Agency Information Collection Activities: Comment Request, 11432-11441 [2022-04194]

Agencies

• FEDERAL RESERVE SYSTEM

[Federal Register Volume 87, Number 40 (Tuesday, March 1, 2022)]
[Notices]
[Pages 11432-11441]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-04194]


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FEDERAL RESERVE SYSTEM


Agency Information Collection Activities: Comment Request

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Notice, request for comment.

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SUMMARY: The Board of Governors of the Federal Reserve System (Board) 
invites comment on a proposal to extend for three years, with revision, 
the Capital Assessments and Stress Testing Reports (FR Y-14A/Q/M; OMB 
No. 7100-0341).

DATES: Comments must be submitted on or before May 2, 2022.

ADDRESSES: You may submit comments, identified by FR Y-14A/Q/M, by any 
of the following methods:
     Agency Website: https://www.federalreserve.gov/. Follow 
the instructions for submitting comments at https://www.federalreserve.gov/apps/foia/proposedregs.aspx.
     Email: [email protected]. Include the OMB 
number or FR number in the subject line of the message.
     Fax: (202) 452-3819 or (202) 452-3102.

[[Page 11433]]

     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 from the Board's website at 
https://www.federalreserve.gov/apps/foia/proposedregs.aspx as 
submitted, unless modified for technical reasons or to remove 
personally identifiable information at the commenter's request. 
Accordingly, comments will not be edited to remove any confidential 
business information, identifying information, or contact information. 
Public comments may also be viewed electronically or in paper in Room 
M-4365A, 2001 C St NW, Washington, DC 20551, between 9:00 a.m. and 5:00 
p.m. on weekdays. For security reasons, the Board requires that 
visitors make an appointment to inspect comments. You may do so by 
calling (202) 452-3684. Upon arrival, visitors will be required to 
present valid government-issued photo identification and to submit to 
security screening in order to inspect and photocopy comments.
    Additionally, commenters may send a copy of their comments to the 
Office of Management and Budget (OMB) Desk Officer for the Federal 
Reserve Board, Office of Information and Regulatory Affairs, Office of 
Management and Budget, New Executive Office Building, Room 10235, 725 
17th Street NW, Washington, DC 20503, or by fax to (202) 395-6974.

FOR FURTHER INFORMATION CONTACT: Federal Reserve Board Clearance 
Officer--Nuha Elmaghrabi--Office of the Chief Data Officer, Board of 
Governors of the Federal Reserve System, Washington, DC 20551, (202) 
452-3829.

SUPPLEMENTARY INFORMATION: On June 15, 1984, OMB delegated to the Board 
authority under the Paperwork Reduction Act (PRA) to approve and assign 
OMB control numbers to collections of information conducted or 
sponsored by the Board. In exercising this delegated authority, the 
Board is directed to take every reasonable step to solicit comment. In 
determining whether to approve a collection of information, the Board 
will consider all comments received from the public and other agencies.
    During the comment period for this proposal, a copy of the proposed 
PRA OMB submission, including the draft reporting form and 
instructions, supporting statement, and other documentation, will be 
made available on the Board's public website at https://www.federalreserve.gov/apps/reportforms/review.aspx or may be requested 
from the agency clearance officer, whose name appears above. Final 
versions of these documents will be made available at https://www.reginfo.gov/public/do/PRAMain, if approved.

Request for Comment on Information Collection Proposal

    The Board invites public comment on the following information 
collections, which are being reviewed under authority delegated by the 
OMB under the PRA. Comments are invited on the following:
    a. Whether the proposed collections of information are necessary 
for the proper performance of the Board's functions, including whether 
the information has practical utility;
    b. The accuracy of the Board's estimate of the burden of the 
proposed information collections, including the validity of the 
methodology and assumptions used;
    c. Ways to enhance the quality, utility, and clarity of the 
information to be collected;
    d. Ways to minimize the burden of information collection on 
respondents, including through the use of automated collection 
techniques or other forms of information technology; and
    e. Estimates of capital or startup costs and costs of operation, 
maintenance, and purchase of services to provide information.
    At the end of the comment period, the comments and recommendations 
received will be analyzed to determine the extent to which the Board 
should modify the proposal.

Proposal Under OMB Delegated Authority To Extend for Three Years, With 
Revision, the Following Information Collections

    Report title: Capital Assessments and Stress Testing Reports.
    Agency form number: FR Y-14A/Q/M.
    OMB control number: 7100-0341.
    Frequency: Annually, quarterly, and monthly.
    Respondents: These collections of information are applicable to 
bank holding companies (BHCs), U.S. intermediate holding companies 
(IHCs), and savings and loan holding companies (SLHCs) with $100 
billion or more in total consolidated assets, as based on: (i) The 
average of the firm's total consolidated assets in the four most recent 
quarters as reported quarterly on the firm's Consolidated Financial 
Statements for Holding Companies (FR Y-9C); or (ii) if the firm has not 
filed an FR Y-9C for each of the most recent four quarters, then the 
average of the firm's total consolidated assets in the most recent 
consecutive quarters as reported quarterly on the firm's FR Y-9C. 
Reporting is required as of the first day of the quarter immediately 
following the quarter in which the respondent meets this asset 
threshold, unless otherwise directed by the Board.
    Estimated number of respondents: FR Y-14A/Q: 36; FR Y-14M: 34; \1\ 
FR Y-14 On-going Automation Revisions: 36; FR Y-14 Attestation On-
going: 8.
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    \1\ The estimated number of respondents for the FR Y-14M is 
lower than for the FR Y-14Q and FR Y-14A because, in recent years, 
certain respondents to the FR Y-14A and FR Y-14Q have not met the 
materiality thresholds to report the FR Y-14M due to their lack of 
mortgage and credit activities. The Board expects this situation to 
continue for the foreseeable future.
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    Estimated average hours per response: FR Y-14A: 1,330 hours; FR Y-
14Q: 1,999 hours; FR Y-14M: 1,071 hours; FR Y-14 On-going Automation 
Revisions: 480 hours; FR Y-14 Attestation On-going: 2,560 hours.
    Estimated annual burden hours: FR Y-14A: 47,880 hours; FR Y-14Q: 
287,852 hours; FR Y-14M: 436,968 hours; FR Y-14 On-going Automation 
Revisions: 17,280 hours; FR Y-14 Attestation On-going: 20,480 hours.
    General description of report: This family of information 
collections is composed of the following three reports:
     The annual FR Y-14A collects quantitative projections of 
balance sheet, income, losses, and capital across a range of 
macroeconomic scenarios and qualitative information on methodologies 
used to develop internal projections of capital across scenarios.\2\
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    \2\ In certain circumstances, a firm may be required to re-
submit its capital plan. See 12 CFR 225.8(e)(4); 12 CFR 
238.170(e)(4). Firms that must re-submit their capital plan 
generally also must provide a revised FR Y-14A in connection with 
their resubmission.
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     The quarterly FR Y-14Q collects granular data on various 
asset classes, including loans, securities, trading assets, and pre-
provision net revenue (PPNR) for the reporting period.
     The monthly FR Y-14M is comprised of three retail 
portfolio- and loan-level schedules, and one detailed address-matching 
schedule to supplement two of the portfolio- and loan-level schedules.
    The data collected through the FR Y-14A/Q/M reports (FR Y-14 
reports) provide the Board with the information needed to help ensure 
that large firms have strong, firm-wide risk measurement and management 
processes supporting their internal assessments of capital adequacy and 
that their capital resources are

[[Page 11434]]

sufficient, given their business focus, activities, and resulting risk 
exposures. The data within the reports are used to set firms' stress 
capital buffer (SCB) requirements. The data are also used to support 
other Board supervisory efforts aimed at enhancing the continued 
viability of large firms, including continuous monitoring of firms' 
planning and management of liquidity and funding resources, as well as 
regular assessments of credit risk, market risk, and operational risk, 
and associated risk management practices. Information gathered in this 
data collection is also used in the supervision and regulation of 
respondent financial institutions. Respondent firms are currently 
required to complete and submit up to 17 filings each year: One annual 
FR Y-14A filing, four quarterly FR Y-14Q filings, and 12 monthly FR Y-
14M filings. Compliance with the information collection is mandatory.
    Proposed revisions: The proposed revisions would enable the Board 
to better identify risk as part of the stress test, to better 
facilitate data reconciliation, and to mitigate ambiguity within the 
instructions. Data reconciliation is an important step in the stress 
testing analysis conducted by the Federal Reserve, as it ensures values 
are being reported consistently across firms. Consistent data leads to 
consistent treatment for stress testing purposes, which is critical, as 
stress testing is used to determine a firm's capital requirements via 
the SCB requirement. The Board also proposes revisions and 
clarifications to the instructions. All proposed revisions would be 
effective for the September 30, 2022, report date for the FR Y-14Q and 
FR Y-14M, and for the December 31, 2022, report date for the FR Y-14A.

General

    The Board proposes to change the as-of date of the fourth quarter, 
unstressed submissions of FR Y-14Q, Schedules F (Trading) and L 
(Counterparty). Per the FR Y-14Q instructions, firms are required to 
report these schedules the earlier of fifty-two calendar days following 
the date on which they are notified of the global market shock (GMS) 
date, or March 15. The instructions also state that unless the Board 
requires the data to be provided over a different weekly period, firms 
may provide these data as of the most recent date that corresponds to 
their weekly internal risk reporting cycle as long as it falls before 
the as-of date. The Board proposes to revise the instructions to allow 
firms to use the most recent date that corresponds to their weekly 
internal risk reporting cycles as long as it falls within the same 
calendar week as the as-of date. This change would provide firms with 
more flexibility in reporting these schedules and would correspond to 
guidance provided in the Dodd-Frank Act Stress Test Publications: 2021 
Stress Test Scenarios document.\3\
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    \3\ See Board of Governors of the Federal Reserve System, Dodd-
Frank Act Stress Test Publications: 2021 Stress Test Scenarios 
(Washington: Board of Governors, February 2021), https://www.federalreserve.gov/publications/stress-test-scenarios-february-2021.htm.
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Capital

Savings and Loan Holding Companies

    On February 3, 2021, the Board adopted a final rule \4\ to tailor 
the requirements in the Board's capital plan rule \5\ based on risk. As 
part of the final rule, the Board adopted several revisions, notably 
that SLHCs would be subject to capital planning requirements beginning 
with the 2022 stress testing and capital planning cycle (cycle). 
Previously, SLHCs were not required to submit FR Y-14Q, Schedule C 
(Regulatory capital instruments) and Schedule D (Regulatory capital) 
because they were not subject to capital planning requirements. 
However, given that SLHCs will now be subject to these requirements, 
the Board proposes to require SLHCs to submit these schedules.\6\ This 
revision would align with the spirit of the capital plan rule.
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    \4\ 86 FR 7927 (February 3, 2021).
    \5\ 12 CFR 225.8.
    \6\ SLHC requirements for submitting the capital information 
required in these schedules for the 2022 cycle is forthcoming.
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Assumptions Associated With Comprehensive Capital Analysis and Review 
(CCAR) Submissions

    The FR Y-14A, Schedule A (Summary) instructions describe when firms 
must use ``planned capital actions'' and ``alternative capital 
actions,'' but do not define either term or list the required 
assumptions for reported capital actions. Because the Board did not 
release CCAR instructions \7\ for the 2021 cycle, it instead issued a 
CCAR Q&A (GEN0500) that contained the definitions and assumptions of 
capital actions required per the capital plan rule. The Board proposes 
to incorporate the definitions and assumptions of ``planned capital 
actions'' and ``alternative capital actions'' previously contained in 
CCAR Q&A GEN0500 into the FR Y-14A instructions to provide clarity 
regarding the meaning of these terms.
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    \7\ For an example of these instructions, see Board of Governors 
of the Federal Reserve System, Comprehensive Capital Analysis and 
Review 2020 Summary Instructions (Washington: Board of Governors, 
March 2020), https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20200304a3.pdf.
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    Under the supervisory severely adverse (SSA) scenario CCAR 
submission, firms are required to include the effects of planned 
business plan changes (BPCs) and use planned capital actions. Per the 
Board's capital rule,\8\ if a firm does not stay above its minimum 
capital requirements, including regulatory capital buffers that may 
encompass the SCB requirement, then it is subject to automatic 
restrictions on capital distributions and discretionary bonus payments. 
Requiring firms to assume that their planned BPCs and planned capital 
actions will occur under stressed conditions has resulted in 
unrealistic projections, as some or all of the planned capital actions 
would not be able to materialize if firms dropped into their regulatory 
capital buffers over the course of the projection horizon. Under the 
Internal stress scenario, firms are required to only include the 
effects of planned BPCs that the firm anticipates occurring, given the 
scenario, and to use alternative capital actions. To improve 
comparability between the CCAR Summary submissions under the Internal 
stress and SSA scenarios, the Board proposes to revise the planned BPC 
and capital action assumptions of the Summary CCAR submission under the 
SSA scenario to match those of the Internal stress scenario.
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    \8\ 12 CFR part 217.
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    Firms are required to incorporate the effects of planned, material 
BPCs in their CCAR submissions of the Summary schedule. The 
instructions do not specify whether firms must also include the effects 
of planned, immaterial BPCs that firms anticipate occurring over the 
projection horizon under baseline or stressed conditions. For clarity, 
the Board is proposing to revise the instructions to give firms the 
option to include the effects of planned, immaterial BPCs in their CCAR 
Summary submissions. Inclusion of the effects of planned, material BPCs 
in CCAR Summary submissions will still be required.

Other Proposed Changes

    The Board often provides firms the option to phase in the effects 
of new accounting standards or other changes that affect the 
calculation of regulatory capital through the use of transition 
provisions (e.g., transitioning the impact of current expected credit 
loss methodology (CECL) adoption on regulatory capital). Firms must 
report

[[Page 11435]]

regulatory capital items on FR Y-14Q, Schedule D (Regulatory Capital) 
exclusive of the effects of transition provisions, whereas regulatory 
capital items on FR Y-9C, Schedule HC-R (Regulatory Capital) may be 
reported inclusive of transition provisions if firms elect to apply the 
transition provisions. As described in the Dodd-Frank Act Stress Test 
2021: Supervisory Stress Test Methodology document,\9\ the Board 
adjusts the numerator and denominator of the supervisory stress test 
capital calculations to align with the capital rule, which includes the 
effects of transition provisions. To ensure consistency with regulatory 
capital balances that are used in the capital calculations of the 
supervisory stress test and to improve comparability across the capital 
schedules of the FR Y-14Q and FR Y-9C, the Board proposes to revise 
Schedule D to remove the requirement that firms exclude the effects of 
transition provisions.
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    \9\ See Board of Governors of the Federal Reserve System, Dodd-
Frank Act Stress Test 2021: Supervisory Stress Test Methodology 
(Washington: Board of Governors, April 2021), https://www.federalreserve.gov/publications/files/2021-april-supervisory-stress-test-methodology.pdf.
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    Firms currently report the carrying value of capital instruments at 
quarter-end in Column I (``Carrying value, as of quarter-end'') of FR 
Y-14Q, Schedule C.1 (Regulatory capital instruments as of quarter end). 
On this schedule, firms also report some components that affect the 
carrying value, such as the fair value of swaps associated with the 
capital instrument (Column K). Not all categories of components that 
affect the carrying value have their own item, and some components may 
only be applicable to certain capital instruments. The Board proposes 
to add an item to capture all other changes that affect the carrying 
value of an instrument that are not currently captured by the existing 
component items. This item would enhance data reconciliation efforts 
for Schedule C.1.
    Firms report repurchases and redemptions on both FR Y-14A, Schedule 
C (Regulatory capital instruments) and FR Y-14Q, Schedule C (Regulatory 
capital instruments). The FR Y-14A, Schedule C instructions require 
firms to report repurchases and redemptions as negative values. The FR 
Y-14Q, Schedule C instructions do not specify how to report repurchases 
and redemptions, and so, there is diversity in practice across firms. 
For consistency between the reports, the Board proposes to require 
repurchases and redemptions to be reported as negative values on FR Y-
14Q, Schedule C.
    Firms report dividends on FR Y-14A, Schedule A.1.d (Capital) and 
Schedule C. The instructions for dividend items on Schedules A.1.d and 
C reference definitions on FR Y-9C, Schedule HI-A (Changes in holding 
company equity capital). On Schedule HI-A, firms report values on a 
year-to-date basis, while most items on Schedules A.1.d and C are 
reported on a quarter-to-date basis. As a result, some firms have 
reported dividend items on a year-to-date basis, while others report 
values on a quarter-to-date basis. To remove ambiguity, the Board 
proposes to revise the instructions for the following items to specify 
that these items must be reported on a quarter-to-date basis:
     ``Cash dividends declared on preferred stock'' (Schedule 
A.1.d, item 12; Schedule C item 116); and
     ``Cash dividends declared on common stock'' (Schedule 
A.1.d, items 13 and 117; Schedule C, item 117).
    Firms are required to report issuances of capital and subordinated 
debt instruments on FR Y-14Q, Schedule C.3 (Regulatory capital and 
subordinated debt instruments issuances during quarter). The 
instructions do not specify whether subordinated debt instruments that 
were acquired must be reported on Schedule C.3. Such instruments were 
not issued by a firm but are new to a firm's balance sheet. Given that 
these instruments are new to a firm's balance sheet, the Board proposes 
to revise the instructions to state that subordinated debt instruments 
acquired via a merger or acquisition must be reported on Schedule C.3. 
The Board proposes to further clarify that firms must also report on 
Schedule C.3 situations in which a Committee on Uniform Securities 
Identification Procedures (CUSIP) number for a subordinated debt 
instrument changes, even if the terms of the instrument did not change. 
This revision would ensure that CUSIP number changes are properly 
captured.
    Firms are required to report the unamortized discounts/premiums, 
fees, and foreign exchange translation impacts as of quarter-end in 
Column J of FR Y-14Q, Schedule C.1. However, there is inconsistency 
across firms in terms of whether discounts and premiums must be 
reported as positive or negative values. To remove ambiguity, the Board 
proposes to clarify that unamortized amounts of discounts must be 
reported as positive values and unamortized amounts of premiums must be 
reported as negative values. These revisions would standardize the 
reporting of this item.
    To further enhance data reconciliation efforts, the Board proposes 
to add four items to FR Y-14Q, Schedule C.1. The specific items the 
Board proposes to add are:
     ``Interest expense for the quarter (net of swaps);''
     ``Interest expense for the quarter (with swaps, excluding 
any gains or losses due to the fair value adjustment of ASC 185/FAS 133 
hedges);''
     ``Interest expense for the quarter (with swaps, this 
number should reconcile to the quarterly number reported in FR Y-9C 
BHCK4397 for all subordinated debt instruments);'' and
     ``Fair value adjustment at the quarter end for 
subordinated debt securities that are carried at fair value.''
    The addition of these items would ensure that balances on Schedule 
C.1 are properly reconciled for use in supervisory models. With the 
addition of these items, the Board also proposes to remove the 
following four items from Schedules C.1 and C.3, as they would no 
longer be needed:
     ``Y-9C BHCK4602 reconciliation'' (Column N of Schedule 
C.1);
     ``Currency of foreign exchange swap payment'' (Column LL 
of Schedule C.3);
     ``Notional amount of foreign exchange swap ($ Million)'' 
(Column MM of Schedule C.3); and
     ``Exchange rate implied by foreign exchange swap'' (Column 
NN of Schedule C.3).

Securities

    Firms are required to report the amount of allowance for credit 
losses in FR Y-14Q, Schedule B.1 (Securities 1--main schedule). 
However, the instructions for this item do not specify whether amounts 
must be reported as positive or negative values. To improve the 
consistency of reporting across firms, the Board proposes to revise the 
instructions to indicate that the allowance for credit losses on 
Schedule B.1 must be reported as a positive number. This revision would 
better enable the Board to compare reported values, as all values would 
be reported in the same manner.

Trading

    As mentioned in the Dodd-Frank Act Stress Test 2021: Supervisory 
Stress Test Methodology document,\10\ the Board adjusts a firm's 
trading profit and loss to estimate losses on private equity 
investments in affordable housing that qualify as public welfare 
investments under Regulation Y. The data used to make this adjustment 
is currently

[[Page 11436]]

collected through a supplemental collection, and the Board proposes to 
formalize this supplemental collection by incorporating its key 
elements into FR Y-14Q, Schedule F.24 (Private equity). This proposal 
would require firms to isolate and report private equity exposures that 
qualify as public welfare investments in new line items. The 
instructions would specify that a public welfare investment is defined 
as an equity investment in corporations or projects designed primarily 
to promote community welfare, such as the economic rehabilitation and 
development of low-income areas.\11\ Incorporating this supplemental 
collection into FR Y-14Q, Schedule F (Trading) would allow for more 
standardized reporting, which is crucial to ensure private equity 
investments in affordable housing that qualify as public welfare 
investments are treated the same across firms.
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    \10\ See Board of Governors of the Federal Reserve System, Dodd-
Frank Act Stress Test 2021: Supervisory Stress Test Methodology 
(Washington: Board of Governors, April 2021), https://www.federalreserve.gov/publications/files/2021-april-supervisory-stress-test-methodology.pdf.
    \11\ For reporting public welfare investments made at the bank 
holding company level, an affordable housing private equity 
investment would be recognized by the Federal Reserve if it also 
qualifies under 12 CFR 225.28(b)(12) and 12 CFR 225.127. For 
reporting public welfare investments made at the bank level, an 
affordable housing private equity investment would be recognized by 
the Federal Reserve if it also qualifies under the applicable public 
welfare investment criteria of the bank's primary Federal regulator.
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    The Board also proposes to make clarifications to the Schedule F 
instructions regarding the reporting of accrual loan and fair value 
option (FVO) loan hedges across Schedule F, the reporting of interest 
rate basis risk on Schedule F.6 (Rates DV01), and limiting the 
allowable units used to report interest rate sensitivities on Schedule 
F.7 (Rates Vega). These clarifications would remove ambiguity around 
the reporting of hedges on Schedule F and would standardize reporting 
of interest rate information, which would improve data comparability 
across firms.

Counterparty

Client-Cleared Derivative Exposures

    Beginning with the June 30, 2021, as-of date, firms became required 
to include client-cleared derivative exposures in FR Y-14Q, Schedule L 
(Counterparty).\12\ Exposures to client-cleared derivatives are 
excluded from the calculation of stressed losses. As part of Schedule 
L.5 (Derivatives and securities financing transaction profile), firms 
are required to rank their top 25 exposures by certain counterparty 
methodologies. Client-cleared derivative exposures are currently 
excluded from these rankings. The Board proposes to require firms to 
rank their top 25 exposures for client-cleared derivatives on Schedule 
L.5. This new ranking would enable the Board to continue to exclude 
exposures to client-cleared derivatives from the calculation for 
stressed losses and would provide more insight into the size and 
diversity of these exposures. As part of this revision, the Board would 
also modify the instructions to reinforce that exposures to client-
cleared derivatives must be excluded from other top 25 rankings.
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    \12\ 85 FR 56607 (September 14, 2020).
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Counterparty Identification

    Firms are required to report counterparty attribute information 
(e.g., legal entity identifier (LEI), industry code, etc.) at the 
counterparty legal entity level on FR Y-14Q, Schedule L. The Board 
proposes to require firms to report counterparty attribute information 
at the consolidated/parent level in addition to the counterparty legal 
entity level. Collecting this information at the consolidated/parent 
level would enable the Board to better identify exposures to parent and 
subsidiary entities within the same organizational structure, which 
would allow for a more robust analysis of counterparty exposure. This 
more robust analysis would improve the Board's ability to evaluate the 
counterparty risk faced by firms.

Additional/Offline Credit Valuation Adjustment (CVA) Reserves

    Firms are currently required to report ``trades not captured'' in 
the ``Additional/offline CVA Reserves'' item of FR Y-14Q, Schedule 
L.1.e (Aggregate CVA data by ratings and collateralization). ``Trades 
not captured'' refers to trades or counterparties for which CVA is 
computed outside of a firm's regular CVA system, which could occur due 
to the complexity or novelty of a particular trade. Such trades would 
not be captured in Schedules L.2 (EE [Expected exposure] profile by 
counterparty) or L.3 (Credit quality by counterparty) due to the custom 
CVA approximation methodology of these trades. The instructions for the 
``Additional/offline CVA Reserves'' item require firms to report 
exposures to counterparties only at the aggregate level. Several firms 
report significant portions of their counterparty exposures as 
additional/offline CVA reserves. The Board proposes to require firms to 
report these exposures by rating, which is more granular than the 
current requirements, to better understand, identify, and monitor risks 
associated with exposures reported in this item. Such data would 
provide a more complete picture of counterparty exposures at firms with 
significant amounts reported as additional/offline CVA reserves.

Unstressed vs. Stressed Counterparty Submissions

    Firms are required to report unstressed data on Schedule L 
quarterly and are required to report stressed data on this schedule 
annually. The Schedule L instructions note that for unstressed 
submissions, firms must only include exposures in certain sub-schedules 
for which the firm computes CVA for its public financial statement 
reported under U.S. generally accepted accounting principles (U.S. 
GAAP) or applicable standard. However, for stressed submissions, firms 
must also include transactions that would not typically require CVA for 
public financial statement reporting under U.S. GAAP or applicable 
standard (e.g., fully- or over- collateralized derivatives). Therefore, 
the scope of reported exposures is larger for stressed submissions.
    The scope of reported exposures on FR Y-14Q, Schedule L expanded 
for data as of June 30, 2020, to include securities financing 
transactions (SFTs).\13\ This additional scope of transactions 
increases the divide between the transactions reported on unstressed 
submissions compared to those reported on stressed submissions. As a 
result of this greater divide and to better compare the impact of 
stressed conditions on a firm's counterparty exposures, the Board 
proposes to require aggregate unstressed CVA related exposures to be 
reported together with stressed exposures in Schedule L.1.e. This data 
would give the Board a more complete understanding of firms' 
counterparty credit risk, as it would enable the Board to directly 
compare the same exposures under unstressed and stressed conditions.
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    \13\ 84 FR 70529 (December 23, 2019).
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Wrong-Way and Right-Way Risk

    Across Schedule L, firms are required to report wrong-way risk and 
right-way risk exposures. Wrong-way risk arises when the exposure to a 
counterparty is adversely correlated with the credit quality of that 
counterparty. Right-way risk occurs when this situation is reversed. 
When wrong-way risk is directly connected to a particular counterparty 
(e.g., the counterparty's rating was downgraded), it is referred to as 
specific wrong-way risk. Due to questions received from reporting 
firms, the Board proposes to clarify how to report occurrences of 
specific wrong-way risk. The Board proposes to require

[[Page 11437]]

firms to assume zero for the value of the received collateral during 
the calculation of both stressed and unstressed net current exposure 
when specific wrong-way risk is present in the collateral. This 
revision would align with the principle of conservatism in the Board's 
Stress Testing Policy Statement.\14\
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    \14\ Appendix B of 12 CFR 252.
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    The Board also proposes to incorporate the response to FR Y-14 Q&A 
#1374 to remove ambiguity regarding the reporting of right-way risk on 
Schedule L. Specifically, the Board would revise the instructions to 
require firms to exclude stressed exposures on trades where the 
exposure is eliminated upon default of the counterparty. This revision 
would ensure that only true exposures are captured on Schedule L.

Discount Factor

    Firms are required to report the discount factor used to calculate 
stressed and unstressed CVA on Schedule L.2. The instructions for this 
item mention the London Interbank Offered Rate (LIBOR), which was 
discontinued at the end of 2021. Given this, the Board proposes to 
generalize the language to instead mention the reference or benchmark 
rate used to discount the expected exposure in a firm's CVA model. This 
revision would allow for more flexibility since LIBOR was discontinued.

Unique Identifiers

    The general instructions of Schedule L state that unique 
identifiers (e.g., Counterparty ID) and names must be consistent across 
all sub-schedules. However, the Board has identified several cases in 
which this requirement has not been met. To reinforce this requirement, 
the Board proposes to add language to the instructions for Schedules 
L.2 and L.3 to remove any potential uncertainty in reporting unique 
identifiers. This revision would result in more consistent reporting 
across Schedule L.

Collateral

    Firms are required to report the total unstressed mark-to-market 
value of collateral of derivatives on Schedule L.5.1 (Derivative and 
SFT information by counterparty legal entity and netting set/
agreement). The instructions note that all collateral reported must be 
eligible financial collateral. The Board clarified through FR Y-14 Q&A 
#1155 that eligible financial collateral refers to the definition of 
``financial collateral'' in the Board's capital rule.\15\ To mitigate 
confusion, the Board proposes to incorporate the response to Q&A #1155 
into the Schedule L.5.1 instructions.
---------------------------------------------------------------------------

    \15\ 12 CFR 217.2.
---------------------------------------------------------------------------

    Firms are also required to report the type of non-cash collateral 
or initial margin (e.g., corporate debt) allowed under a given 
agreement in the ``Non-Cash Collateral Type'' item of Schedule L.5.1. 
The instructions for this item only mention posted collateral in terms 
of what must be reported. In response to questions from reporting 
firms, the Board proposes to require firms to include all non-cash 
collateral or initial margin that was posted or received in actuality 
as opposed to only those allowed under a given agreement. This revision 
would reduce ambiguity surrounding what to report and would also 
provide the Board with a more encompassing view of the non-cash 
collateral involved in applicable transactions. This more encompassing 
view would result in more accurate loss calculations and would enhance 
risk monitoring.

Credit Support Annexes (CSAs)

    On Schedule L.5.1, firms are required to indicate in the ``CSA 
contractual features (non-vanilla)'' item whether any transactions 
conducted under a given CSA agreement have any non-vanilla contractual 
features (e.g., downgrade triggers). However, the instructions for this 
item do not specify how firms should report transactions that have 
vanilla contractual features. The Board proposes to clarify that for 
such transactions, firms must report ``NA'' in this item.
    Due to questions from reporting firms, the Board also proposes to 
clarify that the ``CSA contractual features (non-vanilla)'' item 
applies to any non-standard market terms inclusive of features such as 
minimum threshold amounts (MTAs), changes to MTAs, additional 
termination events, and ratings-based thresholds. This revision would 
remove uncertainty regarding what features are considered non-vanilla 
for purposes of this item.

Reporting Scope

    On Schedules L.1-L.3, top counterparties are identified based on 
the exposure amount at a consolidated counterparty level for ranking 
purposes in determining top 95% stressed or unstressed CVA. The Board 
has received several questions regarding the scope of this reporting, 
including consistency across schedules. To remove ambiguity, the Board 
proposes to clarify that if a consolidated or parent counterparty is 
selected as top 95% of CVA, then a firm's exposures to all the 
counterparties and legal entities associated with the consolidated or 
parent counterparty must be included and reported in L.1 (Derivatives 
profile by counterparty and aggregate across all counterparties), 
rather than including only counterparties and legal entities with which 
the firm has a CVA. In comparison, the firm can report in Schedules L.2 
and L.3 the exposure information limited to the legal entities and/or 
netting sets with which the firm has a CVA. These revisions would 
provide a more complete view of counterparty exposures faced by firms 
and would incorporate responses to FR Y-14 Q&As #1180 and #1190 into 
the Schedule L instructions.
    Per FR Y-14 Q&A #1181, Schedules L.1.a and L.1.b (Top consolidated/
parent counterparties comprising 95% of firm unstressed CVA, ranked by 
unstressed and stressed CVA, respectively) must be reported at the 
legal entity level, at a minimum. This is also true for Schedules L.2 
and L.3. The Board has received several questions from reporting firms 
regarding providing data at the netting set or sub-netting level. In 
light of these questions, the Board proposes to clarify that firms may 
choose to report these schedules at the netting set or sub-netting set 
level. Note that the Schedule L instructions specify that if a firm 
chooses to report one of these schedules at the netting set or sub-
netting set level, then it must report all of them at that level.

Gross Current Exposure

    In several places on Schedule L.1, firms are required to report the 
gross current exposure of given transactions. Gross current exposure is 
defined as pre-collateral exposure after bilateral counterparty 
netting. The Board has received questions from reporting firms on 
whether fair-valued SFTs should be in scope for reporting in the gross 
current exposure items. The questioners note that the definition 
provided applies to derivatives but does not apply to SFTs. The Board 
clarified in FR Y-14 Q&A #1279 that gross current exposure items only 
apply to derivatives and must be left blank for SFTs. The Board 
proposes to incorporate this response into the Schedule L.1 
instructions.

Minimum Transfer Amounts

    Firms are required to report the minimum amounts that must be 
transferred to the counterparty and to the reporting firm in the event 
of a margin call in Schedule L.5.1. Due to observed diversity in 
reporting, the Board proposes to specify that firms must report the 
U.S. dollar equivalent of values reported in these items, as opposed to 
the non-U.S. dollar local

[[Page 11438]]

currency associated with a particular CSA. This revision would 
standardize the units reported in this item and improve comparability 
across exposures.

Other Revisions

    The instructions for Schedule L.5 state that for positions with no 
legal netting set agreement, mark-to-market amounts can be aggregated 
and reported as a single record. The instructions further state that 
firms must report ``N'' in the ``Legal Enforceability'' item and 
``None'' in the ``Netting Set ID'' item for such aggregated records. In 
the case of the ``Legal Enforceability'' item, these instructions are 
redundant and in the case of the ``Netting Set ID'' item, they conflict 
with language provided later in the Schedule L.5 instructions. The 
Board proposes to remove the redundant and conflicting language from 
Schedule L.5, which would clarify that firms must only report ``NA'' in 
the ``Netting Set ID'' item for positions with no legal agreement. This 
revision would incorporate the response from FR Y-14 Q&A #1383 into the 
Schedule L instructions.
    Firms are required to report mark-to-market amounts that reflect 
the positive or negative contribution to an exposure upon counterparty 
default and close-out netting in Schedule L.5. The Board has received 
questions from reporting firms about whether this language applies to 
both derivatives and SFTs. Reporting firms have also asked the Board 
how to report in line with the instructions in cases where close-out 
netting for SFTs is not enforceable (i.e., the SFT mark-to-market 
received cannot be netted against the amount posted when calculating 
current exposure). The Board clarified in FR Y-14 Q&A #1386 that the 
language regarding reporting mark-to-market amounts that reflect the 
positive or negative contribution to an exposure upon counterparty 
default and close-out netting only applies to derivatives and not to 
SFTs. In this FR Y-14 Q&A, the Board also clarified that firms must 
report zero in cases where the SFT close-out netting is not 
enforceable. The Board proposes to incorporate the response in FR Y-14 
Q&A #1386 into the instructions by (1) revising the Schedule L.5 
general instructions to specify that the language reflecting the 
positive or negative contribution to exposure upon counterparty default 
only applies to derivatives, and (2) revising the ``Unstressed Mark-to-
Market Received (SFTs)'' and ``Stressed Mark-to-Market Received 
(SFTs)'' items of Schedule L.5.1 to specify that in cases where the 
close-out netting is not enforceable, firms must report zero. 
Relatedly, since the Board is proposing to revise the Schedule L.5 
general instructions to specify reporting for derivatives, the Board 
also proposes to revise the instructions for the stressed and 
unstressed mark-to-market received and posted SFT items on Schedule 
L.5.1 to clarify that these items must be reported as positive values.
    Firms became required to include exposures to client-cleared 
derivatives in Schedule L.5 for the June 30, 2021, as-of date. As part 
of this requirement, firms must report SFT exposures when a firm acts 
as an agent on behalf of a client for which lender indemnification has 
been provided against the borrower's default. Due to observed diversity 
in reporting practices, the Board proposes to revise the Schedule L.5 
instructions to clarify that firms must also include SFT exposures when 
the firm acts as an agent on behalf of a client for which a credit 
guarantee has been provided against the borrower's default. This 
revision would reinforce the original intent of adding the reporting of 
exposures to client-cleared derivatives to Schedule L.5, in that it 
would require firms to report their indirect exposures to clients when 
credit risk is present, regardless of whether that exposure arises from 
a lender indemnification or a credit guarantee.
    Firms are required to report stressed CVA values on Schedules L.1 
and L.5.1. On Schedule L.1, the instructions state that firms must 
report the full revaluation of asset-side CVA under stressed 
conditions. On Schedule L.5.1, the instructions state that firms must 
only include stressed CVA as it relates to derivatives. For consistency 
across Schedule L, the Board proposes to revise the ``Stressed CVA'' 
item of Schedule L.5.1 to require firms to include stressed CVA as it 
relates to SFTs, as well as continue to include stressed CVA as it 
relates to derivatives. This revision would allow the Board to get a 
more complete and consistent picture of CVA exposure across reporting 
firms.

Wholesale

Internal Risk Rating

    Firms began reporting FR Y-14Q, Schedule H.4 (Internal risk rating) 
as of March 31, 2020.\16\ On this schedule, firms are required to 
report the ratings used in their internal risk rating system, as well 
as a description of each rating. There has been a wide variety of 
internal ratings and descriptions provided, which has made evaluations 
across firms difficult. To improve comparability of internal ratings 
reported in this schedule, the Board proposes to add three items: 
Minimum probability of default, maximum probability of default, and the 
calculation method of the probability of default (i.e., calculated 
through the cycle or as a point-in-time value). The minimum and maximum 
probability of default items would allow the Board to assess credit 
risk more easily across firms by providing benchmark values for 
internal ratings. The type of probability of default item would provide 
critical information for how the minimum and maximum values are 
calculated (e.g., point in time calculation). The addition of these 
items would enhance wholesale risk monitoring.
---------------------------------------------------------------------------

    \16\ 84 FR 70529 (December 23, 2019).
---------------------------------------------------------------------------

Undrawn Commitments

    Firms are required to report the interest rate charged on the 
credit facility for corporate and commercial real estate (CRE) loans on 
FR Y-14Q, Schedule H.1 and H.2, items 38 and 27, respectively. The 
instructions require the reporting of the most conservative interest 
rate for fully undrawn facilities, which was intended to accommodate a 
scenario in which there are multiple interest rate options, and the 
actual interest rate would not be known until the loan was drawn. 
However, reporting firms have asked how to report a second scenario 
where a facility is comprised of multiple lines of credit, each with a 
separate interest rate. The Board proposes to clarify the reporting 
requirements for these two scenarios in the instructions to improve 
consistency and mitigate confusion. For the first scenario, the Board 
proposes to clarify that the instruction to report the most 
conservative interest rate only applies to situations where the obligor 
has a choice of interest rates and one is chosen when the line is 
drawn. For the second scenario, the instructions would require firms to 
report the dollar-weighted average interest rate that approximates the 
overall rate as if the credit facility were funded and fully drawn on 
the reporting date.

Update Property Type Options

    Firms currently report the property type of their CRE loans on FR 
Y-14Q, Schedule H.2, in item 9 (``Property Type''). While this item 
contains multiple property type options, the structure of the CRE 
market has changed since these initial property type options were 
implemented for this item. More specifically, over the past decade, 
there has been rapid growth in the healthcare

[[Page 11439]]

and assisted living industry, resulting in demographic changes, as well 
as in e-commerce platforms, which rely on warehouses for storage. The 
existing property type options do not separately break out these 
industries, and these CRE loans are commingled with other property 
types in other options. The Board proposes to update the property type 
options to include ``Healthcare/Assisted Living'' and ``Warehouse/
Distribution.'' This revision would improve risk identification within 
the CRE portfolio.

Clarify Informal ``Advised Lines'' Exclusion

    On FR Y-14Q, Schedule H.1, the instructions for corporate loan 
population state to exclude informal ``advised lines,'' but the current 
definition of this term is ambiguous, potentially resulting in the 
exclusion of more commitments than there should be. The Board proposes 
to modify the language to clarify that only lines of credit that are 
unknown to the customer must be excluded from Schedule H.1. This 
modification would ensure that all applicable commitments are reported, 
other than the clearly defined exclusions.

Retail

Credit Score Reporting Requirements

    Firms are required to report the origination credit bureau score 
for the primary account holder and the refreshed credit bureau score 
for domestic credit card account holders on FR Y-14M, Schedule D 
(Domestic credit card) in items 38 and 40, respectively. For both 
items, the instructions allow firms to map an internal credit score 
used to determine the primary account holder's creditworthiness to a 
commercial credit score for cases in which a commercial credit score 
was not obtained or was not being used to evaluate the creditworthiness 
of the primary account holder. The ability to map an internal credit 
score to a commercial credit score has resulted in reporting 
inconsistencies, due to the subjectivity of the mapping. To standardize 
the reporting of credit scores, the Board proposes to revise the 
language in the instructions for both items to require firms to report 
a commercial credit score if one was available at origination or 
refresh for the primary account holder. The Board proposes to further 
revise the instructions to state that if a commercial credit score was 
not available at the time of origination or refresh and if the 
underwriting decision was based on an internal score, then firms would 
be required to map their internal credit scores to commercial credit 
scores.
    Firms are also required to report the FICO score range of the 
credit score of the borrower at origination in the ``Original 
commercially available credit bureau score or equivalent'' segment 
variable on all sub-schedules of FR Y-14Q, Schedule A (Retail). The 
instructions for this segment variable allow the reporting of an 
internal credit score mapped to a commercial credit score if an 
internal score was used in the original underwriting decision. To also 
standardize credit score reporting on Schedule A, the Board proposes to 
require firms to report a commercial credit score if one was available 
at origination. Firms would be required to map their internal credit 
scores or non-FICO commercial credit scores to FICO credit scores if a 
FICO credit score was not available at origination. Additionally, the 
instructions for this segment variable require firms to report in FICO 
credit score ranges and state that upon request, the Federal Reserve 
will provide ranges for other commercial credit scores. However, to 
further standardize the reporting of credit scores, the Board proposes 
to remove this sentence from the instructions. Removing this sentence 
would require firms to create their own mappings from their internal 
credit scores or from non-FICO commercial credit scores to FICO credit 
scores.

Loans in Forbearance or Other Loss Mitigation Situations

    The coronavirus disease 2019 (COVID) event caused an increase in 
loans in forbearance or other loss mitigation situations (collectively, 
``loss mitigation''). These loans have different risk characteristics 
than other loans reported on the FR Y-14M. While there are some loss 
mitigation items on the FR Y-14M, the Board observed during the COVID 
event that there are still data gaps, and several loss mitigation items 
did not have the flexibility to capture loss mitigation in the face of 
occurrences such as the COVID event. To fill observed data gaps, the 
Board proposes to add a ``Workout Type Started'' item to Schedule A 
(Domestic first lien) and Schedule B (Domestic home equity), as well as 
an ``Actual Payment Amount'' item to Schedule A. The ``Workout Type 
Started'' item would be used in conjunction with the ``Workout Type 
Completed'' item (Schedule A, item 77; Schedule B, item 61) and would 
allow the Board to track any changes to the loss mitigation plans of 
the loan once a loan has undergone loss mitigation. The ``Actual 
Payment Amount'' item would allow the Board to track actual payments 
made on loans, which would enable the Board to better monitor activity 
on loans in loss mitigation. Note that this item is only being proposed 
to be added to Schedule A because an equivalent item already exists on 
Schedule B (item 68).
    Firms are required to report the principal deferred amount and the 
principal write-down amount in items 87 and 89, respectively, of 
Schedule A. Per the instructions, these items are only reported if the 
loan has been modified. During the COVID event, certain loans were not 
modified but did experience principal deferrals and write-downs. 
However, these amounts were not reported on Schedule A due to the 
requirement that the loans be modified. To expand the circumstances 
under which firms would report these items, the Board proposes to 
remove the requirement that these items only be reported if loans are 
modified. Relatedly, the Board proposes to rename item 87 to ``Deferred 
Amount'' to capture all deferred amounts, not just those related to the 
loan principal.
    Finally, the Board proposes to revise the reporting options to the 
``Modification Type'' and ``Workout Type Completed'' items (Schedule A, 
items 74 and 77, respectively; Schedule B, items 77 and 61, 
respectively) to add flexibility to enable these items to apply to a 
broader set of occurrences, such as the COVID event. These revisions 
would enable the Board to better monitor loss mitigation loans.

Other Revisions

    Firms currently flag whether portfolio loans are held-for-
investment (HFI) and measured at fair value under the FVO or are held-
for-sale (HFS) in item 130 (``HFI FVO/HFS Flag'') of Schedule A. 
However, the actual fair-value amount is not reported on Schedule A. 
Firms are required to report the aggregate fair-value amounts of HFS 
loans and HFI loans measured under the FVO on FR Y-14Q, Schedule J 
(Retail FVO/HFS). For data reconciliation across the FR Y-14M and FR Y-
14Q, as well as for monitoring purposes, the Board is proposing to add 
a new field to Schedule A to capture the fair-value amount of HFS loans 
and HFI loans measured under the FVO.
    Additionally, on both Schedule A and Schedule B, there is an item 
that captures the adjustable-rate mortgage (ARM) index (Schedule A, 
item 32; Schedule B, item 29). This item does not include options for 
the Bloomberg Short-Term Bank Yield (BSBY) rate. The Board proposes to 
revise this item to include several BSBY options, to allow

[[Page 11440]]

firms to identify loans using this index rate.
    The Board also proposes to remove several items from Schedule A, as 
they are no longer needed, assuming that the aforementioned revisions 
to Schedule A are implemented (items proposed for removal would be 
redundant). Specifically, the Board proposes to remove the following 
items:
     ``Capitalization'' (item 81);
     ``Duration of Modification'' (item 83);
     ``Interest Rate Reduced'' (item 98);
     ``Term Extended'' (item 100);
     ``P&I Amount Before Modification'' (item 101);
     ``P&I Amount After Modification'' (item 102);
     ``Remaining Term Before Modification'' (item 105); and
     ``Remaining Term After Modification'' (item 106).
    Firms are required to report the cohort default rate (CDR) of 
student loans on FR Y-14Q, Schedule A.10 (Student Loan). There are 
several CDR buckets, one of which requires reporting in cases in which 
the CDR is greater than 10 percent (item 16). However, the instructions 
don't specify how to report cases when the CDR is equal to 10 percent. 
For completeness, the Board proposes to rename and revise item 16 to 
clarify that firms must also include in this item balances for which 
the CDR equals 10 percent.

Balances

    Firms are required to report quarter-end balances of bank cards and 
charge cards on FR Y-14Q, Schedule M.1 (Quarter-end balances) in items 
3.a and 3.b, respectively. The instructions do not define bank or 
charge cards, but in general, bank cards and charge cards differ in two 
key ways. First, bank cards allow holders to spend up to their credit 
limits during each billing cycle, while charge cards typically have no 
preset spending limits. Second, bank cards allow holders to pay 
outstanding balances over time, while charge cards must be fully paid 
off each billing cycle. There are some products that have features of 
both bank and charge cards, in that only a portion of the outstanding 
balance can be rolled over to the next billing cycle. Products with 
features of both bank and charge cards have caused inconsistent 
reporting across firms. To remove ambiguity, the Board proposes to 
better clarify which products must be reported as charge cards in the 
instructions.
    Firms are required to report quarter-end balances of small/medium 
enterprise (SME) cards in item 2.c (SME cards and corporate cards) on 
Schedule M.1. The instructions define SME cards as ``credit card 
accounts where the loan is underwritten with the sole proprietor or 
primary business as an applicant.'' The instructions also refer to 
several FR Y-9C items where SME cards and corporate cards are reported. 
Firms are required to report the applicable balances of SME cards and 
corporate cards in item 2.c that are reported in the referenced FR Y-9C 
items. The item 2.c instructions do not reference FR Y-9C, Schedule HC-
C, item 9.a (Loans to nondepository financial institutions). Upon 
review, the Board has determined that certain card balances reported in 
Schedule HC-C, item 9.a could be included in Schedule M.1, item 2.c. 
Therefore, the Board proposes to revise the instructions for Schedule 
M.1, item 2.c to reference Schedule HC-C, item 9.a.
    Legal authorization and confidentiality: The Board has the 
authority to require BHCs to file the FR Y-14 reports pursuant to 
sections 5(b) and 5(c) of the Bank Holding Company Act (BHC Act) \17\ 
and section 165(i) of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Dodd-Frank Act) as amended by sections 401(a) and (e) 
of the Economic Growth, Regulatory Relief, and Consumer Protection Act 
(EGRRCPA).\18\ Section 5(b) of the BHC Act authorizes the Board to 
issue regulations and orders relating to capital requirements for bank 
holding companies. Section 5(c) of the BHC Act authorizes the Board to 
require a BHC and any subsidiary of such company to submit reports to 
keep the Board informed of its financial condition, systems for 
controlling financial and operating risks, transactions with depository 
institution subsidiaries of the BHC, and compliance with law. Section 
165(i)(1) of the Dodd-Frank Act, as amended by the EGRRCPA, requires 
the Board to conduct supervisory stress tests of certain companies.\19\ 
Further, section 165(i)(2) of the Dodd-Frank Act, as amended by the 
EGRRCPA, requires the Board to issue regulations requiring certain 
companies to conduct company-run stress tests.\20\
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    \17\ 12 U.S.C. 1844(b) and 1844(c).
    \18\ 12 U.S.C. 5365(i).
    \19\ See 12 U.S.C. 5365(i)(1). Annual supervisory stress tests 
are required for bank holding companies with $250 billion or more in 
total consolidated assets. ``Periodic'' supervisory stress tests are 
required for bank holding companies with $100 billion or more, but 
less than $250 billion, in total consolidated assets. 12 U.S.C. 5365 
note.
    \20\ See 12 U.S.C. 5365(i)(2). Bank holding companies with $250 
billion or more in total consolidated assets and financial companies 
with more than $250 billion in total consolidated assets must 
conduct ``periodic'' stress tests.
---------------------------------------------------------------------------

    The Board has authority to require SLHCs file the FR Y-14 reports 
pursuant to section 10(b) of the Home Owners' Loan Act (HOLA) as 
amended by section 369(8) and 604(h)(2) of the Dodd-Frank Act.\21\ 
Section 10(b) of HOLA, as amended, authorizes the Board to require 
savings and loan holding companies to file ``such reports as may be 
required by the Board'' containing ``such information concerning the 
operations of such savings and loan holding company . . . as the Board 
may require.''
---------------------------------------------------------------------------

    \21\ 12 U.S.C. 1467a(b).
---------------------------------------------------------------------------

    The Board has authority to require IHCs file the FR Y-14 reports 
pursuant to section 5(c) of the BHC Act \22\ and sections 102(a)(1) and 
165 of the Dodd-Frank Act.\23\ In addition, section 401(g) of EGRRCPA 
\24\ provides that the Board has the authority to establish enhanced 
prudential standards for foreign banking organizations with total 
consolidated assets of $100 billion or more, and clarifies that nothing 
in section 401 ``shall be construed to affect the legal effect of the 
final rule of the Board . . . entitled `Enhanced Prudential Standard 
for [BHCs] and Foreign Banking Organizations' (79 FR 17240 (March 27, 
2014)), as applied to foreign banking organizations with total 
consolidated assets equal to or greater than $100 million.'' \25\
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    \22\ 12 U.S.C 1844(c).
    \23\ 12 U.S.C. 5311(a)(1) and 5365. Section 102(a)(1) of the 
Dodd-Frank Act, 12 U.S.C. 5311(a)(1), defines ``bank holding 
company'' for purposes of Title I of the Dodd-Frank Act to include 
foreign banking organizations that are treated as bank holding 
companies under section 8(a) of the International Banking Act of 
1978, 12 U.S.C. 3106(a). The Board has required, pursuant to section 
165(b)(1)(B)(iv) of the Dodd-Frank Act, 12 U.S.C. 5365(b)(1)(B)(iv), 
certain foreign banking organizations subject to section 165 of the 
Dodd-Frank Act to form U.S. intermediate holding companies. 
Accordingly, the parent foreign-based organization of a U.S. IHC is 
treated as a BHC for purposes of the BHC Act and section 165 of the 
Dodd-Frank Act. Because section 5(c) of the BHC Act authorizes the 
Board to require reports from subsidiaries of BHCs, section 5(c) 
provides authority to require U.S. IHCs to report the information 
contained in the FR Y-14 reports.
    \24\ 12 U.S.C. 5365 note.
    \25\ The Board's Final Rule referenced in section 401(g) of 
EGRRCPA specifically stated that the Board would require IHCs to 
file the FR Y-14 reports. See 79 FR 17240, 17304 (March 27, 2014).
---------------------------------------------------------------------------

    The FR Y-14 reports are mandatory.
    The information reported in the FR Y-14 reports is collected as 
part of the Board's supervisory process, and therefore, such 
information is afforded confidential treatment pursuant to exemption 8 
of the Freedom of Information Act (FOIA) which protects information 
contained in ``examination, operating, or condition reports'' obtained 
in the bank supervisory

[[Page 11441]]

process.\26\ In addition, confidential commercial or financial 
information, which a submitter both customarily and actually treats as 
private, may be exempt from disclosure under exemption 4 of the 
FOIA.\27\ \28\
---------------------------------------------------------------------------

    \26\ 5 U.S.C. 552(b)(8).
    \27\ 5 U.S.C. 552(b)(4).
    \28\ Note that the Board may disclose a summary of the results 
of supervisory stress testing pursuant to 12 CFR 225.8(h)(5)(iii) 
and publishes a summary of the results of stress testing pursuant to 
12 CFR 252.46(b) and 12 CFR 238.134, which includes aggregate data. 
In addition, under the Board's regulations, covered companies must 
also publicly disclose a summary of the results of stress testing. 
See 12 CFR 252.58; 12 CFR 238.146. The public disclosure requirement 
contained in 12 CFR 252.58 for covered BHCs and covered IHCs is 
separately accounted for by the Board in the Paperwork Reduction Act 
clearance for FR YY (OMB No. 7100-0350) and the public disclosure 
requirement for covered SLHCs is separately accounted for in by the 
Board in the Paperwork Reduction Act clearance for FR LL (OMB No. 
7100-0380).

    Board of Governors of the Federal Reserve System, February 23, 
2022.
Michele Taylor Fennell,
Deputy Associate Secretary of the Board.
[FR Doc. 2022-04194 Filed 2-28-22; 8:45 am]
BILLING CODE 6210-01-P