FFIEC 002 Instructions Non-Material Change

FFIEC 002 Instructions – Non-Material Change Justification
In the December 2008, instructions for the FFIEC 031/041, were updated to move the reporting of
balances due from Federal Reserve Banks from Schedule RC, item 1.a (noninterest- bearing balances and
currency and coin) to item 1.b (interest-bearing balances) in conjunction with the Fed’s payment of
interest on reserves (IOR) that began October 1, 2008. Since the FFIEC 002 did not collect cash assets
broken down by interest-bearing and noninterest-bearing on Schedule RAL during that time, no
comparable change was made to the FFIEC 002 instructions.
Currently, the FFIEC 002 instructions for Schedule K item 1,“Interest-bearing balances” corresponds to
the total of items 3 and 4, column A, of Schedule A, i.e., “Balances due from depository institutions in
the U.S” and “Balances due from banks in foreign countries and foreign central banks,” minus all
noninterest-bearing balances due from these entities.
However, the FFIEC 031/041/051 instructions for Schedule RC-K item 1, “Interest-bearing balances due
from depository institutions” states to report the quarterly average for interest-bearing balances due
from depository institutions as defined for Schedule RC, item 1.b, “Interest-bearing balances”, which
explicitly states to include all interest-bearing balances due from depository institutions whether in the
form of demand, savings, or time balances, including certificates of deposit (CDs), even if the CDs are
negotiable or have CUSIP numbers, but excluding certificates of deposit held for trading; balances due
from Federal Reserve Banks; commercial banks in the U.S.; other depository institutions in the U.S.;
Federal Home Loan Banks; banks in foreign countries, and foreign central banks.
To correct this discrepancy between the FFIEC 002 and FFIEC 031/041/051 instructions for similar line
items, Schedule K item 1 is being revised to correspond to the totals of items 3, 4, and 5, column A, of
Schedule A, i.e., “Balances due from depository institutions in the U.S”, “Balances due from banks in
foreign countries and foreign central banks”, and “Balances due from Federal Reserve Banks”, minus all
noninterest-bearing balances due from these entities. This will align Schedule K item 1 on the FFIEC 002
report with Schedule RC-K item 1 on the FFIEC 031/041/051.
Put succinctly, the information collected on the FFIEC 002 will not change, but this change to the
instructions will organize it with the way that similar information is collected on the FFIEC
031/041/051.