FRY7N_FRY7NS_FRY7Q_20210316_omb_emergency

PUBLIC/OFFICIAL RELEASE // EXTERNAL

Supporting Statement for the
Reports of Foreign Banking Organizations
(FR Y-7N, FR Y-7NS, and FR Y-7Q; OMB No. 7100-0125)
Summary
The Board of Governors of the Federal Reserve System (Board), under authority
delegated by the Office of Management and Budget (OMB), has temporarily revised the Reports
of Foreign Banking Organizations (FR Y-7N, FR Y-7NS, and FR Y-7Q; OMB No. 7100-0125)
pursuant to its authority to approve temporarily a collection of information without providing
opportunity for public comment.1 This information collection comprises the following three
reports:
• Financial Statements of U.S. Nonbank Subsidiaries Held by Foreign Banking
Organizations2 (FR Y-7N),
• Abbreviated Financial Statements of U.S. Nonbank Subsidiaries Held by Foreign
Banking Organizations (FR Y-7NS), and
• Capital and Asset Report for Foreign Banking Organizations (FR Y-7Q).
The FR Y-7N and FR Y-7NS collect financial information for non-functionally regulated
U.S. nonbank subsidiaries held by foreign banking organizations (FBOs) other than through a
U.S. bank holding company (BHC), financial holding company (FHC), or U.S. bank. FBOs file
the FR Y-7N quarterly or annually or the FR Y-7NS annually predominantly based on asset size
thresholds. The FR Y-7Q collects consolidated regulatory capital information from all FBOs
either quarterly or annually. Part 1A of the FR Y-7Q is filed quarterly by FBOs that have
effectively elected to become U.S. FHCs and by FBOs that have total consolidated assets of $50
billion or more, regardless of FHC status. Part 1B of the FR Y-7Q is filed quarterly by FBOs
with combined U.S. assets of $100 billion or more, or combined U.S. assets of less than $100
billion but total consolidated assets of $250 billion or more. All other FBOs file the FR Y-7Q
annually.
To mitigate temporary transition costs on banking organizations related to the
coronavirus disease 2019 (COVID event), the Board, Federal Deposit Insurance Corporation
(FDIC), and Office of the Comptroller of the Currency (OCC) (collectively, the agencies) issued
an interim final rule3 to permit national banks, savings associations, state banks, bank holding
companies, savings and loan holding companies, and U.S. branches and agencies of foreign
banking organizations with under $10 billion in total assets as of December 31, 2019,
(community banking organizations) to use asset data as of December 31, 2019, in order to
determine the applicability of various regulatory asset thresholds during the remainder of 2020
and calendar year 2021. Consistent with the interim final rule, the Board temporarily revised the
instructions for the FR Y-7N and FR Y-7NS reports to allow a holding company to use asset data
as of December 31, 2019, in order to determine reporting requirements. There are no revisions to
the FR Y-7Q. The Board believes the changes to the measurement dates for the total asset
thresholds used to determine additional reporting requirements will not result in a change in the
1

5 CFR Part 1320, Appendix A(1)(a)(3)(i)(A).
Excludes nonbanking subsidiaries held through a U.S. bank holding company or U.S. bank subsidiary.
3
See 85 FR 77345 (December 2, 2020).
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currently approved burden estimates. Therefore, the burden estimates for these reports remain
unchanged by the interim final rule.
The estimated total annual burden for the FR Y-7N, FR Y-7NS, and FR Y-Q is 2,444
hours, and would remain unchanged. The forms and instructions are available on the Board’s
public website at https://www.federalreserve.gov/apps/reportforms/default.aspx.
Background and Justification
The Federal Reserve uses the data collected on the FR Y-7N and FR Y-7NS to assess an
FBO’s ability to be a continuing source of strength to its U.S. operations and to determine
compliance with U.S. laws and regulations. The FR Y-7Q collects consolidated regulatory
capital and asset information from all FBOs. This information is not available from other
sources.
Description of Information Collection
The FR Y-7N consists of an income statement and a balance sheet, schedules that collect
information on changes in equity capital, changes in the allowance for loan and lease losses, offbalance-sheet data items, loans, and a memoranda section. All FBOs file the FR Y-7N quarterly
for their significant nonbank subsidiaries. Subsidiaries are defined as significant if they have
total assets of at least $1 billion or off-balance-sheet activities (including commitments to
purchase foreign currencies and U.S. dollar exchange, all other futures and forwards contracts,
option contracts, and the notional value of interest rate swaps, exchange swaps and other swaps)
of $5 billion or more, as of the end of a quarter. FBOs commence quarterly reporting for these
subsidiaries at the end of the quarter in which the subsidiaries meet the significance threshold.
The FR Y-7N is filed annually, as of December 31, for each individual nonbank subsidiary that
does not meet the criteria for filing quarterly and that has total assets of at least $500 million, but
less than $1 billion.
The FR Y-7NS is an abbreviated reporting form that collects net income, total assets,
equity capital, and total off-balance-sheet data items. The FR Y-7NS is filed annually, as of
December 31 by top-tier FBOs for each individual nonbank subsidiary (that does not meet the
filing criteria for filing the detailed report) with total assets of at least $250 million, but less than
$500 million.
The FR Y-7Q collects consolidated capital and asset information from all FBOs. Part 1 of
the reporting form currently collects the following information: tier 1 capital, total risk-based
capital, risk-weighted assets, total consolidated assets, total combined assets of U.S. operations,
net of intercompany balances and transactions between U.S. domiciled affiliates, branches, and
agencies, and total U.S. non-branch assets. In addition, an FBO that files the FR Y-7Q because it
is a financial holding company (FHC) also must provide separate capital schedules on Part 2 of
the FR Y-7Q quarterly for each lower-tier FBO operating a branch, agency, Edge or agreement
corporation, or commercial lending company in the United States. Part 1A of the FR Y-7Q is
filed quarterly by FBOs if the top-tier FBO or any FBO in its tiered structure has effectively
elected to be an FHC and by FBOs with total consolidated assets of $50 billion or more,

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regardless of FHC status. Part 1B of the FR Y-7Q is filed quarterly by FBOs with combined U.S.
assets of $100 billion or more, or combined U.S. assets of less than $100 billion but total
consolidated assets of $250 billion or more. The FR Y-7Q is filed annually if the FBO or any
FBO in its tiered structure has not effectively elected to be a FHC and the FBO has total
consolidated assets of less than $50 billion.
Respondent Panel
Top-tier FBOs file the FR Y-7N and FR Y-7NS reports for their nonbank subsidiaries.
Additionally, top-tier FBOs file the FR Y-7Q report.
Temporary Revisions
The delegation of authority to the Board from OMB that permits the Board to approve
collections of information under the Paperwork Reduction Act includes the authority to
temporarily approve a collection of information without seeking public comment. To exercise
this authority, the Board must determine that a new collection of information or a change to an
existing collection must be instituted quickly and that public participation in the approval process
would substantially interfere with the Board’s ability to perform its statutory obligation.
Following the temporary approval of an information collection, the Board must conduct a normal
delegated review of the collection within six months, including publishing in the Federal
Register a notice seeking public comment.
During 2020, relief measures enacted by Congress through the Coronavirus Aid, Relief,
and Economic Security Act (CARES Act) in response to the strains on the U.S. economy and
disruptions to the financial markets as a result of COVID-19 have led to unprecedented growth at
many institutions, including loans made through the Paycheck Protection Program (PPP). This
rapid growth has caused the assets of some institutions to rise above certain asset-based
thresholds, and may cause other institutions to do so in the near future. Much of this growth,
especially growth related to PPP lending, is likely to be temporary, and the increase in assets
currently held by an institution may not reflect a change in the institution’s longer-term risk
profile. Community banking organizations have played an instrumental role in the nation’s
financial response to the COVID event and many have experienced unexpected and sharp
increase in assets, swelling their balance sheets in some cases by more than 25 percent. Further,
community banking organizations have originated a disproportionately large percentage of PPP
loans, as compared with the organizations’ market share.
Many community institutions may have unexpectedly crossed these total asset thresholds
during 2020 due to participation in CARES Act relief programs or other COVID-19-related
stimulus activities, which would otherwise trigger additional reporting obligations starting in
calendar year 2021. The Board expects some of these institutions may fall below the relevant
total asset threshold as of June 30, 2021, for example, after forgiveness of PPP loans and
redemption of borrowings obtained through the Board’s PPP liquidity facility. The Board does
not want to create a short-term increase in burden on these community institutions to comply
with the additional reporting for a single year. For community institutions that remain above a
total asset threshold as of the June 30, 2021, measurement date, the one-year reporting relief

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provided in the interim final rule would assist those institutions in focusing on COVID-19related stimulus activities in the near term while providing additional time to comply with any
additional reporting requirements starting in 2022 rather than 2021.
The interim final rule adjusts for community banking organizations the measurement
dates for certain total asset thresholds that would otherwise trigger additional collection
requirements for the remainder of calendar years 2020 through the end of 2021. The temporary
relief applies only to filing requirements associated with asset-based reporting thresholds of $10
billion or less. To implement the interim final rule, the Board is temporarily revising the
instructions for the following reports: FR Y-7N, and FR Y-7NS. The revised instructions instruct
community banking organizations to use the lesser of total assets as of December 31, 2019, or
the most recent applicable measurement period to determine the applicability of asset-based
filing thresholds for the remainder of calendar years 2020 through the end of 2021. All reporting
eligibility criteria for these collections, besides the temporarily revised total assets measurement
date, continue to apply. Holding companies must revert back to normal measurement dates for
determining applicability of the reporting requirements in calendar year 2022, as summarized in
Table 1 of the interim final rule.
Time Schedule for Information Collection
FBOs are required to file the FR Y-7N (quarterly or annual) and FR Y-7NS reports 60
days after the report date. All FBOs are required to file the FR Y-7Q within 90 days after the
report date. Respondents self-determine, as of the reporting date, whether they meet the
thresholds for filing quarterly.
Public Availability of Data
The data from the FR Y-7N, FR Y-7NS, and FR Y-Q reports that are not given
confidential treatment are available to the public and are available through the Board’s Freedom
of Information Office, but are not published routinely.
Legal Status
The FR Y-7N, FR Y-7NS, and FR Y-Q are authorized by section 5(c) of the Bank
Holding Company Act of 1956 (12 U.S.C. § 1844(c)) and sections 8(c) and 13 of the IBA (12
U.S.C. §§ 3106(c) and 3108). Section 165 of the Dodd-Frank Act (12 U.S.C. § 5365) directs the
Board to establish enhanced prudential standards for certain companies, including certain FBOs.
The obligation of covered institutions to report this information is mandatory.
Information disclosed in these reports is collected as part of the Board’s supervisory
process and may be accorded confidential treatment under exemption 8 of the Freedom of
Information Act (FOIA) (5 U.S.C. § 552(b)(8)), but information that is required to be disclosed
publicly is generally not considered confidential. However, individual respondents may request
that certain data be protected pursuant to exemptions 4 and 6 (5 U.S.C. §§ 552(b)(4) and (6)) of
FOIA, where such data relates to trade secrets and financial information, or to personal

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information, respectively. The applicability of these exemptions would have to be determined on
a case-by-case basis.
Consultation Outside the Agency
The Board coordinated and consulted with the FDIC and OCC regarding the temporary
revisions to the FR Y-7N and FR Y-7NS.
Estimate of Respondent Burden
As shown in the table below, the estimated total annual burden for the FR Y-7N,
FR Y-7NS, and FR Y-Q is 2,444 hours, and would remain unchanged. These reporting
requirements represent less than 1 percent of the Board’s total paperwork burden.
Estimated
Estimated
Annual
number of
average hours
frequency
respondents4
per response
35
4
7.6
19
1
7.6
22
1
1
130
4
2.25
29
1
1.5

FR Y-7N, FR Y-7NS, and
FR Y-Q
FR Y-7N (quarterly)
FR Y-7N (annual)
FR Y-7NS
FR Y-7Q (quarterly)
FR Y-7Q (annual)
Total

Estimated
annual burden
hours
1,064
144
22
1,170
44
2,444

The estimated total annual cost to the public for the FR Y-7N, FR Y-7NS, and FR Y-Q is
$141,141.5
Sensitive Questions
These collections of information contain no questions of a sensitive nature, as defined by
OMB guidelines.

4

Of these respondents, 1 FR Y-7N (quarterly) filer; 5 FR Y-7N (annual) filers; and 22 FR Y-7NS filers 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. There are no special accommodations
given to mitigate the burden on small institutions.
5
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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Estimate of Cost to the Federal Reserve System
The estimated cost to the Federal Reserve System for collecting and processing the
FR Y-7N, FR Y-7NS, and FR Y-Q is $158,800.

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