[Federal Register: January 23, 2003 (Volume 68, Number 15)]
[Notices]
[Page 3318-3324]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23ja03-141]
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DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
Proposed Agency Information Collection Activities; Comment
Request--Thrift Financial Report
AGENCY: Office of Thrift Supervision (OTS), Treasury.
ACTION: Notice and request for comments.
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SUMMARY: The Department of the Treasury invites the general public and
other Federal agencies to comment on proposed and continuing
information collections, as required by the Paperwork Reduction Act of
1995, 44 U.S.C. 3507. Today, the Office of Thrift Supervision (OTS)
within the Department of the Treasury solicits comments on proposed
changes to the Thrift Financial Report (TFR), effective with the March
31, 2004 report. A proposal to amend Schedule CMR, Consolidated
Maturity and Rate, a schedule that addresses interest rate risk, will
be published separately at a later date.
The following subjects are discussed in more detail below:
(1) Definition of Mortgage Loans;
(2) Mortgage Backed Securities;
(3) Asset-backed Securities;
(4) Junior liens;
(5) Multifamily mortgages;
(6) General Valuation Allowances;
(7) Credit Cards;
(8) Servicing Assets in Schedule SC;
(9) Bank-Owned Life Insurance;
(10) Minority Interest on the Balance Sheet;
(11) Accumulated Other Comprehensive Income;
(12) Optional Narrative Statement;
(13) FHLB Dividend Income;
(14) Goodwill Expense;
(15) Schedule VA, Valuation Allowance Reconciliation;
(16) Troubled Debt Restructured;
(17) Guaranteed Loans Past Due;
(18) Unused Balances of Credit Cards and Home Equity Lines of
Credit;
(19) Deletion of Lines in Schedule CF (Cash Flow);
(20) Refinancing Loans
(21) Nonmortgage Loan Activity;
(22) Mortgage Derivative Securities Activity Detail;
(23) Deposit Information and Deposit Insurance Premium Assessment
Information;
(24) Summary of Changes in Equity Capital;
(25) Thrift Investment in Service Corporations;
(26) Savings Association and Subsidiary Web Site Addresses;
(27) IRS Domestic Building and Loan Association (DBLA) Test;
(28) Mutual Fund and Annuity Sales;
(29) Transactions with affiliates;
(30) Average Balance Sheet Data;
(31) Schedule SB, Small Business Loans;
(32) Holding Company Information;
(33) Reporting Frequency of Schedule CSS (Subordinate Organization
Schedule);
(34) Consolidation of Subordinate Organizations;
(35) Schedule CCR (Capital Requirement);
(36) Shorter Deadlines for TFR, Including Schedules HC and CMR.
At the end of the comment period, the comments and recommendations
received will be analyzed to determine the extent to which OTS should
modify the proposed revisions prior to giving its final approval. OTS
will then submit the revisions to the Office of Management and Budget
(OMB) for review and approval.
DATES: Submit written comments on or before March 24, 2003.
ADDRESSES: Send comments to Information Collection Comments, Chief
Counsel's Office, Office of Thrift Supervision, 1700 G Street, NW.,
Washington, DC 20552, Attention 1550-0023. Hand deliver comments to the
Guard's Desk, east lobby entrance, 1700 G Street, NW., between 9 A.M.
and 4 P.M. on business days. Send facsimile transmissions to FAX Number
(202) 906-6518. Send e-mails to infocollection.comments@ots.treas.gov.
All comments should refer to ``TFR Revisions, OMB No. 1550-0023,'' and
include your name, company, and telephone number. OTS will post
comments and the related index on the OTS Internet site at: http://www.ots.treas.gov.
In addition, interested persons may inspect comments
at the Public Reading Room, 1700 G Street, NW., Washington, DC 20552 by
appointment. To make an appointment, call (202)906-5922, send an e-mail
to public.info@ots.treas.gov, or
[[Page 3319]]
send a facsimile transmission to (202)906-7755. Appointments will be
scheduled on business days between 10 AM and 4 PM.
FOR FURTHER INFORMATION: You can access sample copies of the proposed
March 2004 TFR form on OTS's web site, www.ots.treas.gov, or you may
request them by electronic mail from tfr.instructions@ots.treas.gov;
from Trudy Reeves, Senior Financial Reporting Analyst, National
Systems, (202) 906-7317, Office of Thrift Supervision, 1700 G Street,
NW., Washington, DC 20552; or from Marilyn K. Burton, OTS Paperwork
Clearance Officer, (202) 906-6467, Office of Thrift Supervision, 1700 G
Street, NW., Washington, DC 20552, by electronic mail at
marilyn.burton@ots.treas.gov.
SUPPLEMENTARY INFORMATION:
Title: Thrift Financial Report.
OMB Number: 1550-0023.
Form Number: OTS 1313.
Abstract: All OTS-regulated savings associations must comply with
the information collections described in this notice. OTS collects this
information each calendar quarter, or less frequently if so stated. OTS
needs this information to monitor the condition, performance, and risk
profile of the savings association industry.
Current Actions: After reviewing its current supervisory and
examination needs, OTS proposes a number of revisions to the Thrift
Financial Report (TFR), effective with the March 31, 2004 report. The
proposed revisions will enhance the usefulness of the TFR from a
supervisory prospective and will complement the federal banking
agencies' emphasis on risk-focused supervision.
OTS had proposed in August 2000 to collect most of the data being
proposed today beginning with the first quarter of 2001. However, OTS
decided to postpone certain changes to the TFR until March 2004. The
original proposal can be accessed on the OTS web site at http://www.ots.treas.gov/docs/86233.pdf
.
This proposal also addresses certain aspects of sections 307(b) and
(c) of the Riegle Community Development and Regulatory Improvement Act
of 1994 (the Riegle Act). These sections direct the federal banking
agencies to work jointly toward more uniform reporting, review the
information that institutions currently report, and eliminate existing
reporting requirements that are not warranted for safety and soundness
or other public policy purposes.
Several reporting changes being proposed would introduce more
uniformity for savings associations, banks, and bank holding companies
to certain aspects of regulatory reporting. In this regard, over the
past several years, the federal banking regulators have sought greater
consistency among the reporting requirements imposed on savings
associations, banks, and bank holding companies.
Increasing the uniformity of reporting requirements, among the
different types of institutions supervised by the federal financial
institution regulators, is a necessary step toward achieving the goal
of a single set of reporting requirements for the filing of core
information that is set forth in section 307(b) of the Riegle Act.
1. Definition of Mortgage Loans
We propose redefining mortgages for TFR reporting to encompass all
real estate loans subject to 12 CFR 560.100-101 (real estate lending
standards) and OTS Thrift Bulletin 72a. This revised definition would
include all loans predicated upon a security interest in real property.
All revolving home equity loans and second mortgages would be reported
as mortgages, not as consumer loans. The only loans that would be
reported as nonmortgage loans are unsecured loans and those that are
otherwise substantially secured by collateral other than real estate,
where a mortgage was taken as an abundance of caution (for example, an
auto loan with an incidental lien on a residence), and where the terms
as a consequence have not been made more favorable than they would have
been in the absence of the lien. If a loan can be placed under more
than one classification (for example, when a loan to finance a small
business is primarily secured by a single-family residence), the
institution may classify the loan as either single-family or commercial
for purposes of HOLA percent-of-assets limitations and for purposes of
the TFR. However, even if the institution places such a loan in a non-
real-estate category, it is subject to Sec. 560.100-101.
The current criteria for classification as a mortgage--that a loan
is fully secured by the property and that an appraisal or other
evaluation has been performed--would no longer apply. If this change in
mortgage loan definition is adopted, mortgage loan classification in
the TFR would be more consistent with the mortgage loan classification
by commercial banks on the Call Report. Increasing uniformity between
the TFR and the Call Report is a step toward achieving the goal of a
single set of reporting requirements for the filing of core information
that is set forth in section 307(b) of the Riegle Act.
2. Mortgage Backed Securities
We propose combining mortgage-backed pass-through securities and
mortgage derivatives into one section in the balance sheet (Schedule
SC); breaking out insured or guaranteed pass-through securities into
two lines:
(1) Guaranteed by GNMA; and
(2) Issued by FNMA and FHLMC.
We propose breaking out mortgage derivative securities into three
lines:
(1) Those issued or guaranteed by FNMA, FHLMC, or GNMA;
(2) Those collateralized by securities issued or guaranteed by
FNMA, FHLMC, or GNMA; and
(3) All others.
This would provide consistent information with the commercial bank
Call Report, would be more consistent with the presentation of
mortgage-backed securities in financial statements included with
filings under the Securities and Exchange Act of 1934, and would
provide information on the degree of risk of the derivative investment.
Consistent with the commercial bank Call Report, mortgage-backed bonds
would be reported with other investment securities on SC185.
3. Asset-backed Securities
OTS proposes to add a line under ``Investment Securities'' on the
balance sheet (Schedule SC) to collect securities collateralized by
nonmortgage loans (asset-backed securities), including securities
backed by credit cards, other consumer loans, and commercial loans.
Asset-backed securities are currently reported with other types of
investment securities on SC185. The addition of this line item would
provide important information concerning the holdings of these
securities.
4. Junior Liens
OTS proposes to separately collect first liens and junior liens
under ``Permanent Mortgages'' on 1-4 dwelling units in the balance
sheet (Schedule SC) to better monitor the riskier junior lien market.
Currently, the TFR does not collect data on single-family residential
junior liens. This change would make the TFR mortgage loan breakdown
consistent with the commercial bank Call Report. This change would also
be made to the breakdown of residential mortgages in the charge-off and
recovery data on Schedule VA and past-due data in Schedule PD.
5. Multifamily Mortgages
OTS proposes to rename ``5 or More Dwelling Units'' to
``Multifamily (5 or more) Residential Properties'' throughout the TFR.
The use of
[[Page 3320]]
``multifamily residential properties'' conforms to the wording in the
OTS capital regulations, other OTS regulations, and in the commercial
bank Call Report, clarifying that these are the same type of loans.
Schedules CCR and CMR currently use the term ``multifamily residential
mortgages.''
6. General Valuation Allowances
OTS proposes removing from Schedule SC general valuation allowances
on investment securities (SC199), real estate held for investment
(SC481), and equity investments (SC529). This would require savings
associations to report these items net of general valuation allowances,
if there are any. It is OTS's opinion that a general valuation
allowance on these items should be rare.
7. Credit Cards
OTS proposes to collect credit cards separately under the heading
``Consumer Loans.'' Currently, credit cards are combined with other
similar plans such as overdraft lines on checking accounts. These other
similar plans would be reported with ``Other Consumer Loans.'' Because
the change in the definition of mortgage loans mentioned above results
in restructuring the consumer loan categories in Schedule SC, we would
eliminate the distinction between closed-end and open-end consumer
loans. Consequently, the line for ``Other, Including Leases'' would
contain both closed-end loans and open-end loans such as those
currently reported with credit cards. Credit cards would be broken out
separately on the balance sheet (Schedule SC), in charge-offs and
recoveries (Schedule VA), and in past due and nonaccrual (Schedule PD).
This presentation would be consistent with the Call Report.
8. Servicing Assets in Schedule SC
OTS proposes adding a section in Schedule SC to characterize
servicing assets as intangibles, as required by Financial Accounting
Standards Board (FASB) Statement No. 142. No new lines would be added;
this change would simply regroup intangible assets. Under this proposal
a new subheading ``Intangible Assets'' would be added. Grouped under
this heading would be Servicing Assets on Mortgage Loans (line SC642),
Servicing Assets on Nonmortgage Loans (line SC644), and Goodwill and
Other Intangibles (line SC660).
9. Bank-Owned Life Insurance
OTS proposes adding two lines in Schedule SC (Statement of
Condition) to collect balances of key person life insurance and other
bank-owned life insurance. These lines would facilitate monitoring of
the level of bank-owned life insurance held by thrifts, an amount that
has risen considerably over the past several years. Key person life
insurance is defined as: life insurance where the intended purpose is
to provide the institution protection against the potential for losses
arising from the untimely death of a key employee or borrower. These
policies are generally surrendered when the key employee leaves the
institution or when the borrower pays off his loan. OTS currently
collects this information in Other Assets (SC690).
10. Minority Interest on the Balance Sheet
OTS proposes changing the caption of SC799 from ``Redeemable
Preferred Stock and Minority Interest'' to ``Minority Interest.'' The
FASB has on their agenda consideration of a change in the financial
reporting of redeemable preferred stock. It is anticipated that a
statement will be released in 2003, to be effective in 2004. This
change likely will clarify that redeemable preferred stock and similar
instruments should be reported as borrowings and will no longer be
reported in the balance sheet mezzanine area. We may be required to
make additional changes to the TFR based on FASB's final pronouncement
at a later date.
11. Accumulated Other Comprehensive Income
OTS proposes to add a subsection in the equity section of the
balance sheet (Schedule SC) for accumulated other comprehensive income
to conform to generally accepted accounting principles (GAAP). This
section would include the existing line for unrealized gains (losses)
on available-for-sale securities and two additional lines for:
(1) Gains (losses) on cash flow hedges; and
(2) Other, including foreign currency translation adjustments and
minimum pension liability adjustments.
This change would put Schedule SC in conformity with GAAP, as
described in FASB Statement No. 130.
12. Optional Narrative Statement
OTS proposes adding a space for thrift management to submit a brief
narrative statement concerning data reported in their TFR. This would
permit institutions to provide narrative information on significant
transactions, mergers, organizational adjustments, reclassifications,
prior period adjustments, etc., of which they want OTS and the public
to be aware. The narrative statement is optional and, therefore, poses
no additional burden. The contents of the narrative would be the
responsibility of management, would not be edited or screened by OTS,
and would be released to the public.
13. Federal Home Loan Bank (FHLB) Dividend Income
OTS proposes adding a separate line in Schedule SO (Statement of
Operations) for FHLB dividend income. FHLB dividends comprise a
relatively large portion of net income for many institutions. Because
of the magnitude of FHLB dividend income, we currently require the
reporting of FHLB dividends in the detail of other noninterest income,
leaving only two detail lines for other noninterest income. Creating a
separate line for FHLB dividends would provide us with three detail
lines describing other noninterest income as originally intended.
14. Goodwill Expense
OTS proposes revising the title of SO560 from ``Amortization of
Goodwill'' to ``Goodwill and Other Intangibles Expense'' to provide for
periodic write-down of goodwill along with amortization of other
intangibles, pursuant to FASB Statement No. 142.
15. Schedule VA, Valuation Allowance Reconciliation
OTS proposes to change the caption in the last column of the
charge-off and recovery schedule from ``Total'' to ``Adjusted Net
Charge-offs'' to better reflect its purpose.
16. Troubled Debt Restructured
OTS proposes to break out Troubled Debt Restructured (TDR) reported
on VA941 into TDR in compliance with modified terms and past-due TDR.
We would delete VA941 (TDR) and replace it with a line for TDR in
compliance. We would add new lines in Schedule PD for each of the past
due categories (30-89 days, 90 days or more, and nonaccrual) for past-
due TDR included in Schedule PD. This would give OTS important
monitoring information concerning the relative risk of the TDR on the
books of an institution. It would also permit industry analysts to
better identify assets with possible problems, since TDR in compliance
may not present as much of a risk. This corresponds to the Call Report
break out of TDR--troubled debt restructured and in compliance with
modified terms, RC-C, Part I, Memoranda item 1 and troubled debt
restructured past due, which is reported on RC-N, Memoranda item 1.
[[Page 3321]]
17. Guaranteed Loans Past Due
OTS proposes adding a line in each of the past due categories (30-
89 Days, 90 Days or More, and Nonaccrual) in Schedule PD for the
guaranteed portion of loans and leases that are wholly or partially
guaranteed by the U.S. Government or Agency thereof. All loans,
regardless of any guarantee, are included in Schedule PD, and all of
Schedule PD is released to the public. The addition of this data would
benefit institutions. Because investment and loan ratings are based on
amounts reported in Schedule PD, without this new line, delinquent
guaranteed loans could bring a rating down when in fact these loans may
present no credit risk to the institution if they are properly
underwritten and administered. This line is included in the Call Report
on RC-N item 10.a.
18. Unused Balances of Credit Cards and Home Equity Lines of Credit
OTS proposes to add two lines in Schedule CC (Commitment and
Contingencies) to collect data on the unused balance of credit cards,
and outstanding home equity lines of credit that have not yet been
drawn down; currently these amounts are included with Open-end Consumer
Lines on CC410.
19. Deletion of Lines in Schedule CF (Cash Flow)
OTS proposes to delete the following lines that are no longer used:
[sbull] Mortgage Pool Securities Activity--OTS proposes combining
the activity of mortgage pool securities secured by fixed-rate
mortgages and those secured by variable-rate mortgages in Schedule CF
(Cash Flow) (lines CF140 through CF170) into one line for purchases and
one line for sales. We feel the breakdown of activity between fixed and
variable rate is no longer necessary.
[sbull] Mortgage Loan Activity--OTS proposes combining the activity
of newly built and previously occupied permanent mortgages on
residential property in Schedule CF into one line collecting these
data. The breakdown between newly built and previously occupied is no
longer considered necessary for supervisory purposes.
20. Refinancing Loans
In order to track total refinancing loans, OTS proposes to change
the definition of CF360, Refinancing Loans, to include not only
refinanced loans where the reporting institution held the original
mortgage, but also refinanced loans where another institution held the
original mortgage. Line CF360 would be deleted and replaced with a new
line using the revised definition. This would provide OTS with more
complete information when assessing the amount of refinancing activity
in an institution or in a geographical area.
21. Nonmortgage Loan Activity
Because nonmortgage loans have become a larger, and, in most cases,
riskier part of the thrift industry's loan portfolio, OTS proposes
adding two lines capturing sales of commercial and consumer nonmortgage
loans. Schedule CF currently reconciles the activity in mortgage loans,
deposits, and mortgage pool securities; however, nonmortgage commercial
and consumer loans have only one line each for originations and
purchases. These lines along with the proposed lines would improve
reconciliation of nonmortgage loans and would indicate the volume of
nonmortgage loans that are acquired and sold within the same quarter.
22. Mortgage Derivative Securities Activity Detail
OTS proposes adding activity detail on mortgage derivative
securities, i.e., purchases, sales, and other balance changes. For some
institutions, period-to-period swings in these assets can be more
significant than in their loan portfolio balances. This section would
be placed in Schedule CF immediately following purchases and sales of
mortgage pool securities.
23. Deposit Information and Deposit Insurance Premium Assessment
Information
OTS proposes to move the deposit data and deposit insurance premium
assessment information from Schedule SI (Supplemental Information) to a
new schedule, Schedule DI (Deposit Information). Schedule SI was
designed to contain supplementary data not collected elsewhere in the
TFR. Because the number of items collected for deposit insurance
premium assessment purposes has increased substantially over the past
ten years, we believe it is preferable to move these data items to a
separate schedule. This schedule would correspond to Call Report
Schedules RC-E and RC-O.
The Federal Deposit Insurance Corporation (FDIC) Assessments Branch
has requested that we re-establish a line that was deleted in 1996 that
collected reciprocal balance accounts deducted from insured deposits in
calculating the deposit insurance premium. We propose adding this line,
which would be collected in the new Schedule DI and would be captioned:
``Adjustments to Demand Deposits for Reciprocal Demand Balances with
Commercial Banks and Other Savings Associations.'' These reciprocal
demand balances are currently collected along with other items in
SI247. This line corresponds to Call Report RC-O Line 11.a.
OTS also proposes adding balance information on:
[sbull] Transaction accounts,
[sbull] Money market deposit accounts,
[sbull] Passbook accounts, and
[sbull] Time deposits.
Similar data are currently collected for those institutions that
file Schedule CMR, but is not publicly released. Placing these balances
on the new Schedule DI would provide publicly available data for all
institutions, consistent with the breakdown of deposits in the Call
Report, RC-E.
24. Summary of Changes in Equity Capital
Currently SI670, Other Adjustments to Equity Capital, is made up of
various items and, for most savings associations, this miscellaneous
data item is the largest reconciling amount to capital. To provide a
better understanding of this adjustment, OTS proposes adding the
following three lines in the reconciliation of equity capital in
Schedule SI:
[sbull] Other Comprehensive Income (an amount that can be generated
in the electronic filing software and would require no input by the
reporting savings association);
[sbull] Other Capital Contributions (where no stock is issued); and
[sbull] Prior Period Adjustments (for periods that can no longer be
amended).
We would change the title of this section to ``Summary of Changes
in Equity Capital.'' The inclusion of current comprehensive income in
the summary of changes in equity capital would put this reconciliation
in conformity with GAAP, as described in FASB Statement No. 130.
25. Thrift Investment in Service Corporations
OTS proposes adding a line in Schedule SI to collect the thrift's
aggregate investment in service corporations. The definition of service
corporation investment would include the thrift's total exposure, that
is, all equity investments, unsecured loans, and third party
guarantees. Under OTS rules, a thrift can make investments in service
corporations and lower-tier entities. For determining compliance with
lending and investment limits, a federal thrift has the flexibility to
place loans to service corporations or lower-tier entities in either
the service corporation investment category or another applicable
investment category
[[Page 3322]]
(such as its commercial lending authority), consistent with the lending
and investment powers set forth in Sec. 560.30 (Lending and Investment
Powers of Federal Savings Associations). Collecting this data will
enable OTS to monitor a thrift's total investment in service
corporations and lower-tier entities.
26. Savings Association and Subsidiary Web Site Addresses
OTS proposes the addition of an Internet home page address and
transactional web site addresses as defined in Sec. 555.300(b) to
assist in monitoring the activities of savings associations on their
web sites. These data items would be collected in Schedule SQ
(Supplementary Questions). OTS also proposes adding a similar data item
to collect transactional web site addresses of subsidiaries in Schedule
CSS (Subordinate Organization Schedule).
27. IRS Domestic Building and Loan Association (DBLA) Test
OTS proposes to add a line for those savings associations that do
not use the Home Owners' Loan Act (HOLA) Qualified Thrift Lender (QTL)
test, but instead use the IRS Domestic Building and Loan Association
(DBLA) test. The addition of this line would more exactly identify
savings associations that are using the IRS DBLA test and would enable
the regions to better monitor the QTL status of those associations.
This line would be added in Schedule SI following the lines for QTL. It
would be required only of those associations using the DBLA test, who
are currently required to calculate their DBLA test monthly. Thus, the
addition of this line would pose no additional burden.
28. Mutual Fund and Annuity Sales
OTS proposes eliminating the collection of data on quarterly sales
of annuities, mutual funds, and proprietary products, SI800 through
SI850. In place of these items, each savings association would respond
to a ``yes'' or ``no'' question asking whether it sells private label
or third party mutual funds and annuities. In addition, savings
associations would report the total assets under their management in
proprietary mutual funds and annuities. The data item collecting fee
income from the sale and servicing of mutual funds and annuities would
be retained. For savings associations with proprietary mutual funds and
annuities, reporting the amount of assets under management should be
significantly less burdensome than reporting the quarterly sales volume
for these proprietary products. These changes were made to the Call
Report in March 2001.
29. Transactions with Affiliates
OTS proposes adding memoranda information in Schedule SI on certain
transactions the savings association has with its affiliates. The term
``affiliate'' is defined in 12 CFR 563.41(b)(1). For purposes of the
collection of this information, ``affiliate'' is defined as the holding
company(s), any holding company subsidiary(s), a bank or thrift
subsidiary of the savings association, and any company controlled by or
for the benefit of shareholders or which shares a majority of the same
directors with the savings association or holding company. These data
generally would not include transactions with subsidiaries of the
savings association. Additionally, any transaction by a savings
association or its subsidiaries with any person or entity is a
transaction with an affiliate if the proceeds of the transaction are
used for the benefit of, or transferred to, an affiliate.
The items to be collected are:
[sbull] Fees/expenses paid by the thrift to affiliates during the
quarter including interest, management and service fees, tax sharing
payments, and other general and administrative expenses;
[sbull] The amount of assets sold to affiliates during the quarter;
[sbull] The outstanding balance at the end of the quarter of:
--Assets purchased from affiliates,
--Commitments to purchase assets from affiliates, and
--extensions of credit to affiliates;
[sbull] The percentage of the thrift's directors who are also
directors of affiliates; and
[sbull] The percentage of the thrift's officers who are also
officers of the affiliates.
More complex business plans and increased merger and acquisition
activity have changed the nature of the relationship of the thrift with
its affiliates. OTS proposes to collect this information for the
purpose of off-site monitoring and to more precisely scope its on-site
examinations.
30. Average Balance Sheet Data
OTS proposes to add the collection of average balances for the
following selected balance sheet items:
[sbull] Total assets (SC60);
[sbull] Deposits and Investments, excluding cash and non-interest-
earning items (SC10 less SC110);
[sbull] Mortgage Loans and Mortgage-Backed Securities;
[sbull] Nonmortgage Loans;
[sbull] Deposits and Escrows; and
[sbull] Total Borrowings.
Associations may calculate the average balances based upon close-
of-business balances using either all the business days in the quarter
or weekly balances, using one day of the week consistently, other than
Friday. Associations with less than $100 million in total assets may
calculate average balance based upon month-end averages. Average
balances for securities would be calculated based upon the following:
for debt securities use amortized cost and for equity securities use
historical cost, except for those securities held in a trading account
for which use determinable fair values. This information would produce
more accurate data for use in ratio analysis; would avoid skewed data
when restructurings, sales, and acquisitions occur; and would enable
calculation of better yield and cost data. The Call Report collects
average data in Schedule RC-K.
31. Schedule SB, Small Business Loans
OTS proposes adding a question at the beginning of Schedule SB
asking: ``Do you have any small business loans to report in this
schedule?'' This question would permit those institutions not required
to file this schedule to respond ``no'' and omit the rest of the
schedule. Currently institutions must answer the first three questions
on Schedule SB even if they have no loans to report.
32. Holding Company Information
More complex business plans, advances in technology, increased
merger and acquisition activity, and earnings pressures have changed
the nature of the relationship of the thrift with its affiliates. OTS
seeks to more fully leverage its collection of holding company
information for the purpose of improving off-site monitoring and to
more precisely scope its on-site examinations. Therefore, OTS proposes
to expand Schedule HC (Thrift Holding Company) to collect additional
data on thrift holding companies and intends to substantially reduce
the data collection in the H-b(11), the details of which will be
announced at a later date. Bank holding companies are excluded from
reporting. Schedule HC is not released to the public. The changes to
Schedule HC would include:
[sbull] Replace the question HC120 (is any company in this holding
company's corporate structure required to file periodic securities
disclosure documents with the SEC, pursuant to the Securities Exchange
Act of 1934?) with a new data item collecting the stock exchange ticker
symbol.
[[Page 3323]]
[sbull] Add SEC number.
[sbull] Add web site address.
[sbull] For the consolidated entity:
--Add a line for minority interest.
--Replace HC510 (Intangible Assets and Deferred Policy Acquisition
Costs) and HC515 (Servicing Assets included in HC510) with three lines:
(1) Intangible assets--servicing assets; (2) intangible assets--other;
and (3) deferred policy acquisition costs.
--Replace HC520 (Debt Maturing Within the Next 12 Months) and HC530
(All Other Debt) with the three lines: (1) Trust preferred securities;
(2) other debt maturing within 12 months; and (3) other debt maturing
beyond 12 months.
--Replace HC560 (Interest Expense for the Quarter) with two items: (1)
Interest expense on trust preferred securities and (2) interest expense
on all other debt.
[sbull] Add the following parent-only financial information:
--Total assets
--Total liabilities
--Minority interest
--Total equity
--Net income for the quarter
--Receivable from subsidiaries--Thrift
--Receivable from subsidiaries--Other
--Investment in subsidiaries--Thrift
--Investment in subsidiaries--Other
--Intangible assets--Servicing assets
--Intangible assets--Other
--Deferred policy acquisition costs
--Payable to subsidiaries--Thrift: Transactional
--Payable to subsidiaries--Thrift: Debt
--Payable to subsidiaries--Other: Transactional
--Payable to subsidiaries--Other: Debt
--Other debt maturing within 12 months
--Other debt maturing beyond 12 months
--Dividends received from thrift subsidiaries
--Dividends received from other subsidiaries
--Interest expense--on all other debt
--Other cash and cash equivalents received from thrift during the
quarter
--Net cash flow from operations for the quarter.
[sbull] Add the following supplemental questions:
--Have any holding company subsidiaries been formed, sold, or dissolved
during the quarter?
--Are you or any of your subsidiaries functionally regulated:
--Registered broker-dealers regulated by the SEC and NASD?
--Registered investment advisers regulated by the SEC?
--Registered investment companies regulated by the SEC?
--Insurance companies and agencies regulated by the states?
--Entities regulated by the Commodity Futures Trading Commission?
--Has the holding company appointed any new senior executive officers
or directors during the quarter?
--Has the holding company entered into a new pledge, or changed the
terms and conditions of any existing pledge, of capital stock of any
subsidiary savings association that secures short-term or long-term
debt or other borrowings of the holding company?
--Have the rights of the holders of any class of securities of the
holding company or its subsidiaries changed during the quarter?
--Has there been any default in the payment of principal, interest, a
sinking or purchase fund installment, or any other default of the
holding company or any of its subsidiaries during the quarter?
--Has there been a change in independent auditors during the quarter?
--Has there been a change during the quarter in the fiscal year-end
month?
--Do you or any of your GAAP consolidated subsidiaries (other than the
reporting thrift) control other U.S. depository institutions?
[mshbox] If so, provide the FDIC certificate number.
--Do you or any of your GAAP consolidated subsidiaries control a
foreign depository institution?
The holding company would provide this information to the savings
association, and the holding company schedule would continue to be
filed as part of the TFR.
34. Reporting Frequency of Schedule CSS (Subordinate Organization
Schedule)
In 1996, OTS reduced the reporting frequency of Schedule CSS from
quarterly to annually in order to reduce reporting burden of the
industry. While annual reporting of subordinate organizations was
adequate at that time, we now have a need for more frequent reporting
and propose to again collect Schedule CSS quarterly. The basic data for
all subordinate organizations are contained in the OTS electronic
filing software database; therefore, institutions would only be
required to make necessary changes to the subordinate organization
database and update financial data.
34. Consolidation of Subordinate Organizations
OTS proposes revising Schedule CSS to include the following
question: ``Is this entity a GAAP-consolidated subsidiary of the parent
savings association?'' The addition of this question would provide
information as to whether the assets and liabilities of the subordinate
organization are consolidated with the parent savings association in
Schedule SC. An institution would respond ``No'' if the subordinate
organization was not consolidated and was accounted for using the
equity or cost method of accounting.
35. Schedule CCR (Capital Requirement)
OTS proposes to update Schedule CCR by making the following
changes:
[sbull] Renumber the lines in Tier 1 Capital to be sequential;
[sbull] Eliminate the lines that are either obsolete or seldom
used;
[sbull] Add lines for ``Other'' in each category under Tier 1
Capital and Supplementary Capital;
[sbull] Change the caption of CCR125 to ``Minority Interest and
REIT Preferred Stock of Includable Consolidated Subsidiaries;'' the
instructions for CCR125 were expanded in June 2002 to include REIT
preferred stock;
[sbull] Change the caption of CCR115 and CCR155 to ``Goodwill and
Certain Other Intangible Assets;'' adding the word ``Certain'' to these
lines, since servicing rights are included as intangible assets under
FASB Statement No. 142 but are not deducted on CCR115 and CCR155.
[sbull] Combine CCR408, ``Notes and Obligations of FDIC,'' and
CCR410, ``FDIC Covered Assets,'' into one line;
[sbull] Expand CCR430, ``20% Risk Weight: High-quality MBS,'' to
include asset-backed securities eligible for 20% risk weighting;
[sbull] Expand CCR470, ``50% Risk Weight: Other MBS Backed by
Qualifying Mortgage Loans,'' to include Asset-Backed Securities
eligible for 50% risk weighting; and
[sbull] Add a line in the 100% Risk Weight for ``Securities Risk
Weighted at 100% Under the Ratings Based Approach.''
The following lines would be eliminated:
[sbull] CCR120, ``Nonqualifying Equity Instruments'';
[sbull] CCR130, ``Mutual Institutions' Nonwithdrawable Deposit
Accounts Reported on SC710'';
[sbull] CCR320, ``Capital Certificates;'' and
[sbull] CCR330, ``Nonwithdrawable Deposit Accounts Not Reported on
CCR130.''
[[Page 3324]]
Items that would have been reported on these lines would be
included in the new ``Other'' categories. These changes are largely
required by regulatory and accounting changes.
36. Shorter Deadlines for TFR, Including Schedules HC and CMR
Savings associations are required to submit their TFR
electronically so that OTS receives it no later than thirty days after
the quarter-end reporting date. Savings associations have been provided
additional time (a total of forty-five days) to complete Schedule CMR
(Consolidated Maturity and Rate) a schedule that addresses interest
rate risk, and Schedule HC (Thrift Holding Company). This later due
date was granted to allow more time in which to receive information
from data service providers and holding companies that was needed to
complete these schedules. OTS's monitoring and analysis of interest
rate risk exposure in individual savings associations and for the
thrift industry as a whole and of its holding company and affiliates'
activity and exposure is impeded by the delayed submission of these
schedules. Furthermore, with the technological advances over the past
several years, savings associations have the ability to receive data
from their data service providers and from their holding companies on a
timelier basis and transmit it conveniently through the Electronic
Filing System software provided by OTS. Therefore, OTS proposes to
shorten the filing due date for the TFR from thirty (30) to twenty (20)
calendar days after the end of the quarter, and for Schedules HC and
CMR from forty-five (45) to thirty (30) calendar days after the end of
the quarter. This would allow OTS to provide data publicly on an
earlier schedule, provide for the compilation and timelier analysis of
individual and aggregate statistics on the condition and performance of
savings associations, and provide the Uniform Thrift Performance Report
(UTPR) to associations on a timelier basis. An earlier deadline for
Schedule CMR would also enable OTS to transmit the Interest Rate Risk
Exposure Report to reporting associations on a timelier basis. With the
advances in technology coupled with the improvements in OTS's
electronic filing system software, earlier due dates should not create
a significant burden to the industry.
Type of Review: Revision.
Affected Public: Business or for profit.
Estimated Number of Respondents and Recordkeepers: 950.
Estimated Time Per Respondent: 36.4 hours average for quarterly
schedules and 1.9 hours average for schedules required only annually
plus recordkeeping of an average of one hour per quarter.
Estimated Total Annual Burden Hours: 143,703 hours.
Because some of these proposed changes will not affect all savings
associations that file the TFR, the burden hours reflected above may
vary from institution to institution. OTS invites comment on how
savings associations think the burden would change given these form
changes.
Request for Comments: In addition to the issues presented above,
comments are invited on:
(a) Whether the proposed revisions to the TFR collections of
information are necessary for the proper performance of the agency's
functions, including whether the information has practical utility;
(b) The accuracy of the agency'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 information collections on
respondents, including through the use of automated collection
techniques, the Internet, or other forms of information technology; and
(e) Estimates of capital or start up costs and costs of operation,
maintenance, and purchase of services to provide information.
OTS will summarize or include comments submitted in response to
this notice with the request for OMB approval. All comments will become
a matter of public record.
Dated: January 16, 2003.
Deborah Dakin,
Deputy Chief Counsel, Regulations and Legislation Division.
[FR Doc. 03-1448 Filed 1-22-03; 8:45 am]
BILLING CODE 6720-01-P