FR2046_20160830_omb

Supporting Statement for the
Selected Balance Sheet Items for Discount Window Borrowers
(FR 2046; OMB No. 7100-0289)
Summary
The Board of Governors of the Federal Reserve System (Board), under delegated
authority from the Office of Management and Budget (OMB), proposes to extend for three years,
without revision, the Selected Balance Sheet Items for Discount Window Borrowers (FR 2046;
OMB No. 7100-0289). These data are used to monitor discount window borrowing. The
Federal Reserve’s Regulation A, Extensions of Credit by Federal Reserve Banks, requires that
Reserve Banks review balance sheet data in determining whether to extend credit and to help
ascertain whether undue use is made of such credit. Depository institutions that borrow from the
discount window report on the FR 2046 certain balance sheet data for a period that encompasses
the dates of borrowing. The total annual burden for the FR 2046 is estimated to be 384 hours.
Background and Justification
The Federal Reserve’s Regulation A establishes rules under which Federal Reserve
Banks may extend credit to depository institutions and defines three basic lending programs:
primary credit, secondary credit, and seasonal credit.1 Primary credit is designed as a back-up
funding source to assist depository institutions in meeting very short-term needs (usually
overnight). Since such credit is provided at an above-market rate and ordinarily is available to
generally sound depository institutions, there is little or no administrative burden on the borrower
or the Reserve Banks. Secondary credit is designed as a back-up funding source for depository
institutions that do not qualify for primary credit. Such credit may be provided to meet
temporary funding needs of an institution if such a credit extension would be consistent with the
institution’s timely return to a reliance on market funding sources, or if such credit would
facilitate the orderly resolution of serious financial difficulties of the borrowing institution.
Unlike primary credit borrowers, secondary credit borrowers are subject to a higher level of
administration by the lending Reserve Bank and therefore subject to a slightly higher interest
rate. In these cases, supplemental information for monitoring the borrower would likely be
obtained from other sources, such as direct contacts with banking regulators. Seasonal credit is
designed to assist smaller institutions in meeting longer-term funding needs arising from regular
intra-year patterns in deposits and loans. Regulation A requires that Reserve Banks ensure that
the borrower’s funding need is truly seasonal in nature and that it will persist for at least four
weeks. Seasonal credit is provided at a market-related rate. Nonetheless, borrowers may still
find the rate charged on seasonal credit attractive relative to the rates they would be charged for
comparable credit arrangements from market sources. Therefore, while borrowing at the

Regulation A also defines “Emergency credit for others”—under which in unusual and exigent circumstances,
credit may be extended to any participant in a program or facility with broad-based eligibility—and a temporary
Term Auction Facility (TAF)—in which depository institutions obtain discount window loans at an interest rate that
is determined as the result of an auction. Borrowers of emergency credit for others and TAF credit are not required
to file the FR 2046.
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discount window, seasonal borrowers must agree to limit their net federal funds sales to an
amount consistent with their usual operating pattern.2
In 1998, the Subcommittee on Credit, Reserves, and Risk Management (SCRRM)
requested standardized data reporting for discount window monitoring as part of its broader
effort to promote greater uniformity across the Federal Reserve System in the administration of
the discount window.3 There had been considerable variation across Districts in the specific data
elements collected, in the time periods for which data were requested, and in the formats in
which data were reported. The implementation of the FR 2046 standardized these aspects of data
collection across Reserve Banks and, in many cases, reduced reporting burden relative to that
under the previous data reporting procedures. In 2003, the FR 2046 was updated owing to
changes to Regulation A (the establishment of the primary and secondary credit programs) with
no substantial changes to the reporting form or the instructions. In 2010, the FR 2046 was
revised to be consistent with the 2009 revisions to the (FR 2644) so that respondents that provide
Wednesday-only data on the FR 2046 and file the FR 2644 need not report data items that are
commonly defined in both reports. In 2013, the FR 2046 was revised to update data element
definitions to account for the discontinuance of the Thrift Financial Report (OTS Form 1313).
Also, an additional exception to reporting was added: institutions that file the FR 2644 need not
report the Wednesday-only data item for total loans on the FR 2046.
There are many cases in which discount window borrowing might be considered
inappropriate and inconsistent with Regulation A. For example, using the primary or secondary
credit programs as a primary funding source, or using seasonal credit to meet a non-seasonal
funding need, would be considered inappropriate. To guard against such situations,
Regulation A (12 CFR 201.3(c)(2)-(3)) requires Reserve Banks to consider the balance sheet
information of borrowers in determining whether to extend credit and to ensure that any credit
provided is used for an appropriate purpose. Questionable behavior might lead to follow-up
discussions with the borrower concerning their circumstances at the time of borrowing and to
counseling if their borrowing is deemed to have been inappropriate.
As noted above, there is usually little or no administrative burden on primary credit
borrowers, and the FR 2046 will usually not be collected from them. However, the FR 2046 may
be required from a primary credit borrower in very unusual circumstances, such as frequent
borrowing or if there is information to suggest that undue use is being made of the credit. In
these cases, information on federal funds sold and purchased (including resale and repurchase
agreements, respectively) would be important in identifying situations in which an institution
might be attempting to substitute borrowing at the discount window for its normal market
sources of funding. In addition, information on total assets, loans, deposits, and securities could
be used to assess the borrower’s funding need or use of the credit. Because primary credit is
extended for very short terms, daily data are necessary to capture the borrower’s balance sheet
trends.

2

See S-Letter 2487, March 1985.
This subcommittee is now known as SCRM (Subcommittee on Credit Risk Management). SCRM is a
subcommittee of the Conference of Presidents’ Committee on Credit and Risk Management.
3

2

The FR 2046 data are not routinely collected from secondary credit borrowers if adequate
information on the need for funding and the reason for borrowing from the Federal Reserve is
available from other sources, such as direct contacts with banking regulators. However, because
secondary credit borrowers are not in generally sound condition, they are subject to a higher
level of administration by the lending Reserve Bank. For example, if the loan is requested for a
reason other than to cover an unexpected overdraft, the borrower is not allowed to increase its
net exposure to other depository institutions—such as by selling federal funds—without
permission. The FR 2046 data may be required if the Reserve Bank becomes concerned about
the frequency or size of the institution’s borrowing. The use of the data is very similar to that
described for primary credit. Secondary credit is generally extended for one day at a time;
therefore, daily data are necessary to capture the borrower’s balance sheet trends.
The FR 2046 data are collected primarily from seasonal credit borrowers. Information on
federal funds sold and purchased is important to guard against situations in which a bank might
be using seasonal credit inappropriately. Under the terms of the program, seasonal credit
borrowers may be net sellers of federal funds while borrowing at the discount window, as long as
this pattern is consistent with their normal operating practices. The information obtained on
federal funds sold and purchased on the FR 2046 is used by discount officers to assess whether a
seasonal borrower’s position in the federal funds market is consistent with normal operations.
Similarly, information on a seasonal borrower’s total assets, loans, securities and deposits
is used to monitor whether loans advanced at the discount window are being used for the
intended purpose. Total loans and total deposits are used in monitoring an institution’s net funds
availability (defined as total deposits less total loans) during the period of borrowing. Historical
data on net funds availability is a key variable used in establishing an institution’s seasonal credit
line. Discount officers monitor net funds availability during the period of borrowing to ensure
that an institution’s actual funding need during the year is consistent with its seasonal credit line.
In addition, information on total assets, loans, and securities is used to ensure that seasonal credit
is used appropriately. Many seasonal credit borrowers, for example, exhibit a marked increase in
their loan portfolios over the first three quarters in each year reflecting increased agricultural
credit demands. Later in the year, loan demand at these banks subsides as farmers sell their
crops and repay their outstanding bank loans with the proceeds. Deviations from this typical
pattern might indicate that seasonal credit was being used inappropriately. For example, if a
seasonal borrower’s total loans increased only modestly during the year while its securities
portfolio expanded sharply, discount officers might contact the institution to verify whether it
remained eligible for the seasonal credit program.
Seasonal credit is typically extended over lengthy periods, and the borrower’s funding
need is expected to change slowly over the term of the borrowing. Therefore, Wednesday-only
data provide an adequate picture of a borrower’s balance sheet trends. In cases where seasonal
credit is extended to institutions in marginal financial condition, increased monitoring of the
borrower is required, and daily data may be collected at the Reserve Bank’s discretion.

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Description of Information Collection
Table 1 lists the data elements that are reported on the FR 2046. Data are reported
weekly for each two-week period in which a borrowing is outstanding. All data are reported for
the borrower’s domestic offices only and reported in thousands of dollars. The data elements
include the amounts of total securities, federal funds sold and securities purchased under
agreements to resell, total loans, total assets, total deposits, and federal funds purchased and
securities sold under agreements to repurchase.
Primary or secondary credit borrowers report daily data. A borrower need not supply
deposit data on the FR 2046 when it already files such information weekly on the Report of
Transaction Accounts, Other Deposits, and Vault Cash (FR 2900; OMB No. 7100-0087). For
these respondents, the two-week reporting period corresponds to their reserve maintenance
period.
Seasonal credit borrowers report Wednesday-only data. Depositories that already report
total securities, federal funds sold and resale agreements, total loans, and total assets weekly on
the Weekly Report of Selected Assets and Liabilities of Domestically Chartered Commercial
Banks and U.S. Branches and Agencies of Foreign Banks (FR 2644; OMB No. 7100-0075) or
total deposits weekly on the FR 2900 or on the FR 2644 do not need to provide these data on the
FR 2046.4

4

The FR 2644 and the FR 2900 employ somewhat different concepts of total deposits. Either concept is adequate
for the purpose of monitoring discount window borrowers.

4

Table 1 -Data Items on the FR 2046

Type of
Credit

Primary
or
Secondary

Data Elements

Qualifications

Definition Source*

Total securities

None

Call Report /
NCUA 5300

Federal funds sold and resale
agreements

None

Call Report

Total loans

All

None

Total assets

None

Total deposits

When not reported
weekly on FR 2900

Federal funds purchased and
repurchase agreements
(exclude FRB borrowings)

None

Total securities
Federal funds sold and resale
agreements
Total loans
Seasonal

Days of Report Period
for which
Data are
Provided

Total assets

Wednesday
only
Wednesday
only
Wednesday
only
Wednesday
only

Total deposits

Wednesday
only

Federal funds purchased and
repurchase agreements
(exclude FRB borrowings)

Wednesday
only

When not reported on
FR 2644
When not reported on
FR 2644
When not reported on
FR 2644
When not reported on
FR 2644
When not reported
weekly on FR 2900 or
FR 2644

Call Report /
NCUA 5300
Call Report/
NCUA 5300
FR 2900 or Call
Report / NCUA 5300
Call Report
Call Report / NCUA
5300
Call Report
FR 2644 or Call
Report / NCUA 5300
Call Report /
NCUA 5300
FR 2900 or Call
Report / NCUA 5300
Call Report

None

* source of definition:
Call Reports =

NCUA 5300 =
FR 2644 =
FR 2900 =

U.S. commercial bank Consolidated Reports of Condition and Income (FFIEC 031 and
FFIEC 041; OMB No. 7100-0036) or Report of Assets and Liabilities of U.S. Branches and
Agencies of Foreign Banks (FFIEC 002; OMB No. 7100-0032)
Statement of Financial Condition (NCUA 5300; OMB No. 3133-0004)
Weekly Report of Selected Assets and Liabilities of Domestically Chartered Commercial Banks
and U.S. Branches and Agencies of Foreign Banks (FR 2644; OMB No. 7100-0075)
Report of Transaction Accounts, Other Deposits, and Vault Cash (FR 2900; OMB No. 71000087)

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Data Content
In general, the definitions of data items reported on the FR 2046 correspond closely with
data definitions employed in the Call Reports for each type of institution. As shown in table 2,
the FR 2046 definitions of total assets, total securities, total loans, and total deposits coincide
with the relevant data definitions in the quarterly Call Reports filed by each type of institution.5
Most institutions that borrow at the discount window are banks and hence file the bank Call
Report. Thus, these definitions should be familiar to the vast majority of discount window
borrowers. Moreover, the Call Report definitions are adequate for discount window monitoring
purposes; they include federal funds purchased and sold on an overnight basis or rolled over
daily under a continuing contract and also include most overnight and term funding under
repurchase agreements. Thus, this definition includes instruments that are likely alternative
market sources of short-term funds for most discount window borrowers.
Table 2 - Definitions of Securities, Loans, Assets, and Deposits on the FR 2046

FR 2046
data item

Total
securities

U.S. branches and agencies
of foreign banks:

Credit unions:

U.S. commercial banks and others:
FFIEC 031

FFIEC 041

FFIEC 0026

NCUA 5300

Schedule RC
Balance Sheet,
Domestic office
portion of:
+ Held-tomaturity securities, item 2.a
+ Available-forsale securities,
item 2.b
+ Trading
assets, item 5

Schedule RC
Balance Sheet
+ Held-tomaturity securities, item 2.a
+ Available-forsale securities,
item 2.b
+ Trading
assets, item 5

Schedule RAL Assets and
Liabilities
+ U.S. Treasury securities,
item 1.b(1)
+ U.S. government agency
obligations, item 1.b(2)
+ Securities of foreign governments and official institutions, item 1.c(1), Col. A
minus Col. B
+ Mortgage-backed securities
issued or guaranteed by U.S.
Govt. agencies, item 1.c(2)a,
Col. A minus Col. B
+ Other mortgage-backed
securities, item 1.c(2)b, Col.
A minus Col. B
+ Other asset-backed
securities, Item 1.c(3),
Column A minus Column B
+ All other bonds, notes,
debentures, and corporate
stock (including state and
local securities), Item 1.c(4),
Column A minus Column B

Statement of
Financial
Condition,
Assets,
Investments:
+Trading
securities, item 4,
column E
+Available for
sale securities,
item 5, column E
+Held-tomaturity
securities, item 6,
column E

5

For U.S. branches and agencies of foreign banks that file a consolidated condition report, it is likely that discount
officers would request FR 2046 data for the particular branch that borrows.
6
Excluding transactions of the reporting institution’s own International Banking Facilities (IBFs) with nonrelated
parties and related depository institutions.

6

FR 2046
data item

U.S. branches and agencies
of foreign banks:

Credit unions:

U.S. commercial banks and others:
FFIEC 031

FFIEC 0026

NCUA 5300

FFIEC 041

+ Trading assets, U.S.
Treasury and Agency
securities, item 1.f(1), Col. A
minus Col. B
+ Trading assets: Mortgagebacked issued or guaranteed
by U.S. Govt. agencies, item
1.f(2)a, Col. A minus Col. B
+ Trading assets: Other
mortgage-backed securities,
item 1.f(2)b, Col. A minus
Col. B
+ Trading assets: Other assetbacked securities, item
1.f(3), Col. A minus Col. B
+ Trading assets: Other
securities , item 1.f(4), Col.
A minus Col. B
+ Trading assets: Other
trading assets, item 1.f(5),
Col. A minus Col. B
Total
loans

Schedule RC-C
Loans and Lease
Financing
Receivables,
Part I. Total
loans and leases,
net of unearned
income,
Column B, item
12

Schedule RC-C
Loans and Lease
Financing
Receivables, Part
I. Total loans and
leases, net of
unearned income,
Column B, item
12

Schedule RAL Assets and
Liabilities, Loans and leases,
net of unearned income, item
1.e, Col. A minus Col. B

Statement of
Financial
Condition,
Assets, Loans &
Leases, Total
Loans & Leases,
item 25, amount

Total
assets

Schedule RC-H
Selected Balance Sheet Items
for Domestic
Offices
+ Net due from
own foreign
offices, Edge
and agreement
subsidiaries, and
IBFs, item 6
+ Total assets
(excludes net
due from own
foreign offices,
Edge and
agreement
subsidiaries, and
IBFs), item 8

Schedule RC
Balance Sheet,
Total Assets,
item 12

Schedule RAL Assets and
Liabilities, Total Assets, item
3, Col. A minus Col. B

Statement of
Financial
Condition,
Assets, Total
Assets, item 33,
amount

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FR 2046
data item
Total
deposits

U.S. branches and agencies
of foreign banks:

Credit unions:

U.S. commercial banks and others:
FFIEC 031

FFIEC 041

FFIEC 0026

NCUA 5300

Schedule RC
Balance Sheet,
Deposits in
domestic offices,
item 13.a

Schedule RC
Balance Sheet,
Deposits in
domestic offices,
item 13.a

Schedule RAL Assets and
Liabilities, Total deposits
and credit balances, item 4.a,
Col. A minus Col. B

Statement of
Financial
Condition,
Liabilities,
Shares/Deposits,
Total shares and
deposits, item 18,
column C

Reporting Panel
The reporting panel for the FR 2046 changes from week to week. Any depository
institution that maintains reservable deposits is eligible to borrow at the discount window.
Approximately 12,750 depositories are eligible to borrow at the discount window including
domestic commercial banks, savings banks, savings and loan associations, credit unions, U.S.
branches and agencies of foreign banks, and others. However, in any given week only a relatively
small number of depositories turn to the discount window.7
As noted above, the FR 2046 is usually not collected from primary credit borrowers, and it
is not routinely collected from secondary credit borrowers if necessary information is available
from other sources. The reporting panel consists almost entirely of institutions that borrow
seasonal credit. The number of seasonal credit borrowers in any given week varies considerably
over the year and is generally less than 300, even during peak borrowing months, and in the past
several years has been much lower than that.
Frequency
The FR 2046 collects data for any two-week reporting period ending on Wednesday in
which borrowing was outstanding on one or more days. The data are typically collected after the
fact in one-week increments. For example, if an institution borrows on each day of a two-week
reporting period, Reserve Banks collect FR 2046 data twice: once to obtain data for the first week
of the reporting period and a second time to obtain data for the second week of the reporting
period. If an institution borrowed only during the first week of the maintenance period (or only
during the second week), FR 2046 data are still collected for both weeks of that maintenance
period. Reserve Banks indicate the dates for which FR 2046 data are required. For a weekly
FR 2900 respondent, this period coincides with its reserve maintenance period.
For primary and secondary credit borrowers, the FR 2046 collects daily (business day)
data. For seasonal credit borrowers, the FR 2046 collects weekly (Wednesday) data. Reserve
Banks may collect daily data from seasonal borrowers in questionable financial condition.

7

From 2013 to 2015 the weekly number of primary credit borrowers ranged from 15 to 113, and the weekly
number of secondary credit borrowers ranged from 0 to 8.

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Time Schedule for Information Collection
Depository institutions are required to file the FR 2046 by the Wednesday following the
end of the reporting week. Generally, Reserve Banks receive the data via mail or fax to the
discount window or statistics department.
Legal Status
The Board’s Legal Division has determined that the FR 2046 is authorized by sections
10B and 19(b)(7) of the Federal Reserve Act (12 U.S.C. §§ 347b and 461(b)(7)) and the Board’s
Regulation A (12 C.F.R. Part 201). Sections 10B and 19(b)(7) authorize Federal Reserve Banks
to make advances to a member bank or other depository institution on the borrower’s time or
demand notes under rules and regulations prescribed by the Board. The Board’s Regulation A
sets out the rules for obtaining such advances. The FR 2046 is required to obtain a benefit
because an entity may be required to file the form in order to borrow from the Federal Reserve’s
discount window.
The FR 2046 is considered confidential until the fact that the entity borrowed from the
discount window is disclosed. Until this point, the release of this information would cause
substantial harm to the competitive position of the entity from whom the information was
obtained because it would reveal the fact of discount window borrowing, as only borrowers are
required to file this form. Thus, this information can be kept confidential under exemption (b)(4)
of the Freedom of Information Act (5 U.S.C. § 552(b)(4)), which protects from disclosure “trade
secrets and commercial or financial information obtained from a person and privileged or
confidential.” Once the fact that an entity borrowed from the discount window is disclosed, the
FR 2046 is no longer considered confidential.
Consultation Outside the Agency
On May 19, 2016, the Board published a notice in the Federal Register (81 FR 31635)
requesting public comment for 60 days on the extension, without revision, of the FR 2046. The
comment period for this notice expired on July 18, 2016. The Board did not receive any
comments. On August 4, 2016, the Board published a final notice in the Federal Register
(81 FR 51447).
Estimates of Respondent Burden
The annual reporting burden of the FR 2046 is estimated to be 384 hours, as shown in the
following table. Because the report is event-generated, it is not possible to predict exactly how
many reports will be filed in a given year. As a result, the estimate of respondent burden is
based on recent historical discount window borrowing frequencies. As noted above, the FR 2046
data usually are not collected from primary credit borrowers, and are not routinely collected from
secondary credit borrowers if necessary information is available from other sources. Therefore,
only a nominal burden is expected for these programs. The estimated number of respondents and
annual frequency for the seasonal credit program is based on borrowing activity in 2013 through
2015. The estimated average hours per response of 0.75 hours for primary and secondary credit

9

borrowers is attributed to the collection of daily data. The estimated average hours per response
of 0.25 hours for seasonal credit borrowers is attributed to the collection of weekly (Wednesday)
data. These reporting requirements represent less than 1 percent of total Federal Reserve System
paperwork burden.
Number of
respondents8

FR 2046
Primary and
Secondary Credit
Seasonal Credit

Annual
frequency

Estimated
average hours
per response

Estimated
annual burden
hours

1

1

0.75

1

85

18

0.25

383
384

Total

The total annual cost to the public for this information collection is estimated to be $20,410.9
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 ongoing annual cost of the FR 2046 is estimated to be $70,333, based on an estimate
of 20 minutes of staff time per filed report, plus 4 hours per Reserve Bank for biweekly
processing (including panel maintenance, report generation, and report analysis), at $40 per hour.
The data are not subject to extensive editing or other manipulation and are not submitted to the
Board of Governors.

8

Of these estimated respondents, 85 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/contracting/getting-started-contractor/makesure-you-meet-sba-size-standards/table-small-business-size-standards.
9
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
$65, 15% Lawyers at $66, and 10% Chief Executives at $89). Hourly rates for each occupational group are the
(rounded) mean hourly wages from the Bureau of Labor and Statistics (BLS), Occupational Employment and Wages
May 2015, published March 30, 2016 www.bls.gov/news.release/ocwage.t01.htm. Occupations are defined using
the BLS Occupational Classification System, www.bls.gov/soc/.

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