Overview
Title
Agency Information Collection Activities; Submission for OMB Review; Comment Request
Agencies
ELI5 AI
The government wants to hear from people about new rules for banks to report the money they have. These rules let banks choose older numbers to make reporting easier during the pandemic, and the government wants to know if people think this plan is helpful or too complicated.
Summary AI
The Office of the Comptroller of the Currency, the Federal Reserve System, and the Federal Deposit Insurance Corporation are seeking public comments on proposed updates to the Consolidated Reports of Condition and Income, also known as Call Reports. These updates, intended to remain effective through 2021, address changes in asset measurement dates due to temporary asset growth linked to relief programs from the COVID-19 pandemic. The modifications aim to help financial institutions manage reporting burdens by allowing them to use asset figures from either December 2019 or June 2020 for determining their reporting requirements for the upcoming year. The agencies are inviting feedback about the utility, accuracy, and potential burden of these changes as they move forward with the proposal.
Abstract
In accordance with the requirements of the Paperwork Reduction Act of 1995 (PRA), the OCC, the Board, and the FDIC (the agencies) may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. On November 30, 2020, the agencies, under the auspices of the Federal Financial Institutions Examination Council (FFIEC), requested public comment for 60 days on a proposal to revise and extend the Consolidated Reports of Condition and Income (Call Reports) (FFIEC 031, FFIEC 041, and FFIEC 051), which are currently approved collections of information. The agencies' proposal addressed measurement dates of total asset thresholds associated with the reporting of certain data in the Call Reports. The comment period for the November 2020 notice ended on January 29, 2021. After considering the comments received on the notice, the agencies are proceeding with the proposed revisions to the reporting forms and instructions for the Call Reports related to the agencies' asset-size thresholds rulemaking. The agencies hereby give notice of their plan to submit to OMB a request to approve the revision and extension of these information collections, and again invite comment on the renewal.
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AnalysisAI
General Summary
The document from the Federal Register is a notice issued by the Office of the Comptroller of the Currency (OCC), the Federal Reserve System (Board), and the Federal Deposit Insurance Corporation (FDIC). It seeks public comments on proposed revisions to the Consolidated Reports of Condition and Income, commonly referred to as Call Reports. These reports are used by banks to provide the agencies with important information about their financial condition.
The proposed updates are in response to temporary changes in asset levels due to economic relief programs initiated during the COVID-19 pandemic. The agencies propose allowing institutions to use asset measures from either December 2019 or June 2020 to determine reporting requirements in 2021, intending to ease the reporting burden on banks during this unusual time.
Significant Issues or Concerns
One major concern is the document's complexity, laden with technical terms and specific regulatory references, which may prove challenging for the average reader to fully comprehend. This complexity might hinder public engagement, as stakeholders without a background in financial regulations could find it difficult to decipher what the proposed changes entail.
Similarly, the document could benefit from greater clarity regarding how public comments will be handled. Explicitly stating how feedback will be incorporated into the final decision-making process could enhance transparency and encourage participation.
Moreover, the document does not explicitly address how these revisions will impact smaller institutions, which might experience a disproportionate burden from changes in reporting requirements. Ensuring that such stakeholders are considered is crucial for fair and equitable implementation.
Broad Public Impact
For the general public, these changes might appear distant, but they do impact the broader financial environment. The Call Reports play a critical role in maintaining the soundness of financial institutions, which is vital for economic stability. By adjusting reporting requirements in response to the pandemic, the agencies aim to support the financial sector's resilience.
However, if these changes result in increased reporting burdens without clarity or support, smaller banks could face operational challenges. This, in turn, might influence their ability to serve local communities effectively, potentially affecting consumers seeking financial services.
Impact on Specific Stakeholders
Financial Institutions: Larger banks will likely cope with the proposed changes due to more substantial resources and infrastructures. Smaller community banks and credit unions may find these adjustments more challenging, emphasizing the necessity for clarity and aid in compliance.
Regulatory Bodies: The agencies involved will employ the revised Call Reports to monitor financial health more accurately during these unprecedented times. Their effectiveness in utilizing this data will ultimately support the broader goal of maintaining financial stability.
Public Commenters: The opportunity for public comment provides stakeholders a voice, but the complexity of the document might dissuade meaningful engagement. Ensuring that feedback is genuinely considered could improve trust and cooperation between financial institutions and regulatory bodies.
In conclusion, while the proposed changes aim to address immediate regulatory challenges posed by the pandemic, they also highlight the need for clear, accessible communication and equitable consideration of all stakeholders involved in the financial regulatory landscape.
Financial Assessment
The document discusses proposals related to the Consolidated Reports of Condition and Income, commonly known as Call Reports. These reports are crucial for financial institutions like banks and savings associations because they must regularly submit information regarding their financial status to federal agencies. A significant part of the document focuses on revising the thresholds for reporting, specifically mentioning asset size limits.
Asset Thresholds for Reporting
One of the key financial metrics highlighted in the document is the asset threshold for filing different types of Call Reports, specifically the FFIEC 051 report. Several references mention a threshold of $5 billion in total assets as the limit for eligibility to use this report. This threshold is relevant because it determines which financial institutions can utilize this streamlined reporting form, potentially reducing their reporting burden.
In the document, there's a mention of a public comment suggesting an increase in this threshold to $10 billion. Such a change could significantly alter which institutions are eligible for the simpler reporting format, potentially reducing the reporting burden for a greater number of medium-sized banks. However, the document notes that the current proposal does not include any changes to this threshold, leaving it at $5 billion.
Temporary Relief Considerations
In response to economic impacts, partly from participation in COVID-19 relief programs, institutions experienced rapid asset growth. The document outlines a temporary relief measure allowing institutions to use the lesser value of their total assets as of December 31, 2019, or June 30, 2020, for determining their eligibility and reporting requirements for 2021. This temporary measure is significant as it provides flexibility for banks that otherwise might exceed the $5 billion mark due to temporary and possibly atypical asset increases during the pandemic.
Connection to Document Issues
The financial references in the document can be challenging to dissect due to the technical language inherent in regulatory and financial discussions. The proposed changes to asset thresholds and temporary relief measures aim to address some institutional concerns, but details about these calculations and their implications might not be entirely transparent to all audiences. Additionally, while the document seeks public comments, the effectiveness of this feedback process might be compromised if potential commenters do not understand the financial implications fully. The lack of explicit measures to minimize burdens on smaller institutions could also be notable since these institutions might be more affected by changes to reporting requirements. This situation underscores a need for clarity in explaining how asset-related criteria are determined and how they might impact different groups of financial institutions.
Issues
• The document contains complex language and technical jargon that may be difficult for a general audience to understand, particularly in sections discussing regulatory requirements and methodological assumptions.
• The call to action for public comments might not be clear enough for all readers, potentially leading to less engagement from interested parties.
• There is a potential lack of transparency in how certain burden estimates are calculated, which could raise concerns about the methodology's validity.
• Some sections, such as legal basis and criteria for Call Report eligibility, are detailed and could benefit from summarization for better comprehension.
• The document does not specify any measures for minimizing the burden on small institutions, which could be a concern for equitable implementation of the proposed revisions.
• No explicit mention of how public comments will be assessed or incorporated, potentially reducing the perceived impact of public participation in the process.