
the MMLF capital interim final rule to neutralize the regulatory 
capital effect of participation in the MMLF. The MMLF capital interim 
final rule permits a banking organization to exclude exposures acquired 
as part of the MMLF from the banking organization's total leverage 
exposure, average total consolidated assets, advanced approaches total 
risk-weighted assets, and standardized total risk-weighted assets, as 
applicable. Because of the non-recourse nature of the Federal Reserve 
Bank of Boston's extension of credit to the banking organization, the 
organization is not exposed to credit or market risk from the assets 
purchased by the banking organization and pledged to the Federal 
Reserve Bank of Boston. The MMLF capital interim final rule reflects 
the agencies' determination that, prior to the MMLF capital interim 
final rule, the leverage and risk-based capital requirements in place 
in the capital rule for the assets acquired by a banking organization 
as part of the MMLF did not reflect the substantial protections 
provided to the organization by the Federal Reserve Bank of Boston in 
connection with the facility.

B. PPPLF Capital Interim Final Rule

    On April 13, 2020, the agencies published in the Federal Register 
the PPPLF capital interim final rule to neutralize the regulatory 
capital effect of participation in the PPPLF. The PPPLF capital interim 
final rule permits a banking organization to exclude exposures pledged 
as collateral to the PPPLF from the banking organization's total 
leverage exposure, average total consolidated assets, advanced 
approaches total risk-weighted assets, and standardized total risk-
weighted assets, as applicable. Because of the non-recourse nature of 
each Federal Reserve Bank's extension of credit to the banking 
organization, the banking organization is not exposed to credit or 
market risk from the pledged PPP covered loans. The PPPLF capital 
interim final rule reflects the agencies' determination that, prior to 
the PPPLF capital interim final rule, the regulatory capital 
requirements in place in the capital rule for PPP covered loans pledged 
by a banking organization to a Federal Reserve Bank as part of the 
PPPLF did not reflect the substantial protections from risk provided to 
the banking organization in connection with the facility.
    Additionally, the PPPLF capital interim final rule provides that a 
banking organization must apply a zero percent risk weight to PPP 
covered loans, as required by Section 1102 of the Coronavirus Aid, 
Relief, and Economic Security (CARES) Act. A banking organization must 
apply a zero percent risk weight to PPP covered loans regardless of 
whether they are pledged under the PPPLF.

C. LCR Interim Final Rule

    On May 6, 2020, the agencies published in the Federal Register the 
LCR interim final rule to require a banking organization subject to the 
LCR rule to neutralize the effect on its LCR of participation in the 
MMLF and PPPLF. The LCR interim final rule requires a covered company 
to neutralize the LCR effects of the advances made by the MMLF and 
PPPLF together with the assets securing these advances. Specifically, 
the LCR interim final rule adds a new definition to the LCR rule for 
``Covered Federal Reserve Facility Funding'' to identify MMLF and PPPLF 
advances separately from other secured funding transactions under the 
LCR rule. The LCR interim final rule requires outflow amounts 
associated with Covered Federal Reserve Facility Funding and inflow 
amounts associated with the assets securing this funding to be excluded 
from a covered company's total net cash outflow amount under the LCR 
rule.\12\
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    \12\ See 12 CFR 50.34 (OCC); 12 CFR 249.34 (Board); and 12 CFR 
329.34 (FDIC). Section __.34 does not apply to the extent the 
covered company secures Covered Federal Reserve Facility Funding 
with securities, debt obligations, or other instruments issued by 
the covered company or its consolidated entity.
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    Advances from the MMLF and PPPLF facilities are non-recourse and 
the maturity of the advance generally aligns with the maturity of the 
collateral. Accordingly, a covered company is not exposed to credit or 
market risk from the collateral securing the MMLF or PPPLF advance that 
could otherwise affect the banking organization's ability to settle the 
loan and generally can use the value of cash received from the 
collateral to repay the advances at

[[Page 68246]]

maturity. For these reasons, the agencies issued the LCR interim final 
rule to better align the treatment of these advances and collateral 
under the LCR rule with the liquidity risk associated with funding 
exposures through these facilities, and to ensure consistent and 
predictable treatment of covered companies' participation in the 
facilities under the LCR rule.

D. Public Comments

Comments on the MMLF Capital Interim Final Rule
    The agencies received two comment letters, from a trade association 
and an advocacy organization, addressing the MMLF capital interim final 
rule. These commenters supported the agencies' actions to encourage 
banking organizations' participation in the emergency lending facility. 
One commenter recommended broader considerations for money market 
mutual fund reform that are outside the scope of this rulemaking.
Comments on the PPPLF Capital Interim Final Rule
    The agencies received 14 comment letters from industry 
participants, advocacy groups, trade associations, and individuals 
addressing the PPPLF interim final rule. Several commenters expressed 
support for the agencies' actions under the PPPLF capital interim final 
rule, and two of these commenters further supported the agencies' 
determination that good cause existed to issue the interim final rules 
without notice and comment. Several commenters suggested that the 
agencies extend the zero percent risk weight to PPP covered loans 
purchased in secondary markets. The agencies note that, under the PPPLF 
capital interim final rule, the risk weight for all PPP covered loans 
is zero percent.
    Several commenters asserted that the PPPLF capital interim final 
rule should extend the leverage exclusion to PPP covered loans that are 
not pledged to the PPPLF, arguing that the treatment could discourage 
banking organizations that are not using the PPPLF from making PPP 
covered loans. Notwithstanding these arguments, the agencies are 
adopting as final the PPPLF capital interim final rule. The CARES Act 
set the risk weight of these loans at zero percent and did not exclude 
these loans from the leverage capital requirements. The favorable 
leverage capital treatment in the PPPLF capital interim final rule 
reflects the non-recourse nature of the relevant Federal Reserve Bank's 
extension of credit to a banking organization only for PPP covered 
loans pledged by a banking organization to a Federal Reserve Bank.
Comments on the LCR Interim Final Rule
    The agencies received one comment letter, from a trade association, 
on the LCR interim final rule. The commenter supported the requirements 
under the LCR interim final rule, arguing that the requirements 
encourage participation in the facilities, which ultimately provides 
benefits to small businesses, households, and investors.

III. Summary of the Final Rule

    For the reasons discussed above, the agencies are adopting as final 
the revisions to the capital and LCR rules unchanged from the interim 
final rules. Accordingly, a banking organization may continue to 
exclude assets acquired as part of the MMLF and PPP covered loans 
pledged under the PPPLF from its total leverage exposure, average total 
consolidated assets, advanced approaches total risk-weighted assets, 
and standardized total risk-weighted assets, as applicable (and for 
purposes of the community bank leverage ratio).\13\ Further, a banking 
organization must continue to apply a zero percent risk weight to all 
PPP covered loans that are not pledged to the PPPLF (regardless of 
whether the banking organization originated the loan). In addition, a 
banking organization subject to the LCR rule is required to continue 
excluding from its total net cash outflow amount outflow amounts 
associated with advances from the MMLF and PPPLF and inflow amounts 
associated with collateral securing the advances.
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    \13\ Assets acquired as part of the MMLF and PPP covered loans 
pledged to the PPPLF would continue to be included in a bank's 
measure of total consolidated assets, including for purposes of 
determining whether a banking organization is a qualifying community 
banking organization.
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IV. Administrative Law Matters

A. Congressional Review Act

    For purposes of the Congressional Review Act, the Office of 
Management and Budget (OMB) makes a determination as to whether a final 
rule constitutes a ``major'' rule.\14\ If a rule is deemed a ``major 
rule'' by the OMB, the Congressional Review Act generally provides that 
the rule may not take effect until at least 60 days following its 
publication.\15\
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    \14\ 5 U.S.C. 801 et seq.
    \15\ 5 U.S.C. 801(a)(3).
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    The Congressional Review Act defines a ``major rule'' as any rule 
that the Administrator of the Office of Information and Regulatory 
Affairs of the OMB finds has resulted in or is likely to result in (A) 
an annual effect on the economy of $100,000,000 or more; (B) a major 
increase in costs or prices for consumers, individual industries, 
Federal, State, or local government agencies or geographic regions; or 
(C) significant adverse effects on competition, employment, investment, 
productivity, innovation, or on the ability of United States-based 
enterprises to compete with foreign-based enterprises in domestic and 
export markets.\16\
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    \16\ 5 U.S.C. 804(2).
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    As required by the Congressional Review Act, the agencies will 
submit the final rule and other appropriate reports to Congress and the 
Government Accountability Office for review.

B. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) (PRA) 
states that no agency may conduct or sponsor, nor is the respondent 
required to respond to, an information collection unless it displays a 
currently valid OMB control number. This final rule does not contain 
any information collection requirements. However, in connection with 
the interim final rules, the Board temporarily revised the Financial 
Statements for Holding Companies (FR Y-9 reports; OMB No. 7100-0128) 
and the Complex Institution Liquidity Monitoring Report (FR 2052a; OMB 
No. 7100-0361) and invited comment on proposals to extend those 
collections of information for three years, with revision.\17\
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    \17\ The Board published a separate Federal Register notice to 
make temporary revisions to the FR Y-9 reports in connection with 
the MMLF Capital Interim Final Rule. 85 FR 19944 (Apr. 9, 2020).
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    Additionally, in connection with the interim final rules, the 
agencies made revisions to the Call Reports (OCC OMB Control No. 1557-
0081; Board OMB Control No. 7100-0036; FDIC OMB Control No. 3064-0052), 
the Report of Assets and Liabilities of U.S. Branches and Agencies of 
Foreign Banks (FFIEC 002; OMB Control No. 7100-0032), and the 
Regulatory Capital Reporting for Institutions Subject to the Advanced 
Capital Adequacy Framework (FFIEC 101; OCC OMB Control No. 1557-0239; 
Board OMB Control No. 7100-0319; FDIC OMB Control No. 3064-0159). The 
changes to the Call Reports, FFIEC 002, and FFIEC 101 and their related 
instructions are addressed in a separate Federal Register notice.\18\
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    \18\ See 85 FR 44361 (July 22, 2020).
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Current Actions

    The Board has extended the FR Y-9 and FR 2052a for three years, 
with

[[Page 68247]]

revision, as originally proposed. The updates to the FR Y-9 and FR 
2052a resulted in an estimated zero net change in hourly burden. No 
public comments were received regarding these proposals under the PRA.

Revision, With Extension, of the Following Information Collections

    (1) Report title: Financial Statements for Holding Companies.
    Agency form numbers: FR Y-9C, FR Y-9LP, FR Y-9SP, FR Y-9ES, and FR 
Y-9CS.
    OMB control number: 7100-0128.
    Effective date: December 28, 2020.
    Frequency: Quarterly, semiannually, and annually.
    Affected public: Businesses or other for-profit.
    Respondents: Bank holding companies (BHCs), savings and loan 
holding companies (SLHCs), securities holding companies (SHCs), and 
U.S. intermediate holding companies (IHCs) (collectively, holding 
companies (HCs)).\19\
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    \19\ An SLHC must file one or more of the FR Y-9 family of 
reports unless it is: (1) A grandfathered unitary SLHC with 
primarily commercial assets and thrifts that make up less than five 
percent of its consolidated assets; or (2) a SLHC that primarily 
holds insurance-related assets and does not otherwise submit 
financial reports with the SEC pursuant to section 13 or 15(d) of 
the Securities Exchange Act of 1934.
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    Estimated number of respondents:
    FR Y-9C (non-advanced approaches (AA) HCs community bank leverage 
ratio (CBLR)) with less than $5 billion in total assets--71,
    FR Y-9C (non AA HCs CBLR) with $5 billion or more in total assets--
35,
    FR Y-9C (non AA HCs non-CBLR) with less than $5 billion in total 
assets--84,
    FR Y-9C (non AA HCs non-CBLR) with $5 billion or more in total 
assets--154,
    FR Y-9C (AA HCs)--19,
    FR Y-9LP--434,
    FR Y-9SP--3,960,
    FR Y-9ES--83,
    FR Y-9CS--236.
    Estimated average hours per response:

Reporting

    FR Y-9C (non AA HCs CBLR) with less than $5 billion in total 
assets--29.17,
    FR Y-9C (non AA HCs CBLR) with $5 billion or more in total assets--
35.14,
    FR Y-9C (non AA HCs non-CBLR) with less than $5 billion in total 
assets--41.01,
    FR Y-9C (non AA HCs non-CBLR) with $5 billion or more in total 
assets--46.98,
    FR Y-9C (AA HCs)--48.80,
    FR Y-9LP--5.27,
    FR Y-9SP--5.40,
    FR Y-9ES--0.50,
    FR Y-9CS--0.50.

Recordkeeping

    FR Y-9C--1,
    FR Y-9LP--1,
    FR Y-9SP--0.50,
    FR Y-9ES--0.50,
    FR Y-9CS--0.50.
    Estimated annual burden hours:

Reporting

    FR Y-9C (non AA HCs CBLR) with less than $5 billion in total 
assets--8,284,
    FR Y-9C (non AA HCs CBLR) with $5 billion or more in total assets--
4,920,
    FR Y-9C (non AA HCs non-CBLR) with less than $5 billion in total 
assets--13,779,
    FR Y-9C (non AA HCs non-CBLR) with $5 billion or more in total 
assets--28,940,
    FR Y-9C (AA HCs)--3,709,
    FR Y-9LP--9,149,
    FR Y-9SP--42,768,
    FR Y-9ES--42,
    FR Y-9CS--472.

Recordkeeping

    FR Y-9C--1,452,
    FR Y-9LP--1,736,
    FR Y-9SP--3,960,
    FR Y-9ES--42,
    FR Y-9CS--472.
    General description of report: The FR Y-9C consists of standardized 
financial statements similar to the Call Reports filed by banks and 
savings associations. The FR Y-9C collects consolidated data from HCs 
and is filed quarterly by top-tier HCs with total consolidated assets 
of $3 billion or more.\20\
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    \20\ Under certain circumstances described in the FR Y-9C's 
General Instructions, HCs with assets under $3 billion may be 
required to file the FR Y-9C.
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    The FR Y-9LP, which collects parent company only financial data, 
must be submitted by each HC that files the FR Y-9C, as well as by each 
of its subsidiary HCs.\21\ The report consists of standardized 
financial statements.
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    \21\ A top-tier HC may submit a separate FR Y-9LP on behalf of 
each of its lower-tier HCs.
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    The FR Y-9SP is a parent company only financial statement filed 
semiannually by HCs with total consolidated assets of less than $3 
billion. In a banking organization with total consolidated assets of 
less than $3 billion that has tiered HCs, each HC in the organization 
must submit, or have the top-tier HC submit on its behalf, a separate 
FR Y-9SP. This report is designed to obtain basic balance sheet and 
income data for the parent company, and data on its intangible assets 
and intercompany transactions.
    The FR Y-9ES is filed annually by each employee stock ownership 
plan (ESOP) that is also an HC. The report collects financial data on 
the ESOP's benefit plan activities. The FR Y-9ES consists of four 
schedules: A Statement of Changes in Net Assets Available for Benefits, 
a Statement of Net Assets Available for Benefits, Memoranda, and Notes 
to the Financial Statements.
    The FR Y-9CS is a free-form supplemental report that the Board may 
utilize to collect critical additional data deemed to be needed in an 
expedited manner from HCs on a voluntary basis. The data are used to 
assess and monitor emerging issues related to HCs, and the report is 
intended to supplement the other FR Y-9 reports. The data items 
included on the FR Y-9CS may change as needed.
    Legal authorization and confidentiality: The Board has the 
authority to impose the reporting and recordkeeping requirements 
associated with the FR Y-9 family of reports on BHCs pursuant to 
section 5 of the Bank Holding Company Act of 1956 (BHC Act) (12 U.S.C. 
1844); on SLHCs pursuant to section 10(b)(2) and (3) of the Home 
Owners' Loan Act (12 U.S.C. 1467a(b)(2) and (3)), as amended by 
sections 369(8) and 604(h)(2) of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act (Dodd-Frank Act); on U.S. IHCs pursuant to 
section 5 of the BHC Act (12 U.S.C. 1844), as well as pursuant to 
sections 102(a)(1) and 165 of the Dodd-Frank Act (12 U.S.C. 511(a)(1) 
and 5365); and on SHCs pursuant to section 618 of the Dodd-Frank Act 
(12 U.S.C. 1850a(c)(1)(A)). The obligation to submit the FR Y-9 series 
of reports, and the recordkeeping requirements set forth in the 
respective instructions to each report, are mandatory, except for the 
FR Y-9CS, which is voluntary.
    With respect to the FR Y-9C report, Schedule HI's data item 7(g), 
``FDIC deposit insurance assessments,'' Schedule HC-P's data item 7(a), 
``Representation and warranty reserves for 1-4 family residential 
mortgage loans sold to U.S. government agencies and government 
sponsored agencies,'' and Schedule HC-P's data item 7(b), 
``Representation and warranty reserves for 1-4 family residential 
mortgage loans sold to other parties'' are considered confidential 
commercial and financial information. Such treatment is appropriate 
under exemption 4 of the Freedom of Information Act (FOIA) (5 U.S.C. 
552(b)(4)) because these data items reflect commercial and financial 
information that is both customarily and actually treated as private by 
the submitter, and which the Board has

[[Page 68248]]

previously assured submitters will be treated as confidential. It also 
appears that disclosing these data items may reveal confidential 
examination and supervisory information, and in such instances, this 
information would also be withheld pursuant to exemption 8 of the FOIA 
(5 U.S.C. 552(b)(8)), which protects information related to the 
supervision or examination of a regulated financial institution.
    In addition, for both the FR Y-9C report, Schedule HC's memorandum 
item 2.b. and the FR Y-9SP report, Schedule SC's memorandum item 2.b., 
the name and email address of the external auditing firm's engagement 
partner, is considered confidential commercial information and 
protected by exemption 4 of the FOIA (5 U.S.C. 552(b)(4)) if the 
identity of the engagement partner is treated as private information by 
HCs. The Board has assured respondents that this information will be 
treated as confidential since the collection of this data item was 
proposed in 2004.
    Additionally, items on the FR Y-9C, Schedule HC-C for loans 
modified under Section 4013, data items Memorandum items 16.a, ``Number 
of Section 4013 loans outstanding''; and Memorandum items 16.b, 
``Outstanding balance of Section 4013 loans'' are considered 
confidential. While the Board generally makes institution-level FR Y-9C 
report data publicly available, the Board is collecting Section 4013 
loan information as part of condition reports for the impacted HCs and 
the Board considers disclosure of these items at the HC level would not 
be in the public interest. Such information is permitted to be 
collected on a confidential basis, consistent with 5 U.S.C. 552(b)(8). 
In addition, holding companies may be reluctant to offer modifications 
under Section 4013 if information on these modifications made by each 
holding company is publicly available, as analysts, investors, and 
other users of public FR Y-9C report information may penalize an 
institution for using the relief provided by the CARES Act. The Board 
may disclose Section 4013 loan data on an aggregated basis, consistent 
with confidentiality considerations.
    Aside from the data items described above, the remaining data items 
on the FR Y-9C report and the FR Y-9SP report are generally not 
accorded confidential treatment. The data items collected on FR Y-9LP, 
FR Y-9ES, and FR Y-9CS reports, are also generally not accorded 
confidential treatment. As provided in the Board's Rules Regarding 
Availability of Information (12 CFR part 261), however, a respondent 
may request confidential treatment for any data items the respondent 
believes should be withheld pursuant to a FOIA exemption. The Board 
will review any such request to determine if confidential treatment is 
appropriate, and will inform the respondent if the request for 
confidential treatment has been denied.
    To the extent the instructions to the FR Y-9C, FR Y-9LP, FR Y-9SP, 
and FR Y-9ES reports each respectively direct the financial institution 
to retain the work papers and related materials used in preparation of 
each report, such material would only be obtained by the Board as part 
of the examination or supervision of the financial institution. 
Accordingly, such information is considered confidential pursuant to 
exemption 8 of the FOIA (5 U.S.C. 552(b)(8)). In addition, the 
financial institution's work papers and related materials may also be 
protected by exemption 4 of the FOIA, to the extent such financial 
information is treated as confidential by the respondent (5 U.S.C. 
552(b)(4)).
    (2) Report title: Complex Institution Liquidity Monitoring Report.
    Agency form number: FR 2052a.
    OMB control number: 7100-0361.
    Effective date: December 28, 2020.
    Frequency: Monthly, and each business day (daily).
    Affected public: Businesses or other for-profit.
    Respondents: U.S. BHCs, U.S. SLHCs, and foreign banking 
organizations (FBOs) with U.S. assets.
    Estimated number of respondents: Monthly, 26; daily, 16.
    Estimated average hours per response: Monthly, 120; daily, 220.
    Estimated annual burden hours: 917,440.
    General description of report: The Board uses the FR 2052a to 
monitor the overall liquidity profile of supervised institutions. These 
data provide detailed information on the liquidity risks within 
different business lines (e.g., financing of securities positions, 
prime brokerage activities). In particular, these data serve as part of 
the Board's supervisory surveillance program in its liquidity risk 
management area and provide timely information on firm-specific 
liquidity risks during periods of stress. Analyses of systemic and 
idiosyncratic liquidity risk issues are then used to inform the Board's 
supervisory processes, including the preparation of analytical reports 
that detail funding vulnerabilities.
    Legal authorization and confidentiality: The FR 2052a is authorized 
pursuant to section 5 of the BHC Act (12 U.S.C. 1844), section 8 of the 
International Banking Act (12 U.S.C. 3106), section 165 of the Dodd-
Frank Act (12 U.S.C. 5365), and section 10 of the Home Owners' Loan Act 
(12 U.S.C. 1467(a)) and is mandatory. Section 5(c) of the BHC Act 
authorizes the Board to require BHCs to submit reports to the Board 
regarding their financial condition. Section 8(a) of the International 
Banking Act subjects FBOs to the provisions of the BHC Act. Section 165 
of the Dodd-Frank Act requires the Board to establish prudential 
standards for certain BHCs and FBOs, which include liquidity 
requirements. Section 10(g) of the Home Owners' Loan Act authorizes the 
Board to collect reports from SLHCs.
    Financial institution information required by the FR 2052a is 
collected as part of the Board's supervisory process. Therefore, such 
information is entitled to confidential treatment under Exemption 8 of 
the FOIA (5 U.S.C. 552(b)(8)). In addition, the institution information 
provided by each respondent would not be otherwise available to the 
public and its disclosure could cause substantial competitive harm. 
Accordingly, it is entitled to confidential treatment under the 
authority of exemption 4 of the FOIA (5 U.S.C. 552(b)(4)), which 
protects from disclosure trade secrets and commercial or financial 
information.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) requires an agency to consider 
whether the rules it proposes will have a significant economic impact 
on a substantial number of small entities. The RFA requires an agency 
to prepare a final regulatory flexibility analysis when it promulgates 
a final rule after being required to publish a general notice of 
proposed rulemaking. As discussed previously, the agencies have decided 
to adopt, without changes, revisions to the capital and LCR rules made 
under the interim final rules. There was no general notice of proposed 
rulemaking associated with the interim final rules or this final rule. 
Accordingly, the agencies have concluded that the RFA's requirements 
relating to initial and final regulatory flexibility analyses do not 
apply to the promulgation of this final rule.

D. Riegle Community Development and Regulatory Improvement Act of 1994

    Pursuant to section 302(a) of the Riegle Community Development and 
Regulatory Improvement Act (RCDRIA),\22\ in determining the effective 
date and administrative compliance requirements for new regulations 
that

[[Page 68249]]

impose additional reporting, disclosure, or other requirements on 
insured depository institutions (IDIs), each Federal banking agency 
must consider, consistent with the principle of safety and soundness 
and the public interest, any administrative burdens that the 
regulations would place on depository institutions, including small 
depository institutions and customers of depository institutions, as 
well as the benefits of the regulations. In addition, section 302(b) of 
RCDRIA requires new regulations and amendments to regulations that 
impose additional reporting, disclosures, or other new requirements on 
IDIs generally to take effect on the first day of a calendar quarter 
that begins on or after the date on which the regulations are published 
in final form.\23\ Each Federal banking agency has determined that the 
final rule would not impose additional reporting, disclosure, or other 
requirements; therefore the requirements of the RCDRIA do not apply.
---------------------------------------------------------------------------

    \22\ 12 U.S.C. 4802(a).
    \23\ 12 U.S.C. 4802.
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E. Use of Plain Language

    Section 722 of the Gramm-Leach-Bliley Act \24\ requires the Federal 
banking agencies to use ``plain language'' in all proposed and final 
rules published after January 1, 2000. In light of this requirement, 
the agencies have sought to present the final rule in a simple and 
straightforward manner. The agencies did not receive any comments on 
the use of plain language in the interim final rules.
---------------------------------------------------------------------------

    \24\ 12 U.S.C. 4809.
---------------------------------------------------------------------------

F. OCC Unfunded Mandates Reform Act of 1995

    As a general matter, the Unfunded Mandates Act of 1995 (UMRA), 2 
U.S.C. 1531 et seq., requires the preparation of a budgetary impact 
statement before promulgating a rule that includes a Federal mandate 
that may result in the expenditure by State, local, and tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more in any one year. However, the UMRA does not apply to 
final rules for which a general notice of proposed rulemaking was not 
published.\25\ Because there was no general notice of proposed 
rulemaking associated with the interim final rules or the final rule, 
the OCC concludes that the requirements of the UMRA do not apply to 
this final rule.
---------------------------------------------------------------------------

    \25\ See 2 U.S.C. 1532(a).
---------------------------------------------------------------------------

Authority and Issuance

    For the reasons set forth in the joint SUPPLEMENTARY INFORMATION 
section, the interim final rules, which were published at 85 FR 16232, 
85 FR 20387, and 85 FR 26835 on March 23, April 13, and May 6, 2020, 
are adopted as a final rule by the OCC, Board, and FDIC without change.

Brian P. Brooks,
Acting Comptroller of the Currency.

    By order of the Board of Governors of the Federal Reserve 
System.
Ann E. Misback,
Secretary of the Board.

Federal Deposit Insurance Corporation.

    By order of the Board of Directors.

    Dated at Washington, DC, on or about September 15, 2020.
James P. Sheesley,
Assistant Executive Secretary.
[FR Doc. 2020-21894 Filed 10-27-20; 8:45 am]
BILLING CODE 4810-33-6210-01-6714-01-P