30-Day Federal Register Notice

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Federal Register / Vol. 85, No. 17 / Monday, January 27, 2020 / Notices

as MARAD–2020–0011 at http://
www.regulations.gov. Interested parties
may comment on the effect this action
may have on U.S. vessel builders or
businesses in the U.S. that use U.S.-flag
vessels. If MARAD determines, in
accordance with 46 U.S.C. 12121 and
MARAD’s regulations at 46 CFR part
388, that the issuance of the waiver will
have an unduly adverse effect on a U.S.vessel builder or a business that uses
U.S.-flag vessels in that business, a
waiver will not be granted. Comments
should refer to the vessel name, state the
commenter’s interest in the waiver
application, and address the waiver
criteria given in section 388.4 of
MARAD’s regulations at 46 CFR part
388.
Public Participation
How do I submit comments?
Please submit your comments,
including the attachments, following the
instructions provided under the above
heading entitled ADDRESSES. Be advised
that it may take a few hours or even
days for your comment to be reflected
on the docket. In addition, your
comments must be written in English.
We encourage you to provide concise
comments and you may attach
additional documents as necessary.
There is no limit on the length of the
attachments.
Where do I go to read public comments,
and find supporting information?
Go to the docket online at http://
www.regulations.gov, keyword search
MARAD–2020–0011 or visit the Docket
Management Facility (see ADDRESSES for
hours of operation). We recommend that
you periodically check the Docket for
new submissions and supporting
material.
Will my comments be made available to
the public?
Yes. Be aware that your entire
comment, including your personal
identifying information, will be made
publicly available.

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If you wish to submit comments
under a claim of confidentiality, you
should submit three copies of your
complete submission, including the
information you claim to be confidential
business information, to the Department
of Transportation, Maritime
Administration, Office of Legislation
and Regulations, MAR–225, W24–220,
1200 New Jersey Avenue SE,
Washington, DC 20590. Include a cover
letter setting forth with specificity the
basis for any such claim and, if possible,

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Privacy Act
In accordance with 5 U.S.C. 553(c),
DOT solicits comments from the public
to better inform its rulemaking process.
DOT posts these comments, without
edit, to www.regulations.gov, as
described in the system of records
notice, DOT/ALL–14 FDMS, accessible
through www.dot.gov/privacy. To
facilitate comment tracking and
response, we encourage commenters to
provide their name, or the name of their
organization; however, submission of
names is completely optional. Whether
or not commenters identify themselves,
all timely comments will be fully
considered. If you wish to provide
comments containing proprietary or
confidential information, please contact
the agency for alternate submission
instructions.
Authority: 49 CFR 1.93(a), 46 U.S.C.
55103, 46 U.S.C. 12121

* * *
Dated: January 22, 2020.
By Order of the Maritime Administrator.
T. Mitchell Hudson, Jr.,
Secretary, Maritime Administration.
[FR Doc. 2020–01308 Filed 1–24–20; 8:45 am]
BILLING CODE 4910–81–P

DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
FEDERAL RESERVE SYSTEM
FEDERAL DEPOSIT INSURANCE
CORPORATION
Agency Information Collection
Activities; Submission for OMB
Review; Comment Request
Office of the Comptroller of the
Currency (OCC), Treasury; Board of
Governors of the Federal Reserve
System (Board); and Federal Deposit
Insurance Corporation (FDIC).
ACTION: Joint notice and request for
comment.
AGENCY:

May I submit comments confidentially?

VerDate Sep<11>2014

a summary of your submission that can
be made available to the public.

In accordance with the
requirements of the Paperwork
Reduction Act of 1995 (PRA), the OCC,
the Board, and the FDIC (the agencies)
may not conduct or sponsor, and the
respondent is not required to respond
to, an information collection unless it
displays a currently valid Office of
Management and Budget (OMB) control
number. On October 4, 2019, the
agencies, under the auspices of the

SUMMARY:

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Federal Financial Institutions
Examination Council (FFIEC), requested
public comment for 60 days on a
proposal to revise and extend the
Consolidated Reports of Condition and
Income (Call Reports) (FFIEC 031,
FFIEC 041, and FFIEC 051) and the
Regulatory Capital Reporting for
Institutions Subject to the Advanced
Capital Adequacy Framework (FFIEC
101), which are currently approved
collections of information.
The comment period for the October
2019 notice ended on December 3, 2019.
As described in the SUPPLEMENTARY
INFORMATION section, after considering
the comments received on the proposal,
the agencies are proceeding with the
proposed revisions to the reporting
forms and instructions for the Call
Reports and the FFIEC 101 (except for
the reporting changes arising from the
proposed total loss absorbing capacity
holdings rule that has not yet been
finalized), but with certain
modifications. In general, the
modifications relate to the disclosure of
an institution’s election of the
community bank leverage ratio
framework, a change in the scope of the
FFIEC 031 Call Report, and the
reporting of home equity lines of credit
that convert from revolving to nonrevolving status. The reporting revisions
that implement various changes to the
agencies’ capital rule would take effect
in the same quarters as the effective
dates of the capital rule changes, i.e.,
primarily as of the March 31 and June
30, 2020, report dates. Call Report
revisions applicable to operating lease
liabilities and home equity lines of
credit would take effect in the first
quarter of 2020 and 2021, respectively.
In addition, the agencies are giving
notice they are sending the collections
to OMB for review.
DATES: Comments must be submitted on
or before February 26, 2020.
ADDRESSES: Interested parties are
invited to submit written comments to
any or all of the agencies. All comments,
which should refer to the ‘‘Call Report
and FFIEC 101 Reporting Revisions,’’
will be shared among the agencies.
OCC: You may submit comments,
which should refer to ‘‘Call Report and
FFIEC 101 Reporting Revisions,’’ by any
of the following methods:
• Email: [email protected].
• Mail: Chief Counsel’s Office, Office
of the Comptroller of the Currency,
Attention: 1557–0081 and 1557–0239,
400 7th Street SW, Suite 3E–218,
Washington, DC 20219.
• Hand Delivery/Courier: 400 7th
Street SW, Suite 3E–218, Washington,
DC 20219.

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Federal Register / Vol. 85, No. 17 / Monday, January 27, 2020 / Notices
Instructions: You must include
‘‘OCC’’ as the agency name and ‘‘1557–
0081 and 1557–0239’’ in your comment.
In general, the OCC will publish
comments on www.reginfo.gov without
change, including any business or
personal information provided, such as
name and address information, email
addresses, or phone numbers.
Comments received, including
attachments and other supporting
materials, are part of the public record
and subject to public disclosure. Do not
include any information in your
comment or supporting materials that
you consider confidential or
inappropriate for public disclosure.
You may review comments and other
related materials that pertain to these
information collections following the
close of the 30-Day comment period for
this notice by any of the following
methods:
• Viewing Comments Electronically:
Go to www.reginfo.gov. Click on the
‘‘Information Collection Review’’ tab.
Underneath the ‘‘Currently under
Review’’ section heading, from the dropdown menu select ‘‘Department of
Treasury’’ and then click ‘‘submit.’’
These information collections can be
located by searching by OMB control
number ‘‘1557–0081’’ or ‘‘1557–0239.’’
Upon finding the appropriate
information collection, click on the
related ‘‘ICR Reference Number.’’ On the
next screen, select ‘‘View Supporting
Statement and Other Documents’’ and
then click on the link to any comment
listed at the bottom of the screen.
• For assistance in navigating
www.reginfo.gov, please contact the
Regulatory Information Service Center
at (202) 482–7340.
• Viewing Comments Personally: You
may personally inspect comments at the
OCC, 400 7th Street SW, Washington,
DC. For security reasons, the OCC
requires that visitors make an
appointment to inspect comments. You
may do so by calling (202) 649–6700 or,
for persons who are deaf or hearing
impaired, TTY, (202) 649–5597. Upon
arrival, visitors will be required to
present valid government-issued photo
identification and submit to security
screening in order to inspect comments.
Board: You may submit comments,
which should refer to ‘‘Call Report and
FFIEC 101 Reporting Revisions,’’ by any
of the following methods:
• Agency Website: http://
www.federalreserve.gov. Follow the
instructions for submitting comments at:
http://www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm.
• Email: regs.comments@
federalreserve.gov. Include ‘‘Call Report

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and FFIEC 101 Reporting Revisions’’ in
the subject line of the message.
• Fax: (202) 452–3819 or (202) 452–
3102.
• Mail: Ann E. Misback, Secretary,
Board of Governors of the Federal
Reserve System, 20th Street and
Constitution Avenue NW, Washington,
DC 20551.
All public comments are available on
the Board’s website at https://
www.federalreserve.gov/apps/foia/
proposedregs.aspx as submitted, unless
modified for technical reasons.
Accordingly, your comments will not be
edited to remove any identifying or
contact information. Public comments
may also be viewed electronically or in
paper in Room 146, 1709 New York
Avenue NW, Washington, DC 20006,
between 9:00 a.m. and 5:00 p.m. on
weekdays. For security reasons, the
Board requires that visitors make an
appointment to inspect comments. You
may do so by calling (202) 452–3684.
Upon arrival, visitors will be required to
present valid government-issued photo
identification and to submit to security
screening in order to inspect and
photocopy comments.
FDIC: You may submit comments,
which should refer to ‘‘Call Report and
FFIEC 101 Reporting Revisions,’’ by any
of the following methods:
• Agency Website: https://
www.fdic.gov/regulations/laws/federal/.
Follow the instructions for submitting
comments on the FDIC’s website.
• Federal eRulemaking Portal:
https://www.regulations.gov. Follow the
instructions for submitting comments.
• Email: [email protected].
Include ‘‘Call Report and FFIEC 101
Reporting Revisions’’ in the subject line
of the message.
• Mail: Manuel E. Cabeza, Counsel,
Attn: Comments, Room MB–3128,
Federal Deposit Insurance Corporation,
550 17th Street NW, Washington, DC
20429.
• Hand Delivery: Comments may be
hand delivered to the guard station at
the rear of the 550 17th Street Building
(located on F Street) on business days
between 7:00 a.m. and 5:00 p.m.
• Public Inspection: All comments
received will be posted without change
to https://www.fdic.gov/regulations/
laws/federal/ including any personal
information provided. Paper copies of
public comments may be requested from
the FDIC Public Information Center,
3501 North Fairfax Drive, Arlington, VA
22226, or by telephone at (877) 275–
3342 or (703) 562–2200.
Additionally, commenters may send a
copy of their comments to the OMB
desk officer for the agencies by mail to
the Office of Information and Regulatory

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Affairs, U.S. Office of Management and
Budget, New Executive Office Building,
Room 10235, 725 17th Street NW,
Washington, DC 20503; by fax to (202)
395–6974; or by email to oira_
[email protected].
FOR FURTHER INFORMATION CONTACT: For
further information about the proposed
revisions to the information collections
discussed in this notice, please contact
any of the agency staff whose names
appear below. In addition, copies of the
report forms for the Call Report and the
FFIEC 101 can be obtained at the
FFIEC’s website (https://www.ffiec.gov/
ffiec_report_forms.htm).
OCC: Kevin Korzeniewski, Counsel,
Chief Counsel’s Office, (202) 649–5490,
or for persons who are deaf or hearing
impaired, TTY, (202) 649–5597.
Board: Nuha Elmaghrabi, Federal
Reserve Board Clearance Officer, (202)
452–3884, Office of the Chief Data
Officer, Board of Governors of the
Federal Reserve System, 20th and C
Streets NW, Washington, DC 20551.
Telecommunications Device for the Deaf
(TDD) users may call (202) 263–4869.
FDIC: Manuel E. Cabeza, Counsel,
(202) 898–3767, Legal Division, Federal
Deposit Insurance Corporation, 550 17th
Street NW, Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Affected Reports
A. Call Reports
B. FFIEC 101
II. Current Actions
A. Overview
B. Capital Simplifications Rule
1. Background
2. Proposed Revisions to Call Report
Schedule RC–R
3. Comments Received and Final Capital
Simplifications Rule Reporting Revisions
C. Community Bank Leverage Ratio (CBLR)
Rule
1. Background
2. Proposed Revisions to Call Report
Schedule RC–R
3. Other Proposed Call Report Revisions
Related to the CBLR
4. Comments Received and Final CBLR
Rule Reporting Revisions
D. Tailoring Rule
1. Background
2. Proposed Revisions to Call Report
Schedule RC–R, Part I
3. Proposed Revisions to the FFIEC 101
4. Comments Received and Final Tailoring
Rule Reporting Revisions
a. Call Report Revisions
b. FFIEC 101 Revisions
E. Revisions to the Supplementary
Leverage Ratio for Certain Central Bank
Deposits of Custodial Banks
1. Background
2. Proposed Revisions to Call Report
Schedule RC–R, Part I
3. Proposed Revisions to FFIEC 101
Schedule A

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4. Final Reporting Revisions
F. Standardized Approach for Counterparty
Credit Risk on Derivative Contracts
1. Background
2. Proposed Revisions to Call Report
Schedule RC–R, Part II
3. Proposed Revisions to FFIEC 101
Schedule A, SLR Table 2
4. Comments Received and Instructions for
Reporting Derivatives
G. High Volatility Commercial Real Estate
(HVCRE) Land Development Loans
1. Background
2. Proposed Revisions to Call Report
Schedule RC–R, Part II
3. Proposed Revisions to FFIEC 101
Schedule G
H. Operating Lease Liabilities
I. Reporting Home Equity Lines of Credit
That Convert From Revolving to NonRevolving Status
1. Proposed Instructional Clarification
2. Comments Received and Final Reporting
Revisions
III. Timing
IV. Request for Comment

I. Affected Reports
All of the proposed changes discussed
below affect the Call Reports, while a
number of the changes also affect the
FFIEC 101. On December 27, 2019, the
Board separately proposed to make
revisions to the Consolidated Financial
Statements for Holding Companies (FR
Y–9C) 1 corresponding to those initially
proposed by the agencies on October 4,
2019.2

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A. Call Reports
The agencies propose to extend for
three years, with revision, the FFIEC
031, FFIEC 041, and FFIEC 051 Call
Reports.
Report Title: Consolidated Reports of
Condition and Income (Call Report).
Form Number: FFIEC 031
(Consolidated Reports of Condition and
Income for a Bank with Domestic and
Foreign Offices), FFIEC 041
(Consolidated Reports of Condition and
Income for a Bank with Domestic
Offices Only), and FFIEC 051
(Consolidated Reports of Condition and
Income for a Bank with Domestic
Offices Only and Total Assets Less Than
$5 Billion).
Frequency of Response: Quarterly.
Affected Public: Business or other forprofit.
Type of Review: Revision and
extension of currently approved
collections.
OCC
OMB Control No.: 1557–0081.
Estimated Number of Respondents:
1,143 national banks and federal savings
associations.
1 See 84 FR 71414, December 27, 2019.
Consolidated Financial Statements for Holding
Companies (FR Y–9C), OMB Number 7100–0128.
2 84 FR 53227, October 4, 2019.

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Estimated Average Burden per
Response: 41.24 burden hours per
quarter to file.
Estimated Total Annual Burden:
188,549 burden hours to file.
Board
OMB Control No.: 7100–0036.
Estimated Number of Respondents:
779 state member banks.
Estimated Average Burden per
Response: 44.45 burden hours per
quarter to file.
Estimated Total Annual Burden:
138,506 burden hours to file.
FDIC
OMB Control No.: 3064–0052.
Estimated Number of Respondents:
3,386 insured state nonmember banks
and state savings associations.
Estimated Average Burden per
Response: 39.43 burden hours per
quarter to file.
Estimated Total Annual Burden:
534,040 burden hours to file.
The estimated average burden hours
collectively reflect the estimates for the
FFIEC 051, the FFIEC 041, and the
FFIEC 031 reports for each agency.
When the estimates are calculated by
type of report across the agencies, the
estimated average burden hours per
quarter are 36.70 (FFIEC 051),
50.11(FFIEC 041), and 95.42 (FFIEC
031). The estimated burden hours for
the currently approved reports are 40.27
(FFIEC 051), 53.72 (FFIEC 041), and
95.60 (FFIEC 031), so the revisions
proposed in this notice would represent
a reduction in estimated average burden
hours per quarter of 3.57 (FFIEC 051),
3.61 (FFIEC 041), and 0.18 (FFIEC 031).
The change in burden is predominantly
due to changes associated with the
community bank leverage ratio final
rule. The reduction in average burden
hours is significantly less for the FFIEC
031 than for the FFIEC 041 or the FFIEC
051 because greater percentages of
institutions that would be eligible to
report under the proposed community
bank leverage ratio framework currently
file the FFIEC 041 or the FFIEC 051 than
the FFIEC 031.3 The estimated burden
per response for the quarterly filings of
the Call Report is an average that varies
by agency because of differences in the
composition of the institutions under
each agency’s supervision (e.g., size
distribution of institutions, types of
activities in which they are engaged,
and existence of foreign offices).
Type of Review: Extension and
revision of currently approved
collections.
3 For estimating burden hours, the agencies
assumed 60 percent of eligible institutions would
use the framework.

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Legal Basis and Need for Collections
The Call Report information
collections are mandatory: 12 U.S.C. 161
(for national banks), 12 U.S.C. 324 (for
state member banks), 12 U.S.C. 1817 (for
insured state nonmember commercial
and savings banks), and 12 U.S.C. 1464
(for federal and state savings
associations). At present, except for
selected data items and text, these
information collections are not given
confidential treatment.
Banks and savings associations
submit Call Report data to the agencies
each quarter for the agencies’ use in
monitoring the condition, performance,
and risk profile of individual
institutions and the industry as a whole.
Call Report data serve a regulatory or
public policy purpose by assisting the
agencies in fulfilling their shared
missions of ensuring the safety and
soundness of financial institutions and
the financial system and protecting
consumer financial rights, as well as
agency-specific missions affecting
national and state-chartered institutions,
such as conducting monetary policy,
ensuring financial stability, and
administering federal deposit insurance.
Call Reports are the source of the most
current statistical data available for
identifying areas of focus for on-site and
off-site examinations. Among other
purposes, the agencies use Call Report
data in evaluating institutions’ corporate
applications, including interstate merger
and acquisition applications for which
the agencies are required by law to
determine whether the resulting
institution would control more than 10
percent of the total amount of deposits
of insured depository institutions in the
United States. Call Report data also are
used to calculate institutions’ deposit
insurance assessments and national
banks’ and federal savings associations’
semiannual assessment fees.
B. FFIEC 101
The agencies propose to extend for
three years, with revision, the FFIEC
101 report.
Report Title: Risk-Based Capital
Reporting for Institutions Subject to the
Advanced Capital Adequacy
Framework.
Form Number: FFIEC 101.
Frequency of Response: Quarterly.
Affected Public: Business or other forprofit.
OCC:
OMB Control No.: 1557–0239.

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Estimated Number of Respondents: 5
national banks and federal savings
associations.
Estimated Time per Response: 674
burden hours per quarter to file for
banks and federal savings associations.
Estimated Total Annual Burden:
13,480 burden hours to file.
Board
OMB Control No.: 7100–0319.
Estimated Number of Respondents: 4
state member banks; 4 bank holding
companies and savings and loan
holding companies that complete
Supplementary Leverage Ratio (SLR)
Tables 1 and 2 only; 9 other bank
holding companies and savings and
loan holding companies; and 6
intermediate holding companies.
Estimated Time per Response: 674
burden hours per quarter to file for state
member banks; 3 burden hours per
quarter to file for bank holding
companies and savings and loan
holding companies that complete
Supplementary Leverage Ratio (SLR)
Tables 1 and 2 only; 677 burden hours
per quarter to file for other bank holding
companies and savings and loan
holding companies; and 3 burden hours
per quarter to file for intermediate
holding companies.
Estimated Total Annual Burden:
10,784 burden hours for state member
banks to file; 48 burden hours for bank
holding companies and savings and
loan holding companies that complete
Supplementary Leverage Ratio (SLR)
Tables 1 and 2 only to file; 24,372
burden hours for other bank holding
companies and savings and loan
holding companies to file; and 72
burden hours for intermediate holding
companies to file.

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FDIC
OMB Control No.: 3064–0159.
Estimated Number of Respondents: 1
insured state nonmember bank and state
savings association.
Estimated Time per Response: 674
burden hours per quarter to file.
Estimated Total Annual Burden:
2,696 burden hours to file.
Type of Review: Extension and
revision of currently approved
collections.
Legal Basis and Need for Collections
Each advanced approaches
institution 4 is required to report
quarterly regulatory capital data on the
FFIEC 101. Each Category III
institution 5 is required to report
4 See 12 CFR 3.100(b) (OCC); 12 CFR 217.100(b)
(Board); 12 CFR 324.100(b) (FDIC).
5 See 12 CFR 3.2 (OCC); 12 CFR 217.2 (Board); 12
CFR 324.2 (FDIC).

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supplementary leverage ratio
information on the FFIEC 101. The
FFIEC 101 information collections are
mandatory for advanced approaches and
Category III institutions: 12 U.S.C. 161
(national banks), 12 U.S.C. 324 (state
member banks), 12 U.S.C. 1844(c) (bank
holding companies), 12 U.S.C. 1467a(b)
(savings and loan holding companies),
12 U.S.C. 1817 (insured state nonmember commercial and savings banks),
12 U.S.C. 1464 (savings associations),
and 12 U.S.C. 1844(c), 3106, and 3108
(intermediate holding companies).
Certain data items in this information
collection are given confidential
treatment under 5 U.S.C. 552(b)(4) and
(8).
The agencies use data reported in the
FFIEC 101 to assess and monitor the
levels and components of each reporting
entity’s applicable capital requirements
and the adequacy of the entity’s capital
under the Advanced Capital Adequacy
Framework 6 and the supplementary
leverage ratio,7 as applicable; to
evaluate the impact of the Advanced
Capital Adequacy Framework and the
supplementary leverage ratio, as
applicable, on individual reporting
entities and on an industry-wide basis
and its competitive implications; and to
supplement on-site examination
processes. The reporting schedules also
assist advanced approaches institutions
and Category III institutions in
understanding expectations relating to
the system development necessary for
implementation and validation of the
Advanced Capital Adequacy Framework
and the supplementary leverage ratio, as
applicable. Submitted data that are
released publicly will also provide other
interested parties with information
about advanced approaches institutions’
and Category III institutions’ regulatory
capital.
II. Current Actions
A. Overview
On October 4, 2019, the agencies
proposed revisions to the Call Reports
and the FFIEC 101 that would
implement various changes to the
agencies’ regulatory capital rule 8 that,
as of that date, the agencies had
finalized or were considering
6 12 CFR part 3, subpart E (OCC); 12 CFR part 217,
subpart E (Board); 12 CFR part 324, subpart E
(FDIC).
7 12 CFR 3.10(c)(4) (OCC); 12 CFR 217.10(c)(4)
(Board); 12 CFR 324.10(c)(4) (FDIC).
8 12 CFR part 3 (OCC); 12 CFR part 217 (Board);
12 CFR part 324 (FDIC). While the agencies have
codified the capital rule in different parts of title 12
of the Code of Federal Regulations, the internal
structure of the sections within each agency’s rule
is substantially similar.

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finalizing.9 The changes to the agencies’
regulatory capital rule included in their
October 2019 notice were the capital
simplifications rule, the community
bank leverage ratio (CBLR) rule, the
proposed tailoring rule, the proposed
total loss absorbing capacity (TLAC)
holdings rule, the proposed rule for
supplementary leverage ratio (SLR)
revisions for certain central bank
deposits of custodial banks, the
proposed rule for the standardized
approach for counterparty credit risk
(SA–CCR) on derivative contracts, and
the high volatility commercial real
estate (HVCRE) land development
proposal.
The agencies also proposed a change
in the scope of the FFIEC 031 Call
Report; a change in the reporting of
construction, land development, and
other land loans with interest reserves
in the Call Report; and Call Report
instructional revisions for the reporting
of operating lease liabilities and home
equity lines of credit (HELOCs) that
convert from revolving to non-revolving
status.
The comment period for the October
2019 notice ended on December 3, 2019.
The agencies received comments on the
proposed reporting changes covered in
the notice from four entities: Three
bankers’ associations and one savings
association. These comments are
addressed in the following sections of
this notice.
Except for the proposed TLAC
holdings rule, final rules have been
adopted for all of the regulatory capital
rulemakings addressed in the October
2019 notice. The capital-related
reporting changes discussed in the
October 2019 notice will be effective in
the same quarters as the effective dates
of the various capital rules that have
been finalized (see Section III below).
However, because the proposed TLAC
holdings rule has not been finalized, at
this time the agencies are not
proceeding with the implementation of
the TLAC-related reporting changes
proposed in the October 2019 notice.
Once the proposed TLAC holdings rule
is finalized, the agencies plan to issue
a 30-day Federal Register notice
pursuant to the PRA to implement the
associated reporting changes, which
would address any comments received
on the proposed changes.
After carefully considering the
comments received on the October 2019
notice, the agencies are adopting the
reporting changes proposed in that
notice (other than for TLAC) with
modifications discussed in the
following sections of this notice.
9 84

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B. Capital Simplifications Rule

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1. Background
On July 22, 2019, the agencies
published a final rule amending their
regulatory capital rule to make a number
of burden-reducing changes to the
capital rule (capital simplifications
rule).10 The capital simplifications rule
had an effective date of April 1, 2020.
However, the agencies subsequently
approved a final rule that permits nonadvanced approaches banking
organizations 11 to implement the
capital simplifications rule on January
1, 2020.12 As a result, non-advanced
approaches banking organizations have
the option to implement the capital
simplifications rule on the revised
effective date of January 1, 2020, or in
the quarter beginning April 1, 2020.
The agencies proposed revisions to
Call Report Schedule RC–R, Regulatory
Capital, in all three versions of the Call
Report to implement the associated
changes to the agencies’ regulatory
capital rule effective as of the March 31,
2020, report date, consistent with the
final rule that effectively permits early
adoption of the capital simplifications
rule.
2. Proposed Revisions to Call Report
Schedule RC–R
The revisions in the capital
simplifications rule would make a
number of changes to the calculation of
common equity tier 1 (CET1) capital,
additional tier 1 capital, and tier 2
capital for non-advanced approaches
institutions that do not apply to
advanced approaches institutions. Thus,
the capital simplifications rule results in
different sets of calculations for these
tiers of regulatory capital for nonadvanced approaches institutions and
advanced approaches institutions. At
present, the FFIEC 031 and the FFIEC
041 Call Reports are completed by both
non-advanced approaches institutions
and advanced approaches institutions
while only non-advanced approaches
institutions are eligible to file the FFIEC
051 Call Report. To mitigate the
complexity of revising existing
Schedule RC–R, Part I, Regulatory
Capital Components and Ratios, to
incorporate the different sets of
regulatory capital calculations for nonadvanced approaches institutions and
advanced approaches institutions, and
to reflect the effects of the capital
simplifications rule in both the FFIEC
FR 35234 (July 22, 2019).
approaches banking
organizations are institutions that do not meet the
criteria in 12 CFR 3.100(b) (OCC); 12 CFR
217.100(b) (Board); or 12 CFR 324.100(b) (FDIC).
12 84 FR 61804 (November 13, 2019).

031 and FFIEC 041 Call Reports, the
agencies proposed in the October 2019
notice to require all advanced
approaches institutions to file the FFIEC
031 Call Report effective as of the March
31, 2020, report date.13 As a result, the
agencies proposed to adjust the existing
regulatory capital calculations reported
on Schedule RC–R, Part I, for the FFIEC
041 Call Report, and also for the FFIEC
051 Call Report, to reflect the effects of
the capital simplifications rule for nonadvanced approaches institutions. For
the FFIEC 031 Call Report, which is
filed by the fewest number of
institutions, the agencies proposed to
incorporate the two different sets of
regulatory capital calculations (one for
non-advanced approaches institutions
and the other for advanced approaches
institutions) in Schedule RC–R, Part I,
and, as mentioned above, require all
advanced approaches institutions to file
this version of the Call Report.
In the October 2019 notice, the
agencies proposed a number of revisions
that would simplify the capital
calculations on each version of
Schedule RC–R, Part I, effective March
31, 2020, and thereby reduce reporting
burden. Because both non-advanced
approaches institutions and advanced
approaches institutions file the FFIEC
031 Call Report, the FFIEC 031 Call
Report would include two different sets
of calculations (one that incorporates
the effects of the capital simplifications
rule and another that does not) in
adjacent columns in the affected portion
of Schedule RC–R, Part I. An institution
would complete only the column for the
set of calculations applicable to that
institution. For the March 31, 2020,
report date, non-advanced approaches
institutions that file the FFIEC 031 Call
Report and elect to adopt the capital
simplifications rule on January 1, 2020,
would complete the column for the set
of calculations that incorporates the
effects of the capital simplifications
rule. Non-advanced approaches
institutions that elect to wait to adopt
the capital simplifications rule on April
1, 2020, and all advanced approaches
institutions would complete the column
for the set of calculations that does not
reflect the effects of the capital
simplifications rule (i.e., that reflects the
capital calculation in effect for all
institutions before this revision).
Beginning with the June 30, 2020, report
date, all non-advanced approaches
institutions that file the FFIEC 031 Call

10 84

11 Non-advanced

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13 As discussed in Sections II.B.3. and II.D.1.,
below, the agencies also proposed in their October
2019 notice to require all Category III institutions
to file the FFIEC 031 Call Report effective as of the
March 31, 2020, report date.

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Report would complete the column for
the set of calculations that incorporates
the effects of the capital simplifications
rule; all advanced approaches
institutions that file this Call Report
would complete the column that does
not reflect the effects of the capital
simplifications rule.
Because advanced approaches
institutions currently are not permitted
to file the FFIEC 051 Call Report and,
as proposed in the October 2019 notice,
would not be permitted to file the FFIEC
041 Call Report, the FFIEC 041 and
FFIEC 051 Call Reports would include
a single column for the capital
calculation in Schedule RC–R, Part I,
that would be revised effective March
31, 2020, to incorporate the effects of
the capital simplifications rule. For the
March 31, 2020, report date, nonadvanced approaches institutions that
file the FFIEC 041 or FFIEC 051 Call
Report and elect to adopt the capital
simplifications rule on January 1, 2020,
would complete the capital calculation
column in Schedule RC–R, Part I, as
revised for the capital simplifications
rule. The agencies would provide
instructions for non-advanced
approaches institutions that file the
FFIEC 041 or FFIEC 051 Call Report that
elect to wait to adopt the capital
simplifications rule on April 1, 2020, on
how to complete Schedule RC–R,
including the capital calculation
column, for the March 31, 2020, report
date in accordance with the capital rule
in effect before the capital
simplifications rule’s revised effective
date of January 1, 2020. Such nonadvanced approaches institutions would
use these instructions on a one-time
basis for the March 31, 2020, report date
only. Beginning with the June 30, 2020,
report date, all non-advanced
approaches institutions that file the
FFIEC 041 or FFIEC 051 Call Report
would complete Schedule RC–R as
revised for the capital simplifications
rule.
In connection with proposing that all
advanced approaches institutions file
the FFIEC 031 Call Report in the
October 2019 notice, the agencies
proposed to remove certain items from
the FFIEC 041 Call Report that apply
only to advanced approaches
institutions. Thus, for Schedule RC–R,
Part I, in the FFIEC 041 Call Report, the
agencies proposed to remove items 30.b,
32.b, 34.b, 35.b, 40.b, 41 through 43
(Column B only), 45.a, 45.b, and 46.b.
The agencies proposed to renumber
items 30.a, 32.a, 34.a, 35.a, 40.a, and
46.a as items 30, 32, 34, 35, 40, and 46,
respectively.
In the capital simplifications rule, the
agencies increased the thresholds for

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including mortgage servicing assets
(MSAs), temporary difference deferred
tax assets that could not be realized
through net operating loss carrybacks
(temporary difference DTAs),14 and
investments in the capital of
unconsolidated financial institutions for
non-advanced approaches institutions.
In addition, the agencies revised the
capital calculation for minority interests
included in the various capital
categories for non-advanced approaches
institutions and to the calculation of the
capital conservation buffer.
The current regulatory capital
calculations in Call Report Schedule
RC–R, which do not yet reflect the
revisions contained in the capital
simplifications rule, require that an
institution’s capital cannot include
MSAs, certain temporary difference
DTAs, and significant investments in
the common stock of unconsolidated
financial institutions in an amount
greater than 10 percent of CET1 capital,
on an individual basis, and those three
data items combined cannot comprise
more than 15 percent of CET1 capital.
When the reporting of regulatory capital
calculations by non-advanced
approaches institutions in accordance
with the capital simplifications rule
takes effect, this calculation would be
revised in Schedule RC–R, Part I, to
require that only MSAs or temporary
difference DTAs in an amount greater
than 25 percent of CET1 capital, on an
individual basis, could not be included
in a non-advanced approaches
institution’s regulatory capital. The 15
percent aggregate limit would be
removed. In addition, the capital
simplifications rule combines the
current three categories of investments
in financial institutions (non-significant
investments in the capital of
unconsolidated financial institutions,
significant investments in the capital of
unconsolidated financial institutions
that are in the form of common stock,
and significant investments in the
capital of unconsolidated financial
institutions that are not in the form of
common stock) into a single category,
investments in the capital of
unconsolidated financial institutions,
and applies a limit of 25 percent of
CET1 capital on the amount of these
investments that can be included in
14 The agencies note that An Act to provide for
reconciliation pursuant to titles II and V of the
concurrent resolution on the budget for fiscal year
2018, Public Law 115–97 (originally introduced as
the Tax Cuts and Jobs Act), enacted December 22,
2017, eliminated the concept of net operating loss
carrybacks for U.S. federal income tax purposes,
although the concept may still exist in particular
jurisdictions for state or foreign income tax
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capital. Any investments in excess of
the 25 percent limit would be deducted
from regulatory capital using the
corresponding deduction approach.
Consistent with the current capital
rule, an institution must risk weight
MSAs, temporary difference DTAs, and
investments in the capital of
unconsolidated financial institutions
that are not deducted. The agencies
proposed revisions to allow institutions
to enter values into the Column K—
250% risk weight on Schedule RC–R,
Part II, in the FFIEC 051 Call Report,
which is currently shaded out, and
remove footnote two on the second page
of Schedule RC–R, Part II, and the
corresponding footnote on subsequent
pages of Schedule RC–R, Part II, in all
three versions of the Call Reports
effective as of the March 31, 2020,
report date to accommodate the capital
simplifications rule revisions to the risk
weight for MSAs and temporary
difference DTAs. Consistent with the
capital simplifications rule, nonadvanced approaches institutions will
not be required to differentiate among
categories of investments in the capital
of unconsolidated financial institutions.
The risk weight for such equity
exposures generally will be 100 percent,
provided the exposures qualify for this
risk weight.15 For non-advanced
approaches institutions, the capital
simplifications rule eliminates the
exclusion of significant investments in
the capital of unconsolidated financial
institutions in the form of common
stock from being eligible for a 100
percent risk weight.16 The application of
the 100 percent risk weight (i) requires
a banking organization to follow an
enumerated process for calculating
adjusted carrying value and (ii)
mandates the equity exposures that
must be included in determining
whether the threshold has been reached.
Equity exposures that do not qualify for
a preferential risk weight will generally
15 12 CFR 3.52 and .53 (OCC); 12 CFR 217.52 and
.53 (Board); 12 CFR 324.52 and .53 (FDIC). Note that
for purposes of calculating the 10 percent
nonsignificant equity bucket, the capital rule
excludes equity exposures that are assigned a risk
weight of zero percent and 20 percent, and
community development equity exposures and the
effective portion of hedge pairs, both of which are
assigned a 100 percent risk weight. In addition, the
10 percent non-significant bucket excludes equity
exposures to an investment firm that would not
meet the definition of traditional securitization
were it not for the application of criterion 8 of the
definition of traditional securitization, and has
greater than immaterial leverage.
16 Equity exposures that exceed, in the aggregate,
10 percent of a non-advanced approaches banking
organization’s total capital would then be assigned
a risk weight based upon the approaches available
in sections 52 and 53 of the capital rule. 12 CFR
3.52 and .53 (OCC); 12 CFR 217.52 and .53 (Board);
12 CFR 324.52 and .53 (FDIC).

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receive risk weights of either 300
percent or 400 percent, depending on
whether the equity exposures are
publicly traded.
In order to implement these
regulatory capital changes from a
regulatory reporting perspective, the
agencies proposed in their October 2019
notice to make a number of revisions to
Schedule RC–R, Part I, for nonadvanced approaches institutions
effective March 31, 2020. Specifically,
in Schedule RC–R, Part I, in the FFIEC
041 and FFIEC 051 Call Reports, the
agencies proposed to remove item 11
and modify item 13 to reflect the
consolidation of all investments in
unconsolidated financial institutions
into a single category and apply a single
25 percent of CET1 capital limit to these
investments. The agencies proposed to
modify items 14 and 15 to reflect the 25
percent of CET1 capital limit for MSAs
and certain temporary difference DTAs,
respectively. The agencies also
proposed to remove item 16, which
applies to the aggregate 15 percent
limitation that was removed from the
capital rule for non-advanced
approaches institutions. In the FFIEC
031 Call Report, the agencies proposed
to create two columns for existing items
11 through 19. Column A would be
reported by non-advanced approaches
institutions that elect to adopt the
capital simplifications rule on January
1, 2020, in the March 2020 Call Report
and by all non-advanced approaches
institutions beginning in the June 2020
Call Report using the definitions under
the capital simplifications rule. Column
A would not include items 11 or 16, and
items 13 through 15 would be
designated as items 13.a through 15.a to
reflect the new calculation
methodology. Column B would be
reported by advanced approaches
institutions and by non-advanced
approaches institutions that elect to
wait to adopt the capital simplifications
rule on April 1, 2020, in the March 2020
Call Report and only by advanced
approaches institutions beginning in the
June 2020 Call Report using the existing
definitions. Existing items 13 through
15 would be designated as items 13.b
through 15.b to reflect continued use of
the existing calculation methodology.
The agencies did not propose any
changes to the form to incorporate the
minority interest revisions. However,
the agencies proposed to modify the
instructions for the existing minority
interest items in all versions of the Call
Report to reflect the ability of nonadvanced approaches institutions to use
the revised method under the capital
simplifications rule to calculate
minority interest in existing items 4, 22,

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and 29 (CET1, additional tier 1, and tier
2 minority interest, respectively).
3. Comments Received and Final Capital
Simplifications Rule Reporting
Revisions
Two commenters opposed the
agencies’ proposal to require all
advanced approaches institutions and
Category III institutions to file the FFIEC
031 Call Report because this
requirement could impact the reporting
burden of numerous small depository
institution subsidiaries of holding
companies that are advanced
approaches and Category III institutions.
The agencies agree with the commenters
with respect to Category III institutions,
and therefore they will allow such
institutions that are not otherwise
required to file the FFIEC 031 Call
Report to file the FFIEC 041 Call Report.
To do so, the agencies will retain three
existing data items for reporting
supplementary leverage ratio
information and countercyclical capital
buffer information in the FFIEC 041 Call
Report for use by Category III
institutions. Specifically, the agencies
will retain items 45.a and 45.b
(renumbered as items 55.a and 55.b) in
the FFIEC 041 to collect supplementary
leverage ratio information from
institutions with domestic offices only
and total assets less than $100 billion
that are subsidiaries of banking
organizations subject to Category III
capital standards. Additionally, the
agencies will retain item 46.b
(renumbered as item 52.b) in the FFIEC
041 to collect countercyclical capital
buffer information from Category III
institutions.
In proposing to require all advanced
approaches institutions to file the FFIEC
031 Call Report (including those
advanced approaches institutions that
currently file the FFIEC 041 Call Report)
in conjunction with the implementation
of the capital simplifications rule, the
agencies sought to retain a streamlined
and straightforward Part I of Schedule
RC–R for the more than 1,400 nonadvanced approaches institutions that
filed the FFIEC 041 Call Report (based
on data as of September 30, 2019).
When the capital simplifications rule
takes effect in the first quarter of 2020,
allowing advanced approaches
institutions currently filing the FFIEC
041 Call Report to continue to do so,
rather than requiring them to begin
filing the FFIEC 031 Call Report as had
been proposed, would subject all
institutions filing the FFIEC 041 to the
complexity of the same dual column
structure for items 11 through 19 of
Schedule RC–R, Part I, that is discussed
above in the context of the FFIEC 031

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reporting form. The benefit of a simple,
straightforward Part I of Schedule RC–
R in the FFIEC 041 Call Report that
would be applicable only to the more
than 1,400 non-advanced approaches
institutions is expected to offset the
impact on the small group of less than
20 advanced approaches institutions
that currently file the FFIEC 041 Call
Report of having to migrate to the FFIEC
031 Call Report when the capital
simplifications rule takes effect. Thus,
the agencies are not adopting the
commenters’ recommendation to permit
advanced approaches institutions
currently eligible to file the FFIEC 041
to continue to file this version of the
Call Report.
In addition, as a consequence of the
technical amendments that the capital
simplifications rule made to the
agencies’ capital rule effective October
1, 2019, the agencies are clarifying when
an institution must report the amount of
distributions and discretionary bonus
payments in Schedule RC–R, Part I, item
48 (which would be renumbered as item
54). The agencies are clarifying the
instructions for renumbered item 54 to
explain that an institution must report
the amount of distributions and
discretionary bonus payments made
during the calendar quarter ending on
the report date if the amount of its
capital conservation buffer that it
reported for the previous calendar
quarter-end report date was less than its
applicable required buffer percentage on
that previous calendar quarter-end
report date. This change will enhance
the agencies’ ability to monitor
compliance with the limitations on
distributions and discretionary bonus
payments. Institutions must comply
with this instructional clarification
beginning with the March 31, 2020,
report date.
C. Community Bank Leverage Ratio Rule
1. Background
In November 2019, the agencies
published a final rule to provide a
simplified alternative measure of capital
adequacy, the community bank leverage
ratio (CBLR), for qualifying community
banking organizations with less than
$10 billion in total consolidated assets
(CBLR final rule).17
In addition, the FDIC recently
approved a final rule regarding the
application of the CBLR framework to
the deposit insurance assessment
system (CBLR assessments final rule).18
Certain clarifications would be made to
the Schedule RC–O instructions to
17 84

FR 61776 (November 13, 2019).
FR 66833 (December 6, 2019). See also FDIC
Press Release 80–2019, dated September 17, 2019.
18 84

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address the application of the CBLR
framework to the FDIC’s deposit
insurance assessment system in
accordance with the CBLR assessments
final rule, but no revisions would be
made to the data items in this schedule.
Under the CBLR final rule, banking
organizations that have less than $10
billion in total consolidated assets, meet
risk-based qualifying criteria, and have
a leverage ratio of greater than 9 percent
are eligible to opt into the CBLR
framework. A banking organization that
opts into the CBLR framework,
maintains a leverage ratio of greater than
9 percent, and meets the other
qualifying criteria will not be subject to
other risk-based and leverage capital
requirements and, in the case of an
insured depository institution (IDI), is
considered to have met the well
capitalized capital ratio requirements
for purposes of the agencies’ prompt
corrective action framework.
Under the CBLR final rule, a bank or
savings association (bank) that opts into
the CBLR framework (CBLR bank) may
opt out of the CBLR framework at any
time, without restriction, by reverting to
the generally applicable capital
requirements in the agencies’ capital
rule 19 and reporting its regulatory
capital information in Call Report
Schedule RC–R, ‘‘Regulatory Capital,’’
Parts I and II, at the time of opting out.
As described in the CBLR final rule,
a banking organization that no longer
meets the qualifying criteria for the
CBLR framework will be required
within two consecutive calendar
quarters (grace period) either to once
again satisfy the qualifying criteria or
demonstrate compliance with the
generally applicable capital
requirements. During the grace period,
the bank would continue to be treated
as a CBLR bank and would be required
to report its leverage ratio and related
components in Call Report Schedule
RC–R, Part I, in the manner described in
this notice.20 A CBLR bank that ceases
to meet the qualifying criteria as a result
of a business combination (e.g., a
merger) would receive no grace period,
19 12 CFR part 3 (OCC); 12 CFR part 217 (Board);
12 CFR part 324 (FDIC).
20 For example, if the banking organization
electing the CBLR no longer meets one of the
qualifying criteria as of February 15, and still does
not meet the criteria as of the end of that quarter,
the grace period for such a banking organization
will begin as of the end of the quarter ending March
31. The banking organization may continue to use
the community bank leverage ratio framework as of
June 30, but will need to comply fully with the
generally applicable rule (including the associated
reporting requirements) as of September 30, unless
the banking organization once again meets all
qualifying criteria of the community bank leverage
ratio framework, including a leverage ratio of
greater than 9 percent, by that date.

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and would immediately become subject
to the generally applicable capital
requirements. Similarly, a CBLR bank
that fails to maintain a leverage ratio
greater than 8 percent would not be
permitted to use the grace period and
would immediately become subject to
the generally applicable capital
requirements.
2. Proposed Revisions to Call Report
Schedule RC–R
In the October 2019 notice, the
agencies proposed reporting revisions to
the Call Reports for banks that qualify
for and opt into the CBLR framework,
consistent with the CBLR final rule. The
agencies also proposed in the October
2019 notice that the reporting changes
to the Call Reports to implement the
CBLR framework would take effect in
the same quarter as the effective date of
the final rule adopting the CBLR
framework.
As provided in the CBLR final rule,
the numerator of the community bank
leverage ratio will be tier 1 capital,
which is currently reported in Schedule
RC–R, Part I, item 26. Therefore, the
agencies are not proposing any changes
related to the numerator of the
community bank leverage ratio.
As provided in the CBLR final rule,
the denominator of the community bank
leverage ratio will be average total
consolidated assets. Specifically,
average total consolidated assets would
be calculated in accordance with the
existing reporting instructions for
Schedule RC–R, Part I, items 36 through
39. The agencies did not propose any
substantive changes related to the
denominator of the community bank
leverage ratio. However, the agencies are
proposing to move existing items 36
through 39 of Schedule RC–R, Part I,
and renumber them as items 27 through
30 of Schedule RC–R, Part I, to
consolidate all of the community-bankleverage-ratio-related capital items
earlier in Schedule RC–R, Part I.
As provided in the CBLR final rule, a
CBLR bank will calculate its community
bank leverage ratio by dividing tier 1
capital by average total consolidated
assets (as adjusted), and the community
bank leverage ratio would be reported as
a percentage, rounded to four decimal
places. Since this calculation is
essentially identical to the existing
calculation of the tier 1 leverage ratio in
Schedule RC–R, Part I, item 44, the
agencies are not proposing a separate
item for the community bank leverage
ratio in Schedule RC–R, Part I. Instead,
the agencies proposed to move the tier
1 leverage ratio from item 44 of Part I
and renumber it as item 31, and rename
the item the Leverage Ratio, as this ratio

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would apply to all institutions (as the
community bank leverage ratio for
qualifying institutions or the tier 1
leverage ratio for all other institutions).
As provided in the CBLR final rule, a
CBLR bank will need to satisfy certain
qualifying criteria in order to be eligible
to opt into the CBLR framework. The
proposed items identified below would
collect information necessary to ensure
that a bank continuously meets the
qualifying criteria for using the CBLR
framework.
Specifically, a CBLR bank is a bank
that is not an advanced approaches
institution and meets the following
qualifying criteria:
• A leverage ratio of greater than 9
percent;
• Total consolidated assets of less
than $10 billion;
• Total trading assets and trading
liabilities of 5 percent or less of total
consolidated assets; and
• Total off-balance sheet exposures
(excluding derivatives other than sold
credit derivatives and unconditionally
cancelable commitments) of 25 percent
or less of total consolidated assets.21
Accordingly, the agencies proposed to
collect the items described below for
community bank leverage ratio
reporting purposes.
In proposed item 32 of Schedule RC–
R, Part I, a CBLR bank would report
total assets, as reported in Call Report
Schedule RC, item 12.
In proposed item 33, a CBLR bank
would report the sum of trading assets
from Schedule RC, item 5, and trading
liabilities from Schedule RC, item 15, in
Column A. The bank would also report
that sum divided by total assets from
Schedule RC, item 12, and expressed as
a percentage in Column B. As provided
in the CBLR final rule, trading assets
and trading liabilities would be added
together, not netted, for purposes of this
calculation. Also as discussed in the
CBLR final rule, a bank would not meet
the definition of a qualifying
community banking organization for
21 Under the CBLR final rule, the agencies have
reserved the authority to disallow the use of the
CBLR framework by a depository institution or
depository institution holding company based on
the risk profile of the banking organization. This
authority is reserved under the general reservation
of authority included in the capital rule, in which
the CBLR framework would be codified. See 12 CFR
3.1(d) (OCC); 12 CFR 217.1(d) (Board); and 12 CFR
324.1(d) (FDIC). In addition, for purposes of the
capital rule and section 201 of the Economic
Growth, Regulatory Relief, and Consumer
Protection Act (EGRRCPA) (Pub. L. 115–174, 132
Stat. 1296 (2018)), the agencies have reserved the
authority to take action under other provisions of
law, including action to address unsafe or unsound
practices or conditions, deficient capital levels, or
violations of law or regulation. See 12 CFR 3.1(b)
(OCC); 12 CFR 217.1(b) (Board); and 12 CFR
324.1(b) (FDIC).

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purposes of the CBLR framework if the
percentage reported in Column B is
greater than 5 percent.
In proposed items 34.a through 34.d,
a CBLR bank would report information
related to commitments, other offbalance sheet exposures, and sold credit
derivatives.
In proposed item 34.a, a CBLR bank
would report the unused portion of
conditionally cancelable commitments.
This amount would be the amount of all
unused commitments less the amount of
unconditionally cancelable
commitments, as discussed in the
planned CBLR final rule and defined in
the agencies’ capital rule.22 This item
would be calculated consistent with the
sum of Schedule RC–R, Part II, items
18.a and 18.b, Column A.
In proposed item 34.b, a CBLR bank
would report total securities lent and
borrowed, which would be the sum of
Schedule RC–L, items 6.a and 6.b.
In proposed item 34.c, a CBLR bank
would report the sum of certain other
off-balance sheet exposures and sold
credit derivatives. Specifically, a CBLR
bank would report the sum of selfliquidating, trade-related contingent
items that arise from the movement of
goods; transaction-related contingent
items (performance bonds, bid bonds,
warranties, and performance standby
letters of credit); sold credit protection
in the form of guarantees and credit
derivatives; credit-enhancing
representations and warranties;
financial standby letters of credit;
forward agreements that are not
derivative contracts; and off-balance
sheet securitizations. A CBLR bank
would not include derivatives that are
not sold credit derivatives, such as
foreign exchange swaps and interest rate
swaps, in proposed item 34.c.
In proposed item 34.d, a CBLR bank
would report the sum of proposed items
34.a through 34.c in Column A. The
bank would also report that sum
divided by total assets from Schedule
RC, item 12, and expressed as a
percentage in Column B. As discussed
in the planned CBLR final rule, a bank
would not be eligible to opt into the
CBLR framework if this percentage is
greater than 25 percent.
In proposed item 35, a CBLR bank
would report the total of
unconditionally cancellable
commitments, which would be
calculated consistent with the
instructions for existing Schedule RC–R,
Part II, item 19. This item is not used
specifically to calculate a bank’s
22 See definition of ‘‘unconditionally cancellable’’
in 12 CFR 3.2 (OCC); 12 CFR 217.2 (Board); 12 CFR
324.2 (FDIC).

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eligibility for the CBLR framework.
However, the agencies are collecting
this information to identify any bank
using the CBLR framework that may
have significant or excessive
concentrations in unconditionally
cancellable commitments that would
warrant the agencies’ use of the
reservation of authority in their capital
rule to direct an otherwise-eligible
CBLR bank to report its regulatory
capital using the generally applicable
capital requirements.23
In proposed item 36, a CBLR bank
would report the amount of investments
in the capital instruments of an
unconsolidated financial institution that
would qualify as tier 2 capital. Since the
CBLR framework does not have a total
capital requirement, a CBLR bank is
neither required to calculate tier 2
capital nor make any deductions that
would be taken from tier 2 capital.
Therefore, if a CBLR bank has
investments in the capital instruments
of an unconsolidated financial
institution that would qualify as tier 2
capital of the CBLR bank under the
generally applicable capital
requirements (tier 2 qualifying
instruments), and the CBLR bank’s total
investments in the capital of
unconsolidated financial institutions
exceed 25 percent of its CET1 capital,
the CBLR bank is not required to deduct
the tier 2 qualifying instruments. A
CBLR bank is required to make a
deduction from CET1 capital or tier 1
capital only if the sum of its
investments in the capital of an
unconsolidated financial institution is
in a form that would qualify as CET1
capital or tier 1 capital instruments of
the CBLR bank and the sum exceeds the
25 percent CET1 threshold. The
agencies believe it is important to
continue collecting information on the
amount of investments in tier 2
qualifying instruments as excessive
investments similarly could warrant the
agencies’ use of their reservation of
authority.
In proposed item 37, a CBLR bank
would be required to report its allocated
transfer risk reserve (ATRR), as
currently calculated and reported in
Schedule RC–R, Part II, item 30. In
proposed items 38.a through 38.c, a
CBLR bank that has adopted Accounting
Standards Update (ASU) No. 2016–13
on credit losses must report the amount
of any allowances for credit losses on
purchased credit-deteriorated loans and
leases held for investment, held-to23 Other factors also may lead the agencies to
determine that the risk profile of an otherwiseeligible CBLR bank would warrant the use of the
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maturity debt securities, and other
financial assets measured at amortized
cost, as currently calculated and
reported in Schedule RC–R, Part II,
Memorandum items 4.a through 4.c.
The amount of the ATRR, if any, is
necessary to calculate capital and
surplus and corresponding limits in a
number of the OCC’s regulations,
including investment securities limits
(12 CFR part 1) and lending limits (12
CFR part 32). After an institution adopts
ASU 2016–13, allowances for credit
losses on purchased credit-deteriorated
assets similarly would affect the
calculation of these limits. While these
limits apply directly to institutions
supervised by the OCC, a number of
federal or state laws may apply the
OCC’s calculation of certain limits to
state-chartered institutions supervised
by the FDIC or the Board. Therefore, the
agencies are proposing to retain this
information for all CBLR banks. As
CBLR banks would not complete
Schedule RC–R, Part II, this information
would otherwise not be readily
available for the agencies to calculate
the relevant regulatory limits for these
institutions.24
Because a CBLR bank would not be
subject to the generally applicable
capital requirements, a CBLR bank
would not need to complete any of the
items in Schedule RC–R, Part I, after
proposed item 38, nor would the bank
need to complete Schedule RC–R, Part
II, Risk-Weighted Assets.
In connection with moving the
leverage ratio calculations and inserting
items for the CBLR qualifying criteria in
Schedule RC–R, Part I, existing items 27
through 35 of Schedule RC–R, Part I,
will be renumbered as items 39 through
47. Existing items 40 through 43 will be
renumbered as items 48 through 51,
while existing items 46 through 48 will
be renumbered as items 52 through 54.
For advanced approaches institutions
filing the FFIEC 031 Call Report,
existing items 45.a and 45.b for total
leverage exposure and the
supplementary leverage ratio,
respectively, will be renumbered as
items 55.a and 55.b.
As proposed in the October 2019
notice, a CBLR bank would indicate that
it has elected to apply the CBLR
framework by completing Schedule RC–
R, Part I, items 32 through 38.
Institutions not subject to the CBLR
24 Institutions that are not CBLR banks would not
complete proposed items 37 and 38.a through 38.c,
but would continue to report any ATRR and any
allowances for credit losses on purchased creditdeteriorated loans and leases held for investment,
held-to-maturity debt securities, and other financial
assets measured at amortized cost in Schedule RC–
R, Part II.

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framework would be required to report
all data items in Schedule RC–R, Part I,
except for items 32 through 38.
3. Other Proposed Call Report Revisions
Related to the CBLR
While not specifically part of the
CBLR final rule, the agencies currently
collect information in Call Report
Schedule RC–C, Part I, ‘‘Loans and
Leases,’’ Memorandum item 13, from
institutions that have a significant
amount of construction, land
development, and other land loans with
interest reserves in relation to their total
regulatory capital as reported as of the
previous calendar year-end report date.
At present, total regulatory capital is
defined as total capital reported on
Schedule RC–R, Part I, item 35 (FFIEC
051) or item 35.a (FFIEC 031 or FFIEC
041). While CBLR banks would no
longer report their total capital in
Schedule RC–R, Part I, the agencies
believe it is still important to collect this
information from CBLR banks that have
a significant amount of construction,
land development, and other land loans
with interest reserves. Therefore,
effective March 31, 2021,25 the agencies
proposed to revise the reporting
threshold for Schedule RC–C, Part I,
Memorandum item 13, for all
institutions to reference the sum of tier
1 capital as reported in Schedule RC–R,
Part I, item 26, plus the allowance for
loan and lease losses or the allowance
for credit losses on loan and leases, as
applicable, as reported in Schedule RC,
item 4.c.
4. Comments Received and Final CBLR
Rule Reporting Revisions
Two commenters addressed certain
aspects of the proposed CBLR reporting
revisions. Aspects of the proposed CBLR
reporting revisions on which no
comments were received, including the
proposed change in the reporting
threshold for Schedule RC–C, Part I,
Memorandum item 13, would be
implemented as proposed.
One commenter supported ‘‘the
proposed line item additions to RC–R,
Part I reporting to support changes to
the leverage ratio,’’ but the other
commenter recommended removing
25 For report dates during 2020, the reporting
threshold for Schedule RC–C, Part I, Memorandum
item 13, would be the total capital an institution
reported in Schedule RC–R, Part I, as of December
31, 2019, which will predate the initial reporting
under the CBLR framework in Schedule RC–R. The
first year-end report date under the CBLR
framework would be December 31, 2020, which
would be the report date to which a CBLR bank
would refer in order to determine whether it would
need to complete Schedule RC–C, Part I,
Memorandum item 13, as of each quarter-end report
date during 2021.

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proposed items 35 through 38.c of Part
I because the data to be reported are not
qualifying criteria under the CBLR
framework. Both commenters did not
favor the proposal to move existing
items 36 through 39 of Schedule RC–R,
Part I, which are used to measure total
assets for the leverage ratio, and existing
item 44, ‘‘Tier 1 leverage ratio,’’ from
their present locations in Part I of the
schedule to an earlier position in Part I
where all of the CBLR-related items
would be reported and these five items
would be renumbered as items 27
through 31. One of the commenters
stated that, although this proposed
change in the presentation of Part I of
Schedule RC–R would not affect the
results of individual items in Part I, the
proposed new presentation could be
confusing to end users of the schedule.
The second commenter expressed
concern about inserting the data items
for the CBLR framework within existing
Schedule RC–R, Part I, rather than in a
separate version of the schedule as the
agencies had originally proposed in
April 2019, because the insertion of
these data items was confusing and
could lead to reporting errors. Thus, this
commenter suggested that the agencies
break the proposed revised structure of
Part I of Schedule RC–R into three
separate parts with existing Part II of
Schedule RC–R becoming the fourth
part of the schedule. In addition, this
commenter noted that an institution that
is eligible to opt into the CBLR
framework may opt into and out of the
framework at any time, and that there is
a grace period for an institution that no
longer meets the qualifying criteria for
the CBLR framework. During the grace
period, the institution continues to be
treated as a CBLR bank. Because an
institution’s status, i.e., as a CBLR bank
or as subject to the generally applicable
capital requirements, can change from
quarter to quarter, the commenter
recommended the addition of data items
to Schedule RC–R for reporting the
institution’s status with respect to the
CBLR framework.
The agencies have considered these
comments and will retain proposed
items 35 through 38.c for reporting by
CBLR banks in Schedule RC–R, Part I,
as proposed for the reasons cited in the
October 2019 notice.26 When
unconditionally cancellable
commitments or investments in the tier
2 capital instruments of unconsolidated
financial institutions, as reported in
proposed items 35 and 36, reach
excessive levels, this may warrant the
agencies’ use of the reservation of
authority in their capital rule to direct
26 See

84 FR 53234 (October 4, 2019).

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an otherwise-eligible CBLR bank to
report its regulatory capital using the
generally applicable capital
requirements. The allocated transfer risk
reserve and allowances for credit losses
on purchased credit-deteriorated assets,
which would be reported in proposed
items 37 and 38.a through 38.c,
currently exist in Part II of Schedule
RC–R, which a CBLR bank would no
longer complete. The agencies use the
information reported in these data items
in the calculation of regulatory limits on
investment securities and lending where
relevant.
The agencies also will retain the
proposed movement of the data items
related to the leverage ratio to a position
immediately after the calculation of tier
1 capital (designated items 27 through
31 of Schedule RC–R, Part I, as it would
be revised) as well as the placement of
the proposed data items to be completed
only by CBLR banks, including those
within the grace period (designated
items 32 through 38.c of Schedule RC–
R, Part I, as it would be revised).
Because all institutions are subject to a
leverage ratio requirement, all
institutions must calculate and report
the ratio’s numerator, which is tier 1
capital, and its denominator, which is
based on average total assets. As a
consequence, items 1 through 31 of Part
I would be applicable to and completed
by all institutions. Moving the leverage
ratio data items as proposed would
allow CBLR banks to avoid completing
the remainder of Schedule RC–R after
item 38.c of Part I, which the agencies
believe will be less confusing for CBLR
banks than having to complete the
leverage ratio items in their current
location in Part I of the schedule, which
is after numerous items that will not be
applicable to CBLR banks.
Furthermore, the agencies will modify
the formatting of Schedule RC–R, Part I,
to better distinguish the data items that
should be completed only by CBLR
banks and those that should be
completed only by those institutions
applying the generally applicable
capital requirements. This will be
accomplished by improving the
captioning before Schedule RC–R, Part I,
item 32, which is the first data item to
completed only by CBLR banks, and
between items 38.c, which is the final
data item only for CBLR banks, and item
39, which is the first data item
applicable only to other institutions
subject to the generally applicable
capital requirements. The portion of
Schedule RC–R, Part I, applicable only
to CBLR banks also will be marked by
bordering. These modifications to the
formatting of Part I should functionally
achieve an outcome similar to the

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comment suggesting that Part I be split
into Parts 1, 2, and 3 with existing Part
II then renumbered as Part 4.
In addition, the agencies acknowledge
that, under the CBLR final rule, an
institution that is eligible to opt into the
CBLR framework may choose to opt into
or out of this framework at any time and
for any reason. Accordingly, the
agencies see merit in a commenter’s
recommendation that an institution
should report its status as of the report
date regarding the use of the CBLR
framework. Therefore, the agencies
propose to add a ‘‘yes/no’’ item 31.a to
Schedule RC–R, Part I, after item 31,
‘‘Leverage ratio,’’ in which each
institution would report whether it has
a CBLR framework election in effect as
of the quarter-end report date. An
institution would answer ‘‘yes’’ if it
qualifies for the CBLR framework (even
if it is within the grace period) and has
elected to adopt the framework as of
that report date. Otherwise, the
institution would answer ‘‘no.’’
Captioning after the ‘‘yes/no’’ response
to item 31.a would indicate which of the
subsequent data items in Schedule RC–
R should be completed based on the
response to item 31.a. This ‘‘yes/no’’
response should assist an institution in
understanding which specific data items
it should complete in the rest of
Schedule RC–R. The response also
should assist users of Schedule RC–R in
understanding the regulatory capital
regime an institution is following as of
the report date. The agencies are not
adopting a commenter’s
recommendation to add additional data
items relating to use of the CBLR, for
example by differentiating between
banks that currently meet the CBLR
qualifying criteria and those that are
within the grace period, as the agencies
do not need this additional level of
detail in the Call Report.
The agencies believe these
modifications to the format and
structure of Part I of Schedule RC–R will
limit the burden on reporting
institutions and lessen possible
confusion, including for users of
Schedule RC–R and for those qualifying
community institutions that elect to
adopt the CBLR framework. Redlined
drafts of Call Report Schedule RC–R in
all three versions of the Call Report as
it is proposed to be revised, with the
modifications described in this Section
II.C.4., will be available on the FFIEC’s
Reporting Forms web page.
D. Tailoring Rule
1. Background
On November 1, 2019, the agencies
published a final rule to revise the

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criteria for determining the applicability
of regulatory capital and liquidity
requirements for large U.S. banking
organizations and the U.S. intermediate
holding companies of certain foreign
banking organizations (tailoring final
rule).27
Under the tailoring final rule, the
most stringent set of standards (Category
I) applies to U.S. global systemically
important banks (GSIBs). The second set
of standards (Category II) applies to
banking organizations that are very large
or have significant international
activity, but are not GSIBs. Like
Category I, this category generally
includes standards that are based on
standards that reflect agreements
reached by the Basel Committee on
Banking Supervision. The third set of
standards (Category III) applies to
banking organizations with $250 billion
or more in total consolidated assets that
do not meet the criteria for Category I
or II. The third set of standards also
applies to banking organizations with
total consolidated assets of $100 billion
or more, but less than $250 billion, that
meet or exceed other specified riskbased indicators. The fourth set of
standards (Category IV) applies to
banking organizations with total
consolidated assets of $100 billion or
more that do not meet the thresholds for
one of the other categories.
Under the tailoring final rule,
depository institution subsidiaries
generally are subject to the same
category of standards that apply at the
holding company level.28
Based on the proposed capital and
liquidity requirements that would apply
to institutions subject to Category I, II,
III, or IV capital standards in the
domestic interagency tailoring and
foreign interagency tailoring NPRs, the
agencies proposed in their October 2019
notice to amend certain regulatory
reporting forms to clarify the reporting
requirements for those institutions that
would be subject to those proposed
rules. Specifically, the agencies
proposed changes to Call Report
Schedule RC–R, Part I, Regulatory
Capital Components and Ratios, and
FFIEC 101 Schedule A, Advanced
Approaches Regulatory Capital, to
provide clarification for institutions
subject to Category III capital
standards.29
27 84

FR 59230 (November 1, 2019).
standardized liquidity requirements
apply only to depository institution subsidiaries
with $10 billion or more in total consolidated assets
under Categories I through III, and such
requirements do not apply to depository institution
subsidiaries under Category IV.
29 In the October 2019 notice, the agencies stated
that they do not believe reporting form or
28 However,

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In addition, the agencies proposed in
the October 2019 notice that all
institutions subject to Category I, II, or
III capital standards would be required
to file the FFIEC 031 Call Report. While
the agencies proposed to require all
advanced approaches institutions to file
the FFIEC 031 Call Report in connection
with the capital simplifications rule (see
Section II.B., above), the tailoring rules
would narrow the scope of institutions
calculating risk-weighted assets under
the advanced approaches. In the
October 2019 notice, the agencies stated
that they expected the revision in the
scope of advanced approaches
institutions to have little, if any, impact
on current institutions, as all
institutions with total consolidated
assets of $100 billion or more or with
foreign offices already are required to
file the FFIEC 031, which generally
aligns with the standards for Category I,
II, and III institutions. However, the
agencies noted in the October 2019
notice that, under the domestic
interagency tailoring and foreign
interagency tailoring NPRs, institutions
that are subsidiaries of institutions
subject to Category I, II, or III capital
standards also are considered Category
I, II, or III institutions. The tailoring
final rule maintains the application of
the same category of capital standards to
depository institution holding
companies and their depository
institution subsidiaries. Thus, the
proposed change in scope for the FFIEC
031 under the October 2019 notice
meant that depository institutions
considered Category I, II, or III
institutions, but not required to file the
FFIEC 031 Call Report at that time,
would have been required to begin filing
the FFIEC 031.
The agencies noted that modifying the
scope of the Call Report in this manner
would enable them to streamline
Schedule RC–R, Part I, of the FFIEC 041
report by removing data items that
apply only to the limited number of
institutions then considered advanced
approaches institutions that were then
also eligible to file the FFIEC 041 report
and to any future institutions that
would, absent this change in scope, be
eligible to file the FFIEC 041 report.
instructional clarifications are needed to reflect
capital requirements that would apply to
institutions subject to Category I, II, or IV capital
standards under the domestic interagency tailoring
and foreign interagency tailoring NPRs. With the
issuance of the tailoring final rule, the agencies
continue to believe no such reporting form or
instructional clarifications are needed.

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2. Proposed Revisions to Call Report
Schedule RC–R, Part I
In order to implement the
clarifications for institutions subject to
Category III capital standards, as
discussed above, the agencies proposed
to require all Category III institutions to
file the FFIEC 031 Call Report and to
revise the caption for Schedule RC–R,
Part I, item 45, ‘‘Advanced approaches
institutions only: Supplementary
leverage ratio information,’’ on the
FFIEC 031 Call Report. Specifically, the
agencies proposed to clarify that item 45
(proposed to be renumbered as item 55)
applies to ‘‘advanced approaches and
Category III institutions’’ on the FFIEC
031 report form. Item 45 would be
removed from the FFIEC 041 report
form. The instructions for Schedule RC–
R, Part I, item 45 (proposed to be
renumbered as item 55), in the FFIEC
031–FFIEC 041 instruction book also
would be revised in the same manner.
The general instructions for Schedule
RC–R, Part I, in the FFIEC 031–FFIEC
041 instruction book also would be
clarified to indicate that Category III
institutions are not required to calculate
risk-weighted assets according to the
advanced approaches rule, but are
subject to the supplementary leverage
ratio and countercyclical capital buffer.
3. Proposed Revisions to the FFIEC 101
To implement the clarification for
institutions subject to Category III
capital standards, the agencies proposed
to revise the instructions for the scope
of the FFIEC 101. Specifically, because
Category III institutions are not required
to calculate risk-weighted assets
according to the advanced approaches
rule, the FFIEC 101 instructions would
be revised to clarify that top-tier
Category III bank holding companies,
savings and loan holding companies,
and insured depository institutions, and
all Category III U.S. intermediate
holding companies, must complete
FFIEC 101 Schedule A, SLR Tables 1
and 2, only and would not complete or
file any other part of the FFIEC 101. In
addition, any Category III banking
organization that is a consolidated
subsidiary of a top-tier Category III bank
holding company, savings and loan
holding company, U.S. intermediate
holding company, or insured depository
institution would not complete or file
any part of the FFIEC 101. Instead,
Category III subsidiary banking
organizations that file Call Reports
would report SLR data in Call Report
Schedule RC–R, Part I, item 45
(proposed to be renumbered as item 55).

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All Category IV institutions would not
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4. Comments Received and Final
Tailoring Rule Reporting Revisions
a. Call Report Revisions
Two commenters addressed the
agencies’ proposal to require all
institutions subject to Category I, II, or
III capital standards to file the FFIEC
031 Call Report. One commenter
observed that institutions that are
subsidiaries of Category I, II, and III
institutions, and therefore also
considered Category I, II, and III
institutions, will experience increases in
overall reporting burden if they
currently file the FFIEC 041 Call Report,
but now must file the FFIEC 031 Call
Report. The other commenter explicitly
stated that the agencies should not
expand the scope of the FFIEC 031 to
require subsidiaries of Category I, II, and
III institutions that previously were
eligible to file the FFIEC 041 Call Report
to file the FFIEC 031 Call Report. This
commenter recommended that the
agencies confirm that subsidiary
depository institutions that currently
file the FFIEC 041 or FFIEC 051 Call
Report should continue to do so rather
than ‘‘filing the more burdensome
FFIEC 031.’’
As previously discussed in Section
II.B.3., the agencies have reviewed these
comments and are modifying the
proposed change in scope as it applies
to Category III institutions not currently
required to file the FFIEC 031 Call
Report. Accordingly, Category III
institutions that have less than $100
billion in total assets and have no
foreign offices (as defined in the Call
Report instructions) would be eligible to
file the FFIEC 041 Call Report and
would not be required to file the FFIEC
031. Such institutions also would not be
eligible to file the FFIEC 051 Call
Report. As previously mentioned, to
accommodate this modification to the
originally proposed change in scope for
Category III institutions, the agencies
will retain existing SLR information
items 45.a and 45.b (proposed to be
renumbered as items 55.a and 55.b), as
well as existing item 46.b for the
countercyclical capital buffer (proposed
to be renumbered as item 56.b), in
Schedule RC–R, Part I, in the FFIEC 041
Call Report rather than removing these
three items from this report as had been
proposed. However, the agencies would
require all Category I and II institutions,
including depository institution
subsidiaries of Category I and II
institutions, to file the FFIEC 031 Call
Report as proposed. As advanced

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approaches institutions, depository
institutions that are Category I and II
institutions are not eligible to file the
FFIEC 051 Call Report.
b. FFIEC 101 Revisions
Two commenters recommended that
Category III institutions should not be
required to file the FFIEC 101. Such
institutions are not required to calculate
risk-weighted assets according to the
advanced approaches rule, but are
subject to the supplementary leverage
ratio (SLR). Thus, the only portions of
the FFIEC 101 report applicable to
Category III institutions are
Supplementary Leverage Ratio Tables 1
and 2. However, one commenter noted
that depository institution subsidiaries
of Category III institutions, which are
themselves considered Category III
institutions, are not required to
complete these two tables in the FFIEC
101 and instead report specified SLR
data only in Call Report Schedule RC–
R, Part I.
In support of their recommendation to
eliminate SLR data from the FFIEC 101,
these commenters asserted that holding
companies that report detailed SLR
information in the FFIEC 101 report
duplicate information in the Board’s FR
Y–15.30 However, the instructions for
the FR Y–15 state that ‘‘[i]f the banking
organization files the Regulatory Capital
Reporting for Institutions Subject to the
Advanced Capital Adequacy Framework
(FFIEC 101) for the same reporting
period, then’’12 data items in Schedule
A of the FR Y–15 ‘‘will be populated
automatically’’ from the corresponding
data items reported in FFIEC 101 SLR
Table 2. Furthermore, the FR Y–15 does
not collect data comparable to the data
reported in FFIEC 101 SLR Table 1,
‘‘Summary comparison of accounting
assets and total leverage exposure.’’
Both commenters also noted that
Table 13 of the Pillar 3 disclosures 31
requires certain institutions to disclose
the same SLR information as is reported
in FFIEC 101 SLR Tables 1 and 2. These
commenters also cited these Pillar 3
disclosures as a reason for eliminating
the SLR Tables from the FFIEC 101.
However, the agencies’ capital rule
provides that the management of an
institution required to make the Pillar 3
public disclosures may provide all of
the required disclosures in one place on
its public website ‘‘or may provide the
disclosures in more than one public
financial report or other regulatory
reports,’’ provided the institution
30 Banking Organization Systemic Risk Report (FR
Y–15), OMB No. 3064–0352.
31 See 12 CFR 3.173 (OCC); 12 CFR 217.173
(Board); 12 CFR 324.173 (FDIC).

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‘‘publicly provides a summary table
specifically indicating the location(s) of
all such disclosures.’’ 32 Thus, an
institution could satisfy the Table 13
disclosure requirement through the use
of FFIEC 101 SLR Tables 1 and 2, the
location of which would be provided in
the institution’s summary table.
Although the agencies recognize the
existence of overlaps between the SLR
information in the FR Y–15, Table 13 of
the Pillar 3 disclosures, and SLR Tables
1 and 2 of the FFIEC 101, the latter
serves, or can serve, as the source for
some or all of the SLR information in
the other two. Therefore, the agencies
do not agree with the comments that
SLR Tables 1 and 2 in the FFIEC 101
duplicate other available information
and will retain these tables.
In addition, one commenter suggested
that if the requirement to complete SLR
Tables 1 and 2 is retained for top-tier
Category III banking organizations, as
proposed, ‘‘a change to Line 2.20 Tier 1
capital for Category III firms to account
for Tier 1 capital calculation differences
would be appropriate.’’ On the FFIEC
101 reporting form, the caption for Item
2.20 currently says, ‘‘Tier 1 capital (from
Schedule A, item 45).’’ The agencies
note that the existing instructions for
Item 2.20 already state that an
institution ‘‘that does not complete
Schedule A, except for the SLR
disclosures, must use the corresponding
item as reported on the institution’s
Schedule RC–R of the Call Report or
Schedule HC–R of the FR Y–9C, as
applicable.’’ Thus, the Item 2.20
instructions already address the
commenter’s suggestion. However, the
agencies will modify the caption for
Item 2.20 to clarify the source for the
amount of Tier 1 capital to be reported
in this item.
E. Revisions to the Supplementary
Leverage Ratio for Certain Central Bank
Deposits of Custodial Banks
1. Background
On November 19, 2019, the agencies
announced that they had finalized the
proposed revisions to the SLR for
certain central bank deposits of banking
organizations predominantly engaged in
custodial activities.33 The final rule,
which implements section 402 of the
EGRRCPA, takes effect April 1, 2020.
In the October 2019 notice, the
agencies proposed changes to the
instructions for Call Report Schedule
32 See 12 CFR 3.172(c)(1) (OCC); 12 CFR
217.172(c)(1) (Board); 12 CFR 324.172(c)(1) (FDIC).
33 See the custodial bank SLR final rule attached
to OCC News Release 2019–135, Board Press
Release, and FDIC Press Release 109–2019, all of
which are dated November 19, 2019.

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RC–R and the addition of a new data
item to both SLR Tables 1 and 2 in
FFIEC 101 Schedule A that would
implement the proposed changes to the
agencies’ capital rule.
2. Proposed Revisions to Call Report
Schedule RC–R, Part I
In the October 2019 notice, the
agencies proposed to modify the
instructions for the calculation of the
total leverage exposure to enable an
institution that qualifies as a ‘‘custodial
banking organization’’ to exclude
deposits placed at a ‘‘qualifying central
bank’’ from the total leverage exposure
reported in Schedule RC–R, Part I, item
45.a (which would become item 54.a of
Part I, as proposed above). The excluded
deposits would be limited to the amount
of deposit liabilities on the consolidated
balance sheet of the custodial banking
organization that are linked to fiduciary
or custody and safekeeping accounts.
3. Proposed Revisions to FFIEC 101
Schedule A
In the October 2019 notice, the
agencies also proposed to revise the
total leverage exposure calculation that
would be reported on the FFIEC 101
Schedule A through the addition of a
new data item for the qualifying central
bank deduction to the calculations of
the total leverage exposure in SLR
Tables 1 and 2 of this schedule. The
new reporting item would be placed
between existing data items 1.7 and 1.8
in SLR Table 1 and between data items
2.2 and 2.3 in SLR Table 2.
4. Final Reporting Revisions
The agencies received no comments
on the proposed changes to Call Report
Schedule RC–R, Part I, and FFIEC 101
Schedule A for the SLR for custodial
banks and will implement the changes
as proposed.

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F. Standardized Approach for
Counterparty Credit Risk on Derivative
Contracts
1. Background
On November 19, 2019, the agencies
announced that they had adopted a final
rule implementing a new approach for
calculating the exposure amount of
derivative contracts under the capital
rule: The standardized approach for
counterparty credit risk (SA–CCR final
rule).34 The SA–CCR final rule takes
effect April 1, 2020 (i.e., for the Call
Report and the FFIEC 101 for the June
30, 2020, report date) with a mandatory
34 See the SA–CCR final rule attached to OCC
News Release 2019–136, Board Press Release, and
FDIC Press Release 110–2019, all of which are dated
November 19, 2019.

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compliance date of January 1, 2022 (i.e.,
for the Call Report and the FFIEC 101
for the March 31, 2022, report date).
The SA–CCR final rule replaces the
current exposure methodology (CEM)
with SA–CCR in the capital rule for
advanced approaches institutions. The
final rule requires banking organizations
subject to Category I and II standards
(Category I and II banking organizations)
in the agencies’ tailoring final rule,35
discussed in Section II.D. above, to use
SA–CCR to calculate their standardized
total risk-weighted assets and permits
non-advanced approaches banking
organizations the option of using SA–
CCR in place of CEM to calculate the
exposure amount of their noncleared
and cleared derivative contracts.
Category I and II banking organizations
would have to choose either SA–CCR or
the internal models methodology (IMM)
to calculate the exposure amount of
their noncleared and cleared derivative
contracts in connection with calculating
their risk-based capital under the
advanced approaches. The SA–CCR
final rule provides for the eventual
elimination of the current methods for
Category I and II banking organizations
to determine the risk-weighted asset
amount for their default fund
contributions to a central counterparty
(CCP) or a qualifying central
counterparty (QCCP) and implements a
new and simpler method that would be
based on the banking organization’s prorata share of the CCP’s and QCCP’s
default fund. However, the final rule
allows banking organizations that elect
to use SA–CCR to continue to use
method 1 and method 2 under CEM to
calculate the risk-weighted asset amount
for default fund contributions until
January 1, 2022.
The SA–CCR final rule also requires
Category I and Category II banking
organizations to use SA–CCR to
determine the exposure amount of
derivative contracts for purposes of
calculating total leverage exposure for
the supplementary leverage ratio. If a
Category III banking organization
chooses to use SA–CCR to calculate its
total risk-weighted assets, it must use
SA–CCR to determine the exposure
amount of derivative contracts for its
total leverage exposure. Where a
banking organization has the option to
choose among the approaches
applicable to such banking organization
under the capital rule, it must use the
same approach for all purposes.
Furthermore, the final rule allows a
clearing member banking organization
to recognize the counterparty credit
risk-reducing effect of client collateral
35 84

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in replacement cost and potential future
exposure (PFE) for purposes of
calculating total leverage exposure
under certain circumstances. In
particular, this treatment applies to a
clearing member banking organization’s
exposure from its client-facing
derivative transactions. For such
exposures, a clearing member banking
organization would use SA–CCR, as
applied for risk-based capital purposes,
which permits recognition of both cash
and non-cash forms of margin in the
form of financial collateral received
from a client to offset the replacement
cost and PFE components for clientfacing derivative transactions.
In the October 2019 notice, the
agencies proposed to revise the
instructions for Call Report Schedule
RC–R, Part II, as well as for SLR Table
2 in FFIEC 101 Schedule A, to
implement the changes to the
calculation of the exposure amount of
derivative contracts under the agencies’
capital rule.
Additionally, the SA–CCR final rule
notes that the FDIC is unable to
incorporate the SA–CCR methodology
into the deposit insurance assessment
pricing methodology for highly complex
institutions 36 upon the effective date of
this rule, but will consider options for
addressing the use of SA–CCR in the
deposit insurance system as derivative
exposure data reported using SA–CCR
becomes available. In the meantime,
certain clarifications would be made to
the instructions for reporting
counterparty exposures in Schedule
RC–O, Memorandum items 14 and 15,
of the FFIEC 031 and the FFIEC 041 Call
Reports, requiring highly complex
institutions to continue to calculate
derivative exposures using CEM, but
without any reduction for collateral
other than cash collateral that is all or
part of variation margin and that
satisfies certain requirements.37
Similarly, certain clarifications would
be made to the instructions for Schedule
RC–O, Memorandum items 14 and 15,
in the FFIEC 031 and the FFIEC 041 Call
Reports requiring highly complex
institutions to continue to report the
exposure amount associated with
securities financing transactions,
including cleared transactions that are
36 See

12 CFR 327.8(g).
12 CFR 3.10(c)(4)(ii)(C)(1)(ii) and (iii) and
3.10(c)(4)(ii)(C)(3)–(7) (OCC); 12 CFR
217.10(c)(4)(ii)(C)(1)(ii) and (iii) and
217.10(c)(4)(ii)(C)(3)–(7) (Board); and 12 CFR
324.10(c)(4)(ii)(C)(1)(ii) and (iii) and
324.10(c)(4)(ii)(C)(3)–(7) (FDIC) (as amended under
the SA–CCR final rule).
37 See

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securities financing transactions, using
the standardized approach.38
2. Proposed Revisions to Call Report
Schedule RC–R, Part II
A banking organization that applies
the generally applicable capital
requirements must report the notional
amount and regulatory capital exposure
amount of its derivatives exposures in
Schedule RC–R, Part II. In the October
2019 notice, the agencies proposed to
revise the instructions for Schedule RC–
R, Part II, to be consistent with SA–CCR.
Generally, the proposed revisions to the
reporting of derivatives elements in
Schedule RC–R, Part II, are driven by
the treatment of cleared derivatives’
variation margin (settled-to-market
versus collateralized-to-market), netting
provisions impacting the calculations of
notional and exposure amounts, and
attributions of derivatives to cleared
versus noncleared derivatives. The
General Instructions for Schedule RC–R,
Part II, and the instructions for Schedule
RC–R, Part II, items 20, 21, and
Memorandum items 1 through 3 would
be revised.

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3. Proposed Revisions to FFIEC 101
Schedule A, SLR Table 2
In connection with their calculation
of the supplementary leverage ratio,
Category I, II, and III banking
organizations must report the exposure
amount of their derivatives in SLR Table
2 of FFIEC 101 Schedule A. In the
October 2019 notice, the agencies
proposed to revise the instructions for
SLR Table 2 to be consistent with SA–
CCR. Institutions that continue to use
the CEM would use the current FFIEC
101 Schedule A instructions to
complete SLR Table 2.
4. Comments Received and Instructions
for Reporting Derivatives
The agencies did not receive
comments specifically addressing their
proposals to revise the instructions for
Schedule RC–R, Part II, and for FFIEC
101 Schedule A, SLR Table 2, consistent
with the SA–CCR final rule. However,
two commenters submitted similar
questions and requests for clarifications
related to certain derivatives reporting
issues. In Schedule RC–R, Part II,
Memorandum item 3, institutions report
the notional principal amounts of
centrally cleared derivative contracts by
remaining maturity. Commenters sought
clarification as to whether, for purposes
of reporting derivatives referred to as
settled-to-market contracts in
38 See 12 CFR 3.37(b) or (c) (OCC); 12 CFR
217.37(b) or (c) (Board); and 12 CFR 324.37(b) or
(c) (FDIC) (as amended under the SA–CCR final
rule).

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Memorandum item 3, the remaining
maturity of such derivatives should be
the remaining maturity used to
determine the conversion factor for the
calculation of the PFE of these contracts
or the contractual remaining maturity of
these contracts. The derivatives
information reported in Memorandum
items 1 through 3 of Schedule RC–R,
Part II, is collected to assist the agencies
in understanding, and assessing the
reasonableness of, the credit equivalent
amounts of the over-the-counter
derivatives and the centrally cleared
derivatives reported in Schedule RC–R,
Part II, items 20 and 21, column B.
Accordingly, when reporting settled-tomarket centrally cleared derivative
contracts in Memorandum item 3, the
remaining maturity used to determine
the applicable conversion factor should
be the basis for reporting. The agencies
will clarify the instructions for
Memorandum item 3 to address the
reporting of settled-to-market contracts.
Both commenters stated that the Call
Report instructions do not explain
whether institutions should report
notional amounts in Schedule RC–L,
Derivatives and Off-Balance Sheet
Items, and Schedule RC–R, Part II, RiskWeighted Assets, for derivatives that
have matured, but have associated
unsettled receivables or payables that
are reported as assets or liabilities,
respectively, on the balance sheet as of
the quarter-end report date. In seeking
clarification of the reporting
requirements for such situations, the
commenters recommended that notional
amounts not be reported for derivatives
that have matured. The agencies agree
and will clarify the Call Report
instructions to so indicate.
For purposes of reporting notional
amounts in the Call Report, one
commenter recommended that the
agencies clarify whether the notional
amount as defined in U.S. generally
accepted accounting principles
(GAAP) 39 or under the SA–CCR final
rule should be used when an institution
must report the notional amount of
derivative contracts in Schedule RC–R,
Regulatory Capital, and elsewhere in the
Call Report, such as Schedule RC–L.
The agencies believe that the SA–CCR
notional amount should be reported in
Schedule RC–R only when an
institution uses SA–CCR to calculate its
exposure amounts when the institution
determines its standardized total riskweighted assets. When an institution
uses CEM to calculate exposure
amounts for its derivative contracts, the
notional amounts to be reported in
39 See Accounting Standards Codification Section
815–10–20.

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Schedule RC–R should be based on the
definition in U.S. GAAP. All notional
amounts reported in Schedule RC–L
should be based on the U.S. GAAP
notional amount. The agencies will
revise the instructions for Schedules
RC–L and RC–R in this manner.
Both commenters addressed the
reporting of the fair value of collateral
held against over-the-counter (OTC)
derivative exposures by type of
collateral and type of derivative
counterparty in Schedule RC–L, item
16.b, and questioned whether this
information is meaningful. One
commenter requested clarification of the
purpose for collecting this information
while the other recommended that the
agencies no longer collect this
information. The data items for
reporting the fair value of collateral are
applicable to institutions with total
assets of $10 billion or more. In general,
the agencies use this information in
their oversight and supervision of banks
engaging in OTC derivative activities.
The breakdown of the fair value of
collateral posted for OTC derivative
exposures in item 16.b provides the
agencies with important insights into
the extent to which collateral is used as
part of the credit risk management
practices associated with derivative
credit exposures to different types of
counterparties and changes over time in
the nature and extent of the collateral
protection. As a result of the agencies’
review of Schedule RC–L in 2016 during
their most recent statutorily mandated
review of existing Call Report data
items,40 the agencies reduced the level
of detail required to be reported on the
fair value of collateral posted for OTC
derivative exposures in item 16.b
effective June 30, 2018. The agencies’
use of the information reported in
Schedule RC–L, item 16.b, will be
reviewed again before the end of 2022
as part of their next statutorily
mandated review.
G. High Volatility Commercial Real
Estate (HVCRE) Land Development
Loans
1. Background
On December 13, 2019, the agencies
published a final rule that conforms the
HVCRE exposure definition in section 2
of the capital rule 41 to the statutory
definition of an HVCRE ADC loan 42 and
clarifies the capital treatment for loans
that finance the development of land
40 This review is mandated by section 604 of the
Financial Services Regulatory Relief Act of 2006 (12
U.S.C. 1817(a)(11)).
41 See 12 CFR 3.2 (OCC); 12 CFR 217.2 (Board);
and 12 CFR 324.2 (FDIC).
42 See Section 214 of the EGRRCPA.

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under the revised HVCRE exposure
definition (HVCRE final rule).43 This
final rule takes effect April 1, 2020.
2. Proposed Revisions to Call Report
Schedule RC–R, Part II
The agencies’ adoption of the HVCRE
final rule supersedes the July 6, 2018,
interagency statement.44 In relevant
part, this statement advised institutions
that, when determining which loans
should be subject to a heightened risk
weight, until the agencies take further
action institutions may choose to
continue to apply the current regulatory
definition of HVCRE exposure, or they
may choose to apply the heightened risk
weight only to those loans they
reasonably believe meet the statutory
definition of HVCRE ADC loan.
Institutions will be required to apply the
HVCRE exposure definition in the final
rule beginning with the Call Report for
June 30, 2020. Therefore, the agencies
will make conforming revisions to the
instructions for Schedule RC–R, Part II,
items 4.b and 5.b, in all versions of the
Call Report effective as of that report
date. No revisions to the Call Report
forms are necessary.

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3. Proposed Revisions to FFIEC 101
Schedule G
The changes to the HVCRE exposure
definition discussed above would also
affect the instructions for Schedule G—
Wholesale Exposure in the FFIEC 101.
Therefore, the agencies also will make
conforming revisions to the FFIEC 101
instructions to align with the new
HVCRE exposure definition in the final
rule effective as of the June 30, 2020,
report date.
H. Operating Lease Liabilities
In February 2016, the Financial
Accounting Standards Board (FASB)
issued ASU No. 2016–02, ‘‘Leases,’’
which added Topic 842, Leases, to the
Accounting Standards Codification
(ASC). Once ASU 2016–02 is effective
for an institution, the ASU’s accounting
requirements, as amended by certain
subsequent ASUs, supersede ASC Topic
840, Leases.
The most significant change that ASC
Topic 842 makes to the previous lease
accounting requirements is to lessee
accounting. Under the lease accounting
standards in ASC Topic 840, lessees
recognize lease assets and lease
liabilities on the balance sheet for
43 84

FR 68019 (December 13, 2019).
FDIC, and OCC, Interagency statement
regarding the impact of the Economic Growth,
Regulatory Relief, and Consumer Protection Act
(EGRRCPA), https://www.federalreserve.gov/
newsevents/pressreleases/files/
bcreg20180706a1.pdf.
44 Board,

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capital leases, but do not recognize
operating leases on the balance sheet.
The lessee accounting model under
Topic 842 retains the distinction
between operating leases and capital
leases, which the new standard labels
finance leases. However, the new
standard requires lessees to record a
right-of-use (ROU) asset and a lease
liability on the balance sheet for
operating leases. (For finance leases, a
lessee’s lease asset also is designated an
ROU asset.) In general, the new standard
permits a lessee to make an accounting
policy election to exempt leases with a
term of one year or less at their
commencement date from on-balance
sheet recognition.
For institutions that are public
business entities, as defined under U.S.
GAAP, Topic 842 is currently in effect.
For institutions that are not public
business entities, the FASB recently
amended the effective date of the new
standard so that Topic 842 will now
take effect for fiscal years beginning
after December 15, 2020, and interim
reporting periods within fiscal years
beginning after December 15, 2021.45
Early application of the new standard is
permitted for all institutions.
The Call Report Supplemental
Instructions for March 2019 46 stated
that a lessee should report lease
liabilities for operating leases and
finance leases, including lease liabilities
recorded upon adoption of the ASU, in
Schedule RC–M, items 5.b, ‘‘Other
borrowings,’’ and 10.b, ‘‘Amount of
‘Other borrowings’ that are secured,’’
which is consistent with the current
Call Report instructions for reporting a
lessee’s obligations under capital leases
under ASC Topic 840. In response to
this instructional guidance, the agencies
received questions from institutions
concerning the reporting of a bank
lessee’s lease liabilities for operating
leases. These institutions indicated that
reporting operating lease liabilities as
other liabilities instead of other
borrowings would better align the
reporting of the single noninterest
expense item for operating leases in the
income statement (which is the
presentation required by ASC Topic
842) with their balance sheet
classification and would be consistent
with how these institutions report
operating lease liabilities internally.
The agencies considered the views
expressed by these institutions and
45 See FASB ASU 2019–10, Financial
Instruments—Credit Losses (Topic 326), Derivatives
and Hedging (Topic 815), and Leases (Topic 842):
Effective Dates.
46 https://www.ffiec.gov/pdf/FFIEC_forms/
FFIEC031_FFIEC041_FFIEC051_suppinst_
201903.pdf.

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proposed in the October 2019 notice to
require that operating lease liabilities be
reported on the Call Report balance
sheet in Schedule RC, item 20, ‘‘Other
liabilities.’’ In Schedule RC–G, Other
Liabilities, operating lease liabilities
would be reported in item 4, ‘‘All other
liabilities.’’ In subitems of Schedule RC–
G, item 4, institutions must itemize and
describe any components of this item in
amounts greater than $100,000 that
exceed 25 percent of the amount
reported in item 4. Because of the
expected prevalence of operating lease
liabilities, the agencies also proposed to
add a new subitem with the preprinted
caption ‘‘Operating lease liabilities’’ to
item 4 to facilitate the reporting of these
liabilities when their amount exceeds
the reporting threshold for itemizing
and describing components of ‘‘All
other liabilities.’’ These changes would
take effect as of the March 31, 2020,
report date.
The agencies received no comments
on these proposed revisions for
operating lease liabilities and will
implement them as proposed.
I. Reporting Home Equity Lines of Credit
That Convert From Revolving to NonRevolving Status
1. Proposed Instructional Clarification
Institutions report the amount
outstanding under revolving, open-end
lines of credit secured by 1–4 family
residential properties (commonly
known as home equity lines of credit or
HELOCs) in item 1.c.(1) of Schedule
RC–C, Part I, Loans and Leases. The
amounts of closed-end loans secured by
1–4 family residential properties are
reported in Schedule RC–C, Part I, item
1.c.(2)(a) or (b), depending on whether
the loan is a first or a junior lien.47
A HELOC is a line of credit secured
by a lien on a 1–4 family residential
property that generally provides a draw
period followed by a repayment period.
During the draw period, a borrower has
revolving access to unused amounts
under a specified line of credit. During
the repayment period, the borrower can
no longer draw on the line of credit, and
the outstanding principal is either due
immediately in a balloon payment or
repaid over the remaining loan term
through monthly payments. Because the
Call Report instructions do not address
the reporting treatment for a home
equity line of credit when it reaches its
end-of-draw period and converts from
47 Institutions report additional information on
open-end and closed-end loans secured by 1–4
family residential properties in certain other Call
Report schedules in accordance with the loan
category definitions in Schedule RC–C, Part I, items
1.c.(1), 1.c.(2)(a), and 1.c.(2)(b).

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revolving to non-revolving status, the
agencies have found diversity in how
these credits are reported in Schedule
RC–C, Part I, items 1.c.(1), 1.c.(2)(a), and
1.c.(2)(b), and in other Call Report items
that use the definitions of these three
loan categories.
In September 2015, to address this
absence of instructional guidance and
promote consistency in reporting, the
agencies proposed to clarify the
instructions for reporting loans secured
by 1–4 family residential properties by
specifying that after a revolving openend line of credit has converted to nonrevolving closed-end status, the loan
should be reported as closed-end in
Schedule RC–C, Part I, item 1.c.(2)(a) or
(b), as appropriate.48 As discussed in a
subsequent notice,49 the agencies
received a number of comments that
raised concerns with the proposal. In
particular, some commenters stated that
reclassifying HELOCs after the draw
period could raise operational
challenges for institutions’ loan systems
that would require additional time to
implement. Based on the feedback
received, the agencies did not proceed
with their proposed instructional
clarification at that time.
The agencies continue to believe that
it is important to collect accurate data
on loans secured by 1–4 family
residential properties in the Call Report.
Consistent classification of HELOCs
based on the status of the draw period
is particularly important for the
agencies’ safety and soundness
monitoring. Due to the structure of
HELOCs discussed above, borrowers
generally are not required to make
principal repayments during the draw
period, which may create a financial
shock for borrowers when they must
make a balloon payment or begin
regular monthly repayments after the
draw period. With some institutions
reporting HELOCs past the draw period
as revolving, this increases the amounts
outstanding, charge-offs, recoveries, past
dues, and nonaccruals reported in the
open-end category relative to the
amounts reported by institutions that
treat HELOCs past the draw period as
closed-end, which makes the data less
useful for agency comparisons and
safety and soundness monitoring. In
addition, in ASU No. 2019–04,50 the
FASB amended ASC Subtopic 326–20
on credit losses to require that, when
presenting credit quality disclosures in
notes to financial statements prepared
48 See

80 FR 56539 (September 18, 2015).
81 FR 45357 (July 13, 2016).
50 ASU No. 2019–04, ‘‘Codification Improvements
to Topic 326, Financial Instruments—Credit Losses,
Topic 815, Derivatives and Hedging, and Topic 825,
Financial Instruments,’’ issued in April 2019.
49 See

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in accordance with U.S. GAAP, an
entity must separately disclose line-ofcredit arrangements that are converted
to term loans from line-of-credit
arrangements that remain in revolving
status. The agencies further stated in the
October 2019 notice that they had
determined that there would be little or
no impact to the regulatory capital
calculations, FDIC deposit insurance
assessments, or other regulatory
reporting requirements as a result of this
proposed clarification, which were
other concerns previously raised by
commenters.
Therefore, in the October 2019 notice,
the agencies re-proposed to clarify the
Call Report instructions for Schedule
RC–C, Part I, items 1.c.(1), 1.c.(2)(a), and
1.c.(2)(b), to address continuing
diversity in reporting practices by
stating that revolving, open-end lines of
credit secured by 1–4 family residential
properties that have converted to nonrevolving closed-end status should be
reported as closed-end loans. The effect
of this clarification would extend to the
instructions for numerous data items
elsewhere in the Call Report that
reference the Schedule RC–C, Part I,
loan category definitions for open-end
and closed-end loans secured by 1–4
family residential properties and were
identified in the October 2019 notice.
That notice also identified a limited
number of Call Report data items to
which this instructional clarification
would not be applied.
To address prior comments regarding
the time needed for any systems
changes, the agencies proposed that
compliance with the clarified
instructions would not be required until
the March 31, 2021, report date. The
October 2019 notice further proposed
that institutions not currently reporting
in accordance with the clarified
instructions would be permitted, but not
required, to report in accordance with
the clarified instructions before that
date.
2. Comments Received and Final
Reporting Revisions
Three commenters opposed the
agencies’ proposal to require that
HELOCs that have converted to nonrevolving closed-end status should be
reported as closed-end loans.
Commenters cited the numerous data
items in multiple Call Report schedules
that would be affected by this proposed
instructional clarification and the
reconfiguration of systems that would
need to be undertaken as well as a
definitional conflict between the Call
Report instructions as the agencies
proposed to clarify them and the
instructions for the Board’s FR Y–14M

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report filed by holding companies with
total consolidated assets of $100 billion
or more.51 In addition, one commenter
stated that the proposed Call Report
instructional clarification may lead to
inconsistencies between the reporting of
HELOCs in open-end and closed-end
status in the Call Report and disclosures
of HELOCs made in filings with the
Securities and Exchange Commission
under the federal securities laws.
Another commenter cited differences in
the risk profiles of loans underwritten as
HELOCs and those underwritten as
closed-end loans at origination and
indicated that the proposed
instructional clarification could distort
performance trends for loans secured by
1–4 family residential properties as
HELOCs migrate between the open-end
and closed-end loan categories in the
Call Report. Two of the commenters
opposing the proposed instructional
clarification instead recommended the
creation of a memorandum item in the
Call Report loan schedule (Schedule
RC–C, Part I) to identify for supervisory
purposes the amount of HELOCs that
have converted to non-revolving closedend status. The other commenter
suggested segregating closed-end
HELOCs using a separate loan category
code, which may also imply separate
reporting and disclosure of such
HELOCs.
One commenter also requested that
the agencies clarify the reporting
treatment for ‘‘drawdowns of a HELOC
Flex product that contain ‘lock-out’
features,’’ which was described as the
borrower’s exercise of an option to
convert a draw on the line of credit to
‘‘a fixed rate interest structure with
defined payments and term.’’
After considering the comments
received, the agencies will not
implement the proposed clarification to
the instructions for Schedule RC–C, Part
I, items 1.c.(1), 1.c.(2)(a), and 1.c.(2)(b)
that would result in revolving, open-end
lines of credit secured by 1–4 family
residential properties that have
converted to non-revolving closed-end
status being reported as closed-end
loans. In light of the guidance in the
instructions for the Board’s FR Y–14M
report that directs reporting entities to
continue to report HELOCs that are no
longer revolving credits in the Home
Equity schedule, the agencies propose to
adopt this treatment for Call Report
purposes. However, recognizing the
existing diversity in practice in which
some institutions report HELOCs that
have converted from revolving to nonrevolving status as closed-end loans in
51 Capital Assessments and Stress Testing Report
(FR Y–14M), OMB Number 7100–0341.

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Federal Register / Vol. 85, No. 17 / Monday, January 27, 2020 / Notices

the Call Report while other institutions
continue to report such HELOCs as
open-end loans, the agencies propose
that institutions report all HELOCs that
convert to closed-end status on or after
January 1, 2021, as open-end loans in
Schedule RC–C, Part I, item 1.c.(1). An
institution that currently reports
HELOCs that have converted to nonrevolving closed-end status as open-end
loans in Schedule RC–C, Part I, item
1.c.(1), should not change its reporting
practice for these loans and should
continue to report these loans in item
1.c.(1) regardless of their conversion
date. An institution that currently
reports HELOCs that convert to nonrevolving closed-end status as closedend loans in Schedule RC–C, Part I, item
1.c.(2)(a) or 1.c.(2)(b), as appropriate,
may continue to report HELOCs that
convert on or before December 31, 2020,
as closed-end loans in Call Reports for
report dates after that date.
Alternatively, the institution may
choose to begin reporting some or all of
these closed-end HELOCs as open-end
loans in item 1.c.(1) as of the March 31,
2020, or any subsequent report date,
provided this reporting treatment is
consistently applied. With respect to
HELOC Flex products, the proposed
reporting treatment described above
would mean that amounts drawn on a
HELOC during its draw period that a
borrower converts to a closed-end
amount before the end of this period
also should be reported as open-end
loans in Schedule RC–C, Part I, item
1.c.(1), subject to the transition guidance
above.
The agencies also agree with
commenters’ suggestion to create a
memorandum item in Schedule RC–C,
Part I, in which institutions would
report the amount of HELOCs that have
converted to non-revolving closed-end
status that are included in item 1.c.(1),
‘‘Revolving, open-end loans secured by
1–4 family residential properties and
extended under lines of credit.’’ This
new Memorandum item 16 in Schedule
RC–C, Part I, would enable the agencies
to monitor the proportion of an
institution’s home equity credits in
revolving and non-revolving status and
changes therein and assess whether
changes in this proportion in relation to
changes in past due and nonaccrual
home equity credits and charge-offs and
recoveries of such credits warrant
supervisory follow-up. Memorandum
item 16 would be collected quarterly in
the FFIEC 031 and the FFIEC 041 Call
Reports and semiannually as of June 30
and December 31 in the FFIEC 051 Call
Report. To provide time needed for any
systems changes, the agencies propose

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to implement this new memorandum
item as of the March 31, 2021, report
date in the FFIEC 031 and the FFIEC
041 Call Reports and as of the June 30,
2021, report date in the FFIEC 051 Call
Report.
III. Timing
As stated in their October 2019 notice,
the agencies plan to make the capitalrelated reporting changes described in
Sections II.B. through II.G. effective the
same quarters as the effective dates of
the various final capital rules discussed
in this notice. Thus, the reporting
revisions to the Call Report and the
FFIEC 101, as applicable, would take
effect March 31, 2020, for the capital
simplifications rule, the community
bank leverage ratio rule, and the
tailoring final rule. In this regard, the
filing of the FFIEC 031 Call Report by
all institutions that are advanced
approaches institutions under the
tailoring final rule and the filing of the
FFIEC 031 or FFIEC 041 Call Report by
institutions considered Category III
institutions under this rule would take
effect as of March 31, 2020. Nonadvanced approaches institutions may
elect to wait to adopt the capital
simplifications rule for reporting
purposes until the June 30, 2020, report
date. The reporting revisions to the Call
Report and the FFIEC 101, as applicable,
would take effect June 30, 2020, for the
custodial bank supplementary leverage
ratio final rule, the standardized
approach for counterparty credit risk on
derivative contracts final rule, and the
high volatility commercial real estate
exposures final rule. However, the
mandatory compliance date for
reporting in accordance with the
standardized approach for counterparty
credit risk final rule is the March 31,
2022, report date.
In addition, the reporting of operating
lease liabilities as ‘‘All other liabilities’’
in Call Report Schedule RC–G would
take effect March 31, 2020, and the
change in the reporting of construction,
land development, and other land loans
with interest reserves in Call Report
Schedule RC–C, Part I, would take effect
March 31, 2021. The requirement to
continue reporting HELOCs that convert
to closed-end status as open-end loans
in Schedule RC–C, Part I, would apply
to those HELOCs that convert on or after
January 1, 2021, with pre-2021
conversions subject to the transition
guidance described in Section II.I.
above; new Memorandum item 16 in
Schedule RC–C, Part I, for HELOCs in
non-revolving closed-end status that are
reported as open-end loans would take
effect March 31, 2021, in the FFIEC 031
and the FFIEC 041 Call Reports and

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June 30, 2021, in the FFIEC 051 Call
Report.
The specific wording of the captions
for the new or revised Call Report data
items discussed in this notice and the
numbering of these data items should be
regarded as preliminary.
IV. Request for Comment
Public comment is requested on all
aspects of this joint notice. Comment is
specifically invited on:
(a) Whether the proposed revisions to
the collections of information that are
the subject of this notice are necessary
for the proper performance of the
agencies’ functions, including whether
the information has practical utility;
(b) The accuracy of the agencies’
estimates of the burden of the
information collections as they are
proposed to be revised, including the
validity of the methodology and
assumptions used;
(c) Ways to enhance the quality,
utility, and clarity of the information to
be collected;
(d) Ways to minimize the burden of
information collections on respondents,
including through the use of automated
collection techniques or other forms of
information technology; and
(e) Estimates of capital or start-up
costs and costs of operation,
maintenance, and purchase of services
to provide information.
Comments submitted in response to
this joint notice will be shared among
the agencies.
Dated: January 21, 2020.
Theodore J. Dowd,
Deputy Chief Counsel, Office of the
Comptroller of the Currency.
Board of Governors of the Federal Reserve
System, January 21, 2020.
Ann E. Misback,
Secretary of the Board.
Federal Deposit Insurance Corporation.
Dated at Washington, DC, on January 21,
2020.
Annmarie H. Boyd,
Assistant Executive Secretary.
[FR Doc. 2020–01292 Filed 1–24–20; 8:45 am]
BILLING CODE 4810–33–P; 6210–01–P; 6714–01–P

DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network
Agency Information Collection
Activities; Proposed Renewal;
Comment Request; Renewal Without
Change of the Registration of Money
Services Businesses Regulation and
FinCEN Form 107
Financial Crimes Enforcement
Network (‘‘FinCEN’’), Treasury.

AGENCY:

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