1550-0023--March 2007 Revisions (Supporting Statement)

SUPPORTING STATEMENT
OMB Control No. 1550-0023
Thrift Financial Report: March 2007 Revisions

A.

JUSTIFICATION

1.

Circumstances and Need

The Office of Thrift Supervision (OTS) collects financial data from insured savings
associations, which are used to regulate and supervise the industry and to develop policy. The
vehicle used to collect these data is the Thrift Financial Report (TFR). OTS collects financial
data from insured savings associations, their subsidiaries, and their holding companies in order
to assure their safety and soundness as depositories of the personal monies of the general public.
On July 31, 2006, OTS requested public comment for 60 days (71 FR 43286) on
proposed revisions to the Thrift Financial Report (TFR), which is currently an approved
collection of information. The proposed revisions would eliminate ten line items from the TFR,
revise six existing items, add 16 new items, and eliminate confidential treatment of Schedule HC
data. After considering the comments received, OTS has adopted the proposed revisions, with
the exception of the proposal to eliminate Schedule HC data from confidential treatment, and is
setting the effective date for the revisions at March 31, 2007.
Subsequently, on October 31, 2006, the Office of the Comptroller of the Currency
(OCC), Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance
Corporation (FDIC), and OTS (collectively, the agencies) requested comment on proposed
revisions to the Call Report and additional changes to the TFR (71 FR 63848). The agencies are
jointly proposing reductions in the data required to determine an insured institution's deposit
assessment base. For savings associations, data collected would be reduced from eight items to
no more than six items. In addition, the FRB requested an addition of two items to the TFR for a
more accurate construction of monetary aggregates and monetary policy purposes. These
changes will also be implemented with the March 31, 2007, TFR. There were no comments
directly relating to these proposed TFR changes.
OTS is submitting the adopted revisions published in both the July 31st and October 31st
notices to OMB for review and approval, with the exception of the proposal to eliminate
Schedule HC data from confidential treatment. Overall, OTS has considered a range of potential
information needs and identified those additions to the TFR that are believed to be most critical
and relevant to OTS as it seeks to fulfill its supervisory responsibilities. At the same time, OTS
identified certain existing TFR data that are no longer relevant or useful to warrant their
continued collection. OTS believes that the reporting burden that would result from the new
TFR items discussed herein would slightly decrease, due to a small increase in individual
institution burden and a decrease in number of respondents. After savings associations make any
necessary changes to their systems and records, OTS estimated that these reporting changes
would produce an average net increase of 0.5 hours per institution per year in the ongoing
reporting burden of the affected schedules. Nevertheless, when viewing these proposed

revisions to the TFR within a larger context, they are intended to maintain the effectiveness of
the on- and off-site supervision activities of the OTS, which should help to control the overall
regulatory burden on institutions.
Additionally, this submission implements Section 601 of the Financial Services
Regulatory Relief Act of 2006 (Relief Act), which removed several statutory reporting
requirements relating to insider lending by banks and savings associations. One of these
amendments, which became effective on October 13, 2006, eliminated the requirement that an
institution include a separate report with its TFR each quarter on any extensions of credit the
institution has made to its executive officers since the date of its last TFR. Accordingly,
institutions are no longer required to report on such extensions of credit effective December 31,
2006, and the “Special Report” on loans to executive officers, which has been included with the
TFR in previous quarters, is being discontinued. Because the reporting burden of this “Special
Report” has been included in the burden for the TFR information collections, the agencies have
adjusted the burden of these collections in response to this statutory change and the elimination
of the reporting requirement.
2.

Use of Information Collected

OTS uses this information to monitor the condition, performance, and risk profile of
individual institutions and systemic risk among groups of institutions and the industry as a
whole.
3.

Use of Technology to Reduce Burden

Since 1993, all reporting associations file their TFRs electronically. Electronic
transmission has significantly reduced the reporting burden and has improved data quality by
reducing transcription errors and providing edit checks at the source of the data entry. OTS
internally developed and maintains the electronic filing software and provides it free-of-charge
to all savings associations in Microsoft Windows on a CDROM. The electronic software sums
totals, brings forward beginning balances, and calculates certain fields, eliminating the need for
data entry for approximately 20% of the fields in the TFR. There are over 900 edit checks in the
electronic software that allow associations to self-edit their data prior to transmitting the report.
The software allows associations to explain any valid deviations from the edits in a
memorandum system called “User Notes.” These enhancements reduce the amount of time OTS
staff has to spend in validating the data and reduce the number of phone calls made to the
associations, thus reducing burden on the industry. OTS is currently exploring a web-based data
collection application. A web-based application will achieve greater efficiencies in the data
collection and report dissemination processes.
4.

Efforts to Identify Duplication

This information collection is not duplicative within the meaning of the PRA and OMB
regulations. Information that is similar to or that corresponds to information that could serve
OTS's purpose and need in this information collection is not being collected from OTS regulated
institutions by any other means or for any other purpose; nor is this information otherwise
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available in the detail necessary to satisfy the purpose and need for which this collection of
information is undertaken. However, the data gathered in this information collection are shared
with the other Federal financial institution regulators, state financial institution regulators, and
other Federal agencies.
5.

Minimizing the Burden on Small Firms

Although the collection of information affects a significant number of small businesses,
OTS does not anticipate that the net economic impact will be large.
6.

Consequences of Less Frequent Collection

Collection of this information less frequently than quarterly would hinder the ability of
OTS to monitor the industry and perform its supervisory function.
7.

Special Circumstances
This collection meets the guidelines in 5 C.F.R. Part 1320.

8.

Consultation with Persons Outside the OTS

Changes to Schedules SC, SO, LD, CF, SI, SQ, and HC
On July 31, 2006, OTS requested public comment for 60 days (71 FR 43286) on
proposed revisions to the Thrift Financial Report (TFR), which is currently an approved
collection of information. The notice described regulatory reporting revisions proposed for the
TFR, Schedule SC – Consolidated Statement of Condition, Schedule SO – Consolidated
Statement of Operations, Schedule LD – Loan Data, Schedule CF – Consolidated Cash Flow
Information, Schedule SI – Supplemental Information, Schedule SQ – Consolidated
Supplemental Questions, and Schedule HC – Thrift Holding Company. The proposed revisions
would eliminate ten line items from the TFR, revise six existing items, add 16 new items, and
eliminate confidential treatment of Schedule HC data.
OTS received four comment letters on the July 2006 proposal from the National
Association of Home Builders (NAHB), a trade group whose members include savings
associations, from the Bureau of Economic Analysis (BEA), an agency of the U.S. Department
of Commerce, and from two OTS-supervised savings associations. The BEA was supportive of
the proposed changes and indicated the changes would allow it to continue certain data and
statistical series derived in part from TFR data.
The NAHB supported the proposed changes and encouraged the addition of line items to
collect data on the volume and performance of loans for the development of land for 1-4 family
dwelling residential housing, and loans for the development of land for multifamily housing.
The NAHB believes this additional reporting detail would assist in improving efficiency and
competition in the market for residential acquisition and development loans, and would
demonstrate different performance characteristics between construction and land development
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loans. After careful consideration of the NAHB comments, OTS has decided to consider these
additional line items in a future revision of the TFR.
Both comments from savings associations focused on the proposal to eliminate
confidential treatment of data filed by individual thrift holding companies on Schedule HC. One
savings association commenter suggested permitting filers of Schedule HC data to opt to
maintain the confidentiality of the individual company’s data, citing competitive concerns and
privacy issues.
The other savings association commenter requested maintaining the confidentiality of
individual companies’ Schedule HC data, citing the already extensive reporting and disclosure
requirements of companies with registered securities. This commenter also asserted that much
of the consolidated financial information required by Schedule HC is included in the financial
statements filed by public savings and loan holding companies with the Securities and Exchange
Commission (SEC) pursuant to the Securities Act of 1934. The commenter stated that quarterly
parent company only information is not normally available to the public. He noted that parent
company only financial data of large bank holding companies collected by the Federal Reserve
Board on Form FR Y-9LP may be released by the Board upon special request on an individual
basis, but that any data released is limited to financial information.
OTS presently does not publicly release Schedule HC data filed by holding companies.
However, public requests are received for these data. In addition, some rating agencies have
indicated thrift holding company debt ratings suffer due to the lack of publicly available data.
After careful consideration of the comments related to Schedule HC, OTS has decided to
maintain the confidentiality of individual company Schedule HC data. OTS-supervised holding
companies with outstanding debt rated by the rating agencies, or considering issuing such debt,
are encouraged to discuss information needs with the rating agencies.
OTS has considered these comments and has decided to proceed with the proposed
changes to Schedules SC, SO, LD, CF, SI, SQ, and HC, but will not eliminate the confidential
treatment of Schedule HC. These changes will become effective on March 31, 2007.
Changes to Schedule DI
On October 31, 2006, the agencies requested comment on proposed revisions to the Call
Report and the TFR (71 FR 63848). All four agencies proposed to replace certain information
currently collected in the Call Report and TFR for deposit insurance assessment purposes with
the information described in proposed amendments to Part 327 of the FDIC’s regulations (71 FR
28790, May 18, 2006).1 The agencies also proposed to revise the information collected in the
Call Report and TFR on time deposits, particularly with respect to certain retirement accounts
affected by the FDIC’s amended deposit insurance regulations.
1

On November 30, 2006, the FDIC published a final rule amending Part 327 of its regulations
to improve and modernize its operational systems for deposit insurance assessments (71 FR
69270).
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These revisions to the Call Report and the TFR, which were approved for publication by
the FFIEC, were proposed to take effect as of March 31, 2007, and, for certain deposit insurance
assessment revisions, March 31, 2008. After considering the comments and other actions since
the publication of the proposal, the agencies approved certain modifications to the initial set of
proposed revisions. The agencies will move forward with these modified reporting changes on
March 31, 2007, and March 31, 2008, as proposed. For the March 31, 2007, report date only,
institutions may provide reasonable estimates for any new or revised Call Report or TFR item for
which the requested information is not readily available. None of the comments received
directly related to the proposed TFR changes.
9.

Payment of Respondents
OTS provides no payment or gift to respondents.

10.

Confidentiality

OTS does not include in the TFR instructions any explicit guarantee of confidentiality of
this information. All but a very limited number of TFR data items, are available to the general
public. Data from Schedules LD and HC, including the proposed changes, are confidential.
Other data revisions proposed in this notice are available to the general public. For a complete
listing of TFR confidential data, please see http://www.ots.treas.gov/docs/7/78196.pdf.
11.

Information of a Sensitive Nature

The TFR form does not request any information that could be considered personally
sensitive.
12.

Estimate of Annual Burden

OTS estimates 845 savings associations (“respondents”). The total annual hour burden to
the respondents is estimated at 123,370, representing 4 submissions per respondent at 36.5 hours
each submission.
845 savings associations x 36.5 hours = 30,842.5 hours per response
30,842.5 hours x 4 submissions per year = 123,370 hours.*

*

This estimate applies to Schedules SC, SO, VA, PD, CC, CF, DI, SI, and SQ only. The proposed total estimated
burden for the entire TFR is 193,139 hours. Please refer to the attached chart for burden detail by schedule.

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13.

Estimate of Annual Cost

The cost to the thrift industry for the reporting burden of these quarterly TFR schedules
would be $3,084,250.
The burden per report was derived by multiplying the number of items requiring input by
the number of reports per year, with appropriate adjustment of especially difficult items.
Variation in burden among reporting associations exists depending on the extent to which their
activities require an entry in every item requested on the reporting form, the complexity of
calculating the entry for an individual association, and the extent to which their own accounting
systems conform to the requirements of the reporting form.
14.

Estimates of Annualized Cost to Government
The total annualized cost to the federal government will be minimal.

15.

Reason for Change in Burden

This submission reflects a decrease in the number of respondents (from 854 to 845) and a
slight increase in individual institution burden (from 36.25 to 36.5), resulting in a net decrease in
total burden for the TFR (from 123,830 to 123,370).
16.

Publication

OTS publishes a series of statistical reports of aggregate data on a national and
geographical area basis. Financial institutions, investment consultants, real estate consultants,
brokers, and appraisers as well as other Federal and state government agencies and institutions of
higher learning use the publications. These statistical reports are an adjunct to the data collected,
which are primarily for supervisory purposes.
17.

Expiration Date

OTS has received permission to not display the expiration date on this form. This form is
revised and issued annually. The expiration date will not assist the public in determining if this
is the correct form to be used when filing with OTS. In addition, OTS distributes copies of the
current form to all institutions and other interested parties and posts it on the OTS web site
whenever the report is changed.
18.

Exceptions
There are no exceptions to the certification statement on OMB Form 83-I.

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B.

COLLECTION OF INFORMATION EMPLOYING STATISTICAL METHODS
Not applicable.

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