FR4006_20220923_omb

Supporting Statement for the
Request for Extension of Time to Dispose of Assets Acquired in
Satisfaction of Debts Previously Contracted
(FR 4006; OMB No. 7100-0129)
Summary
The Board of Governors of the Federal Reserve System (Board), under authority
delegated by the Office of Management and Budget (OMB), has extended for three years, with
revision, the filing requirements associated with the Request for Extension of Time to Dispose of
Assets Acquired in Satisfaction of Debts Previously Contracted (FR 4006; OMB No.
7100-0129). The Bank Holding Company Act of 1956 (BHC Act) and the Board’s Regulation Y
- Bank Holding Companies and Change in Bank Control (12 CFR Part 225) require a bank
holding company (BHC) that, either through foreclosure or otherwise in the ordinary course of
collecting a debt previously contracted (DPC), acquired voting securities of a bank or BHC or
the securities or assets of a company engaged in a nonbanking activity to seek prior Board
approval in order to retain ownership of those shares or assets for more than two years.
The Board revised the FR 4006 to account for certain voluntary reporting provisions
regarding the efforts of a BHC to divest of assets acquired in the course of collecting a DPC that
are set forth in Regulation Y. These voluntary reporting provisions have not previously been
cleared under the Paperwork Reduction Act.
The current estimated total annual burden for the FR 4006 is 105 hours, and would
increase to 129 hours. The revisions would result in an increase of 24 hours. There are no
required reporting forms associated with this information collection.
Background and Justification
Under section 3(a) of the BHC Act and section 225.12(b) of the Board’s Regulation Y, a
bank or other company is not required to seek prior Board approval before acquiring the
securities of a bank or BHC in the ordinary course of collecting a DPC in good faith, if such
securities (banking DPC property) are divested within two years of acquisition. Similarly, under
section 4(c)(2) of the BHC Act and section 225.22(d)(1) of Regulation Y, a BHC is not required
to seek prior Board approval before acquiring the securities or assets of a company engaged in
nonbanking activity if it does so in the ordinary course of collecting a DPC in good faith, if such
securities or assets (nonbanking DPC property) are divested within two years of acquisition.
In order to hold the banking or nonbanking DPC property beyond the two-year periods, a
BHC is required to seek the approval of the Board. The two-year holding period for banking
DPC property may be extended by the Board or the appropriate Reserve Bank for up to three
years, in one-year increments, for a total holding period of five years. The two-year holding
period for nonbanking DPC property may be extended by the Board for up to three additional
years, and may be extended for up to five additional years in certain circumstances, for a total
holding period of 10 years. Pursuant to section 225.12(b) of Regulation Y, a BHC may request
an extension of the holding period for banking DPC property. Pursuant to section 225.22(d)(1) of

Regulation Y, a BHC may request an extension of the holding period for nonbanking DPC
property.
In determining whether to approve an extension request, the Board takes into
consideration whether the extension would be detrimental to the public interest. For requests to
hold nonbanking DPC property for more than five years, the Board considers whether the BHC
has made a good faith effort to dispose of the DPC property or whether the disposal of DPC
property during the initial period would have been detrimental to the BHC.
The information collected is used to monitor safety and soundness of banking
organizations and to maintain compliance with the divestiture requirements for certain DPC
property in the BHC Act and Regulation Y. In the absence of this information collection, BHCs
would not be able to receive consideration from the Board of requests to hold banking or
nonbanking DPC for more than two years.
Additionally, section 225.140(c) of Regulation Y states that a BHC that holds
nonbanking DPC assets past the two-year statutory holding period should report annually to the
appropriate Reserve Bank on its efforts to accomplish divestiture of such assets. Further, section
225.140(d) states that a BHC that holds real estate acquired as DPC property for longer than five
years should keep the appropriate Reserve Bank advised on a regular basis concerning its efforts
to dispose of the property. These updates assist the Federal Reserve System in supervising BHCs
and assessing compliance with the requirements regarding the disposition of DPC property.
Description of Information Collection
No application form exists for a BHC to retain banking or nonbanking DPC property for
more than two years. However, a BHC seeking an extension generally submits a letter to the
appropriate Reserve Bank that states the relevant facts; discusses why the extension should be
approved; provides other information such as the efforts made, to date, to effect divestiture
(including reasons for any delay in the pace of divestiture); and includes financial and descriptive
data with respect to the DPC assets as well as the sales price of any related divested assets.
Generally, approved extensions are granted for a period of one year, although in appropriate
circumstances the Board may grant an extension with regard to nonbanking DPC property of
longer than one year.
Respondent Panel
The FR 4006 panel comprises BHCs.
Revisions to the FR 4006
The Board revised the FR 4006 to account for the voluntary reporting provisions set forth
in sections 225.140(c) and 225.140(d) of Regulation Y. As discussed above, these sections state,
respectively, that a BHC that holds nonbanking DPC assets past the two -year statutory holding
period should report annually to the appropriate Reserve Bank on its efforts to accomplish
divestiture of such assets and that a BHC that holds real estate acquired as DPC property for

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longer than five years should keep the appropriate Reserve Bank advised on a regular basis
concerning its efforts to dispose of the property.
Time Schedule for Information Collection
This information collection is event generated. The first request for extension must be
filed by a BHC generally 30 days before the second anniversary of the date that the specific DPC
property was originally acquired. Subsequent requests for extension are generally filed 30 days
before expiration of the previously authorized holding period.
Public Availability of Data
No data collected by this information collection is published.
Legal Status
The FR 4006 is authorized pursuant to sections 3(a) and 4(c)(2) of the BHC Act
(12 U.S.C. §§ 1842(a) and 1843(c)(2)) and sections 225.12(b) and 225.22(d) of the Board’s
Regulation Y, which permit a BHC to acquire securities or assets in the ordinary cou rse of
collecting a DPC in good faith without seeking prior Board approval if such securities or assets
(DPC property) are divested within two years of acquisition. To hold the DPC property beyond
this two-year period, a BHC must seek the Board’s approval. 1 The FR 4006 is required to obtain
this benefit.
The information contained on the FR 4006 is not considered confidential unless an
applicant requests confidential treatment in accordance with the Board’s Rules Regarding
Availability of Information.2 Requests for confidential treatment of information are reviewed on
a case-by-case basis. To the extent information provided on the FR 4006 is nonpublic
commercial or financial information, which is both customarily and actually treated as private
by the respondent, such information may be protected from disclosure pursuant to exemption 4
of the Freedom of Information Act (5 U.S.C. § 552(b)(4)).
Consultation Outside the Agency
There has been no consultation outside the Federal Reserve System.
Public Comments
On April 6, 2022, the Board published an initial notice in the Federal Register (87 FR
19926) requesting public comment for 60 days on the extension, with revision, of the FR 4006.
1

The two-year period may be extended by the Board for up to three years in one-year increments. 12 CFR
225.12(b); 12 CFR 225.22(d)(1). The Board may provide up to five additional one-year extensions (for a total of ten
years) if the DPC property is shares, real estate, or other assets where the holding company demonstrates that each
extension would not be detrimental to the public interest and either the bank holding company has made good faith
attempts to dispose of such shares, real estate or other assets or disposal of the shares, real estate or other assets
during the initial period would have been detrimental to the company. 12 CFR 225.22(d)(1)(ii).
2
12 CFR 261.17.

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The comment period for this notice expired on June 6, 2022. The Board did not receive any
comments. The Board adopted the extension, with revision, of the FR 4006 as originally
proposed. On August 2, 2022, the Board published a final notice in the Federal Register (87 FR
47214).
Estimate of Respondent Burden
As shown in the table below, the estimated total annual burden for the FR 4006 is 105
hours, and would increase to 129 hours with the revisions. The respondent burden per extension
request is estimated to average five hours per submission. However, the respondent burden
varies depending upon the complexity of the individual situation. Respondent counts are based
on an average of respondents over the past two years. The Federal Reserve has not received any
requests under section 225.12(b) over the past two years but is using a placeholder of 1
respondent in its estimates. These reporting requirements represent less than 1 percent of the
Board’s total paperwork burden.
Estimated
Estimated
Estimated
Annual
number of
average hours annual burden
frequency
respondents3
per response
hours

FR 4006
Current
Section 225.12(b)
Section 225.22(d)(1)
Current Total

1
20

1
1

5
5

5
100
105

Proposed
Section 225.12(b)
Section 225.22(d)(1)
Sections 225.140(c) and (d)
Proposed Total

1
20
12

1
1
1

5
5
2

5
100
24
129

Change

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The estimated total annual cost to the public for the FR 4006 is $6,347, and would
increase to $7,798 with the revisions.4

3

Of these respondents, two are considered small entities as defined by the Small Business Administration (i.e.,
entities with less than $750 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.
4
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 $21, 45% Financial Managers at
$74, 15% Lawyers at $71, and 10% Chief Executives at $102). Hourly rates for each occupational group are the
(rounded) mean hourly wages from the Bureau of Labor Statistics (BLS), Occupational Employment and Wages,
May 2021, published March 31, 2022, 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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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 estimated cost to the Federal Reserve System for collecting and processing this
information collection is negligible.

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