FR 2021-02204

The document from the Federal Register pertains to an official notice from the Board of Governors of the Federal Reserve System, inviting public comment on a proposal to extend a specific data collection initiative. This initiative involves the Quarterly Report of Assets and Liabilities of Large Foreign Offices of U.S. Banks, identified as the FR 2502q form, under OMB control number 7100-0079. The Board seeks to continue this collection for an additional three years, noting no revisions to the current methodology.

General Summary

This document serves as a formal request for public feedback about the continued necessity and utility of collecting data on the assets and liabilities of large foreign offices operated by U.S. banks. Specifically, the Board is interested in comments concerning the utility of the information collected, the burden it imposes on respondents, including time and financial costs, and any suggestions for minimizing the burden. The information collected helps monitor the overseas claims and liabilities of these financial institutions, which is deemed important for regulatory purposes. The deadline for submitting comments is April 5, 2021.

Significant Issues or Concerns

One notable issue is the document's lack of detailed information on the budgetary implications of continuing this information collection. Without clear discussion of the associated costs or any efforts to optimize efficiency, stakeholders could be concerned about potential wasteful spending. Additionally, the language used throughout the document, especially in the section discussing legal authorization and confidentiality, may be too technical for individuals without legal or financial expertise, potentially limiting broader public understanding and engagement.

Moreover, while the document identifies the possibility of confidential treatment of submitted information under exemption 4 of the Freedom of Information Act, it fails to clarify the criteria or process for obtaining such treatment. This omission could lead to ambiguity regarding how and when financial institutions can seek confidentiality.

Impact on the Public

For the general public, this document does not pose immediate or direct implications; however, efficient and accurate regulatory oversight of banks with significant foreign operations is crucial for maintaining a stable financial system. The success of this data collection could, therefore, indirectly contribute to broader financial stability, impacting everyday consumers and investors who rely on a stable economy.

Impact on Specific Stakeholders

For specific stakeholders, including U.S. commercial banks, bank holding companies, and other financial organizations subject to this reporting requirement, the document represents both an ongoing regulatory obligation and an opportunity to influence how this obligation is framed. Those entities will need to balance compliance with potentially cumbersome reporting requirements against contributing to a regulatory framework that ensures industry stability and credibility.

On the positive side, stakeholders can use this comment period to suggest ways to streamline the data collection process, which might reduce their administrative burden. However, if no significant changes are made, these entities may continue to face substantial compliance efforts without any reduction in associated costs or time commitments.

The document from the Federal Reserve System seeks public comments on a proposal to extend the Quarterly Report of Assets and Liabilities of Large Foreign Offices of U.S. Banks (FR 2502q) for an additional three years. This proposal involves financial reporting requirements that are highlighted by several key financial references, particularly concerning the thresholds necessary for the reporting obligation.

Financial Requirements and Reporting

The primary financial criteria for the obligation to file the FR 2502q reporting form are explicitly defined. Specifically, U.S. commercial banks, bank holding companies, and Edge Act and agreement corporations must file these reports if their large branches or banking subsidiaries have assets of $2 billion or more and, in the case of banking subsidiaries, deposits of $10 million or more. This financial threshold determines which branches and subsidiaries are required to participate in this data collection, thereby influencing the volume and scope of information considered by the Federal Reserve.

Potential Financial Implications

While the document sets the parameters for financial reporting, it does not address specific budgetary implications of continuing this information collection activity. Consequently, there are no clear insights into any potential adjustments or allocations of budgetary resources necessary for this purpose. This lack of specifics could raise concerns about whether the extended collection entails any unnecessary or wasteful spending. Without detailed budgetary information, stakeholders might question the economic efficiency and necessity of continuing this initiative in its current form.

Link to Identified Issues

The financial requirements provide a practical frame for determining which entities are subject to the reporting requirement. However, the document does not sufficiently explain why collecting this precise level of financial information — as defined by the asset and deposit thresholds — is essential. Understanding the necessity behind these financial thresholds could help justify both the extension of the reporting requirement and its continued relevance. Stakeholders and commenters might find it critical to ascertain how these specific financial metrics help the Federal Reserve in monitoring and controlling monetary aggregates or in fulfilling other functions.

Furthermore, while soliciting comments on minimizing the data collection burden, the document does not outline any strategic efforts toward reducing costs for reporting entities, such as through the adoption of automated processes or new technologies. By not addressing such potential cost-reduction measures, the document leaves this as an open concern for the entities having to undertake these reporting responsibilities.

Overall, the document provides clear financial criteria for reporting but leaves several questions regarding budgetary implications and the necessity of these financial thresholds unaddressed, which are crucial to understanding the broader economic landscape of this regulatory requirement.