FRLL10e_20190529_omb

Supporting Statement for the
Application to Become a Savings and Loan Holding Company or to
Acquire a Savings Association or Savings and Loan Holding Company
(FR LL-10(e); OMB No. 7100-0336)
Summary
The Board of Governors of the Federal Reserve System (Board), under authority
delegated by the Office of Management and Budget (OMB), has extended for three years, with
revision, the Application to Become a Savings and Loan Holding Company or to Acquire a
Savings Association or Savings and Loan Holding Company (FR LL-10(e); OMB No.
7100-0336). This collection of information is currently titled the Savings and Loan Holding
Company Application (Form H-(e)).1
This collection of information consists of information that must be filed in connection
with certain proposals involving the formation, acquisition, or merger of a savings and loan
holding company (SLHC). The Board requires the submission of this filing from an applicant
for regulatory and supervisory purposes and to allow the Board to fulfill its statutory obligations
to review these transactions under section l0(e) of the Home Owners’ Loan Act (HOLA)
(12 U.S.C. 1461 et. seq.) and the Board’s Regulation LL - Savings and Loan Holding Companies
(12 CFR 238.11). The Board uses the information submitted by applicants to evaluate these
transactions with respect to the financial and managerial resources and future prospects of the
company(ies) and savings association(s) involved, the effect of the acquisition on the savings
association(s), the insurance risk to the Deposit Insurance Fund, the convenience and needs of
communities to be served, and competitive effects.2
The Board is changing the name and title of its current Form H-(e), which the Board
inherited from the Office of Thrift Supervision (OTS) when the OTS’s supervisory authority
over SLHCs was transferred to the Board, to Application to Become a Savings and Loan
Holding Company or to Acquire a Savings Association or Savings and Loan Holding Company
(FR LL-10(e)), and to make numerous other revisions to this collection of information. These
changes would make the form consistent with the format of other Board forms; incorporate
information on the Board’s policies and procedures for processing applications; improve the
clarity of the information requests; reflect the impact of new laws, regulations, capital
requirements, and accounting rules; and delete information requests that are not typically useful
for the analysis of a proposed transaction. The revisions also are intended to increase
transparency by ensuring that initial filings include the information that the Federal Reserve
System (Federal Reserve) requires to evaluate a transaction and thereby reduce the need for
subsequent information requests, which may delay the Board’s consideration of a filing and
create additional burden for filers.
The current estimated total annual burden for the FR LL-10(e) is 7,500 hours and would
decrease to 900 hours. The form and instructions are available on the Board’s public website at
www.federalreserve.gov/apps/reportforms/default.aspx.
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2

The Board is changing the title and internal Agency Tracking Number for the purpose of consistency.
See 12 USC 1467a(e)(2).

Background and Justification
Section 10(e) of HOLA, as implemented in Regulation LL, provides that certain
transactions involving the formation, acquisition, or merger of an SLHC require prior written
approval from the Board.3 These transactions consist of the formation of an SLHC, an
acquisition that causes a savings association to become a subsidiary of an SLHC, the acquisition
of control of or all or substantially all of the assets of a savings association or an SLHC, and the
acquisition of control of a savings association or SLHC by certain individuals.4
The information required for the FR LL-10(e) allows the Board to fulfill its
responsibilities under HOLA and Regulation LL to evaluate the subject transactions. The
completed FR LL-10(e) is the primary source of comprehensive data on, among other things, the
structure of the proposal, the pro forma financial condition of the applicant and of its
subsidiary(ies), the competitive position of the applicant and entities being acquired, and the
convenience and needs of communities to be served. As a general matter, this information is not
readily available from any other source, and the information is critical to the Federal Reserve’s
ability to determine whether a proposed transaction is financially sound, competitively
acceptable, and consistent with convenience and needs considerations.
This information is not available from other sources.
Description of Information Collection
The FR LL-10(e) is event generated. As noted, the form collects information concerning
certain proposed SLHC formations, acquisitions, and mergers. Generally, the application is
submitted to the appropriate Federal Reserve Bank by existing or proposed SLHCs.
Applicants who file the FR LL-10(e) are required to publish a notice in a newspaper of
general circulation in the community(ies) in which the head offices of the applicant, its largest
subsidiary savings association, and each savings association to be directly or indirectly acquired
are located. The notice must state the name and address of the applicant and its proposed
subsidiary, and it must invite the public to submit written comments to the appropriate Federal
Reserve Bank. The newspaper notice must be published no more than fifteen calendar days
before and no later than seven calendar days after the date that the application is filed with the
appropriate Federal Reserve Bank.
Proposed Revisions to the FR LL-10(e)
The Board is revising the name and title of its existing Form H-(e), which the Board
inherited when supervisory authority over SLHCs was transferred to the Board.5 The Board is
3

Certain transactions are exempt from this requirement pursuant to HOLA or 12 CFR 238.12.
See 12 CFR 238.11.
5
Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub.L. 111-203, 124 Stat. 13762223 (July 21, 2010), authority for supervising SLHCs was transferred from the former OTS to the Board in July
2011. Since becoming the supervisor for SLHCs, the Federal Reserve has had the sole authority to act on the
transactions contemplated under the application form.
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making numerous additional revisions to this collection of information. The newly-titled
FR LL-10(e) will be organized and structured similarly to other Board forms such as the FR Y-3,
which governs certain transactions involving the formation, merger, or acquisition of a bank or
bank holding company. The FR LL-10(e) will also incorporate the Board’s policies and
procedures for processing applications and would include references to Regulation LL, which
replaced the OTS regulations for SLHCs.6
As noted above, the changes are being made in order to make the form consistent with
the format of other Board forms; incorporate information on the Board’s policies and procedures
for processing applications; improve the clarity of the information requests; obtain information
necessary to evaluate the statutory factors; reflect the impact of new laws, regulations, capital
requirements and accounting rules; delete information requests that are not typically useful for
the analysis of a proposed transaction; and add transparency for filers regarding the information
that is required to consider in a proposal.

A.
B.
C.
D.

The adopted changes are outlined below and are grouped into the following categories:
Additional requested items relating to information that is needed to evaluate the
transaction but was not requested in the Form H-(e),
Clarification of certain requested items that have been revised to reflect the Board’s
format for requesting this information,
Deletion of requested items in Form H-(e) that the Board is able to obtain elsewhere or is
otherwise not helpful in evaluating the application, and
Other minor changes for improved grammar, comprehension, accurate citations, and
mailing addresses.

A. Additional Requested Items
The FR LL-10(e) requires additional information that was not included in Form H-(e).
This includes information on filing requirements regarding an SLHC electing to be treated as, or
engage in activities only permissible for, a financial holding company. This information is
helpful in determining the permissibility of activities in which the resulting institution may
engage and if other actions need to be taken by the applicant if the target institution is not well
capitalized or well managed.
B. Clarification of Certain Information
The format of FR LL-10(e) has been changed to align with the format of other Board
application forms (in particular the FR Y-3 which governs certain transactions involving the
formation, merger, or acquisition of a bank or bank holding company). As a result, references to
OTS practices and procedures have been replaced with references to Board and Federal Reserve
practices and procedure. This includes a description of publication requirements under the
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The former OTS’s regulation for SLHCs was codified at 12 CFR 574. Regulation LL sought to retain the
substantive requirements of the OTS regulations with respect to formations and acquisitions while structuring the
requirements similarly to Subpart B of Regulation Y and replacing OTS procedures with Board procedures. In
addition, Regulation LL differs from the OTS regulations by incorporating control and controlling influence
provisions that are very similar to those in Regulation Y.

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Board’s regulations and how to request confidential treatment for parts of the application.
In addition, many questions in the Form H-(e) have been replaced, revised, or clarified in
the FR LL-10(e) to match the Board’s format and content in the FR Y-3 for requesting this
information. This includes information regarding:
 The transaction and its structure, including related documents such as merger agreements,
 Related regulatory filings,
 The financial resources of the transaction, including how the transaction is structured,
current and pro forma financials, capital levels, funding source(s) for the transaction,
issuance of any new debt/equity, and cash flow projections,
 The managerial resources of the transaction, including information on principals involved
in the transaction,
 The effect on the convenience and needs of the community, information related to the
Community Reinvestment Act, information regarding any litigation or investigation
involving the applicant or any of its subsidiaries or the target or any of its subsidiaries
during the past two years; and retention or establishment of new branches, and
 Competitive factors of the transaction.
C. Deletion of requested items in the Form H-(e).
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

This includes information regarding:
Certain securities filings related to the applicant,
Federal, state, and local tax consequences of the transaction,
Waivers obtained from other regulators,
Fees, commission, and expenses paid to parties that are involved in the transaction,
Background regarding the history of the applicant, including when it was formed;
description of business activities of the applicant over the past three years, and whether
applicant or any of its subsidiaries depend upon a single or a few customers for their
business,
Information on applications filed by the applicant with the agency over the past five
years,
Adverse trends on the subsidiaries’ financial condition and operations,
Special consideration payments to shareholders, directors, or officers as a result of the
transaction,
Previous acquisitions within the past two years,
Commitments that the applicant or target has with community organizations,
Alternative distribution methods to market product and services,
Online banking services, and
Voting trust agreements.

D. Other minor changes to the form include those to improve style, grammar,
comprehension, and to provide accurate citations and addresses.
These changes include:

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Renaming the form the FR LL-10(e) to reflect the Board’s practice of naming Board
forms after relevant regulations and statutes (e.g., FR Y-3 and FR Y-4);
Replacing references to OTS regulations with references to the Board’s Regulation LL;
Adding information on the Board’s public website; and
Adding information on the Federal Reserve E-Apps electronic filing system.
Respondent Panel
The FR LL-10(e) panel comprises entities seeking prior approval to become or acquire an

SLHC.
Time Schedule for Information Collection
The application submitted with this form is event generated and the data are not part of
any published reporting series. All timeframes are generally dependent upon when the applicant
chooses to enter into a transaction that requires an individual submission.
Legal Status
The FR LL-10(e) is authorized pursuant to section 10(b)(2) of the Home Owners’ Loan
Act (12 U.S.C. 1467a(b)). The FR LL-10(e) is mandatory. The information on the FR LL-10(e)
is not considered confidential unless the applicant requests confidential treatment pursuant to
exemption 4 (confidential business information) or 6 (confidential personal information) of the
Freedom of Information Act (5 U.S.C. 552(b)(4) and (b)(6)). All such requests for confidential
treatment would be reviewed on a case-by-case basis.
Consultation Outside the Agency
There has been no consultation outside the agency.
Public Comments
On November 30, 2018, the Board published an initial notice in the Federal Register
(83 FR 61635) requesting public comment for 60 days on the extension, with revision, of the
FR LL-10(e). The comment period for this notice expired on January 29, 2019. The Board did
not receive any comments. On March 8, 2019, the Board published an additional notice in the
Federal Register (84 FR 8527) requesting public comment on the proposed certification page
that was mistakenly omitted from the original notice. The comment period for this notice expired
on April 8, 2019. The Board did not receive any comments. The revisions will be implemented
as proposed. On May 15, 2019, the Board published a final notice in the Federal Register
(84 FR 21780).
Estimate of Respondent Burden
As shown in the table below, the current estimated total annual burden for the
FR LL-10(e) is 7,500 hours but would decrease to 900 hours. The average estimated hours per

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response would decrease from 500 hours to 60 hours. The decrease in the estimated time burden
per response is partially attributable to a significant reduction in the information collected due to
the proposed revisions to the FR LL-10(e), as noted above. However, the majority of this
decrease is due to the Board’s use for the first time of its own methodology for calculating the
burden associated with the FR LL-10(e). The previous burden estimate was based on the
calculation methodology used by the OTS to estimate the time burden associated with filing the
Form H-(e). When the Board inherited the form from the OTS, the Board adopted the OTS’s
estimates for time burden per response, and has continued to use that estimate until now. In
connection with this proposal, the Board has estimated the time burden per response using the
same methodology that it uses for other applications that have similar requirements.7 The Board
does not have access to the methodology that the OTS used to calculate the estimated burden
associated with filing Form H-(e), so it is not possible to state how the methodologies differ, or
the reasons that the estimate using the Board’s methodology differs significantly from that of the
OTS. The revised burden estimates are based on the number of applications and notifications,
including post-consummation notices, received in 2016 and 2017. These reporting requirements
represent less than 1 percent of the Board’s total paperwork burden.
Estimated
number of
respondents8
15

FR LL-10(e)
Current
Proposed

15

Annual
frequency
1
1

Estimated
average hours
per response
500

Estimated
annual burden
hours
7,500

60

900
(6,600)

Change
The estimated total annual cost to the public for the FR LL-10(e) is $432,000 and would
decrease to $51,840.9
Sensitive Questions

These collections of information contain no questions of a sensitive nature, as defined by
OMB guidelines.

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Application to Become a Bank Holding Company and/or Acquire an Additional Bank or Bank Holding Company
(FR Y-3; OMB No. 7100-0121) and the Notification by a Bank Holding Company to Acquire a Nonbank Company
and/or Engage in Nonbanking Activities (FR Y-4; OMB No. 7100-0121).
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Of these respondents, 8 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.
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 $19, 45% Financial Managers at
$71, 15% Lawyers at $69, and 10% Chief Executives at $96). 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 2018, published March 29, 2019, 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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Estimate of Cost to the Federal Reserve System
The information submitted in the applications is not automated. The cost to the Federal
Reserve System of printing and mailing instructions is negligible.

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