SUPPORTING STATEMENT FOR1510-0052-Aug2011

SUPPORTING STATEMENT FOR

PAPERWORK REDUCTION ACT SUBMISSIONS

OMB No. 1510-0052

“Financial Institution Agreement and Application Forms for Designation as a Treasury Tax and

Loan Depositary”

A. Justifications.

1. As part of the application process for being designated a Treasury Tax and Loan Depositary

(TT&L), financial institutions are required to complete FMS forms 458 and 459. The

information is required to establish authority and responsibility for actions taken under the

programs, including the posting of collateral. Federal Deposit Insurance Corporation

(FDIC) statutes require certain information to preserve the Treasury’s interest in the

collateral in the event that the FDIC is appointed the receiver or conservator.

The collection of information specifically is authorized by 31 C.F.R. 203.3(b) (2) and

generally authorized by 31 CSC 321,323, 3122, 3301, 3302, 3720 and 12 USC 90, 265 and 391.

2. Financial institutions seeking designation as a TT&L depositary, and their authority to

maintain a TT&L account, are required to file these forms. Federal Reserve Banks and the

Treasury Department use the information to evaluate the application and make the

designation. Financial institutions may apply until accepted. Once accepted, financial

institutions need not apply again, unless terminated from the program.

3. According to 12 USC 1823 (e), a written agreement executed by the financial institutions is

required to preserve the Treasury’s interest in the collateral pledged in the event that the

FDIC is appointed as the receiver or conservator. Original signatures are required and the

financial institution’s seal must be embossed on the form. Currently, this information is not

collected in an automated fashion.

4. Financial institutions whose applications are accepted need only apply once. Agreements

are kept on file for the duration plus six years of the financial institution’s participation in

the program. There is no similar information already collected or available.

5. The collection will not have a significant impact on a substantial number of small entities.

6. The form is necessary to designate the financial institutions as TT&L depositaries under 31

CFR 203. Further, if the forms were not completed, Treasury will be unable to regulate the

financial institution’s actions under 31 CFR 203, and to preserve Treasury’s interest in

collateral pledged by the financial institution. Information is collected once for each

financial institution accepted into the program, and therefore cannot be collected less

frequently.

7. This collection requires financial institutions to maintain certain records for more than three

years. (See 5 CFR 1320.6(f)). The forms and the minutes of a financial institutions meeting

are to be maintained continuously as official records of the institution. Such records

specifically are required by the terms of 12 USC 1823(e) (1): this FDIC statute requires

written information to preserve the Treasury’s interest in the collateral in the event that the

FDIC is appointed the receiver or conservator. Forms 458 and 459 are agreements

establishing a TT&L depositary relationship and the pledging of collateral. To ensure that

preservation of the collateral, the records must be maintained for the extent of the

relationship, which could be more than three years.

A financial institution that wants to establish a TT&L account must complete and furnish

the application to an FRB for approval. The amount of time that the financial institution

takes to complete the application is not monitored by the FRB. If the application, and the

supporting document, is complete, the approval process within the FRB takes less than four

business days.

8. A preclearance notice was published in the Federal Register on April 28, 2011, page 23859.

No comments were received regarding this information collection.

FMS consulted with the Federal Reserve Bank of St. Louis, and other Federal Reserve

Banks, for their views on the forms. The Federal Reserve Banks are signatories to form 458.

Because the creation and maintenance of records are required by Treasury regulations, and

necessitated by statute, (see above), no consultation with financial institutions on these topics

was undertaken.

9. The respondents (applicants) do not receive any payment or gift from the U.S. government

or the Federal Reserve System.

10. Information collected is not of a confidential nature.

11. There are not questions of a sensitive nature in the agreement.

12. Respondent hour burden: The two forms are filled out only once per depositary. Each form

requires approximately 15 minutes to complete at an estimated $15 per hour lab one time

postage and envelope fee is included in the total cost, and the storage cost is minimal for the

three pages. The aggregate cost to all respondents is $3,375.

The costs to the financial institutions were estimates for the time to read and complete the

form, gather the required material and file them.

Separate burden estimate for each form:

458

• 450 new applicants estimated per year

• applicant applies once

• No annual burden after initial application except records retention (minimal)

• Burden is $3.75 ($15 per hour times 15 minutes per form.)

459

• 450 new applicants estimated per year

• applicant applies once

• No annual burden after initial application except record retention.

• Burden is $3.75 ($15 per hour times 15 minutes per form)>

13. There is no annual cost burden to the respondents or record keepers except as shown in #12

above with the possible exception of cost to mail the application to the FRB. In addition,

respondents incur no start-up or operational costs.

14. Government cost: The two forms each will require approximately five minutes of review by

an FRB official, at an estimated $15 per hour labor charge. Annual cost for the space

required to store and maintain the completed forms is minimal. It is estimated that 450 new

depositaries will seek authorization annually. Annual cost to the Government is estimated to

be $1,125.

15. There are no program changes or adjustments to this submission.

16. Results of the information collections are not planned for publication.

17. Display of the expiration date on FMS forms 458 and 459 causes’ confusion for the

respondents. When the respondents see an expired date on the forms, they incorrectly

believe that the form is obsolete or must be re-submitted. Since the forms are an on-going

legal document, FMS requests that the expiration date be eliminated.

18. Not applicable.

B. Collections of Information Employing Statistical Methods.

Not applicable. Collection of this information does not employ statistical methods.