Overview
Title
Agency Information Collection Activities: Announcement of Board Approval Under Delegated Authority and Submission to OMB
Agencies
ELI5 AI
The Federal Reserve Board wants banks to keep telling them about money deals they do with their family companies, like checking in on what they're up to. They asked people if this plan was okay, but nobody answered them.
Summary AI
The Board of Governors of the Federal Reserve System is extending for three years the requirement for Holding Company Reports on their transactions with affiliates, known as FR Y-8. This report collects information about transactions between insured depository institutions and their affiliates, helping monitor bank exposures and compliance. The reports must be filed quarterly by certain bank holding companies, savings and loan holding companies, and foreign banking organizations owning U.S. insured depository institutions. Despite a call for public comments on this extension, no feedback was received.
Abstract
The Board of Governors of the Federal Reserve System (Board) is adopting a proposal to extend for three years, without revision, the Holding Company Report of Insured Depository Institutions' Section 23A Transactions with Affiliates (FR Y-8; OMB No. 7100-0126).
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Sources
AnalysisAI
The document from the Federal Register, issued by the Board of Governors of the Federal Reserve System, announces the extension of a report requirement for certain financial institutions. Specifically, the requirement is for holding companies to continue filing reports on transactions between insured depository institutions and their affiliates. Known as the FR Y-8 report, this document seeks to monitor and ensure compliance with legal limits on financial transactions within these establishments. This extension will last for an additional three years, maintaining its quarterly submission cycle.
General Summary
This Federal Reserve document focuses on the extension of a financial reporting requirement, the FR Y-8. It tracks transactions between banks and their affiliates to ensure they adhere to section 23A of the Federal Reserve Act, which imposes specific quantitative limits and requirements on these dealings. The information is vital for overseeing bank exposures to affiliates and is used by the Federal Reserve System to safeguard banking sector stability. Despite calling for public comments on the extension, the document notes that no feedback was received.
Significant Issues or Concerns
One notable issue is the absence of any clarification on how the total number of respondents and the associated annual burden hours were calculated. This lack of transparency can leave questions regarding the assumptions or data used to reach these estimates. Furthermore, although a public comment period was implemented, the document fails to elaborate on why no responses were received or how the lack of feedback was factored into the decision. For some, this could raise concerns about the transparency and inclusiveness of the extension process.
The document uses technical and regulatory jargon, which might be challenging for readers without a background in finance or law. Simplifying the language and providing context could enhance understanding and accessibility, allowing a wider audience to grasp the implications and importance of these reports.
Impact on the Public
For the general public, the document signifies efforts by federal authorities to maintain strict oversight on bank transactions and ensure the integrity of the financial system. While the direct impact on most individuals may be limited, maintaining a stable banking system indirectly benefits everyone by reducing the risk of financial crises.
Impact on Specific Stakeholders
For financial institutions, particularly U.S. bank holding companies, savings and loan holding companies, and foreign banking organizations with U.S. subsidiaries, this extension represents a continued administrative responsibility. These entities must ensure ongoing compliance with the reporting requirements, which gathers data crucial for regulatory bodies. Although this may involve administrative effort and resources, it ultimately ensures a framework within which financial stability can be monitored and enforced, benefiting the broader financial ecosystem.
Overall, while the extension of the FR Y-8 reporting requirement may seem like a technical, procedural update, it carries significant implications for financial oversight and regulatory compliance. However, the document could better serve its audience by clarifying certain aspects and addressing stakeholder engagement more robustly.
Issues
• The document does not specify the criteria used to determine the total estimated number of respondents or total estimated annual burden hours, which could make it unclear how these figures were derived.
• There is no indication of any public comments received or how public feedback was considered in the extension decision, even though a comment period was mentioned. This could raise concerns about transparency and stakeholder engagement.
• The language used in the summary and supplementary information sections may be complex for readers who are not familiar with regulatory or financial terms, potentially limiting accessibility for the general public.
• The description of the FR Y-8 collection's purpose, while mentioned, could benefit from further simplification and additional context to help readers understand the importance of monitoring bank exposures to affiliates.