FFIEC016_20180223_omb

Supporting Statement for the
Annual Dodd-Frank Act Company-Run Stress Test Report for Depository Institutions and
Holding Companies with $10-$50 Billion in Total Consolidated Assets
(FFIEC 016, OMB No. 7100-0356)
Summary
The Board of Governors of the Federal Reserve System (Board) requests approval from
the Office of Management and Budget (OMB) to extend for three years, with revision, the
mandatory Federal Financial Institutions Examination Council (FFIEC) Annual Dodd-Frank Act
Company-Run Stress Test Report for Depository Institutions and Holding Companies with $10$50 Billion in Total Consolidated Assets (FFIEC 016, OMB No. 7100-0356). The FFIEC 016
would replace the Board’s FR Y-16 (Annual Company-Run Stress Test Report For SMBs,
BHCs, and SLHCs with Total Consolidated Assets Greater Than $10 Billion and Less Than $50
Billion), which it currently uses to collect the annual company-run stress test results. The
revisions to the FFIEC 016 that are the subject of this request have been approved by the FFIEC.
The Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the
Currency (OCC) have similarly requested OMB approval to use the FFIEC 016 to request
information from banks under their supervision.
The annual FFIEC 016 report collects quantitative projections of revenues, losses, assets,
liabilities, and capital across three scenarios provided by the Board (baseline, adverse, and
severely adverse) and qualitative supporting information on the methodologies and processes
used to develop these internal projections. The respondent panel for the Board’s FFIEC 016
consists of any state member bank (SMB), bank holding company (BHC), and savings and loan
holding company (SLHC)1 with average total consolidated assets of greater than $10 billion but
less than $50 billion. The annual as of date of the stress test report is December 31, and the
submission deadline for the report is the following July 31.
As part of their proposed adoption of the FFIEC 016 report, the Board, the FDIC, and the
OCC (the agencies) also are proposing to implement a limited number of revisions that would
align the report with recent burden-reducing changes to the Consolidated Reports of Condition
and Income (Call Reports) (FFIEC 031, FFIEC 041, and FFIEC 051; OMB No. 7100-0036) and
the Board’s Consolidated Financial Statements for Holding Companies (FR Y-9C; OMB No.
7100-0128). The proposed FFIEC 016 reporting requirements reflect the company-run stress
testing requirements promulgated by the Dodd-Frank Wall Street Reform and Consumer
Protection Act (Dodd-Frank Act) (as reflected in the agencies’ current information collections).
The proposed FFIEC 016 would take effect for the December 31, 2017, as of date of the stress
test report. The submission deadline for the report would be July 31, 2018. The total current
annual paperwork burden for the FFIEC 016 is estimated to be 52,016 hours and the proposed
revisions would not change the current paperwork burden estimate.

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SLHCs substantially engaged in commercial or insurance underwriting activities are exempt from the
requirements until such time that the Board establishes a final capital rule for such firms. If the Board issued the
rule or order on or before March 31 of the previous year, the stress test requirements would then be effective on
January 1 of a given year, unless the time is accelerated or extended by the Board in writing.

Background and Justification
Currently, the agencies maintain separate, yet identical, reporting forms (FR Y-16 for the
Board, DFAST 10-50 for the FDIC, and DFAST 10-50B for the OCC) for the financial
institutions with total consolidated assets of more than $10 billion but less than $50 billion that
they supervise to report the results of their company-run stress test. These annual reports collect
quantitative projections of balance sheet assets and liabilities, income, losses, and capital across a
range of macroeconomic and financial scenarios as well as qualitative supporting information on
the methodologies and processes used to develop those internal projections. The agencies are
proposing to combine these separate data collections and designate the combined report as a
uniform FFIEC data collection.
Section 165(i)(2) of the Dodd-Frank Act and Regulation YY (12 CFR part 252, subpart
H) require financial institutions with total consolidated assets between $10 and $50 billion to
conduct annual company-run stress tests and to report their stress test results to the Federal
Reserve and the institution’s primary federal regulator.
Information received in the FFIEC 016 report is used in connection with the Board’s
supervision and regulation of these financial institutions to form supervisory assessments of the
quality of a company’s stress testing process and results as part of the broader assessment of a
company’s capital adequacy and risk management process. Data collected in the FFIEC 016
report provides Reserve Bank examiners with an important tool to assist in the analysis and
assessment of a company’s capital position and planning process. This information is not
available from other sources.
Respondents to the FFIEC 016 are not subject to the Board’s Capital Plan Rule, are not
participants in the Board’s Comprehensive Capital Analysis and Review process, and are not
subject to the Board’s supervisory stress testing program. Therefore, the Board does not require
the $10-50 billion companies to maintain a minimum post-stress pro-forma capital ratio over the
stress test planning horizon, and there is no regulatory approval associated with the results of
these internal company-run stress tests.
Description of Information Collection
The FFIEC 016 reporting form collects data through two primary schedules (1) the
Results Schedule (which includes the quantitative results of the stress tests under the baseline,
adverse, and severely adverse scenarios for each quarter of the planning horizon) and (2) the
Scenario Variables Schedule. In addition, respondents are required to submit a summary of the
qualitative information supporting its quantitative projections. The qualitative supporting
information must include:
 a description of the types of risks included in the stress test,
 a summary description of the methodologies used in the stress test,
 an explanation of the most significant causes for the changes in regulatory capital ratios,
and
 the use of the stress test results.

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Results Schedule
For each of the three supervisory scenarios, data are reported on two supporting
schedules (1) the Income Statement Schedule and (2) the Balance Sheet Schedule. In addition,
the Results Schedule includes a Summary Schedule, which summarizes key results from the
Income Statement and Balance Sheet Schedules.
Income statement data are collected on a projected quarterly basis showing projections of
both revenues and losses. These data are organized in a similar fashion to the mandatory
FR Y-9C, Schedule HI - Consolidated Income Statement, and the FFIEC 031 and FFIEC 041,
Schedule RI - Income Statement. For example, respondents project net charge-offs by loan type
(stratified by twelve specific loan types), gains and losses on securities, pre-provision net
revenue, and other key components of net income (i.e., provision for loan and lease losses, taxes,
etc.).
Balance sheet data are collected on a quarterly basis for projections of certain assets,
liabilities, and capital. These data are organized in a similar fashion to the FR Y-9C,
Schedule HC - Consolidated Balance Sheet, and FFIEC 031 and FFIEC 041, Schedule RC Balance Sheet. For example, respondents would project loans, allowance for loan and lease
losses, securities, funding sources, and equity capital. Capital data are also collected on a
projected quarterly basis and include components of regulatory capital, including the projections
of risk weighted assets and capital actions such as common dividends and share repurchases.
Scenario Variables Schedule
To conduct the stress tests, an institution may choose to project additional economic and
financial variables beyond the mandatory supervisory scenarios provided to estimate losses or
revenues for some or all of its portfolios. In such cases, the institution is required to complete
the Scenario Variables Schedule for each scenario where the institution chooses to use additional
variables. The Scenario Variables Schedule collects information on the additional scenario
variables used over the planning horizon for each supervisory scenario.
Proposed Revisions
As part of their proposed adoption of the FFIEC 016 report, the agencies also are
proposing to change the quantitative and qualitative information currently collected in their
separate, yet identical, reporting forms to implement a limited number of revisions that would
align the report with recent burden-reducing changes to the FFIEC 031, FFIEC 041, and the
Board’s FR Y-9C. These revisions are not expected to change the estimated reporting burden for
the proposed FFIEC 016 compared to the estimated reporting burden for the agencies’ existing
stress test reporting forms. The following revisions to the FFIEC 031, FFIEC 041, and FR Y-9C
(as applicable) that took effect March 31, 2017, would affect the proposed FFIEC 016.
(1) On the FFIEC 031 and FFIEC 041 Schedule RI, Memorandum item 14.a, and on the
FR Y-9C Schedule HI, Memorandum item 17(a), “Total other-than-temporary impairment
losses,” was removed, but institutions continue to report other-than-temporary impairment losses

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recognized in earnings on the FFIEC 031 and FFIEC 041 Schedule RI, Memorandum item 14,
and the FR Y-9C Schedule HI, Memorandum item 17. The agencies propose for the FFIEC 016
reporting form and instructions to replace line item 25, “Total other-than-temporary impairment
losses,” on each Income Statement scenario schedule with “Other-than-temporary impairment
losses on held-to-maturity and available-for-sale debt securities recognized in earnings” as
defined in FFIEC 031 and FFIEC 041 Schedule RI, Memorandum item 14, and FR Y-9C
Schedule HI, Memorandum item 17.
(2) On the FFIEC 031 and FFIEC 041 Schedule RC-E, Part I, Memorandum
items 1.c.(1), “Brokered deposits of less than $100,000,” and 1.c.(2), “Brokered deposits of
$100,000 through $250,000 and certain brokered retirement deposit accounts,” were combined
into a single item, Memorandum item 1.c, “Brokered deposits of $250,000 or less (fully insured
brokered deposits).” The agencies propose for the FFIEC 016 reporting form and instructions to
align its Balance Sheet line items 32 and 33 for retail and wholesale funding calculations,
respectively, with the updated FFIEC 031 and FFIEC 041 Schedule RC-E, Part I, Memorandum
item 1.c, “Brokered deposits of $250,000 or less (fully insured brokered deposits).”
(3) On Schedule RC-M of the FFIEC 031 and FFIEC 041, items for the amount of loans
covered by FDIC loss-sharing agreements in the following loan categories were removed and
combined with existing Schedule RC-M, item 13.a.(5), “All other loans and all leases” covered
by such agreements: item 13.a.(2), “Loans to finance agricultural production and other loans to
farmers”; item 13.a.(3), “Commercial and industrial loans”; item 13.a.(4)(a), “Credit cards”;
item 13.a.(4)(b), “Automobile loans”; and item 13.a.(4)(c), “Other (includes revolving credit
plans other than credit cards, and other consumer loans).” In order to keep the data collection
uniform and comparable across types of reporting institutions, the agencies propose for the
FFIEC 016 reporting form and instructions to discontinue the deduction of loans covered by
FDIC loss-sharing agreements from each of the loan categories collected in Balance Sheet line
items 1 through 13. In addition, in the proposed FFIEC 016 reporting form, existing Balance
Sheet line item 14, “Loans covered by FDIC loss-sharing agreements,” will be retained.
In addition, the agencies are proposing to have reporting institutions provide their Legal
Entity Identifier (LEI) on the FFIEC 016 reporting form, if they have one. The LEI is a 20-digit
alpha-numeric code that uniquely identifies entities that engage in financial transactions. The
recent financial crisis spurred the development of a Global LEI System (GLEIS).
Internationally, regulators and market participants have recognized the importance of the LEI as
a key improvement in financial data systems. The Group of Twenty (G-20) nations directed the
Financial Stability Board to lead the coordination of international regulatory work and deliver
concrete recommendations on the GLEIS by mid-2012, which in turn were endorsed by the G-20
later that same year. In January 2013, the LEI Regulatory Oversight Committee (ROC), which
includes regulators from around the world, was established to oversee the GLEIS on an interim
basis. The agencies are all members of the ROC. With the establishment of the full Global LEI
Foundation in 2014, the ROC continues to review and develop broad policy standards for LEIs.
The LEI system is designed to facilitate several financial stability objectives, including
the provision of higher quality financial data. In the United States, the Financial Stability
Oversight Council (FSOC) has recommended that regulators and market participants continue to

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work together to improve the quality and comprehensiveness of financial data both nationally
and globally. In this regard, the FSOC also has recommended that its member agencies promote
the use of the LEI in reporting requirements and rulemakings, where appropriate.2
With respect to the FFIEC 016, the agencies are proposing to have reporting institutions
provide their LEI on the cover page of this revised report once it is implemented, if a reporting
institution has an LEI. A reporting institution that does not have an LEI would not be required to
obtain one for purposes of reporting it on the FFIEC 016.
The uniform FFIEC 016 report would continue to be collected in an electronic format
using file specifications and formats determined by the agencies, as prescribed in the Federal
Reserve System’s Reporting Central application. The agencies believe that developing a
uniform report under the FFIEC reporting structure will promote uniform standards and reporting
across the agencies, which is consistent with the function of the FFIEC.3 The proposed
FFIEC 016 information collection would satisfy each agency’s company-run stress-testing
requirements, while ensuring consistency and comparability of the stress-testing information
across institutions. The change from three separate agency-specific reports to an interagency
FFIEC report is expected to be a seamless change for institutions with $10 to $50 billion in
assets currently reporting annual Dodd-Frank Act stress-testing information. The change also
would ensure that future collections of this information remain uniform across the agencies.
The proposed FFIEC 016 reporting form would take effect as of December 31, 2017.
The first annual filing deadline for the FFIEC 016 reporting form would be July 31, 2018.
Respondent Panel
The Board’s respondent panel includes any SMB, BHC or SLHC with average total
consolidated assets of greater than $10 billion but less than $50 billion. Average total
consolidated assets are based on the average of the total consolidated assets as reported on a
BHC’s four most recent FR Y-9C filings or a SMB’s four most recent FFIEC 031 or FFIEC 041
filings. A BHC or SMB that exceeds the asset threshold for the first time on or before March 31
of a given year must comply with the company-run stress test requirements beginning on January
1 of the following year, unless the Board in writing extends that time. Similarly, a BHC or SMB
that exceeds the asset threshold for the first time after March 31 of a given year must comply
with the company-run stress test requirements beginning on January 1 of the second year
following that given year, unless the Board in writing extends that time. The requirement to file
the FFIEC 016 report does not apply to foreign banking organizations (FBOs). However, U.S.
domiciled BHC subsidiaries or SMB subsidiaries of an FBO that meet the asset threshold must
file the FFIEC 016.4

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Financial Stability Oversight Council 2015 Annual Report, page 14,
http://www.treasury.gov/initiatives/fsoc/studies-reports/Documents/2015%20FSOC%20Annual%20Report.pdf.
3
See 12 U.S.C. 3305(c).
4
U.S. domiciled BHC subsidiaries of FBOs that meet the asset threshold and are currently relying on SR Letter 0101 are not required to report until the stress-test cycle that commences on January 1, 2016.

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Time Schedule for Information Collection
Respondents would be required to submit data annually, no later than July 31 based on
financial data as of December 31 of the prior year.
Legal Status
The FFIEC 016 is authorized pursuant to section 165(i)(2) of the Dodd-Frank Act, which
authorizes the Board to issue regulations implementing the annual stress-testing requirements for
its supervised institutions and provides that a company required to conduct annual stress tests
must submit a report its primary financial regulatory agency at such time, in such form, and
containing such information as the primary financial regulatory agency shall require (12 U.S.C.
5365(i)(2)(C)). The obligation to respond is mandatory.
The information collected by the FFIEC 016 may be accorded confidential treatment
under exemption 8 of the Freedom of Information Act (FOIA) because it will be collected as part
of the Board’s supervisory process (5 U.S.C. 552(b)(8)). This information also is the type of
confidential commercial and financial information that may be withheld under exemption 4 of
FOIA (5 U.S.C. 552(b)(4)). As required information, it may be withheld under exemption 4 only
if public disclosure could result in substantial competitive harm to the submitting institution,
under National Parks and Conservation Association v. Morton, 498 F.2d 765 (D.C. Cir. 1974).
Consultation Outside the Agency
On October 6, 2017, the agencies, under the auspices of the FFIEC, published an initial
notice in the Federal Register (82 FR 46887) requesting public comment for 60 days on the
extension, with revision, of the FFIEC 016. The comment period for this notice expired on
December 5, 2017. The agencies did not receive any comments. On February 23, 2018, the
agencies published a final notice in the Federal Register (83 FR 8149) and the agencies are
adopting the collection as originally proposed.
Estimate of Respondent Burden
The Board’s annual burden for the reporting requirements of this information collection
is estimated to be 469 hours per respondent, for a total of 30,016 hours annually. The Federal
Reserve estimates the automation burden for each new respondent would vary, but on average, it
is estimated to take approximately 2,000 hours (initial stress test) per respondent to prepare their
systems for submitting the data. Approximately, 11 new respondents would be required to
implement and file this report for a total of 22,000 hours annually. These reporting requirements
represents less than 1 percent of the total Federal Reserve System paperwork burden.

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Number of
respondents5

FFIEC 016
Initial stress test

11

Ongoing stress test

64
Total

Estimated
Estimated
Annual
average hours annual burden
frequency
per response
hours
1
2,000
22,000
1
469
30,016
52,016

The total annual cost to the public is estimated to be $2,855,678.6
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 FFIEC 016 is
estimated to be $324,590.

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Of these respondents, none 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/make-sureyou-meet-sba-size-standards/table-small-business-size-standards.
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Total cost to the public was estimated using the following formula: percent of staff time, multiplied by annual
burden hours, multiplied by hourly rate (30% Office & Administrative Support at $18, 45% Financial Managers at
$67, 15% Lawyers at $67, and 10% Chief Executives at $93). 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 2016, published March 31, 2017, 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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