[Federal Register: November 23, 2004 (Volume 69, Number 225)]
[Rules and Regulations]
[Page 68068-68073]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23no04-3]
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FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 327
RIN 3064-AC84
Deposit Insurance Assessments--Certified Statements
AGENCY: Federal Deposit Insurance Corporation.
ACTION: Final rule.
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SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is
modernizing and simplifying its deposit insurance assessment
regulations governing certified statements, to provide regulatory
burden relief to insured depository institutions. Under the final rule,
insured institutions will obtain their certified statements on the
Internet via the FDIC's transaction-based e-business Web site,
FDICconnect. Correct certified statements will no longer be signed by
insured institutions or returned to the FDIC, and the semiannual
certified statement process will be synchronized with the quarterly
invoice process. Two quarterly certified statement invoices will
comprise the semiannual certified statement and reflect the semiannual
assessment amount. If an insured institution agrees with its quarterly
certified statement invoice, it will simply pay the assessed amount and
retain the invoice in its own files. If it disagrees with the quarterly
certified statement invoice, it will either amend its report of
condition or similar report (to correct data errors) or amend its
quarterly certified statement invoice (to correct calculation errors).
The FDIC will automatically treat either as the insured institution's
request for revision of its assessment computation, eliminating the
requirement of a separate filing. In addition, the FDIC will provide e-
mail notification each quarter to let depository institutions know when
their quarterly certified statement invoices are available on
FDICconnect. An institution that lacks Internet access will be able
request from the FDIC a one-year renewable exemption from the use of
FDICconnect, during which it will continue to receive quarterly
certified statement invoices by mail. With these amendments, the time
and effort required to comply with the certified statement process will
be reduced, a result of the FDIC's ongoing program under the Economic
Growth and Regulatory Paperwork Reduction Act (EGRPRA) to provide
regulatory burden relief to insured depository institutions.
DATES: This final rule will become effective on March 1, 2005.
FOR FURTHER INFORMATION CONTACT: Steve Wagoner, Senior Assessment
Specialist, Division of Finance, (202) 416-7152; Linda A. Abood,
Supervisory IT Specialist, Division of Information Resources
Management, (703) 516-1202; or Christopher Bellotto, Counsel, Legal
Division, (202) 898-3801, Federal Deposit Insurance Corporation, 550
17th Street, NW., Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
I. Background
On June 8, 2004, the FDIC published in the Federal Register, for a
60-day comment period, a notice of proposed rulemaking with request for
comment on the proposed amendments to section 327.2, the certified
statement regulation. (69 FR 31922). The comment period closed on
August 9, 2004. The FDIC received 22 comment letters, one from a trade
organization (Independent Community Bankers of America) and 21 from
depository institutions. Seventeen of the commenters generally
supported the proposal and the remaining five generally opposed,
although in varying
[[Page 68069]]
degrees. Eleven commenters addressed the question of e-mail notice, all
of them favoring the courtesy notification suggested by the FDIC. An
alternative form of delivery for institutions without Internet access
was requested by four commenters. The following is a discussion of the
amendments to section 327.2 and the comments received.
Under section 7(c) of the Federal Deposit Insurance Act (FDI Act or
Act) (12 U.S.C. 1817(c)) insured depository institutions are required
to file a certified statement with the FDIC for each semiannual deposit
insurance assessment period, containing such information as the FDIC
``may require for determining the institution's semiannual
assessment.'' 12 U.S.C. 1817(c)(1)(A). The FDI Act also provides that
the certified statement ``shall * * * be in such form and set forth
such supporting information as the Board of Directors shall prescribe *
* *'' 12 U.S.C. 1817(c)(1)(B)(i). In this way, the Act vests in the
FDIC discretion to prescribe the information contained in, as well as
the form of, semiannual certified statements. As a result of the FDIC's
exercise of this discretion over a period of years, the certified
statement process has evolved in response to advances in collection
procedures and data processing technology.
Prior to 1995, the FDIC mailed a blank certified statement form to
every insured depository institution every semiannual period. Each
institution was required to transcribe manually on this form the
deposit data culled from its two prior Call Reports/Thrift Financial
Reports (TFRs) and to calculate its assessment payment. The assessment
was paid for the entire semiannual period one month after the beginning
of the semiannual period (i.e., January 31 and July 31). An officer of
the institution was required to certify the accuracy of that
information by signing the form, which was then returned to the FDIC
along with the institution's check for the assessment amount. Under
this system almost all of the certified statements were returned to the
FDIC each semiannual period, but about 10 percent of the certified
statements received contained mistakes, due in part to simple
transpositions of figures and mathematical errors that required
correction and revision.
The FDIC revised the process for collecting deposit insurance
assessments--adopting the system of quarterly payments in 1994 and
implementing it in March of 1995. 59 FR 67153 (Dec. 29, 1994). As part
of this changeover to the automated invoicing and collection system,
the FDIC assumed responsibility for ``filling out'' the certified
statement and calculating each institution's deposit insurance
assessment. The information used by the FDIC in completing certified
statements is derived from institutions' Call Reports/TFRs, and is
stored by the FDIC electronically. Because the June and December Call
Report/TFR data was not available electronically until after the next
semiannual payment date,\1\ the FDIC instituted the practice of
collecting semiannual assessments in two quarterly installments to
facilitate FDIC preparation of assessment forms for insured
institutions.
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\1\ The June 30 Call Report/TFR data is not available
electronically until after the July 31 payment date; similarly, the
December 31 Call Report/TFR data is not available electronically
until after the January 31 payment date.
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Accordingly, since 1995, the semiannual assessment has been
collected in two quarterly installments; the sum of these installments
equals an institution's semiannual assessment. Each quarterly
installment is based on deposit data contained in one of the two
quarterly Call Reports/TFRs submitted by the institution during the
previous semiannual period. Under section 7(a)(3) of the FDI Act (12
U.S.C. 1817(a)(3)), reports of condition must contain a declaration by
an officer of the institution, and a signed attestation by two other
institution officers, that the information set forth is true and
correct.
The FDIC computes the amount of each quarterly installment by
retrieving the relevant electronic data from the Call Report/TFR for
each institution. Under the present system, the FDIC sends each insured
institution an invoice for the first semiannual installment, and, three
months later, a certified statement for the second installment. The
invoice and the certified statement \2\ are each mailed about two weeks
prior to the actual collection of each respective installment.\3\
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\2\ The ``invoice'' is the first quarterly installment sent each
semiannual period; the ``certified statement'' is the invoice for
the second quarterly installment.
\3\ Collection has been and will continue to be accomplished via
Automated Clearing House (ACH) direct debit of the account
designated by the institution for that purpose. Like the invoice and
certified statement (which were mailed about two weeks prior to the
ACH payment/settlement date), quarterly certified statement invoices
will be made available on FDICconnect approximately two weeks prior
to the ACH payment/settlement date. The FDIC also collects Financing
Corporation (FICO) assessments pursuant to the same statutory
requirements that govern FDIC deposit insurance assessments. The
FICO rate is based on the deposit data reflected on the invoice and
certified statements. Under the final rule, the FICO rate will be
based on the deposit data reflected on the two quarterly certified
statement invoices made available each semiannual period. To ensure
timely collection of adequate funds for FICO, institutions will
continue to pay the original amount due; any appropriate
adjustments, plus interest, will be part of a subsequent quarterly
assessment collection.
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The invoice and the certified statement differ in two essential
respects. The invoice contains the data, assessment computation, and
amount due for the first installment of the semiannual period only. The
certified statement, however, contains more than just the data,
assessment computation, and amount due for the second installment of
the semiannual period. It also restates the first installment
information and combines the two sets of information into a semiannual
presentation. In addition, the second installment invoice--the
certified statement--contains a signature block. Institutions are
required to sign and return the certified statement to the FDIC, while
the first installment invoice was subject to neither requirement.
Under the present process, if an institution agrees with the
information on the first installment invoice, it takes no action other
than to fund the designated assessment account sufficiently to allow
the direct debit of the account. At most institutions, an officer
reviews the first installment invoice before authorizing payment by
comparing the deposit data on the invoice to the amounts reported by
the institution on its corresponding Call Report/TAR, reconciling any
adjustments from prior assessment periods as noted on the back of the
invoice, verifying the rate multiplier used and the ACH account
information, and spot checking mathematical calculations. If the
institution disagrees with the information on the first installment
invoice, the institution is required by regulation (12 CFR 327.3(h)),
to file a request for revision of its assessment computation if it
wished to change its assessment payment, which in practice was usually
done to obtain a refund.
If an institution agrees with the second installment invoice (the
certified statement), in addition to ensuring that the designated
account is adequately funded and payment is authorized, an officer of
the institution is required to certify the accuracy of the statement
and return it to the FDIC. Generally, this process involves checking
the restated first invoice data again, as well as checking the data for
the second half of the semiannual period. The institution has to return
its certified statement (usually by mail) signed by an officer, not
later than the second quarterly payment date of the semiannual period
(i.e., certified statements must be returned by March 30 for the
January-
[[Page 68070]]
June semiannual period and by September 30 for the July-December
semiannual period).\4\ If the institution disagrees with the certified
statement, the institution has to annotate changes on the statement,
certify by signing, and return the form to the FDIC. As with the first
installment, the institution is also required under section 327.3(h) to
file a request for revision of its assessment computation if it wishes
to change its assessment payment, which in practice is usually done to
obtain a refund.
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\4\ An institution's assessment for the first semiannual period
of each year (January 1 through June 30) is calculated on the
deposits reported on the previous September and December Call
Report/TFR. The first installment (due January 2) is based on the
September deposits and the second installment (due March 30) is
based on the December deposits. The assessment for the second
semiannual period (July 1 through December 31) is calculated on the
deposits reported on the previous March and June Call Report/TFR.
The first installment (due June 30) is based on the March deposits,
and the second installment (due September 30) is based on the June
Deposits. See 12 CFR 327.3.
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Under the automated invoicing and collection system, over a period
of years, the certified statement has evolved from a semiannual form
used by insured institutions to report their deposit data and calculate
their assessment payments, into a form designed to confirm the accuracy
of information previously provided by the institution (via Call
Reports/TFRs) and the accuracy of the FDIC's assessment calculations
based on that information.
The existing certified statement process imposes significant and
unnecessary burdens on insured institutions and the FDIC. The FDIC
mails out over 9,000 first installment invoices and an equal number of
certified statements each semiannual period. Institution officials must
review and accept the first installment assessment calculation twice:
once in reviewing the first installment invoice and then a second time,
when reviewing the certified statement. Institutions return their
certified statements to the FDIC, even if no discrepancies are found, a
process prone to recurrent errors. For example, some institutions
return the wrong form (the first installment invoice rather than the
certified statement), or the certified statement is lost in transit.
Further, the FDIC does not receive approximately 1,000 certified
statements each semiannual period, necessitating significant follow-up
efforts by FDIC staff through letters and telephone calls, which in
turn imposes significant burdens on the insured institutions that must
respond.
In addition, institutions filing corrected certified statements or
invoices are required under section 327.3(h) to file a separate request
for revision of that payment with the FDIC within 60 days from the date
of the quarterly assessment invoice. The request for revision sets in
motion the process of FDIC review of the validity of the certified
statement amendment, the accuracy of the corresponding assessment
payment, and the potential for a refund or additional charges based on
the FDIC's determination.
Finally, the return of certified statements to the FDIC was
important when institutions themselves filled out the certified
statement and computed the assessment owed to the FDIC. Since 1995,
however, the information used to complete the certified statement is
drawn from Call Reports/TFRs previously attested to by officers of the
insured depository institutions and stored electronically by the FDIC.
In effect, the information on the certified statements that
institutions are required to certify and return is already certified
and transmitted to the FDIC when the Call Reports/TFRs are filed.
Unlike the certified statement, however, institutions are not required
to return the completed Call Report/TFR signature and attestation page
to the appropriate Federal banking agency. Instead, the attestation
page is signed and attached to the hard-copy record of the completed
Call Report/TFR, which the institution retains in its own files.
For these reasons, return of certified statements to the FDIC has
been identified under the FDIC's ongoing EGRPRA program as an outdated,
redundant, and burdensome process, both for the industry and for the
FDIC.
II. The Final Rule
Under the final rule, the two quarterly assessment invoices issued
during a semiannual period will each be a component of the required
semiannual certified statement. The two quarterly certified statement
invoices combined will reflect an institution's total assessment
payment for each semiannual period, just as the invoice and certified
statement do now. The FDIC, however, will no longer mail out paper
copies of certified statement invoices to insured institutions.
Instead, insured institutions will access their quarterly certified
statement invoices each quarter via the FDIC's transaction-based e-
business website, FDICconnect. In addition, Notices of Assessment Risk
Classification, formerly mailed with the first quarterly invoice each
semiannual period (see 12 CFR 327.4(a)), will be provided with the
first quarterly certified statement invoice each semiannual period on
FDICconnect.
FDICconnect access to quarterly certified statement invoices was
expressly supported by a majority (12) of the commenters. One bank
stated its desire to ``eliminate as many paper processes as possible.''
Another appreciated ``the regulatory effort under the Economic Recovery
and Regulatory Paperwork Reduction Act (EGRPRA) to reduce our filing
and compliance burdens.'' A third pronounced Internet access to
quarterly certified statement invoices ``an excellent move.'' Others
expressed ``favor'' for the proposal, saw ``no problem'' with it,
agreed in principle with the FDIC's goal, and were ``supportive'' of
the amendments. This group of twelve commenters included institutions
of various sizes, plus the Independent Community Bankers of America.
In addition, two other institutions supported the amendments by
inference, asking for e-mail notification of the availability of the
quarterly certified statement invoices on FDICconnect. A third did not
have Internet access yet and inquired about alternative notice; a
fourth favored the proposal albeit incorrectly describing FDICconnect
as receipt of quarterly certified statement invoices ``via e-mail'';
and one other commenter opposed downloading of the quarterly certified
statement invoices, for security reasons, but favored e-mailing them.
Overall, 17 of the 22 comment letters were generally supportive of the
change to FDICconnect.
Five of the comment letters expressed an overall negative opinion,
but in varying degrees. The five negative comments were based largely
on opposition to the requirement that institutions retrieve their
invoices electronically through FDICconnect. However, none of these
comments opposed the concepts of quarterly certified statement
invoices, eliminating return of correct quarterly certified statement
invoices to the FDIC, or treating amendments as automatic requests for
review of the corresponding assessment payments. One commenter favored
the prior system of mailed certified statements, arguing that it was
uncomplicated and required only a pen and a 37 cent stamp. Another
objected that the FDIC should not ``force'' institutions to access
their own quarterly certified statement invoices on FDICconnect. A
third observed: ``It would be just as efficient, if not more efficient,
to e-mail the certification to a bank's president with a 2nd copy to be
e-mailed to the individual responsible for compiling the Call
Reports.'' Two commenters, however, based their opposition on the fear
that institutions
[[Page 68071]]
would forget to download the invoice every quarter. One of these
complained that electronic retrieval ``Makes it really easy to
overlook, the receiving of the assessment prompts us to reply.'' The
other urged that ``Your proposal adds another level of burden on the
banks by way of them having one more thing they have to remember to do,
without the benefit of receiving a notice, statement or bill.'' The
FDIC's courtesy e-mail notification of quarterly certified statement
invoice availability each quarter may substantially relieve these two
commenters' concerns.
The FDIC believes that the benefits of Internet access to quarterly
certified statements inure to insured institutions and the FDIC.
FDICconnect access to quarterly certified statement invoices is another
step toward providing business processes between insured institutions
and the FDIC electronically. With the advent of electronic business
practices, the effort and expense inherent in mailing out and returning
over 9,000 paper certified statement invoices each quarter can be
eliminated. Further, most insured institutions already have Internet
service and regard access to quarterly certified statements as another
favorable step in the direction of increasing electronic business
practices. As one bank noted ``We have already researched FDICconnect
and plan to sign up.'' A bank CFO was ``pleased that the FDIC continues
to progress towards providing regulatory burden relief to insured
depository institutions under the EGRPRA. I believe that these changes
* * * will reduce time and effort by my institution and others required
to comply with the assessment and certified statement process.'' \5\
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\5\ Accessing quarterly certified statement invoices via
FDICconnect is consistent with the provisions of the Government
Paperwork Elimination Act, under which agencies offer on-line
alternatives to paper-based processes.
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Two of the commenters requested that quarterly certified statement
invoices be e-mailed to institutions rather than downloaded from
FDICconnect. The FDIC, however, believes that the security
infrastructure built into FDICconnect makes retrieval by insured
institutions superior to e-mailing invoices directly to institutions.
For this reason, the FDIC has determined that FDICconnect is the better
approach to electronic dissemination of insured institutions' quarterly
certified statement invoices.\6\ In addition, quarterly certified
statement invoices will be provided as PDF files, as one commenter
requested, a secure format less vulnerable to manipulation.
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\6\ Access to FDICconnect as provided under the final rule
requires that each institution register an employee (or employees)
as FDICconnect Designated Coordinator(s). The Designated
Coordinator(s) will then be able to access the quarterly certified
statement invoice or grant access for that purpose to other
individuals.
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Eleven comment letters specifically requested that the FDIC remind
institutions each quarter to download the invoices and pay the
assessment amounts. Several of the comments supporting the amendments
specifically requested that the FDIC include a notification element in
the final rule. One commenter (a small bank--assets less than $100
million) suggested that ``an e-mail be sent to [the] registered
recipient for each bank. It should be sent when the assessments are
available on the FDICconnect site.'' A medium-size thrift ($500 million
assets) urged: ``e-mail notification is the first thing I thought of
when I began reading the proposed changes. Thus, I find the considered
e-mail notification desirable and would be most appreciative of such a
service.'' Another commenter, a very large institution (assets greater
than $10 billion) said: ``Notification would serve as a reminder,
making daily searches around notice time unnecessary. It would also
ensure timely payments of assessment amounts.'' The Independent
Community Bankers of America also advocated for e-mail notification:
``Such email notification would ensure that banks do not neglect to
check their certified statements online or overlook funding their
account in a timely manner for the FDIC's direct debit.''
The FDIC agrees that it would be beneficial to remind institutions
to retrieve their assessment invoices each quarter. The final rule
states that the FDIC will send e-mail notification to all individuals
at insured institutions who have FDICconnect access to quarterly
certified statement invoices each quarter when the invoices are
available to download (no less that 15 days prior to the ACH payment
date). In addition, the final rule also provides that the FDIC may
communicate with insured institutions by e-mail regarding quarterly
certified statement invoices and other assessment-related matters as
well.
Four commenters requested that the FDIC provide an alternative
invoice delivery method. One commenter indicated that it would be a
burden for institutions to get Internet access and maintain the
hardware necessary to retrieve invoices electronically. Another
commenter--a small thrift (assets less than $100 million)--observed:
``As we do not have internet access, we are concerned whether these
proposals will include some sort of alternative method to obtain our
assessments and invoices.'' In addition, the Independent Community
Bankers of America commented that ``some banks may not have ready
access to the Internet'' and urged the FDIC to offer an alternative
delivery method for those banks, suggesting either fax or mail. The
FDIC recognizes that some institutions may not yet have Internet
access. Accordingly, the final rule includes a process for institutions
without Internet access to request a renewable exemption for up to one
year, during which they will continue to receive their quarterly
certified statement invoices through the mail. Any quarterly certified
statement invoice mailed to an insured institution will be treated in
all respects as if it had been downloaded from FDICconnect. Under this
provision, exemptions may be requested in writing from the Chief of the
Assessments Section, FDIC Division of Finance.
Once institutions have obtained their quarterly certified statement
invoices via FDICconnect, return of those statements to the FDIC--if
the institution believes the invoice is correct--will no longer be
required. If an institution agrees with its quarterly certified
statement invoice, an officer of the institution will simply retain it
in the institution's files for the five-year record retention period
established in the FDI Act. See 12 U.S.C. 1817(b)(5).\7\ Because the
data used to complete the quarterly certified statement invoice has
been previously attested to on the institution's Call Report/TFR,
signing the quarterly certified statement invoice will no longer be
required. Instead, the institution will simply pay the assessment
indicated on the quarterly certified statement invoice--by funding its
designated account and permitting the FDIC's direct debit--and the
invoice data will be deemed certified by the institution in conformity
with both the final rule and the FDI Act.
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\7\ The quarterly certified statement invoice will also remain
accessible on FDICconnect for that same five-year period.
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If an institution disagrees with the Call Report/TFR data used to
compute the assessment amount listed on a quarterly certified statement
invoice, the institution will simply amend its Call Report/TFR data (as
it has in the past), return it to the FDIC, and the FDIC will
automatically treat the amendment as a request for revision of
assessment computation under 12 CFR 327.3(h). Similarly, if an
institution disagrees with the calculation of the assessment amount
(with no change required to Call Report/TFR data), the institution will
simply annotate the quarterly certified statement invoice with the
correct information, certify its accuracy by
[[Page 68072]]
signing, and return it to the FDIC within the specified timeframe. The
FDIC will automatically treat the amended invoice as a request for
revision of assessment computation under section 327.3(h). In either
case, no separately filed request for revision will be needed.\8\ In
the event of an assessment dispute, the FDIC can request from an
insured institution the quarterly certified statement invoice retained
in the institution's files.
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\8\ The requirements for filing a request for review of an
institution's assessment risk classification under 12 CFR 327.4(d)
are unaffected by this change.
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Under the final rule, quarterly certified statement invoices from
prior semiannual periods will still be subject to change should an
institution discover errors and seek to amend its Call Report/TFR. The
FDIC considers such requests for assessment changes for the full five-
year statute of limitations period for assessments. Institutions,
however, must in every case ensure that the debit to the institution's
designated ACH account is adequately funded and authorized.
The final rule provides several benefits to the industry and the
FDIC. By accessing FDICconnect, institutions will obtain their
assessment invoice data more quickly, more reliably, and at less cost
to the FDIC. Lowered costs to the FDIC will ultimately benefit
financial institutions because the FDIC is funded by assessments from
the industry. The official(s) delegated with the responsibility for an
institution's FDIC assessments will retrieve quarterly certified
statement invoices at his or her convenience 24 hours a day (allowing
limited downtime for maintenance during off hours) without mail or
internal routing delays. Institutions may facilitate internal
distribution by authorizing more than one person to access FDICconnect.
Signing and returning correct quarterly certified statement invoices
will be eliminated. Because each quarterly certified statement invoice
is a component of the institution's semiannual certified statement, the
payment and certification processes become synchronized, and the
confusion caused by the prior requirement that institutions return
every other invoice will be eliminated. In addition, insured
institutions' officers will benefit from fewer steps in their review
process. Under the prior system, institutions were required to review
their first invoice data twice--once on the first invoice and again
when it was reiterated on the certified statement. This needless
repetition will be eliminated, reducing the regulatory burden imposed
by the certified statement process. Finally, the amendment will
simplify and streamline the FDIC's review process for assessment
payment changes; when an amended quarterly certified statement invoice
is returned to the FDIC, a separately filed request for revision of
assessment computation will not be required.
III. Effective Date
The final rule will become effective on March 1, 2005. Quarterly
certified statement invoices for the quarter beginning April 1, 2005,
will be available on FDICconnect on or about March 15, 2005. The
delayed effective date will allow time for insured institutions that
have not already registered with FDICconnect to do so.
IV. Paperwork Reduction Act
This final rule results in a reduction in burden for a collection
of information entitled ``Certified Statement for Semi-annual Deposit
Insurance Assessment,'' subject to the Paperwork Reduction Act of 1995
(PRA), 44 U.S.C. 3501 et seq. No person is required to respond to, nor
shall any person be subject to a penalty for a failure to comply with,
a collection of information subject to the requirements of the PRA,
unless that collection of information displays a currently valid Office
of Management and Budget (OMB) control number. The FDIC solicited
public comment on the change in burden for the information collection
in accordance with 44 U.S.C. 3506(c)(2)(B). No comments were received.
The FDIC also submitted the change in burden resulting from this final
rule to OMB for review in accordance with 44 U.S.C. 3507(d). The OMB
has approved the change in burden to the collection of information
under control number 3064-0057.
V. Regulatory Flexibility Act
Pursuant to 5 U.S.C. 605(b) the FDIC certifies that the final rule
will not have a significant economic impact on a substantial number of
small businesses within the meaning of the Regulatory Flexibility Act
(5 U.S.C. 601 et seq.). The final rule affects all insured depository
institutions (there are approximately 9,700 at present). Of the total
number of insured institutions, approximately 60% are small business
entities (assets of $150 million or less). The final rule slightly
reduces the regulatory burden (from an estimated 30 minutes per
response to an estimated 20 minutes per response) imposed by the
certified statement process, and therefore does not have a significant
economic impact on any insured depository institution.
The final rule changes the manner in which insured institutions
file certified statements. Under the final rule, institutions will
access their quarterly certified statement invoices via the FDIC's e-
business Web site, FDICconnect, rather than by mail. No significant
burden is anticipated in this requirement because the FDIC believes
that very few institutions do not already have Internet access or
cannot readily obtain it (the final rule provides for an exemption for
up to one year). Return of correct invoices is eliminated. An insured
institution reviews each quarterly certified statement invoice only
once, unlike the prior system. Only quarterly certified statement
invoices that the institution believes are not correct are returned to
the FDIC, amended to show corrections. The FDIC will treat amended
certified statement invoices as requests for review, eliminating the
need for institutions to make a separate filing under 12 CFR 327.3(h).
The final rule requires that institutions retain a copy of the
quarterly certified statement invoice for their records, but no
significant burden is anticipated in this requirement because insured
institutions already retain copies of their certified statements and
invoices. Access to quarterly certified statement invoices via
FDICconnect will be more secure than the mail, will eliminate much
internal routing of statements within institutions, will permit 24-hour
access to quarterly certified statement invoices (with minimal
maintenance downtime), and will eliminate significant FDIC tracking and
processing. In short, the final rule will reduce the regulatory burden
on insured institutions.
VI. The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families
The FDIC has determined that the final rule will not affect family
well-being within the meaning of section 654 of the Treasury and
General Government Appropriations Act, enacted as part of the Omnibus
Consolidated and Emergency Supplemental Appropriations Act of 1999
(Public Law 105-277, 112 Stat. 2681).
VII. Plain Language Requirement
Section 722 of the Gramm-Leach-Bliley Act (GLBA), 15 U.S.C. 6801 et
seq., requires banking agencies to use plain language in all proposed
and final rules published after January 1, 2000. The proposed rule
requested comments
[[Page 68073]]
on how the rule might be changed to reflect the requirements of GLBA.
No GLBA comments were received.
VIII. Small Business Regulatory Enforcement Fairness Act
The Office of Management and Budget has determined that the final
rule is not a ``major rule'' within the meaning of the relevant
sections of the Small Business Regulatory Enforcement Fairness Act of
1996 (SBREFA) (5 U.S.C. 801 et seq.). As required by SBREFA, the FDIC
will file the appropriate reports with Congress and the General
Accounting Office so that the final rule may be reviewed.
List of Subjects in 12 CFR Part 327
Assessments, Bank deposit insurance, Banks, Banking, Financing
Corporation, Freedom of information, Hearing and appeal procedures,
Record retention, Reporting and record keeping requirements, Savings
associations.
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For the reasons stated in the preamble, the Board of Directors of the
Federal Deposit Insurance Corporation hereby amends part 327 of Title
12 of the Code of Federal Regulations as follows:
PART 327--ASSESSMENTS
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1. The authority citation for part 327 continues to read as follows:
Authority: 12 U.S.C. 1441, 1441b, 1813, 1815, 1817-1819; Pub. L.
104-208, 110 Stat. 3009-479 (12 U.S.C. 1821).
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2. Section 327.2 of subpart A is revised to read as follows:
Sec. 327.2 Certified statements.
(a) Required. (1) Each insured depository institution shall file
and certify its semiannual certified statement in the manner and form
set forth in this section.
(2) The semiannual certified statement shall be comprised of the
two quarterly assessment invoices issued during each semiannual period
as prescribed in Sec. 327.3(c) and (d). The two quarterly certified
statement invoices combined shall reflect the institution's semiannual
assessment base, assessment computation, and semiannual assessment
amount.
(3) Any rule applicable to the certified statement shall apply to
each quarterly certified statement invoice.
(b) Availability and access. (1) The Corporation shall make
available to each insured depository institution via the FDIC's e-
business website FDICconnect two quarterly certified statement invoices
during each semiannual period.
(2) Insured depository institutions shall access their quarterly
certified statement invoices via FDICconnect, unless the FDIC provides
notice to insured depository institutions of a successor system. In the
event of a contingency, the FDIC may employ an alternative means of
delivering the quarterly certified statement invoices. A quarterly
certified statement invoice delivered by any alternative means will be
treated as if it had been downloaded from FDICconnect.
(3) Institutions that do not have Internet access may request a
renewable one-year exemption from the requirement that quarterly
certified statement invoices be accessed through FDICconnect. Any
exemption request must be submitted in writing to the Chief of the
Assessments Section.
(4) Each quarter, the FDIC will provide courtesy e-mail
notification to insured depository institutions indicating that new
quarterly certified statement invoices are available and may be
accessed on FDICconnect. E-mail notification will be sent to all
individuals with FDICconnect access to quarterly certified statement
invoices.
(5) E-mail notification may be used by the FDIC to communicate with
insured depository institutions regarding quarterly certified statement
invoices and other assessment-related matters.
(c) Review by institution. The president of each insured depository
institution, or such other officer as the institution's president or
board of directors or trustees may designate, shall review the
information shown on each quarterly certified statement invoice.
(d) Retention by institution. If the appropriate officer of the
insured depository institution agrees that to the best of his or her
knowledge and belief the information shown on the quarterly certified
statement invoice is true, correct and complete and in accordance with
the Federal Deposit Insurance Act and the regulations issued under it,
the institution shall pay the amount specified on the invoice and shall
retain the quarterly certified statement invoice in the institution's
files for five years as specified in section 7(b)(5) of the Federal
Deposit Insurance Act.
(e) Amendment by institution. If the appropriate officer of the
insured depository institution determines that to the best of his or
her knowledge and belief the information shown on the quarterly
certified statement invoice is not true, correct and complete and in
accordance with the Federal Deposit Insurance Act and the regulations
issued under it, the institution shall pay the amount specified on the
invoice, and may:
(1) Amend its Report of Condition, or other similar report, to
correct any data believed to be inaccurate on the quarterly certified
statement invoice; amendments to such reports timely filed under
section 7(g) of the Federal Deposit Insurance Act but not permitted to
be made by an institution's primary Federal regulator may be filed with
the FDIC for consideration in determining deposit insurance
assessments; or
(2) Amend and sign its quarterly certified statement invoice to
correct a calculation believed to be inaccurate and return it to the
FDIC by the quarterly payment date for that invoice as specified in
Sec. 327.3(c) and (d).
(f) Certification. Data used by the Corporation to complete the
quarterly certified statement invoice has been previously attested to
by the institution in its Reports of Condition, or other similar
reports, filed with the institution's primary Federal regulator. When
an insured institution pays the amount shown on the quarterly certified
statement invoice and does not correct that invoice as provided in
paragraph (e) of this section, the information on that invoice shall be
deemed true, correct, complete, and certified for purposes of paragraph
(a) of this section and section 7(c) of the Federal Deposit Insurance
Act.
(g) Requests for revision of assessment computation. (1) The timely
filing of an amended Report of Condition or other similar report, or an
amended quarterly certified statement invoice, that will result in a
change to deposit insurance assessments owed or paid by an insured
depository institution shall be treated as a timely filed request for
revision of computation of quarterly assessment payment under Sec.
327.3(h).
(2) The rate multiplier shown on the quarterly certified statement
invoice shall be amended only if it is inconsistent with the assessment
risk classification assigned to the institution in writing by the
Corporation for the current semiannual period pursuant to Sec.
327.4(a). Agreement with the rate multiplier shall not be deemed to
constitute agreement with the assessment risk classification assigned.
By order of the Board of Directors.
Dated in Washington, DC, this 15th day of November, 2004.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 04-25804 Filed 11-22-04; 8:45 am]
BILLING CODE 6714-01-P