FRLL_20200901_omb

Supporting Statement for the
Reporting and Disclosure Requirements Associated with Regulation LL
(FR LL; OMB No. 7100-NEW)
Prudential Standards for Large Bank Holding Companies,
Savings and Loan Holding Companies, and Foreign Banking Organizations
(Docket No. R-1658; RIN 7100-AF45)
Summary
The Board of Governors of the Federal Reserve System (Board), under authority
delegated by the Office of Management and Budget (OMB), has implemented the Reporting and
Disclosure Requirements Associated with Regulation LL (FR LL; OMB No. 7100-NEW). In
November 2019, the Board amended its Regulation LL - Savings and Loan Holding Companies
(12 CFR 238) to require certain savings and loan holding companies (SLHCs) to conduct
company-run periodic stress tests.1 Specifically, a domestic covered SLHC2 must conduct a
company-run stress test if it is a Category II SLHC or a Category III SLHC, as defined by
section 238.10 of Regulation LL, or if it has average total consolidated assets of greater than
$250 billion, and a foreign SLHC must conduct a company-run stress test if it has average total
consolidated assets of greater than $250 billion.3 This information collection consists of
provisions in the amended Regulation LL that require a SLHC to report the results of its
company-run stress tests to the Board and to publicly disclose a summary of the results such
stress tests.
The estimated total annual burden for the FR LL is 145 hours. There is no formal
reporting form for this information collection (the FR LL designation is for internal purposes
only).
Background and Justification
Section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (DoddFrank Act)4 requires nonbank financial companies supervised by the Board and financial
institutions with total consolidated assets equal to or greater than $250 billion to conduct periodic
company-run stress tests and to provide to the Board and their primary federal regulator reports
regarding such stress tests. Pursuant to section 165, the Board has established rules regarding
company-run stress tests conducted by SLHCs with total consolidated assets equal to or greater
than $250 billion.
Additionally, section 165 permits the Board, subject to certain conditions, to apply any
prudential standard established under that section, including company-run stress tests, to bank
holding companies with total consolidated assets equal to or greater than $100 billion. Pursuant
1

Prudential Standards for Large Bank Holding Companies, Savings and Loan Holding Companies, and Foreign
Banking Organizations, 84 FR 59032 (November 1, 2019) (the tailoring rule).
2
See 12 CFR 238.2(ff) (defining “covered savings and loan holding company”).
3
12 CFR 238.142.
4
12 U.S.C. § 5365.

to this authority, the Board has established rules requiring certain bank holding companies with
less than $250 billion in total consolidated assets to conduct company-run stress tests. Pursuant
to section 10(g) of the Home Owners’ Loan Act (HOLA),5 the Board has established
requirements regarding company-run stress tests for similarly-situated SLHCs with less than
$250 billion in total consolidated assets.
In November 2019, the Board adopted the tailoring rule, which, among other things,
moved the Board’s rules regarding company-run stress tests by SLHCs from Regulation YY Enhanced Prudential Standards (12 CFR 252) to Regulation LL and modified the scope of
applicability of those rules.
Description of Information Collection
Reporting Requirements
Section 238.162(b)(1)(ii) of Regulation LL requires that, unless the Board otherwise
determines in writing, a foreign SLHC must conduct an annual stress test of its U.S. subsidiaries.
The test must address whether those subsidiaries have the capital necessary to absorb losses as a
result of adverse economic conditions. The foreign SLHC must report on at least a biennial basis
a summary of the results of the stress test to the Board. The summary must include a description
of the types of risks included in the stress test, a description of the conditions or scenarios used in
the stress test, a summary description of the methodologies used in the stress test, estimates of
aggregate losses, pre-provision net revenue, total loan loss provisions, net income before taxes
and pro forma regulatory capital ratios required to be computed by the home-country supervisor
of the foreign SLHC and any other relevant capital ratios, and an explanation of the most
significant causes for any changes in regulatory capital ratios.
Section 238.145 of Regulation LL requires a domestic SLHC that is required to conduct
company-run stress tests to report the results of its company-run stress tests to the Board. Such
SLHCs report their stress test results using the Capital Assessments and Stress Testing
(FR Y-14A; OMB No. 7100-0341). Because this reporting requirement is accounted for by the
FR Y-14 clearance, it is not accounted for in the FR LL.
Disclosure Requirements
Section 238.146 of Regulation LL requires that a domestic SLHC that is required to
conduct a company-run stress test must publicly disclose a summary of the results of the stress
test within the period that is 15 calendar days after the Board publicly discloses the results of its
supervisory stress test of the covered company pursuant to section 238.134 of Regulation LL.
The summary required under this section may be disclosed on the website of a covered company,
or in any other forum that is reasonably accessible to the public.
Respondent Panel
The FR LL panel comprises foreign SLHCs with average total consolidated assets of
5

12 U.S.C. § 1467a(g).

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greater than $250 billion, Category II SLHCs, Category III SLHCs, and domestic covered
SLHCs with average total consolidated assets of greater than $250 billion.
Time Schedule for Information Collection
Foreign SLHCs that must conduct a company-run stress test must report a summary of
their stress test results to the Board at least every other year. Domestic SLHCs that must conduct
a company-run stress test and must disclose publicly a summary of the results of such tests
within 15 days of the Board disclosing the results of its supervisory stress test of that company.
Public Availability of Data
Domestic SLHCs make a summary of the results of their stress tests publicly available,
either on their website or in any other forum that is reasonably accessible to the public.
Legal Status
The FR LL is authorized by section 165 of the Dodd-Frank Act, which requires, among
other things, financial companies that have total consolidated assets of more than $250 billion to
conduct company-run stress tests (12 U.S.C. § 5365). Section 165 requires firms that conduct
company-run stress tests to report the results to the Board and requires the Board to issue rules
for company-run stress tests (for companies supervised by the Board) that include a requirement
for the companies to publish a summary of the results of the company-run stress tests. Pursuant
to section 10(g) of HOLA (12 U.S.C. § 1467a(g)), the Board has applied company-run stress
testing requirements, including the reporting and disclosure requirements, to certain SLHCs that
do not have total consolidated assets of more than $250 billion. The Board is also authorized to
collect information from SLHCs under section 10(b)(2) of HOLA (12 U.S.C. § 1467a(b)(2)).
The information collections under FR LL are mandatory.
The information collected through the FR LL is collected as part of the Board’s
supervisory process, and therefore is afforded confidential treatment pursuant to exemption 8 of
the Freedom of Information Act (FOIA), which protects information contained in “examination,
operating, or condition reports” obtained in the bank supervisory process (5 U.S.C. § 552(b)(8)).
In addition, the information may also be kept confidential under exemption 4 for the FOIA,
which protects commercial or financial information obtained from a person that is privileged or
confidential (5 U.S.C. § 552(b)(4)).
Consultation Outside the Agency
There has been no consultation outside the Federal Reserve System.
Public Comments
On November 29, 2018, the Board published a notice of proposed rulemaking on
tailoring prudential requirements for U.S. banking organizations in the Federal Register (83 FR
61408) for public comment. The comment period for this notice expired on January 22, 2019. On

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May 15, 2019, the Board published a notice of proposed rulemaking on tailoring prudential
requirements for foreign banking organizations in the Federal Register (84 FR 21988) for public
comment. The comment period for this notice expired on June 21, 2019. The Board did not
receive any specific comments related to the Paperwork Reduction Act (PRA) analysis. On
November 1, 2019, the Board published a final rule on tailoring prudential requirements in the
Federal Register (84 FR 59032). The final rule became effective on December 31, 2019.
Estimate of Respondent Burden
As shown in the table below, the estimated total annual burden for the FR LL is 145
hours. Currently, there are no foreign SLHCs in existence, and only one domestic covered
SLHC. The table shows an estimate of one respondent. These reporting and disclosure
requirements represent less than 1 percent of the Board’s total paperwork burden.

FR LL
Reporting
Section 238.162(b)(1)(ii)
Disclosure
Section 238.146 (Initial setup)
Section 238.146
Total

Estimated
number of
respondents6

Annual
frequency

Estimated
average hours
per response

Estimated
annual burden
hours

1

0.5

80

40

1
1

0.5
0.5

150
60

75
30
145

The estimated total annual cost to the public for the FR LL is $8,374.7
Sensitive Questions
This collection of information contains no questions of a sensitive nature, as defined by
OMB guidelines.
Estimate of Cost to the Federal Reserve System
The cost to the Federal Reserve System is negligible.

6

Of these respondents, none are considered small entities as defined by the Small Business Administration (i.e.,
entities with less than $600 million in total assets), https://www.sba.gov/document/support--table-size-standards.
7
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 $20, 45% Financial Managers at
$71, 15% Lawyers at $70, and 10% Chief Executives at $93). 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 2019, published March 31, 2020, 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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