FFIEC002_FFIEC002S_20190215_omb

Supporting Statement for the
Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks
(FFIEC 002; OMB No. 7100-0032)
and the
Report of Assets and Liabilities of a Non-U.S. Branch that is Managed or Controlled by a
U.S. Branch or Agency of a Foreign (Non-U.S.) Bank
(FFIEC 002S; OMB No. 7100-0032)
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
Federal Financial Institutions Examination Council (FFIEC) Report of Assets and Liabilities of
U.S. Branches and Agencies of Foreign Banks (FFIEC 002; OMB No. 7100-0032) and Report of
Assets and Liabilities of a Non-U.S. Branch that is Managed or Controlled by a U.S. Branch or
Agency of a Foreign (Non-U.S.) Bank (FFIEC 002S; OMB No. 7100-0032). The Board submits
this request on behalf of itself, Federal Deposit Insurance Corporation (FDIC), and Office of the
Comptroller of the Currency (OCC) (collectively, the agencies). No separate submission will be
made by the FDIC or OCC.
The FFIEC 002 must be submitted quarterly by U.S. branches and agencies of foreign
banks. The report requests detailed schedules of assets and liabilities as a condition report with a
variety of supporting schedules. This information is used to fulfill the agencies’ supervisory and
regulatory requirements pursuant to the International Banking Act of 1978 (IBA).
The FFIEC 002S is a mandatory supplement to the FFIEC 002 and collects information
on assets and liabilities of any non-U.S. branch that is managed or controlled by a U.S. branch or
agency of a foreign bank.1 A separate FFIEC 002S supplement is completed by the managing or
controlling U.S. branch or agency for each applicable foreign branch. The FFIEC 002S
collection improves data on U.S. deposits, credit, international indebtedness, and assists U.S.
bank supervisors determine the assets managed or controlled by the U.S. agency or branch of the
foreign bank.
The proposed revisions to the FFIEC 002 and FFIEC 002S generally address the revised
accounting for credit losses under the Financial Accounting Standards Board’s (FASB)
Accounting Standards Update (ASU) No. 2016-13, “Financial Instruments - Credit Losses
(Topic 326): Measurement of Credit Losses on Financial Instruments” (ASU 2016-13). The
proposal also includes changes related to implementing the agencies’ recent final rule (the CECL
Rule) on the implementation and capital transition for the current expected credit losses
methodology (CECL). These proposed revisions would not affect the estimated annual burden
for the FFIEC 002 of 19,955 hours or the estimated annual burden for the FFIEC 002S of 912
hours.

“Managed or controlled” means that a majority of the responsibility for business decisions, including, but not
limited to, decisions with regard to lending, asset management, funding, liability management, or the responsibility
for recordkeeping with respect to assets or liabilities for that foreign branch resides at the U.S. branch or agency.
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Background and Justification
Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks
(FFIEC 002)
The IBA specifies that foreign banks’ branches and agencies in the United States are
subject to the supervisory authority of the U.S. federal banking agencies and that responsibility
for federal supervision is to be shared among the agencies. As one step in carrying out the
supervisory and regulatory responsibilities imposed by the IBA, the agencies instituted the
FFIEC 002 in June 1980. The report collects from the U.S. branches and agencies of foreign
banks information that is similar to that collected by the Call Report (FFIEC 031, FFIEC 041,
and FFIEC 051; OMB No. 7100-0036) from U.S. commercial banks and savings associations,
although the FFIEC 002 collects fewer data items.
In addition to its supervisory and regulatory uses, the Board uses the information
collected by the FFIEC 002 to conduct monetary and financial analysis essential for the conduct
of monetary policy. The data are used to analyze credit developments, identify sources and uses
of funds in the banking sector, and assess financial developments within the U.S. banking
system. The data help to interpret the bank credit and deposit information that the Board uses
when making monetary policy decisions and assists the Board in gauging the response to those
decisions.
Report of Assets and Liabilities of a Non-U.S. Branch that is Managed or Controlled
by a U.S. Branch or Agency of a Foreign (Non-U.S.) Bank (FFIEC 002S)
Foreign banks often conduct business at branches that are domiciled in countries other
than the United States, but which are largely run out of the banks’ U.S. agency or branch office,
with a separate set of books but often with overlapping management responsibilities. Such
branches often engage in transactions with U.S. residents.
The information reported on the FFIEC 002S is collected for several reasons: (1) to
monitor deposit and credit transactions of U.S. residents, (2) to monitor the impact of policy
changes such as changes in reserve requirements, (3) to analyze structural issues concerning
foreign bank activities in U.S. markets, (4) to understand indebtedness and flows of banking
funds in developing countries, in connection with data collected by the International Monetary
Fund and the Bank for International Settlements that are used in economic analysis, and (5) to
collect information helpful for the supervision of U.S. offices of foreign banks, which often are
managed jointly with these branches.
The FFIEC 002S collects details on transactions with U.S. residents and with residents of
the banks’ home countries. In most cases, these data cover a large proportion of the subject
branches’ total activities since most branches have heavy exposures to their home countries and
deal largely with U.S. customers. This collection allows for the more complete data on U.S.
deposits, credit, and international indebtedness and assists U.S. bank supervisors in determining
the assets managed or controlled by the U.S. agency or branch of the foreign bank.

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Description of Information Collection
The reporting panel for the FFIEC 002 includes all U.S. branches and agencies (including
their International Banking Facilities (IBFs)) of foreign banks, whether federally licensed or state
chartered, insured or uninsured. The FFIEC 002 consists of a summary schedule of assets and
liabilities (Schedule RAL) and several supporting schedules. Each schedule requires information
on balances of the entire reporting branch or agency. On the schedules for cash (Schedule A),
loans (Schedule C), and deposits (Schedule E), separate details are reported on balances of IBFs.
Unlike the Call Report for domestic banks and thrifts, the FFIEC 002 collects no income data.
A separate FFIEC 002S must be completed by any U.S. branch or agency of a foreign
bank that manages or controls a banking branch of its parent bank in a foreign country. The
FFIEC 002S covers all of the foreign branch’s assets and liabilities, regardless of the currency in
which they are payable. The supplement also covers transactions with all entities, both related
and nonrelated, regardless of location. All due from/due to relationships with related institutions,
both depository and nondepository, are reported on a gross basis, that is, without netting due
from and due to data items against each other.
Proposed Revisions
FFIEC 002
At present, a reporting U.S. branch or agency of a foreign bank is not required to, but
may choose to, establish a general allowance for loan losses, which it would report in its
FFIEC 002 report in Schedule M, Part IV, item 1, “Amount of allowance for loan losses, if any,
carried on the books of the reporting branch or agency including its IBF.” In addition, any
general allowance for loan losses is reported in Schedule M, Part I, item 2(a), column B, as part
of the “Gross due to” the “Head office of parent bank,” as well as in either Schedule RAL, item
2(a), “Net due from related depository institutions,” or item 5(a), “Net due to related depository
institutions,” as applicable. The institution currently reports the total amount of the allowance
carried on the books of the reporting institution, even if part of that allowance is applicable to
other branches.
To address the change in allowance nomenclature arising from the broader scope of
allowances under ASU 2016-13, the agencies propose to revise Schedule M, Part IV, item 1,
from “Amount of allowance for loan losses” to “Allowance for credit losses on loans and
leases,” effective March 31, 2021. For the period from March 31, 2019, through December 31,
2020, the reporting form and instructions for this data item would include guidance stating that
institutions that have adopted ASU 2016-13 would report the “allowance for credit losses on
loans and leases,” as applicable. For the transition period from March 31, 2021, through
December 31, 2022, the reporting form and instructions for this data item would be updated to
include guidance stating that institutions that have not adopted ASU 2016-13 would report the
amount of the “allowance for loan losses,’’ as applicable. In addition, for these same time
periods, the agencies propose to revise the instructions for Schedule M, Part I, item 2(a), column
B, as well as Schedule RAL, items 2(a) and 5(a), to incorporate language clarifying that
institutions should include any allowance for loan losses or any allowances for credit losses in

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these items, as applicable. If an institution chooses to establish them, the allowances for credit
losses reportable in item 2(a) or 5(a), as applicable, could apply to loans, leases, other financial
assets measured at amortized cost, and off-balance sheet credit exposures (but not available-for
sale securities, which are reported at fair value on Schedule RAL).
Finally, effective March 31, 2019, the agencies propose to add a statement to the
instructions for Schedule RAL, item 1(h), “Other assets (including other claims on nonrelated
parties,” that specifies that institutions that have adopted ASU 2016-13 should exclude from this
item any accrued interest receivable that is reported elsewhere on the balance sheet as part of the
related financial asset’s amortized cost.
FFIEC 002S
The General Instructions for the FFIEC 002S state that due from/due to relationships with
related institutions (both depository and nondepository) are to be reported on a gross basis and
that such relationships include all claims between the foreign branch and any related institutions
arising in connection with any accounting or regulatory allocations entered on the books of the
reporting foreign branch that ultimately affect unremitted profits. As an example of such
allocations, the General Instructions cite the “allowance for possible loan losses.” In addition,
the instructions for item 2(c), “Loans,” states that loans (and leases) should be reported before
deduction of any allowance for loan losses. To address the change in allowance nomenclature
arising from the broader scope of allowances under ASU 2016-13, the agencies propose to revise
the FFIEC 002S General Instructions and item 2(c) instructions to change the “allowance for
loan losses” terminology to “allowances for credit losses” and “allowances for credit losses on
loans and leases,” respectively, effective March 31, 2021. Allowances for credit losses could
apply to loans, leases, other financial assets measured at amortized cost, and off-balance sheet
credit exposures (but not available-for-sale securities). For the period from March 31, 2019,
through December 31, 2020, the General Instructions for reporting due from/due to relationships
would include guidance stating that institutions that have adopted ASU 2016-13 should interpret
the “allowance for loan losses” as “allowances for credit losses,” as applicable. For the
transition period from March 31, 2021, through December 31, 2022, these General Instructions
would include guidance stating that institutions that have not adopted ASU 2016-13 should
interpret “allowances for credit losses” as the “allowance for loan losses,” as applicable.
Comparable changes would be made to the instructions for item 2(c) for these periods.
Time Schedule for Information Collection and Publication
The FFIEC 002 and FFIEC 002S are collected as of the end of the last calendar day of
March, June, September, and December. U.S. branches and agencies of foreign banks must
submit the FFIEC 002 and FFIEC 002S to the Federal Reserve Bank in whose district the
reporting branch or agency is located within 30 calendar days following the report date. After
processing and editing respondent data, the Board sends the data to the FDIC and OCC for their
use in monitoring the U.S. activities of foreign banks under their supervision.
Aggregate data for all U.S. branches and agencies that file the FFIEC 002 are published
in the Federal Reserve Bulletin and are also used in developing flow of funds estimates and the

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estimates published in the Federal Reserve weekly H.8 statistical release, Assets and Liabilities
of Commercial Banks in the United States. Aggregate data for the FFIEC 002S are available to
the public upon request.
Individual respondent data, excluding confidential information, are available to the public
from the National Technical Information Service in Springfield, Virginia, upon request. In
addition, individual respondent data are also available on the FFIEC public website at
www.ffiec.gov/nicpubweb/nicweb/nichome.aspx.
Legal Status
Section 11(a)(2) of the Federal Reserve Act (FRA) authorizes the Board to require
depository institutions to submit reports of their liabilities and assets as the Board may determine
to be necessary or desirable to enable the Board to discharge its responsibility to monitor and
control monetary and credit aggregates (12 U.S.C. 248(a)(2)). Section 7(c)(2) of the IBA,
provides that Federal branches and agencies of foreign banks are subject to the reporting
requirements in section 11(a) of the FRA “to the same extent and in the same manner as if the
branch or agency were a state member bank” (12 U.S.C. 3105(c)(2)). Section 7(c)(2) of the IBA
also provides that state-licensed branches and agencies of foreign banks are subject to the
requirement in section 9 of the FRA (12 U.S.C. 324) that they file reports of condition with the
appropriate Federal Reserve Bank (12 U.S.C. 3105(c)(2)). In addition, section 4(b) of the IBA
authorizes the OCC to collect such information from Federal branches and agencies of foreign
banks (12 U.S.C. 3102(b)). The Board, FDIC, and OCC also are authorized to collect reports of
condition from insured branches of foreign banks pursuant to section 7(a) of the Federal Deposit
Insurance Act (12 U.S.C. 1817(a)(1) and (3)). The obligation to respond is mandatory for
reporting institutions.
In general, the information collected in the FFIEC 002 report is made available to the
public, except that the data collected from a U.S. branch or agency of a foreign bank in
Schedule M of the FFIEC 002 report is withheld as confidential commercial and financial
information. Schedule M requires respondents to report the amounts due to/due from related
institutions in the U.S. and in foreign countries; however, U.S. banking organizations, which are
direct competitors of the FFIEC 002 respondents, are not required to disclose financial
information involving transactions with related institutions. Accordingly, disclosure of this
confidential financial information on the FFIEC 002 report would put respondents at a distinct
competitive disadvantage relative to their U.S. banking organization counterparts. Schedule M,
therefore, is considered exempt from public disclosure pursuant to exemption 4 of the Freedom
of Information Act (FOIA), which protects “trade secrets and commercial or financial
information obtained from a person and privileged or confidential” (5 U.S.C. 552(b)(4)).2 If a
respondent believes that disclosure of any of the public portions of its FFIEC 002 report would
be reasonably likely to result in substantial harm to its competitive position under exemption 4 of
the FOIA, the respondent may request confidential treatment for such information as set forth in
the Board’s Rules Regarding the Availability of Information (12 CFR 261.15) and in the
Instructions to the FFIEC 002 report.
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Although Schedule M of the FFIEC 002 report is withheld from the public, the Instructions to the FFIEC 002
report indicate that these reports are made available to the relevant state supervisory authority in their entirety.

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The FFIEC 002S report collects data on transactions with all entities, both related and
nonrelated, and similar to Confidential Schedule M of the FFIEC 002 report, also collects data
on the amount due to/from transactions with related institutions (both depository and nondepository). The data collected on the FFIEC 002S report has been deemed confidential since
the inception of the report. The primary rationale for confidential treatment of the FFIEC 002S
report in its entirety is because the report may contain intracompany business information and
because home country data collected on the FFIEC 002S could reveal information about
individual customers. U.S. banking organizations, which are direct competitors of the
FFIEC 002S respondents, are not required to publicly disclose such financial information
involving transactions with related institutions. Accordingly, disclosure of the confidential
financial information submitted on the FFIEC 002S report, would put respondents at a distinct
competitive disadvantage relative to their U.S. banking organization counterparts. The
FFIEC 002S report, therefore, is considered exempt from disclosure in its entirety pursuant to
exemption 4 of the FOIA. Aggregate data from the FFIEC 002S report for multiple respondents,
which does not reveal the identity of any individual respondent, may be released.
Public Comments and Response
On September 28, 2018, the agencies, under the auspices of the FFIEC, published an
initial notice in the Federal Register (83 FR 49160) requesting public comment for 60 days on
the extension, with revision, of the FFIEC 002 and FFIEC 002S. The comment period for this
notice expired on November 27, 2018. No comments were received on the FFIEC 002 or
FFIEC 002S and the agencies will proceed with the revisions as originally proposed. On
February 14, 2019, the agencies published a final notice in the Federal Register (84 FR 4131).
Consultation outside the Agency
There has been no consultation outside of the Federal Reserve System
Estimate of Respondent Burden
The current estimated annual reporting burdens for the FFIEC 002 and FFIEC 002S are
19,955 hours and 912 hours, respectively, and would remain unchanged with the proposed
revisions. This burden estimate accounts for all filers of the FFIEC 002, including those
supervised by the FDIC or OCC. These reporting requirements represent less than 1 percent of
the total Federal Reserve System paperwork burden.

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Number of
respondents3

Annual
frequency

FFIEC 002

209

4

Estimated
average hours
per response
23.87

FFIEC 002S

38

4

6

FFIEC 002 and FFIEC 002S

Total

Estimated
annual burden
hours
19,955
912
20,867

The total cost to the public for the FFIEC 002 and FFIEC 002S is estimated to be $1,169,595.4
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 current annual cost to the Federal Reserve System for collecting and processing the
FFIEC 002 and FFIEC 002S is estimated to be $62,700. The Federal Reserve System collects
and processes the data for all three of the agencies.

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Of these respondents, 89 for the FFIEC 002 and 11 for the FFIEC 002S 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/document/support--table-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 rates (30% Office & Administrative Support at $18, 45% Financial Managers at
$69, 15% Lawyers at $68, and 10% Chief Executives at $94). 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 2017, published March 30, 2018, 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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