SUPPORTING STATEMENT
FOREIGN BANKS
(3064-0114)
INTRODUCTION
The FDIC is requesting OMB approval for a revision of the captioned collection of information. The collections of information contained in 3064-0114 are discussed in detail below, and consist of applications to move an insured state-licensed branch of a foreign bank; applications to operate as such noninsured state-licensed branch of a foreign bank; applications from an insured state-licensed branch of a foreign bank to conduct activities which are not permissible for a federally-licensed branch; internal recordkeeping by such branches; and reporting and recordkeeping requirements relating to such a branch’s pledge of assets to the FDIC.
A. JUSTIFICATION
Application for consent to move an insured branch of a foreign bank.
The FDIC’s regulations at 12 CFR 303.184 provide an administrative procedure for insured branches of foreign banks to apply to the FDIC for permission to move. The application constitutes an information collection under the PRA.
Application for consent to operate as a noninsured branch
The International Banking Act at 12 U.S.C. 3104 (c) prohibits a noninsured state-licensed branch of a foreign bank from receiving deposits of less than $100,000 unless the FDIC determines by regulation or order that the branch is not engaged in domestic retail deposit activities requiring deposit insurance. FDIC rules at 12 CFR 303.186 set forth a procedure for a noninsured state-licensed branch of a foreign bank to apply for exceptions to the prohibition. The application constitutes an information collection under the PRA.
Approval to Conduct Activities Not Permissible for Federal Branches
The International Banking Act at 12 U.S.C. 3105(h) provides that such a branch may not engage in any activity which is not permissible for a federal branch of a foreign bank unless (i) the Board of Governors of the Federal Reserve System has determined that the activity is consistent with safe and sound banking practice, and (ii) the FDIC has determined that the activity would pose no significant risk to the deposit insurance fund. FDIC rules at 12 CFR 303.187 set out procedures to apply for permission to engage in, or continue to engage in, an activity which is not permissible for a federal branch of a foreign bank. The sections also provide for the submission of a plan to discontinue those activities determined to pose significant risk to the deposit insurance fund. The application and the plan constitute information collections under the PRA.
Recordkeeping By Insured Branches of Foreign Banks
In connection with granting insurance to such a branch, the FDI Act at 12 U.S.C. 1815(b) requires the FDIC to consider the probable adequacy and reliability of information to be supplied by the bank to the FDIC to enable the FDIC to carry out its functions. Since such a branch meets the definition of an “insured depository institution” and the FDIC is designated as its appropriate federal banking agency, the branch is subject to examination and supervision by the FDIC. Accordingly, the FDIC’s rules at 12 CFR 347.205 require such a branch to maintain a set of accounts and records in English, and to maintain its records as a separate entity with assets and liabilities separate from the foreign bank’s head office, other branches, etc. These record-keeping requirements constitute information collections under the PRA.
Pledge of Assets by Insured Branches of Foreign Banks
The FDI Act at 12 U.S.C. 1815(c) requires such branches to pledge assets to the FDIC, to protect the Bank Insurance Fund from the risk of insuring an entity whose assets are largely outside the United States. In its rules at 12 CFR 347.209(e)(4), the FDIC specifies procedures under which pledged assets are placed in the hands of a third party depository, and at 347.209(e)(6) requires the branch and the depository to make certain reports to the FDIC to verify that the pledge requirements are being carried out. The reports, and documentation for the pledges, constitute collections of information under the PRA.
1. Circumstance and Need
A uniform standardized process is required to permit state-licensed branches of foreign banks to comply with, and seek exceptions to, various legal requirements and prohibitions relating to branches of foreign banks that operate in the U.S.
2. Use of Information Collected
The information in the application is used by the FDIC to determine compliance with various provisions of the International Banking Act, the FDI Act, and the FDIC’s regulations implementing those laws.
3. Use of Technology to Reduce Burden
No special technology is required to for these collections; banks may use any technology they find appropriate.
4. Efforts to Identify Duplication
The information cannot be obtained from other sources.
5. Minimizing the Burden on Small Institutions
The requirement has been designed to impose the minimal burden consistent with the FDIC’s supervisory obligations. The FDIC permits smaller institutions to utilize less formalized systems, if consistent with their activities.
6. Consequences of Less Frequent Collection
Application for consent to move or to operate, approval to conduct activities, and recordkeeping: the information is collected only once.
Pledge of assets: Quarterly reporting of securities and liabilities is required; less frequent reporting would not permit the FDIC to exercise its insurance function prudentially, because the value of the securities pledged and the amount of the branch’s liabilities fluctuate constantly. Concurrent reporting of documents conveyed by the insured branch to the depository in connection with pledging new assets is prudent because the form of such documentation determines the enforceability and validity of the pledge.
7. Special Circumstances
None.
8. Request for Comments: Consultation with Persons Outside the FDIC
A Federal Register notice seeking comment on renewal of the collection for a 60-day period was published on January 5, 2016 (81 FR 239). No comments were received.
9. Payments and Gifts
None.
10. Confidentiality
Information will be kept private to the extent allowed by law.
11. Information of a Sensitive Nature
None.
12. Estimated Burden
|
No. of Respondents |
Responses per Year |
Hours per Response |
Burden Hours |
Reporting Burden |
|
|
|
|
Moving a Branch |
1 |
1 |
8 |
8 |
Consent to Operate |
1 |
1 |
8 |
8 |
Conduct Activities |
1 |
1 |
8 |
8 |
Pledge of Assets |
|
|
|
|
Documents |
10 |
4 |
.25 |
10 |
Reports |
10 |
4 |
2 |
80 |
Total Reporting Burden |
|
|
|
114 |
Recordkeeping Burden |
10 |
1 |
120 |
1,200 |
|
|
|
|
|
Total Burden |
|
|
|
1,314 |
13. Capital, Start-up, and Operation/Maintenance/Service Costs
None.
14. Annualized Cost to the Federal Government
None.
15. Reason for Change in Burden
There is no change in burden.
16. Publication
The information collected will not be published.
17. Display of Expiration Date
Not applicable.
18. Exceptions to Certification
None.
B. STATISTICAL METHODS
Not applicable.
| File Type | application/msword |
| File Modified | 2016-03-31 |
| File Created | 2016-03-24 |