FR4031_20200219_omb

Supporting Statement for the
Notice of Branch Closure
(FR 4031; OMB No. 7100-0264)
Summary
The Board of Governors of the Federal Reserve System (Board), under authority
delegated by the Office of Management and Budget (OMB), has extended for three years,
without revision, the Notice of Branch Closure (FR 4031; OMB No. 7100-0264). The reporting,
recordkeeping, and disclosure requirements regarding the closing of any branch of an insured
depository institution are contained in section 42 of the Federal Deposit Insurance Act (FDI Act),
as supplemented by an interagency policy statement on branch closings. The Board uses the
information in the FR 4031 to fulfill its statutory obligation to supervise state member banks
(SMBs). There is no reporting form associated with the reporting portion of this information
collection; SMBs notify their appropriate Reserve Bank by letter prior to closing a branch. The
current estimated total annual burden for the FR 4031 is 281 hours.
Background and Justification
Section 42 of the FDI Act imposes reporting, recordkeeping, and disclosure requirements
on insured depository institutions that propose to close any branch (12 U.S.C. § 1831r-1).
Additionally, in 1999, the Board, Office of the Comptroller of the Currency, and Federal
Deposit Insurance Corporation issued a joint policy statement regarding branch closings by
insured depository institutions.1 The policy statement incorporates notice procedures and
provides for banks to inform customers in affected areas of their ability to comment on a
particular branch closing. The federal banking agencies also clarified in the policy statement that
main offices, remote service facilities, loan production offices, and insured branches of foreign
banks are not branches for purposes of section 42 of the FDI Act.
This information is not available from other sources.
Description of Information Collection
There are several requirements associated with this information collection. Each insured
depository institution must adopt a policy regarding the closing of its branches. When a branch is
scheduled for closing, the insured depository institution must notify both its regulator and its
customers of the proposed closure. The agencies examine institutions for compliance with these
requirements and may make adverse examination findings or take enforcement actions for failure
to comply.
SMBs must report any proposed branch closing to the appropriate Federal Reserve Bank
no later than 90 days prior to the date of the proposed branch closing. The report must include
the following information:
 the identification of the branch to be closed,
1

See 64 FR 34844 (June 29, 1999).





the proposed date of closing,
a detailed statement of the reasons for the decision to close the branch, and
statistical or other information in support of such reasons consistent with the institution’s
written policy for branch closings.

The SMB must notify branch customers of the closing by including a notice in a regular
account statement or in a separate mailing and by posting a notice in the branch to be closed. The
customer notice should state the location of the branch to be closed and the proposed date of
closing, and either identify alternative sites where customers may obtain service following the
closing date or provide a telephone number for customers to call to determine such alternative
sites. If the institution is an interstate bank and the branch is located in a low- or moderateincome area, the customer notice must also contain the mailing address of the appropriate
Reserve Bank and a statement that comments on the proposed branch closing may be mailed to
that Reserve Bank.
Respondent Panel
The respondent panel for the FR 4031 is comprised of SMBs.
Time Schedule for Information Collection
At least 90 days prior to the proposed date of the branch closure, an SMB must advise its
Federal Reserve Bank of the closing and send a notice to the branch’s customers. At least
30 days before the closing date, the SMB must post a notice in the branch to be closed. Customer
notices and the institution’s branch closing policy are not submitted to the regulator.
Legal Status
The FR 4031 is authorized pursuant to section 42(a)(1) of the FDI Act (12 U.S.C. §
1831r-1(a)(1)) and section 11 of the Federal Reserve Act (12 U.S.C. § 248(a)), which authorizes
the Board to require state member banks to submit information as the Board deems necessary.
The requirements associated with FR 4031 are mandatory.
Generally, information collected pursuant to the FR 4031 is not considered to be
confidential. However, a SMB may request confidential treatment pursuant to exemption 4 of the
Freedom of Information Act (5 U.S.C. § 552(b)(4)), which protects trade secrets and privileged
or confidential commercial or financial information.
Consultation Outside the Agency
There has been no consultation outside the Federal Reserve System.
Public Comments
On September 10, 2019, the Board published an initial notice in the Federal Register
(84 FR 47516) requesting public comment for 60 days on the extension, without revision, of the

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FR 4031. The comment period for this notice expired on November 12, 2019. The Board did not
receive any comments. On December 23, 2019, the Board published a final notice in the Federal
Register (84 FR 70540).
Estimate of Respondent Burden
As shown in the table below, the estimated total annual burden for the FR 4031 is 281
hours. An SMB has reporting and disclosure obligations each time it closes a branch. The
recordkeeping burden for adopting a branch closing policy is a one-time burden incurred by an
institution when it opens its first branch. Based on the number of notifications received from
2016 through 2018, the Board estimates that each year, on average, 91 SMBs are affected by the
reporting and third party disclosure requirements and very few, if any, additional SMBs are
affected by the recordkeeping requirements. These reporting, recordkeeping, and disclosure
requirements represent less than 1 percent of the Board’s total paperwork burden.
Estimated
number of
respondents2

Annual
frequency

Estimated
average hours
per response

Estimated
annual burden
hours

Reporting
Regulatory notice

91

1

2.00

182

Recordkeeping
Adoption of policy

1

1

8.00

8

Disclosure
Costumer mailing
Posted notice

91
91

1
1

0.75
0.25

68
23
281

FR 4031

Total

The estimated total annual cost to the public for this information collection is $16,186.3
Sensitive Questions
This collection of information contains no questions of a sensitive nature, as defined by
OMB guidelines.

2

Of these respondents, 19 are considered small entities as defined by the Small Business Administration (i.e.,
entities with less than $550 million in total assets) https://www.sba.gov/document/support--table-size-standards.
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Total cost to the public was estimated using the following formula: percent of staff time, multiplied by annual
burden hours, multiplied by hourly rates (30% Office & Administrative Support at $19, 45% Financial Managers at
$71, 15% Lawyers at $69, and 10% Chief Executives at $96). Hourly rates for each occupational group are the
(rounded) mean hourly wages from the Bureau of Labor and Statistics (BLS), Occupational Employment and Wages
May 2018, published March 29, 2019, https://www.bls.gov/news.release/ocwage.t01.htm. Occupations are defined
using the BLS Standard Occupational Classification system, https://www.bls.gov/soc/.

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Estimate of Cost to the Federal Reserve System
The estimated cost to the Federal Reserve System is $20,100 per year.

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