FRY3F_201412_omb

Supporting Statement for the
Application for a Foreign Organization to Acquire a U.S. Bank or Bank Holding Company
(FR Y-3F; OMB No. 7100-0119)
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 Application for a Foreign Organization to Acquire a U.S. Bank or Bank Holding
Company (FR Y-3F; OMB No. 7100-0119). Under the Bank Holding Company Act (BHCA),
submission of this application is required for any company organized under the laws of a foreign
country seeking to acquire a U.S. subsidiary bank or bank holding company. Applicants must
provide financial and managerial information, discuss the competitive effects of the proposed
transaction, and discuss how the proposed transaction would enhance the convenience and needs
of the community to be served. The Federal Reserve uses the information, in part, to fulfill its
supervisory responsibilities with respect to foreign banking organizations in the United States.
The current annual burden is estimated to be 440 hours.
Background and Justification
The FR Y-1F was first used in 1982. Prior to the creation of the FR Y-1F, foreign
applicants filed the FR Y-1, together with a special supplement. 1 In 2005, the FR Y-1F was
retitled, renumbered to the FR Y-3F, and modified to achieve consistency with the FR Y-3, the
Application for Prior Approval to Become a Bank Holding Company or for a Bank Holding
Company to Acquire an Additional Bank or Bank Holding Company (7100-0121), the application
form used by domestic holding companies.
The information collected in the application form is necessary for the Board to fulfill its
responsibilities under the BHCA and the Foreign Bank Supervision Enhancement Act. The
application is the only source of comprehensive and systematic data on the proposed transaction,
the present and pro forma financial condition of the applicant and its proposed subsidiary(ies), the
likely competitive effects of the proposal, and its likely effects on the convenience and needs of the
public. Thus, the Federal Reserve uses the data to determine if proposals are financially sound,
competitively acceptable, and consistent with the public interest. In addition, among other things,
the form collects information on foreign bank applicants to determine if the comprehensive
consolidated supervision standard is met. Such information is also used after consummation in the
supervision program for foreign banking organizations.
Description of Information Collection
The FR Y-3F is filed by any company, organized under the laws of a foreign country,
seeking to acquire a bank or bank holding company in the United States. Applicants provide
financial and managerial information and discuss the competitive effects of the proposed
transaction and how the proposed transaction would enhance the convenience and needs of the
community to be served. The application must contain the most recent information available so
1

The FR Y-1 (OMB No. 7100-0119), was designed for domestic applicants; the supplement adapted the FR Y-1
for submissions by foreign applicants. In 1994, the FR Y-1 was combined with the FR Y-2 (OMB No.
7100-0171) to create the FR Y-3 (OMB No. 7100-0121). The FR Y-1 and FR Y-2 were discontinued.

that the Federal Reserve can analyze compliance with relevant statutory factors. 2 While the
application collects the minimum amount of information needed, the instructions explicitly state
that the formal questions in the application are not intended to limit the applicant’s presentation.
Time Schedule for Information Collection
The applicant is required to publish a notice in a newspaper of general circulation in the
community where the head office of the bank to be acquired is located. The notice must state the
name and address of the applicant and its proposed subsidiary, and it must invite the public to
submit written comments to the appropriate Federal Reserve Bank. The newspaper notice must
be published no more than fifteen calendar days before and no later than seven calendar days
after the date that the application is filed with the appropriate Reserve Bank. The application
will be acted on within sixty days, unless the Federal Reserve notifies the applicant that the
processing period is being extended and indicates the reasons for the extension.
Legal Status
The Board’s Legal Division has determined that this application is authorized by sections
3(a), 3(c), and 5(a) through 5(c) of the Bank Holding Company Act (12 U.S.C. §§1842(a), (c)
and 1844(a) - (c)). Completion of the application is required to obtain or retain a benefit for any
foreign organization seeking to establish or acquire a U.S. bank or bank holding company. The
information provided in the application is not confidential unless the applicant specifically
requests confidentiality and the Board approves the request. The instructions convey the
confidentiality requirements to applicants.
Consultation Outside the Agency
On September 24, 2014, the Federal Reserve published a notice in the Federal Register
(79 FR 57101) requesting public comment for 60 days on the extension, without revision, of the
Application for a Foreign Organization to Acquire a U.S. Bank or Bank Holding Company. The
comment period for this notice expired on November 24, 2014. The Federal Reserve did not
receive any comments. On December 15, 2014, the Federal Reserve published a final notice in
the Federal Register (79 FR 74088).
Estimate of Respondent Burden
The total annual burden for these reports is estimated to be 440 hours, as shown in the
following table. The current burden estimates are based on the average number of responses
received over the last three years. The estimated average hours per response for initial entry is
90 hours and the estimated average hours per response for foreign organizations that have
already received approval to establish a branch or agency or to acquire a U.S. bank is 70 hours.
The reporting requirement of this application represents less than 1 percent of total Federal
Reserve System paperwork burden for all reports.
2

The BHCA directs the Board to consider the financial and managerial resources and future earnings prospects of
the banks involved in the proposed transaction. The Board also may not approve transactions that would result in
monopoly or have other anticompetitive effects, unless such effects are “clearly outweighed in the public interest by
the probable effect of the transaction in meeting the convenience and needs of the community to be served.”
2

Initial application
Subsequent application

Average
number of
respondents

Annual
frequency

Estimated
average hours
per response

Estimated
annual
burden hours

1
5

1
1

90
70

90
350
440

Total
The total annual cost to the public for this application is estimated to be $22,396. 3
Sensitive Questions
This application contains no sensitive questions, as defined by OMB guidelines.
Estimate of Cost to the Federal Reserve System

The cost to the Federal Reserve of printing, mailing, and processing the FR Y-3F is
negligible.

3

Total cost to the public was estimated using the following formula: percent of staff time, multiplied by annual
burden hours, multiplied by hourly rates (30% Office & Administrative Support at $18, 45% Financial Managers at
$61, 15% Lawyers at $63, and 10% Chief Executives at $86). Hourly rate for each occupational group are the
(rounded) mean hourly wages from the Bureau of Labor and Statistics (BLS), Occupational Employment and Wages
2013, www.bls.gov/news.release/ocwage.nr0.htm. Occupations are defined using the BLS Occupational
Classification System, www.bls.gov/soc/
3