FRY8_20150429_omb

Supporting Statement for the
Bank Holding Company Report of Insured Depository Institutions’ Section 23A
Transactions with Affiliates (FR Y-8; OMB No. 7100-0126)
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 quarterly Bank Holding Company Report of Insured Depository Institutions’
Section 23A Transactions with Affiliates (FR Y-8; OMB No. 7100-0126). This reporting form
collects information on transactions between an insured depository institution and its affiliates
that are subject to section 23A of the Federal Reserve Act. The FR Y-8 is filed quarterly by all
top-tier bank holding companies (BHCs), including financial holding companies (FHCs) and
savings and loan holding companies (SLHCs), for all insured depository institutions that are
owned by the BHC and by foreign banking organizations (FBOs) that directly own a U.S.
subsidiary bank. The FR Y-8 reporting form comprises a cover page, declaration page, and two
pages collecting data on covered transactions and derivatives.
The primary purpose of the data is to enhance the Federal Reserve’s ability to monitor
insured depository institutions’ exposures to affiliates and to ensure insured depository
institutions’ compliance with section 23A of the Federal Reserve Act. Section 23A of the
Federal Reserve Act is one of the most important statutes on limiting exposures to individual
institutions and protecting against the expansion of the federal safety net.
The Federal Reserve anticipates revising the FR Y-8 reporting form and instructions in
2015 as part of the rulemaking process for Regulation W, Transactions between Member Banks
and their Affiliates (OMB No. 7100-0304). Regulation W, which implements sections 23A and
23B of the Federal Reserve Act, will be revised to incorporate amendments as required by
section 608 of the Dodd-Frank Act, (Enhancing Existing Restrictions in Bank Transactions with
Affiliates). The total current annual burden for the FR Y-8 is estimated to be 47,422 hours.
Background and Justification
The Federal Reserve implemented the FR Y-8 in March 1975 to monitor transactions
between subsidiary depository institutions, the parent BHC, and other affiliates of the BHC. Over
the years the reporting panel and data items were revised to reflect changing data needs. In 2000,
the reporting form and instructions were completely revised to enhance the Federal Reserve’s
ability to monitor bank exposures to affiliates and to ensure banks’ compliance with section 23A
of the Federal Reserve Act. BHCs were required to file the information separately for each of
their insured depository institutions. In addition, FBOs that directly own U.S. subsidiary banks
were added to the reporting panel. In March 2013, the reporting panel was revised to include
SLHCs.
Section 23A of the Federal Reserve Act is one of the most important statutes protecting
against the expansion of the federal safety net (that is, lower cost insured deposits, the payment
system, and the discount window) by limiting exposures of insured depository institutions to

affiliates. The Gramm-Leach-Bliley Act of 1999 elevated the importance of section 23A and the
need to collect information to monitor insured depository institution exposures to affiliates.
FR Y-8 data are necessary to monitor compliance with section 23A of the Federal Reserve Act.
The required information on derivative transactions between insured depository
institutions and their affiliates enables supervisory staff to better monitor trends in intercompany
derivative transactions on an aggregate basis. This information, coupled with enhanced on-site
supervision of derivative transactions between insured depository institutions and their affiliates
at large banking organizations, aid the Board in evaluating whether it should continue the
approach for regulating derivative transactions between insured depository institutions and their
affiliates that was initially adopted in Regulation W.
Description of Information Collection
The FR Y-8 is filed quarterly by all top-tier BHCs, including FHCs and SLHCs, for all
insured depository institutions that are owned by the BHC and by FBOs that directly own a U.S.
subsidiary bank (respondents). Respondents are required to file the information separately for
each of their insured depository institutions.
Respondents that own insured depository institutions that do not have any covered
transactions with affiliates and do not have any financial subsidiaries sign the declaration page
attesting to these facts and submit it each quarter with the cover page. All other respondents
must report data on covered transactions and derivatives for each of their insured depository
institutions. The data to be reported varies based on the activities and subsidiaries of the insured
depository institution. There are four data items for insured depository institutions that have
covered transactions with affiliates other than financial subsidiaries. There are 10 data items on
covered transactions between insured depository institutions that control financial subsidiaries.
Finally, there is a data item on the maximum aggregate amount of all covered transactions for
any single day during the calendar quarter and three data items on derivative transactions with
affiliates.
Frequency
The Federal Reserve recommends that the reporting frequency of the FR Y-8 remain
quarterly for all respondents. Regular and frequent reporting significantly enhances the Federal
Reserve’s ability to monitor transactions with affiliates and to detect liquidity and funding
problems within an organization. Consistent with the goals of the risk-focused examination
approach, regular reporting permits off-site monitoring FR Y-8 data facilitate pre-analysis work
and conserve on-site examination resources for verifications of compliance and a review of
pertinent issues. In addition, quarterly data lends itself to analysis with data collected on other
BHC reports and the Call Reports.
Time Schedule for Information Collection
The FR Y-8 is submitted quarterly as of the last day of March, June, September, and
December to the appropriate Reserve Bank within 30 days after the as-of date. A 15-day

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extension may be given to respondents that own banks with more than one foreign office. FR Y8 data are not published.
Legal Status
Section 5(c) of the Bank Holding Company Act authorizes the Board to require BHCs,
including FHCs, to file the FR Y-8 reporting form with the Board (12 U.S.C. § 1844(c)). In
addition, section 225.5(b) of Regulation Y states that BHCs, which include FBOs, shall furnish
such information and reports as the Board may require (12 C.F.R. § 225.5(b); see also 12 C.F.R.
§ 225.2(c)(2) (defining BHCs as including FBOs)). Section 10(b)(2) of the Home Owners’ Loan
Act authorizes the Board to require SLHCs to file “such reports as may be required by the
Board” and instructs that such reports “shall contain such information concerning the operations
of such savings and loan holding company and its subsidiaries as the Board may require” (12
U.S.C. § 1467a(b)(2), as amended by section 369 of the Dodd-Frank Act). This information may
be protected from disclosure under exemption (b)(4) of the Freedom of Information Act, which
exempts privileged or confidential trade secrets and commercial or financial information from
disclosure (5 U.S.C. § 552(b)(4)).
Consultation Outside the Agency
On February 11, 2015, the Federal Reserve published a notice in the Federal Register (80
FR 7592) requesting public comment for 60 days on the extension, without revision, of the
FR Y-8. The comment period for this notice expired on April 13, 2015. The Federal Reserve
did not receive any comments. On April 27, 2015, the Federal Reserve published a final notice
in the Federal Register (80 FR 23274).
Estimates of Respondent Burden
The annual burden is estimated to be 47,422 hours as shown in the following table.
Respondents vary greatly in size and number of insured depository institutions; although the
largest holding companies have several insured depository institutions, the average is less than
two insured depository institutions. Similarly, although the volume of section 23A transactions
may be high for some insured depository institutions, approximately 80 percent of the insured
depository institutions have no covered transactions and therefore only complete the cover page
and declaration page. These reporting requirements represent less than 1 percent of the total
Federal Reserve System annual paperwork burden.

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Number of
respondents1

FR Y-8
Institutions with covered
transactions
Institutions without covered
transactions

Estimated
Annual
average hours
frequency
per response

Estimated
annual burden
hours

972

4

7.8

30,326

4,274

4

1.0

17,096

Total

47,422

The total annual cost to the public for this information collection is estimated to be $2,454,089.2
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
The cost to the Federal Reserve System for collecting and processing the FR Y-8 is
estimated to be $264,300.

1

Of these respondents required to comply with this information collection, 580 for the FR Y-8 (Institutions with
covered transactions) and 3,586 for the FR Y-8 (Institutions without covered transactions) are considered small
entities as defined by the Small Business Administration (i.e., entities with less than $550 million in total assets)
www.sba.gov/content/small-business-size-standards. For purposes of this burden table, the number of respondents
represents the number of FR Y-8 reporting forms filed.
2
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 $17, 45% Financial Managers at
$63, 15% Lawyers at $64, and 10% Chief Executives at $87). Hourly rates for each occupational group are the
(rounded) mean hourly wages from the Bureau of Labor and Statistics (BLS), Occupational Employment and Wages
2014, published March 25, 2015, www.bls.gov/news.release/ocwage.nr0.htm. Occupations are defined using the
BLS Occupational Classification System, www.bls.gov/soc/.

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