[Federal Register Volume 79, Number 236 (Tuesday, December 9, 2014)]
[Notices]
[Pages 73071-73073]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-28708]
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FEDERAL DEPOSIT INSURANCE CORPORATION
Agency Information Collection Activities: Information Collection
Revision; Comment Request (3064-0189)
AGENCY: Federal Deposit Insurance Corporation (FDIC).
ACTION: Notice of information collection to be submitted to OMB for
review and approval under the Paperwork Reduction Act, and request for
comment.
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SUMMARY: The Federal Deposit Insurance Corporation (FDIC) invites the
general public and other Federal agencies to take this opportunity to
comment on a revision of a continuing information collection, as
required by the Paperwork Reduction Act of 1995.
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 Dodd-Frank'' (OMB Control No. 3064-0189).
DATES: Comments must be received by January 8, 2015.
ADDRESSES: You may submit written comments by any of the following
methods:
[[Page 73072]]
Agency Web site: http://www.fdic.gov/regulations/laws/federal/. 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'' on the subject line of the message.
Mail: Gary A. Kuiper, Counsel, or John Popeo, Counsel,
Legal Division, MB-3098, 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
7:00 a.m. and 5:00 p.m.
Public Inspection: All comments received will be posted without
change to http://www.fdic.gov/regulations/laws/federal/ including any
personal information provided.
Additionally, you may send a copy of your comments: By mail to the
U.S. OMB, 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, or John Popeo, 202.898.6923, Legal
Division, FDIC, 550 17th Street NW., MB-3098, 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/).
SUPPLEMENTARY INFORMATION: The FDIC is requesting comment on the
following revision of an information collection:
Annual Stress Test Reporting Template and Documentation for Covered
Banks With Total Consolidated Assets of $10 Billion to $50 Billion
Under Dodd-Frank
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 exceed $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\ The final rule requires covered banks to meet specific
reporting requirements under section 165(i)(2). In 2013, the FDIC first
implemented the reporting templates for covered banks with total
consolidated assets of $10 billion to $50 billion and provided
instructions for completing the reports.\7\ This information collection
notice describes revisions by the FDIC to those reporting templates and
related instructions as well as required information. The information
contained in these information collections may be given confidential
treatment to the extent allowed by law. (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).
\7\ See 78 FR 16263 (March 14, 2013) and 78 FR 63470 (October
24, 2013).
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Consistent with past practice, the FDIC intends to use the data
collected through these revised 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 FDIC recognizes that many covered banks with total consolidated
assets of $10 billion to $50 billion are part of a holding company that
is also required to submit relevant Dodd Frank Annual Stress Test
(DFAST) reports to the Board (FR Y-16, OMB No. 7100-0356). The FDIC,
Office of Comptroller of the Currency, and Board (collectively the
``Agencies'') have coordinated the preparation of stress testing
templates in order to make the templates as similar as possible and
thereby minimize the burden on affected institutions. These Agencies
have coordinated in a similar manner regarding these proposed
modifications to the stress testing templates. Therefore, the revisions
by the FDIC to its reporting requirements will remain consistent with
the modifications that the Board proposes to make to the FR Y-16.
Description of Information Collection
The FDIC DFAST 10-50 reporting form collects data through two
primary schedules: (1) The Results Schedule (which includes the
quantitative results of the stress tests under the baseline, adverse,
and severely adverse scenarios for each quarter of the planning
horizon) and (2) the Scenario Variables Schedule. In addition,
respondents are required to submit a summary of the qualitative
information supporting their quantitative projections.
Results Schedule
For each of the three supervisory scenarios (baseline, adverse, and
severely adverse) each covered bank is required to report data on two
supporting schedules: (1) The Income Statement Schedule and (2) the
Balance Sheet Schedule. Therefore, two supporting schedules for each
scenario (baseline, adverse, and severely adverse) are completed. In
addition, the Results Schedule includes a Summary Schedule, which
summarizes key results from the Income Statement and Balance Sheet
Schedules.
Income statement data is collected on a projected quarterly basis
showing projections of revenues and losses. For example, respondents
project net charge-offs by loan type (stratified by twelve specific
loan types), gains and losses on securities, pre-provision net revenue,
and other key components of net income (i.e., provision for loan and
lease losses, taxes, etc.).
Balance sheet data is collected on a quarterly basis for
projections of certain assets, liabilities, and capital. Capital data
is also collected on a projected quarterly basis and include components
of regulatory capital, including the projections of risk weighted
assets and capital actions such as common dividends and share
repurchases.
Scenario Variables Schedule
To conduct the stress tests, an institution may choose to project
additional economic and financial variables beyond the mandatory
supervisory scenarios provided to estimate losses or revenues for some
or all of its portfolios. In such cases, the institution would be
required to complete the Scenario Variables Schedule for each scenario
where the institution chooses to use additional
[[Page 73073]]
variables. The Scenario Variables Schedule collects information on the
additional scenario variables used over the planning horizon for each
supervisory scenario.
Revisions to Reporting Templates for Banks With $10 Billion to $50
Billion in Assets
On July 9, 2013, the FDIC approved an interim final rule that will
revise and replace the FDIC's risk-based and leverage capital
requirements to be consistent with agreements reached by the Basel
Committee on Banking Supervision in ``Basel III: A Global Regulatory
Framework for More Resilient Banks and Banking Systems'' (``Basel
III'').\8\ The final rule was published in the Federal Register on
April 14, 2014 (``revised capital framework'').\9\ The revisions
include implementation of a new definition of regulatory capital, a new
common equity tier 1 minimum capital requirement, a higher minimum tier
1 capital requirement, and, for banking organizations subject to the
Advanced Approaches capital rules, a supplementary leverage ratio that
incorporates a broader set of exposures in the denominator measure. In
addition, the rule will amend the methodologies for determining risk
weighted assets. All banking organizations that are not subject to the
Advanced Approaches Rule must begin to comply with the revised capital
framework on January 1, 2015.
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\8\ 78 FR 55340 (September 10, 2013).
\9\ 79 FR 20754 (April 14, 2014).
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Due to the timing of the Dodd-Frank Act stress test and the revised
capital rulemaking, the FDIC considered several options for the timing
and scope of this proposal to collect information related to the
capital rulemaking. On August 13, 2014, the FDIC published in the
Federal Register, a 60-day information collection notice requesting
public comment on proposed revisions to the stress testing reporting
templates.\10\ The FDIC received one comment. The commenter expressed
concerns that covered banks will lack the relevant data for the stress
testing requirements ahead of when these items are required to be
reported in the Consolidated Report of Condition and Income (``Call
Reports''). After carefully considering this comment, the FDIC has made
minor technical changes and clarifications to the reporting
instructions as described below.
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\10\ 79 FR 47457 (August 13, 2014).
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The FDIC proposes to revise the FDIC DFAST 10-50 Summary Schedule
by adding a common equity tier 1 capital data item and the FDIC DFAST
10-50 Balance Sheet Schedules (baseline, adverse, and severely adverse
scenarios) by adding a common equity tier 1 risk based capital ratio
data item in order to reflect the requirements of the revised capital
framework. These revisions to the FDIC 10-50 DFAST reporting forms
would apply beginning in the 2015 stress test cycle in which covered
banks must report by March 31, 2015.
In addition, the FDIC proposes to clarify the FDIC DFAST 10-50
reporting form instructions to emphasize that a covered bank should
transition to the revised capital framework requirements in its bank-
run stress test projections in the quarter in which the revised capital
framework requirements become effective. Specifically, a covered bank
would be required to comply with the revised capital framework and
begin including the common equity tier 1 capital data item and common
equity tier 1 risk based capital ratio data item in projected quarter 2
(1st quarter, 2015) through projected quarter 9 (4th quarter, 2016) for
each supervisory scenario for the 2015 stress test cycle.
The FDIC also proposes several clarifications to the FDIC DFAST 10-
50 reporting form instructions, including: Indicating that the Scenario
Variables Schedule would be collected as a reporting form in Reporting
Central (instead of as a file submitted in Adobe Acrobat PDF format);
clarifying what covered banks should include in line items 32 and 33
(retail and wholesale funding) on the Balance Sheet Schedule with
reference to relevant Call Report line items; clarifying the disallowed
deferred tax asset and unrealized gains and losses on available-for-
sale (``AFS'') securities line items; clarifying the descriptions of
the total capital and total risk-based capital line items; and finally,
clarifying how the supporting qualitative information should be
organized.
Burden Estimates
The FDIC estimates the burden of this collection of information as
follows:
Current
Number of Respondents: 22.
Annual Burden per Respondent: 464 hours.
Total Annual Burden: 10,208 hours.
Proposed
Estimated Number of Respondents: 22.
Estimated Annual Burden per Respondent: 469 hours.
Estimated Total Annual Burden: 10,318 hours.
The burden for each $10 billion to $50 billion covered bank that
completes the FDIC DFAST 10-50 Results Template and FDIC DFAST 10-50
Scenario Variables Template is estimated to be 469 hours. The burden to
complete the FDIC DFAST 10-50 Results Template is estimated to be 440
hours, including 20 hours to input these data and 420 hours for work
related to modeling efforts. The burden to complete the FDIC DFAST 10-
50 Scenario Variables Template is estimated to be 29 hours. The total
burden for all 22 respondents to complete both templates is estimated
to be 10,318 hours, or an increase to the total burden of 110 hours.
Comments are invited on all aspects of the proposed changes to the
information collection, particularly:
(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 savings associations
with assets between $10 billion and $50 billion to provide the
requested information to the FDIC by March 31, 2015.
Dated at Washington, DC, this 3rd day of December 2014.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2014-28708 Filed 12-8-14; 8:45 am]
BILLING CODE 6714-01-P