[Federal Register Volume 78, Number 50 (Thursday, March 14, 2013)]
[Notices]
[Pages 16263-16265]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-05914]
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FEDERAL DEPOSIT INSURANCE CORPORATION
Agency Information Collection Activities; Proposed Information
Collection; Comment Request
AGENCY: Federal Deposit Insurance Corporation.
ACTION: Notice and request for comment.
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SUMMARY: The Federal Deposit Insurance Corporation, as part of its
continuing effort to reduce paperwork and respondent burden, invites
the general public and other Federal agencies to take this opportunity
to comment on a continuing information collection, as required by the
Paperwork Reduction Act of 1995. Under the Paperwork Reduction Act,
Federal agencies are required to publish notice in the Federal Register
concerning each proposed collection of information and to allow 60 days
for public comment in response to the notice.
An agency may not conduct or sponsor, and a respondent is not
required to respond to, an information collection unless it displays a
currently valid Office of Management and Budget (``OMB'') control
number. The FDIC is soliciting comment concerning its information
collection titled, ``Annual Stress Test Reporting Template and
Documentation for Covered Banks with Total Consolidated Assets of $10
Billion to $50 Billion under the Dodd-Frank Wall Street Reform and
Consumer Protection Act.''
DATES: Comments must be received by May 13, 2013.
ADDRESSES: You may submit written comments by any of the following
methods:
Agency Web site: http://www.fdic.gov/regulations/laws/federal/propose.html. Follow the instructions for submitting comments
on the FDIC Web site.
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Email: [email protected]. Include ``Annual Stress Test
Reporting Template and Documentation for Covered Banks with Total
Consolidated Assets of $10 Billion to $50 Billion'' on the subject line
of the message.
Mail: Robert E. Feldman, Executive Secretary, Attention:
Comments, FDIC, 550 17th Street NW., Washington, DC 20429.
Hand Delivery/Courier: Guard station at the rear of the
550 17th Street Building (located on F Street) on business days between
7 a.m. and 5 p.m.
Public Inspection: All comments received will be posted without
change to http://www.fdic.gov/regulations/laws/federal/propose.html
including any personal information provided. Comments may be inspected
at the FDIC Public Information Center, 3501 North Fairfax Drive, Room
E-1002, Arlington, VA 22226 between 9 a.m. and 4:30 p.m. on business
days.
Additionally, please send a copy of your comments to: By mail to
the U.S. Office of Management and Budget, 725 17th Street NW.,
10235, Washington, DC 20503 or by facsimile to 202.395.6974,
Attention: Federal Banking Agency Desk Officer.
FOR FURTHER INFORMATION CONTACT: You can request additional information
from Gary Kuiper, 202.898.3877, Legal Division, Federal Deposit
Insurance Corporation, 550 17th Street NW., NYA-5046, Washington, DC
20429. In addition, copies of the templates referenced in this notice
can be found on the FDIC's Web site (http://www.fdic.gov/regulations/laws/federal/propose.html).
SUPPLEMENTARY INFORMATION: The FDIC is requesting comment on the
following new proposed information collection:
Title: Annual Stress Test Reporting Template and Documentation for
Covered Banks With Total Consolidated Assets of $10 Billion to $50
Billion Under the Dodd-Frank Wall Street Reform and Consumer Protection
Act.
OMB Control Number: XXXXXXX.
Description: Section 165(i)(2) of the Dodd-Frank Wall Street Reform
and Consumer Protection Act \1\ (Dodd-Frank Act) requires certain
financial companies, including state nonmember banks and state savings
associations, to conduct annual stress tests \2\ and requires the
primary financial regulatory agency \3\ of those financial companies to
issue regulations implementing the stress test requirements.\4\ A state
nonmember bank or state savings association is a ``covered bank'' and
therefore subject to the stress test requirements if its total
consolidated assets are more than $10 billion. Under section 165(i)(2),
a covered bank is required to submit to the Board of Governors of the
Federal Reserve System (Board) and to its primary financial regulatory
agency a report at such time, in such form, and containing such
information as the primary financial regulatory agency may require.\5\
On October 15, 2012, the FDIC published in the Federal Register a final
rule implementing the section 165(i)(2) annual stress test
requirement.\6\ This notice describes the reports and information
required to meet the reporting requirements under section 165(i)(2) for
covered banks with average total consolidated assets of $10 billion to
$50 billion. These information collections will be given confidential
treatment (5 U.S.C. 552(b)(4)).
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\1\ Public Law 111-203, 124 Stat. 1376, July 21, 2010.
\2\ 12 U.S.C. 5365(i)(2)(A).
\3\ 12 U.S.C. 5301(12).
\4\ 12 U.S.C. 5365(i)(2)(C).
\5\ 12 U.S.C. 5365(i)(2)(B).
\6\ 77 FR 62417, October 15, 2012.
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The FDIC intends to use the data collected through these proposed
templates to assess the reasonableness of the stress test results of
covered banks and to provide forward-looking information to the FDIC
regarding a covered bank's capital adequacy. The FDIC also may use the
results of the stress tests to determine whether additional analytical
techniques and exercises could be appropriate to identify, measure, and
monitor risks at the covered bank. The stress test results are expected
to support ongoing improvement in a covered bank's stress testing
practices with respect to its internal assessments of capital adequacy
and overall capital planning.
The Dodd-Frank Act stress testing requirements apply to all covered
banks, but the FDIC recognizes that many covered banks with
consolidated total assets of $50 billion or more have been subject to
stress testing requirements by the Board. The FDIC also recognizes that
these banks' stress tests will be applied to more complex portfolios
and therefore warrant a broader set of reports to adequately capture
the results of the stress tests. These reports will
[[Page 16264]]
necessarily require more detail than would be appropriate for smaller,
less complex institutions. Therefore, the FDIC has decided to specify
separate reporting templates for covered banks with total consolidated
assets between $10 billion and $50 billion and for covered banks with
total consolidated assets of $50 billion or more.\7\ While the general
reporting categories are the same (income statement, balance sheet and
capital), the level of granularity for individual reporting items is
less for $10 billion to $50 billion covered banks. For example,
accounting for provisions by category is not required, and less detail
is required for commercial and industrial lending. Because smaller
banks with assets of $10 billion to $50 billion generally have less
complex balance sheets, the FDIC believes that highly detailed
reporting is not warranted, and so the FDIC is not requiring
supplemental schedules on such areas as retail balances, securities and
trading, operational risk, and pre-provision net revenue (PPNR).
However, where a covered bank with assets less than $50 billion is
affiliated with an organization with assets of $50 billion or more, the
FDIC reserves the authority to require that covered bank to use the
reporting template for larger banks with total consolidated assets of
$50 billion or more.
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\7\ See 77 FR 52718 for the Paperwork Reduction Act Notice and
the FDIC Web site at http://www.fdic.gov/regulations/laws/federal/2012/2012-ad91/2012-ad91_templates.html for the reporting templates
for covered banks with total consolidated assets of $50 billion or
more.
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The FDIC has worked closely with the Board and the Office of the
Comptroller of the Currency (OCC) to make the agencies' respective
rules implementing annual stress testing under the Dodd-Frank Act
consistent and comparable by requiring similar standards for scope of
application, scenarios, data collection and reporting forms. The FDIC
has worked to minimize any potential duplication of effort related to
the annual stress test requirements. The reporting templates for
covered banks with assets of $10 billion to $50 billion or more are
described below.
Description of Reporting Templates for Covered Banks With $10 Billion
to $50 Billion in Assets
The ``Annual Stress Test Reporting Template and Documentation for
Covered Banks with Total Consolidated Assets of $10 Billion to $50
Billion under the Dodd-Frank Wall Street Reform and Consumer Protection
Act'' ($10B-$50B results template) includes data collection worksheets
necessary for the FDIC to assess the company-run stress test results
for baseline, adverse and severely adverse scenarios as well as any
other scenario specified in accordance with regulations specified by
the FDIC. The $10B-$50B results template includes worksheets that
collect information on the following areas:
1. Income Statement;
2. Balance Sheet; and
3. Capital.
Each $10 billion to $50 billion covered bank reporting to the FDIC
using this form will be required to submit to the FDIC separate
worksheets for each scenario provided to covered banks in accordance
with regulations implementing Section 165(i)(2) as specified by the
FDIC.
Worksheets: Income Statement
The income statement worksheet collects data for the quarter
preceding the planning horizon and for each quarter of the planning
horizon for the stress test on projected losses and revenues in the
following categories.
1. Net charge-offs;
2. Pre-provision net revenue;
3. Provision for loan and lease losses;
4. Realized gains (losses) on held to maturity (HTM) and available-
for-sale (AFS) securities;
5. All other gains (losses);
6. Taxes;
Memoranda items:
7. Net gains and losses on sales of other real estate owned; and
8. Total other than temporary impairment (OTTI) losses.
This schedule provides information used to assess losses that
covered banks can sustain in baseline, adverse and severely adverse
stress scenarios.
Worksheets: Balance Sheet
The balance sheet worksheet collects data for the quarter preceding
the planning horizon and for each quarter of the planning horizon for
the stress test on projected equity capital, as well as on assets and
liabilities in the following categories.
1. Loans;
2. HTM securities;
3. AFS securities;
4. Trading assets;
5. Total intangible assets;
6. Other real estate;
7. All other assets;
Memoranda items:
8. Loans and leases guaranteed by other U.S. government or GSE
guarantees (non-FDIC loss sharing agreements);
9. Troubled debt relationships;
10. Loans secured by 1-4 family in foreclosure;
11. Retail funding (core deposits);
12. Wholesale funding;
13. Trading liabilities;
14. All other liabilities;
15. Perpetual preferred stock and related surplus;
16. Common stock;
17. Surplus;
18. Retained earnings;
19. Other equity capital components; and
20. Additional Memoranda items: Average rates for loans,
securities, retail funding, wholesale funding, interest-bearing
deposits, trading and other liabilities.
The FDIC intends to use this worksheet to assess the projected
changes in assets and liabilities that a covered bank can sustain in an
adverse and severely adverse stress scenario. This worksheet will also
be used to assess the revenue and loss projections identified in the
income statement worksheet.
Worksheets: Capital
The capital worksheet, which is appended to the balance sheet
worksheet, collects data for the quarter preceding the planning horizon
and for each quarter of the planning horizon for the stress test on the
following areas.
1. Unrealized gains (losses) on AFS securities;
2. Disallowed deferred tax asset;
3. Tier 1 common capital elements;
4. Tier 1 capital;
5. Tier 2 capital;
6. Total risk based capital;
7. Total capital;
8. Risk weighted assets;
9. Total assets for leverage purposes;
10. Tier 1 common equity ratio;
11. Tier 1 risk based capital ratio;
12. Tier 1 leverage ratio;
13. Total risk based capital ratio; Memoranda items:
14. Sale, conversion, acquisition or retirement of capital stock;
15. Cash dividends declared on preferred stock; and
16. Cash dividends declared on common stock.
In addition to the information collected on the capital worksheet,
the Summary Schedule captures projections for regulatory capital ratios
over the planning horizon by scenario.
The FDIC intends to use these worksheets to assess the impact on
capital of the projected losses and projected changes in assets that
the covered bank can sustain in a stressed scenario. In addition to
reviewing the worksheet in the context of the balance sheet and income
statement projections, the FDIC also intends to use this worksheet to
assess the adequacy of the capital plans and capital planning processes
for each covered bank.
[[Page 16265]]
Description of FDIC Dodd Frank Annual Stress Test (DFAST) Scenario
Variables Template
To conduct the stress test required under this rule, a covered bank
may need to project additional economic and financial variables to
estimate losses or revenues for some or all of its portfolios. In such
a case, the covered bank is required to complete a DFAST Scenario
Variables worksheet for each scenario where such additional variables
are used to conduct the stress test. Each scenario worksheet collects
the variable name (matching that reported on the Scenario Variable
Definitions worksheet), the actual value of the variable during the
third quarter of the reporting year, and the projected value of the
variable for nine future quarters.
Description of Supporting Documentation
Covered banks with total consolidated assets of $10 billion to $50
billion must submit clear documentation of the projections included in
the worksheets to support efficient and timely review of annual stress
test results by the FDIC. The supporting documentation should be
submitted electronically and is not expected to be reported in the
workbooks used for required data reporting. This supporting
documentation must describe the types of risks included in the stress
test; describe clearly the methodology used to produce the stress test
projections; describe the methods used to translate the macroeconomic
factors into a covered bank's projections; and also include an
explanation of the most significant causes for the changes in
regulatory capital ratios. The supporting documentation also should
address the impact of anticipated corporate events, including mergers,
acquisitions or divestitures of business lines or entities, and changes
in strategic direction, and should describe how such changes are
reflected in stress test results, including the impact on estimates of
losses, expenses and revenues, net interest margins, non-interest
income items, and balance sheet amounts.
Where company-specific assumptions are made that differ from the
broad macroeconomic assumptions incorporated in stress scenarios
provided by the FDIC, the documentation must also describe such
assumptions and how those assumptions relate to reported projections.
Where historical relationships are relied upon, the covered banks must
describe the historical data and provide the basis for the expectation
that these relationships would be maintained in each scenario,
particularly under adverse and severely adverse conditions.
Type of Review: New collection.
Affected Public: State nonmember banks and state savings
associations supervised by the FDIC with total consolidated assets of
$10 billion to $50 billion.
Burden Estimates
The FDIC estimates the burden of this collection of information as
follows:
Estimated Number of Respondents: 22.
Estimated Annual Burden per Respondent: 464 hours.
Estimated Total Annual Burden: 10,208 hours.
The burden for each $10 billion to $50 billion covered bank that
completes the $10B-$50B results template is estimated to be 440 hours
for a total of 9,680 hours. This burden includes 20 hours to input
these data and 420 hours for work related to modeling efforts. The
estimated burden for each $10 billion to $50 billion covered bank that
completes the annual DFAST Scenarios Variables Template is estimated to
be 24 hours for a total of 528 hours. The start-up burden for new
respondents is estimated to be 93,600 hours and ongoing revisions for
existing firms, 4,160 hours.
Comments submitted in response to this notice will be summarized
and included in the request for OMB approval. All comments will be a
matter of public record. Comments are invited on:
(a) Whether the collection of information is necessary for the
proper performance of the functions of the FDIC, including whether the
information has practical utility;
(b) The accuracy of the FDIC's estimate of the burden of the
collection of information;
(c) Ways to enhance the quality, utility, and clarity of the
information to be collected;
(d) Ways to minimize the burden of the collection on respondents,
including through the use of automated collection techniques or other
forms of information technology;
(e) Estimates of capital or start-up costs and costs of operation,
maintenance, and purchase of services to provide information; and
(f) The ability of FDIC-supervised banks and thrifts with assets
between $10 billion and $50 billion to provide the requested
information to the FDIC by March 31, 2014.
Dated at Washington, DC, this 7th day of March 2013.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2013-05914 Filed 3-13-13; 8:45 am]
BILLING CODE 6714-01-P