SPST-0148 Renewal (2020) Final

SUPPORTING STATEMENT
THE INTERAGENCY STATEMENT ON SOUND PRACTICES CONCERNING
COMPLEX STRUCTURED FINANCE TRANSACTIONS
(OMB No. 3064-0148)
INTRODUCTION
The Federal Deposit Insurance Corporation (FDIC) is requesting a three-year renewal of the
Interagency Statement on Sound Practices Concerning Complex Structured Finance Transactions
(Statement) (OMB No. 3064-0148), issued jointly by the Federal Deposit Insurance Corporation,
the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve
System, and the Securities and Exchange Commission (Agencies) which describes the types of
internal controls and risk management procedures that the Agencies believe are particularly
effective in assisting financial institutions to identify and address the reputational, legal, and
other risks associated with complex structured finance transactions. The current clearance for the
collection expires on November 30, 2020. There is no change in the method or substance of the
collection.
A.

JUSTIFICATION
1.

Circumstances and Need
Structured finance products normally serve the legitimate business interests of
customers and are an essential part of U.S. and international capital markets. But
a financial institution may assume substantial reputational and legal risk if it
enters into a complex structured finance transaction with a customer and the
customer uses the transaction to circumvent regulatory or financial reporting
requirements, evade tax liabilities, or further other illegal or improper behavior.
Financial institutions need effective policies and procedures to identify those
complex structured finance transactions that may involve heightened reputational
and legal risk, to ensure that these transactions receive enhanced scrutiny by the
institution, and to ensure that the institution does not participate in illegal or
inappropriate transactions.

2.

Use of the Information Collected
A financial institution’s policies and procedures should ensure that its operations
comply with applicable law and regulations. This is critical to the institution’s
well being since it may face substantial legal risk, including enforcement actions
by an Agency and lawsuits by private parties, if it participates in structured
finance transactions used by a customer to circumvent regulatory or financial
reporting requirements, evade tax liabilities, or further other illegal or improper
behavior. The policies and procedures also help the institution avoid reputational
risk when the transactions involved are structured to technically comply with
existing laws and regulations.

3.

Use of Technology to Reduce Burden
State nonmember banks may adopt any existing technology relevant to producing
or retaining the information.

4.

Efforts to Identify Duplication
There is no duplication. This collection is unique in that it involves policies and
procedures specific to a particular institution and appropriate to the types of
structured finance transactions that the institution conducts.

5.

Minimizing Burden on Small Entities
Small institutions are not involved in transactions of this type. Therefore, this
collection of information imposes no burden on them.

6.

Consequences of Less Frequent Collections
Reducing the recordkeeping policies and procedures in the Interagency Statement
would hazardously increase the reputational and legal risks of covered entities.

7.

Special Circumstances
None.

8.

Consultation with Persons Outside the FDIC
A notice seeking public comment for a 60-day period was published in the
Federal Register on September 23, 2020 (85 FR 59797). No comments were
received.

9.

Payment or Gift to Respondents
None.

10.

Confidentiality
The information will be kept private to the extent provided by law.

11.

Information of a Sensitive Nature
This collection contains no sensitive information.

12.

Estimates of Hour Burden and Annualized Cost

2020 Summary of Annual Burden and Internal Cost (3064-0148)
Information Collection
(IC) Description

Complex Structured
Finance Transactions

Type of
Burden

Obligation
to
Respond

Estimated
Number of
Respondents

Estimated
Frequency
of
Responses

Estimated
Time per
Response

Frequency
of
Response

Total
Annual
Estimated
Burden

Voluntary

Mandatory

1

1

25.00

On
Occasion

225.00

TOTAL HOURLY BURDEN

25.00

Total Annual Burden: 100 hours
The total estimated annual cost for all respondents is:
25 hours x $92.23 = $2,355.75
Estimated Category of
Total Estimated Hourly
Personnel Responsible for
Estimated Weights
Weighted Hourly Wage
Compensation
Complying with the PRA Burden
Executives and Managers 1
$121.85
62.5%
$76.16
Financial Analysts 2
$78.46
12.5%
$9.81
Clerical 3
$33.05
25%
$8.26
Weighted Average
$94.23
Source: Bureau of Labor Statistics: "National Industry-Specific Occupational Employment and Wage Estimates:
Industry: Credit Intermediation and Related Activities (5221 And 5223 only)" (May 2019), Employer Cost of
Employee Compensation (June 2020), Consumer Price Index (June 2020).
Note: The 75th percentile wage information reported by the BLS in the Specific Occupational Employment and
Wage Estimates does not include health benefits and other non-monetary benefits. According to the March 2020
Employer Cost of Employee Compensation data compensation rates for health and other benefits are 33.9 percent of
total compensation. Additionally, the wage has been adjusted for inflation according BLS data on the Consumer
Price Index for Urban Consumers (CPI-U) so that it is contemporaneous with the non-wage compensation statistic.
The inflation rate was 0.67 percent between May 2019 and June 2020.

13.

Capital, Start-Up, Operating, and Maintenance Costs
None.

14.

Estimate of annualized costs to the government

1 Occupation (SOC Code): Management Occupations (110000).
2 Occupation (SOC Code): Financial and Investment Analysts, Financial Risk Specialists, and Financial Specialists,
All Other (132098).
3 Occupation (SOC Code): Office and Administrative Support Occupations (430000).

None.
15.

Change in burden
There is no change in the method or substance of the collection. The reduction in
respondents is a result of economic fluctuation. In particular, the number of
respondents has decreased while the hours per response remain the same.

16.

Publication
The information is not published.

17.

Display of expiration date
Not applicable.

18.

Exceptions to certification statement
None.

B.

STATISTICAL METHODS
Not applicable.