60-Day Federal Register Notice

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Interested parties are
invited to submit written comments to
the FDIC by any of the following
methods:
• https://www.FDIC.gov/regulations/
laws/federal.
• Email: [email protected]. Include
the name and number of the collection
in the subject line of the message.
• Mail: Manny Cabeza (202–898–
3767), Regulatory Counsel, 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 17th Street building
(located on F Street), on business days
between 7:00 a.m. and 5:00 p.m.
All comments should refer to the
relevant OMB control number. A copy
of the comments may also be submitted
to the OMB desk officer for the FDIC:
Office of Information and Regulatory

ADDRESSES:

FEDERAL DEPOSIT INSURANCE
CORPORATION
[OMB No. 3064–0057; –0112; –0127; –0140;
–0175; –0198]

Agency Information Collection
Activities: Proposed Collection
Renewal; Comment Request
Federal Deposit Insurance
Corporation (FDIC).
ACTION: Notice and request for comment.
AGENCY:

The FDIC, as part of its
obligations under the Paperwork
Reduction Act of 1995 (PRA), invites the
general public and other Federal
agencies to take this opportunity to
comment on the renewal of the existing
information collections described below
(OMB Control No. 3064–0057; –0112;
–0127; –0140; –0175; –0198).
DATES: Comments must be submitted on
or before May 18, 2020.
SUMMARY:

Affairs, Office of Management and
Budget, New Executive Office Building,
Washington, DC 20503.
FOR FURTHER INFORMATION CONTACT:

Manny Cabeza, Regulatory Counsel,
202–898–3767, [email protected], MB–
3128, Federal Deposit Insurance
Corporation, 550 17th Street NW,
Washington, DC 20429.
SUPPLEMENTARY INFORMATION:

Proposal to renew the following
currently approved collections of
information:
1. Title: Quarterly Certified Statement
Invoice for Deposit Insurance
Assessment.
OMB Number: 3064–0057.
Affected Public: FDIC-insured
depository institutions.
Burden Estimate:

SUMMARY OF ANNUAL BURDEN
Information collection description

Type of burden

Obligation to respond

Estimated
number of
respondents

Estimated frequency of
responses

Certified Statement for Quarterly Deposit Insurance Assessment (FDIC Form 6420/07).

Reporting ...................

Mandatory ..................

5,258

Quarterly .....................

Total Estimated Annual Burden:
6,941 hours.
General Description of Collection: The
FDIC collects deposit insurance
assessments on a quarterly basis. Each
quarterly assessment is based on an
insured depository institution’s
quarterly report of condition for the
prior calendar quarter. The FDIC

collects the quarterly assessment
payments by means of direct debits
through the Automated Clearing House
network. The information collection
consists of the reporting requirement
associated with certifying the review by
officials of the insured institutions to
confirm that the assessment data are

Estimated
time per
response
(minutes)

Estimated
annual
burden
(hours)

20

6,941

accurate and, in cases of inaccuracy,
submission of corrected data.
2. Title: Real Estate Lending
Standards.
OMB Number: 3064–0112.
Affected Public: Insured state
nonmember banks and state savings
associations.
Burden Estimate:

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SUMMARY OF ANNUAL BURDEN
Information collection description

Type of burden

Obligation to respond

Estimated
number of
respondents

Estimated frequency of
responses

Real Estate Lending Standards ......................

Recordkeeping ...........

Mandatory ..................

3,344

On Occasion ...............

Total Estimated Annual Burden:
1,115 hours.
General Description of Collection:
Section 1828(o) of the Federal Deposit
Insurance Act requires each federal
banking agency to adopt uniform
regulations prescribing real estate
lending standards. Part 365 of the FDIC
Rules and Regulations, which
implements section 1828(o), requires
institutions to have real estate lending
policies that include (a) limits and
standards consistent with safe and
sound banking practices; (b) prudent
underwriting standards, including loan-

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to-value ratio (LTV) limits that are clear
and measurable; (c) loan administration
policies; (d) documentation, approval
and reporting requirements; and (e) a
requirement for annual review and
approval by the board of directors. The
rule also establishes supervisory LTV
limits and other underwriting
considerations in the form of guidelines.
Since banks generally have written
policies on real estate lending, the
additional burden imposed by this
regulation is limited to modifications to
existing policies necessary to bring
those policies into compliance with the

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Estimated
time per
response
(minutes)

Estimated
annual
burden
(hours)

20

1,115

regulation and the development of a
system to report loans in excess of the
guidelines to the board of directors.
3. Title: Fast-Track Generic Clearance
for the Collection of Qualitative
Feedback.
OMB Number: 3064–0127.
Affected Public: General public
including FDIC insured depository
institutions.
Burden Estimate:

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Federal Register / Vol. 85, No. 52 / Tuesday, March 17, 2020 / Notices
SUMMARY OF ANNUAL BURDEN

Estimated
annual
burden
(hours)

Estimated
frequency of
responses

Voluntary ........................

850

15

60

12,750

.........................................

....................

....................

....................

12,750

Type of
burden

Obligation to
respond

Occasional Qualitative Surveys ..............................

Reporting ........................

Total Estimated Annual Burden .......................

.........................................

General Description of Collection: The
FDIC is requesting renewal of this
approved collection to use occasional
qualitative surveys to gather information
from the public. While the subject and
nature of the surveys to be deployed
under this information collection are yet
to be determined, based on prior
experience it is expected that the
number of respondents will range from
a few to, at times several thousands, but,
in general, these surveys are expected to
involve an average of 850 respondents.
Likewise, the time to respond to the
surveys can range from a few minutes to
several hours. It is expected that the
average time to respond to a survey is
approximately one hour. These surveys
are completely voluntary in nature.
FDIC estimates that approximately 15
such surveys will be conducted in any
given year.

Estimated
time per
response
(minutes)

Estimated
number of
respondents

Information collection description

The purpose of the surveys is, in
general terms, to obtain anecdotal
information about regulatory burden,
problems or successes in the bank
supervisory process (including both
safety-and-soundness and consumerrelated exams), the perceived need for
regulatory or statutory change, and
similar concerns. The information in
these surveys is anecdotal in nature,
that is, samples are not necessarily
random, the results are not necessarily
representative of a larger class of
potential respondents, and the goal is
not to produce a statistically valid and
reliable database. Rather, the surveys are
expected to yield anecdotal information
about the particular experiences and
opinions of members of the public,
primarily staff at respondent banks or
bank customers. The information is
used to improve the way FDIC relates to

its clients, to develop agendas for
regulatory or statutory change, and in
some cases simply to learn how
particular policies or programs are
working, or are perceived in particular
cases.
4. Title: Insurance Sales Consumer
Protection.
OMB Number: 3064–0140.
Affected Public: Insured State
nonmember banks and savings
associations that sell insurance
products; persons who sell insurance
products in or on behalf of insured State
nonmember banks and savings
associations.
Type of Burden: Third-party
disclosure.
Obligation to Respond: Mandatory.
Burden Estimate:

SUMMARY OF ANNUAL BURDEN
Estimated
number of
respondents

Estimated
annual
burden
(hours)

Type of
burden

Obligation to respond

Insurance Sales Consumer Protections ................

Third Party
Disclosure.

Mandatory ......................

1,774

On Occasion ..................

5

8,870

.......................

........................................

....................

........................................

....................

8,870

Total Estimated Annual Burden .....................

General Description of Collection:
Respondents must prepare and provide
certain disclosures to consumers (e.g.,
that insurance products and annuities
are not FDIC-insured) and obtain
consumer acknowledgments, at two
different times: (1) Before the
completion of the initial sale of an
insurance product or annuity to a

consumer; and (2) at the time of
application for the extension of credit (if
insurance products or annuities are
sold, solicited, advertised, or offered in
connection with an extension of credit).
5. Title: Interagency Guidance on
Sound Incentive Compensation
Practices.
OMB Number: 3064–0175.

Estimated frequency of
response

Estimated
time per
response
(hours)

Information collection description

Affected Public: Insured state
nonmember banks and state savings
associations.
Obligation to Respond: Voluntary.
Burden Estimate:

SUMMARY OF ANNUAL BURDEN
Estimated
number of
respondents

khammond on DSKJM1Z7X2PROD with NOTICES

Type of burden

Estimated
number of
responses

Estimated
time per
response
(hours)

Frequency of response

Total annual
estimated
burden
(hours)

Document policies and procedures (Implementation).
Annual maintenance of policies and procedures
(Ongoing).

Recordkeeping ...............

1

1

40

Annual ............................

40

Recordkeeping ...............

2,164

1

2

Annual ............................

4,328

Total Hourly Burden .........................................

.........................................

....................

....................

....................

.........................................

4,368

Methodology and Assumptions:
Previously, each institution supervised

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by the FDIC was estimated to spend 40
hours per year maintaining a record of

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its policies and procedures regarding
incentive based compensation.

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Federal Register / Vol. 85, No. 52 / Tuesday, March 17, 2020 / Notices

However, while an institution without
any such policies and procedures may
take 40 hours to completely document
them for the first time, after performing
the initial documentation, unless an
institution needs to revise its policies
and procedures, there should be no
further recordkeeping burden. FDIC is
using one respondent as a placeholder
to represent any institution that adopt
incentive based compensation for the
first time. The estimate of 40 hours
remains unchanged from the 2017
estimate. Supervisory experience shows
that approximately 65% of large FDICsupervised institutions revise their
incentive-based compensation policies
and procedures annually. FDIC
estimates it takes approximately 2 hours
for an institution to update its record of
its policies and procedures related to
incentive compensation. While a
majority of the institutions supervised
by the FDIC are small, and may not use
incentive based compensation, or may
use incentive based compensation
arrangements less complex than those
used at large institutions, FDIC assumes

that each year approximately 65 percent
of FDIC-supervised institutions will
spend approximately 2 hours each
revising their records of their incentive
based compensation policies and
procedures. As of December 31, 2019,
the FDIC supervised 3,344 institutions.
FDIC assumes that 2,164 (65%) of those
institutions will revise their records of
incentive based compensation policies
and procedures each year.
General Description of Collection:
This Guidance helps promote that
incentive compensation policies at
insured state non-member banks do not
encourage excessive risk-taking and are
consistent with the safety and
soundness of the organization. Under
this Guidance, banks are encouraged to:
(i) Have policies and procedures that
identify and describe the role(s) of the
personnel and units authorized to be
involved in incentive compensation
arrangements, identify the source of
significant risk-related inputs, establish
appropriate controls governing these
inputs to help ensure their integrity, and
identify the individual(s) and unit(s)

whose approval is necessary for the
establishment or modification of
incentive compensation arrangements;
(ii) create and maintain sufficient
documentation to permit an audit of the
organization’s processes for incentive
compensation arrangements; (iii) have
any material exceptions or adjustments
to the incentive compensation
arrangements established for senior
executives approved and documented
by its board of directors; and (iv) have
its board of directors receive and
review, on an annual or more frequent
basis, an assessment by management of
the effectiveness of the design and
operation of the organization’s incentive
compensation system in providing risktaking incentives that are consistent
with the organization’s safety and
soundness.
6. Title: Generic Information
Collection for Qualitative Research.
OMB Number: 3064–0198.
Affected Public: General public
including FDIC insured depository
institutions.
Burden Estimate:

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SUMMARY OF ANNUAL BURDEN

Voluntary ......

500

20

60

10,000

.......................

....................

....................

....................

10,000

Obligation to
respond

Occasional Qualitative Surveys ..................................................................

Reporting ......

Total Estimated Annual Burden ...........................................................

.......................

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Qualitative data would provide
complementary information on insights,
opinions, and perceptions that will
inform how the FDIC approaches its
mission to safeguard financial stability
of the banking system and promote
consumer protection and economic
inclusion. This clearance would allow
the FDIC to engage with consumers and
other relevant stakeholders through
qualitative research methods such as
focus groups, in-depth interviews,
cognitive testing, and/or qualitative
virtual methods.
The purpose of the surveys is, in
general terms, to obtain anecdotal
information about regulatory burden,
problems or successes in the bank
supervisory process (including both
safety-and-soundness and consumerrelated exams), the perceived need for
regulatory or statutory change, and
similar concerns. The information in
these surveys is anecdotal in nature,
that is, samples are not necessarily
random, the results are not necessarily
representative of a larger class of
potential respondents, and the goal is
not to produce a statistically valid and

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Fmt 4703

Estimated
annual
burden
(hours)

Estimated
frequency of
responses

Type of
burden

General Description of Collection: The
FDIC is requesting renewal of this
approved collection to use occasional
qualitative surveys to gather information
from the public to inform qualitative
research. While the subject and nature
of the surveys to be deployed under this
information collection are yet to be
determined, based on prior experience it
is expected that the number or
respondents will range from a few to, at
times, several thousands, but, in
general, these surveys are expected to
involve an average of 500 respondents.
Likewise, the time to respond to the
surveys can range from a few minutes to
several hours, but, it is expected that the
average time to respond to a survey is
approximately one hour. These surveys
are completely voluntary in nature.
FDIC estimates that approximately 20
such surveys will be conducted in any
given year.
Currently, the FDIC has a variety of
methods to collect quantitative
information from consumers and
institutions (e.g., Call Reports, FDIC
National Survey of Unbanked and
Underbanked Households, etc.).

Estimated
time per
response
(minutes)

Estimated
number of
respondents

Information collection description

Sfmt 4703

reliable database. Rather, the surveys are
expected to yield anecdotal information
about the particular experiences and
opinions of members of the public,
primarily staff at respondent banks or
bank customers. The collection is noncontroversial and does not raise issues
of concern to other Federal agencies;
with the exception of information
needed to provide remuneration for
participants of focus groups and
cognitive laboratory studies, personally
identifiable information (PII) is
collected only to the extent necessary
and is not retained.
Participation in this information
collection will be voluntary and
conducted in-person, by phone, or using
other methods, such as virtual
technology. The types of collections that
this generic clearance covers include,
but are not limited to: Small discussion
groups; focus groups of consumers,
financial industry professionals, or
other stakeholders; cognitive laboratory
studies, such as those used to refine
questions or assess usability of a
website; qualitative customer
satisfaction surveys (e.g., post-

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Federal Register / Vol. 85, No. 52 / Tuesday, March 17, 2020 / Notices
transaction surveys; opt-out web
surveys); and in-person observation
testing (e.g., website or software
usability tests).
Request for Comment
Comments are invited on: (a) Whether
the collection of information is
necessary for the proper performance of
the FDIC’s functions, including whether
the information has practical utility; (b)
the accuracy of the estimates of the
burden of the information collection,
including the validity of the
methodology and assumptions used; (c)
ways to enhance the quality, utility, and
clarity of the information to be
collected; and (d) ways to minimize the
burden of the collection of information
on respondents, including through the
use of automated collection techniques
or other forms of information
technology. All comments will become
a matter of public record.
Federal Deposit Insurance Corporation.
Dated at Washington, DC, on March 12,
2020.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2020–05455 Filed 3–16–20; 8:45 am]
BILLING CODE 6714–01–P

FEDERAL RESERVE SYSTEM
[Docket No. OP–1696]

Internal Appeals Process for Material
Supervisory Determinations and Policy
Statement Regarding the Ombudsman
for the Federal Reserve System
Board of Governors of the
Federal Reserve System.
ACTION: Final policy.
AGENCY:

The Board is revising its
internal appeals process for institutions
wishing to appeal an adverse material
supervisory determination and its
policy regarding the Ombudsman for the
Federal Reserve System.
DATES: The amendments and policy are
applicable on April 1, 2020.
FOR FURTHER INFORMATION CONTACT:
Jason A. Gonzalez, Senior Special
Counsel, (202) 452–3275, Jay Schwarz,
Special Counsel, (202) 452–2970, or
Lucas E. Beirne, Counsel, (202) 452–
2933, Legal Division, Ryan Lordos,
Deputy Associate Director, (202) 452–
2961, Division of Supervision &
Regulation, or Jeremy Hochberg,
Managing Counsel, (202) 452–6496, or
Maureen Yap, Senior Counsel, (202)
452–2642, Division of Consumer and
Community Affairs, for matters relating
to the appeals process; and Margie
Shanks, Ombudsman, (202) 452–3584,

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SUMMARY:

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or Jay Schwarz, Special Counsel, (202)
452–2970, or Lucas E. Beirne, Counsel
(202) 452–2933, Legal Division, for
matters relating to the functions of the
Ombudsman. Telecommunications
Device for the Deaf (TDD) users may call
(202) 263–4869.
SUPPLEMENTARY INFORMATION:
I. Background
In February 2018, the Board of
Governors of the Federal Reserve
System (‘‘Board’’) invited public
comment on proposed amendments to
its intra-agency process for appeals of
material supervisory determinations and
to its policy regarding the Ombudsman
of the Federal Reserve System (‘‘Federal
Reserve’’).1
A. Prior Appeals Process and
Ombudsman Policy
The Board first established guidelines
for an appeals process in March 1995,
when, after providing the opportunity to
comment, the Board published final
guidelines to implement section 309 of
the Riegle Community Development and
Regulatory Improvement Act of 1994
(the ‘‘Riegle Act’’), 12 U.S.C. 4806.
Section 309 requires the Federal
banking agencies, including the Board,
to maintain an independent, intraagency appellate process for review of
material supervisory determinations.
In general, the prior guidelines
provided that all institutions that are
subject to Federal Reserve oversight,
including bank holding companies, U.S.
agencies and branches of foreign banks,
and Edge corporations, may appeal any
material supervisory determination.2
Appeals were decided within a
specified time frame by a review panel
selected by the Reserve Bank, in
consultation with Board staff, that was
composed of persons who were not
employed by the Reserve Bank and had
not participated in, or reported to the
persons who made the material
supervisory determination under
review. An institution was granted the
further right to appeal an adverse
decision by the review panel first to the
President of the Reserve Bank that made
the material supervisory determination
and ultimately to a member of the
Board. The prior guidelines also had
safeguards to protect institutions that
filed appeals from examiner retaliation.
The prior guidelines applied to any
‘‘material supervisory determination,’’
which included any material matter
relating to the examination or
inspection process. The only matters
excluded from this appeals process were
1 83
2 60

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FR 8391 (Feb. 27, 2018).
FR 16470 (Mar. 30, 1995).

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15175

those matters for which an alternative,
independent process of appeal exists,
such as the imposition of a Prompt
Corrective Action directive or a cease
and desist order or other formal actions.
As noted in the prior guidelines,
institutions were encouraged to express
questions or concerns about supervisory
determinations during the course of an
inspection or examination, consistent
with the longstanding Federal Reserve
practice of resolving problems
informally during the course of the
inspection or examination process.
The Board’s prior Ombudsman policy
was adopted in August 1995. It
specified the responsibilities of the
Ombudsman, which include serving as
a point of contact for complaints
regarding any Federal Reserve action,
referring complaints to the appropriate
person, and investigating and resolving
complaints of retaliation.
B. Proposed Appeals Process and
Ombudsman Policy
The Board proposed to amend its
appeals process for material supervisory
determinations in several ways.
Specifically, the Board proposed to
reduce the levels of appeal from three to
two and to enhance independent review
of the matter by providing that Federal
Reserve and Board staff not affiliated
with the affected Reserve Bank review
the matter at both appeal levels. The
Board proposed establishing specific
standards of review to be applied in the
two levels of appeal. The panel that
reviews the initial appeal would be
required to approach the determination
being appealed as if no determination
had previously been made by Federal
Reserve staff. The initial review panel
would consider a record that includes
any relevant materials submitted by the
appealing institution and Federal
Reserve staff, and have the discretion to
augment the record in appropriate
circumstances. The final review panel
would consider whether the decision of
the initial review panel is reasonable
and supported by a preponderance of
the evidence in the record, but would
not seek to augment the record with
new information. To maximize
transparency, the decision of the final
review panel would be made public.
Finally, the Board proposed to establish
an accelerated process for appeals that
relate to or cause an institution to
become critically undercapitalized
under the Prompt Corrective Action
(‘‘PCA’’) framework to better assure that
a review of an adverse material
supervisory determination occurs
within the PCA time frame of 90 days.
The Board also proposed changes to
the Ombudsman policy. The proposed

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