FR4004_200704_omb

Supporting Statement for the
Written Security Program for State Member Banks
(FR 4004; OMB No. 7100-0112)
Summary
The Board of Governors of the Federal Reserve System, under delegated authority from the
Office of Management and Budget (OMB), proposes to extend for three years, without revision, the
Written Security Program for State Member Banks (FR 4004; OMB No. 7100-0112). This
mandatory information collection is a recordkeeping requirement contained in the Board’s
Regulation H Section 208.61. Each state member bank must develop and implement a written
security program and maintain it in the bank’s records. There is no formal reporting form and the
information is not submitted to the Federal Reserve. The annual burden for the FR 4004 is estimated
to be 35 hours (i.e., on average .5 hours per bank) for 70 state member banks, the average number of
state member bank applications received annually during the past three years.
Background and Justification
The Congress adopted the Bank Protection Act of 1968 (12 U.S.C. § 1882) to promulgate
rules establishing minimum standards for banks as to the installation, maintenance, and operation of
security devices and procedures to discourage robberies, burglaries, and larcenies and to assist in the
identification and apprehension of persons who commit such acts.
In response to the passage of the Bank Protection Act (Act), each of the federal financial
institution supervisory agencies established minimum standards for security devices and procedures.
The requirements established by the Board of Governors of the Federal Reserve System in 1969 for
state member banks were contained in Regulation P, Minimum Security Devices and Procedures for
Federal Reserve Banks and State Member Banks. In the regulation, the Federal Reserve required the
board of directors of each state member bank to designate a security officer to assume the
responsibility for the development and administration of a written security program within 180 days
of opening for business. The original Act also contained provisions that required financial
institutions to submit periodic reports to their primary federal supervisory agency with respect to the
installation, maintenance, and operation of security devices and the development of security
procedures.
The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA)
included provisions that amended the Act. The provisions eliminated the requirement that each bank
submit periodic reports to its regulator, but retained the requirement that each bank develop and
implement a written security program. The Federal Reserve amended Regulation P in 1991 to
reflect this change. 1
Effective October 1, 1998, Regulation P was rescinded and its provisions were incorporated
1

Two other reporting and recordkeeping requirements (FR 4003 and FR 4005; OMB No. 7100-0112) were discontinued
following the Regulation P amendments.

into Regulation H (12 CFR §208.61) 2 . The Federal Reserve’s action to incorporate Regulation P
into Regulation H was designed to simplify compliance by consolidating regulatory requirements
that apply to state member banks into one regulation.
The Federal Reserve has determined that Regulation H, section 208.61 continues to require
the board of directors of each state member bank to designate a security officer to assume the
responsibility for the development and administration of a written security program within 180 days
of opening for business.
Description of Information Collection
Each state member bank must keep a written security program in its records. This program
should include a requirement to install security devices and should establish procedures that satisfy
minimum standards in the regulation, with the security officer determining the need for additional
security devices and procedures based on the location of the banking office.
Time Schedule for Information Collection
Because the written security program is a recordkeeping requirement, copies of the program
are not collected by the Federal Reserve System and are not published. Bank examiners verify
compliance with this recordkeeping requirement during examinations of state member banks.
Legal Status
The Board’s Legal Division has determined that section 3 of the Bank Protection Act
[12 U.S.C. § 1882(a)] authorizes the Board to require the recordkeeping of this information.
Section 208.61 of the Board’s Regulation H [12 C.F.R. § 208.61] implements section 3 and sets
forth bank security procedures for state member banks. Because written security programs are
maintained at state member banks, no issue of confidentiality under the Freedom of Information Act
normally arises. However, copies of such documents included in examination work papers would, in
such form, be confidential pursuant to exemption 8 of the Freedom of Information Act [5 U.S.C.
§552(b)(8)].
Consultation Outside the Agency
On December 4, 2006, the Federal Reserve published a notice in the Federal Register
(71 FR 70392) requesting public comment for 60 days on the extension of the FR 4004. The
comment period for this notice expired on February 2, 2007. No comments were received. On
February 14, 2007, the Federal Reserve published a final notice in the Federal Register
(72 FR 7039) for the FR 4004.
Estimate of Respondent Burden
The annual recordkeeping burden for the FR 4004 is estimated to be 35 hours, as presented in
2

Federal Register notice published July 13, 1998, (63 FR 37665).

2

the following table. The number of respondents is based on the average number of state member
bank applications received annually during 2003 through 2005. The total annual burden of this
information collection represents less than 1 percent of total Federal Reserve System annual
reporting burden.

FR 4004

Number of
respondents

Annual
frequency

Estimated
average hours
per response

Estimated
annual burden
hours

70

1

0.5

35

The total cost to the public is estimated to be $2,158. 3
Sensitive Questions
This collection of information contains no questions of a sensitive nature, as defined by
OMB guidelines.
Estimate of Cost to the Federal Reserve System
Annual costs to the Federal Reserve System associated with this recordkeeping requirement
are minimal because there are no reporting forms and the information is not submitted to the Federal
Reserve.

3

Total cost to the public was estimated using the following formula. Percent of staff time, multiplied by annual burden
hours, multiplied by hourly rate: 30% - Clerical @ $25, 45% - Managerial or Technical @ $55, 15% - Senior
Management @ $100, and 10% - Legal Counsel @ $144. Hourly rate estimates for each occupational group are averages
using data from the Bureau of Labor and Statistics, Occupational Employment and Wages, news release.

3