Annual Daylight Overdraft Capital Report for U.S. Branches and Agencies of Foreign Banks

OMB: 7100-0216

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Supporting Statement for the
Annual Daylight Overdraft Capital Report for
U.S. Branches and Agencies of Foreign Banks
(FR 2225; OMB No. 7100-0216)
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,
without revision, the Annual Daylight Overdraft Capital Report for U.S. Branches and Agencies
of Foreign Banks (FR 2225; OMB No. 7100-0216). The FR 2225 is required for foreign banking
organizations (FBOs) that wish to, and are eligible to, establish a non-zero net debit cap for their
U.S. branches and agencies under the Federal Reserve Policy on Payment System Risk (PSR
The estimated total annual burden for the FR 2225 is 51 hours. The form and instructions
are available on the Board’s public website at
Background and Justification
Since 1985, the Board has published and periodically revised a series of policies
encouraging the management of risks in payment and securities settlement systems.1 In 1992, the
Board first issued the “Policy Statement on Payments System Risk,” which provided a
comprehensive statement of its previously adopted policies regarding payment system risk
reduction, including risk management in private large-dollar funds transfer networks, private
delivery-against-payment securities settlement systems, offshore dollar clearing and netting
systems, and private small-dollar clearing and settlement systems.2 Over time, the Board has
updated the PSR policy to reflect the evolution of payment, clearing, and settlement systems that
participate in the financial system; incorporate relevant international risk-management standards
developed by central banks and market regulators as the baseline for its expectations; and
improve transparency in the systems that are subject to the Board’s authority.3
Under the PSR policy, all institutions that maintain a Federal Reserve account are
assigned or may establish a net debit cap that represents an upper limit on uncollateralized
daylight overdrafts incurred in that account. A daylight overdraft occurs when an institution’s
Federal Reserve account is in a negative position during the business day. An institution’s net
debit cap category and its capital measure determine the size of its net debit cap. Net debit caps
for U.S. branches and agencies of foreign banks are calculated in the same manner as for


See 50 FR 21120 (May 22, 1985); 51 FR 23829 (July 1, 1986); 52 FR 29255 (August 6, 1987); 55 FR 22087 (May
31, 1990).
57 FR 40455 (September 3, 1992).
See e.g., 59 FR 25060 (May 13, 1994); 59 FR 67534, 67538 (December 29, 1994); 63 FR 70774 (December 22,
1998); 69 FR 69926 (December 1, 2004); 72 FR 2518 (January 19, 2007); 73 FR 79109 (December 24, 2008); 84
FR 12049 (April 1, 2019); 85 FR 19077 (April 6, 2020). The Federal Reserve Policy on Payment System Risk is
available at

domestic banks: by multiplying an institution’s cap multiple4 by its capital measure.5 An
institution’s cap category and associated cap multiple are determined through a self-assessment
and a board of directors resolution for self-assessed institutions, through a board of directors
resolution for de minimis institutions, or by assignment by the Administrative Reserve Bank.6
Without the worldwide capital figures reported in the FR 2225, Reserve Banks would not
be able to determine an FBO’s net debit cap. Moreover, without at least an annual update of the
worldwide capital figures, the net debit cap would be stale, especially when compared to
domestic peers that must submit their capital figures on at least an annual basis. This information
is not available from other sources.
Description of Information Collection
The FR 2225 reporting form collects information needed to identify the respondent and
its fiscal year end, and collects four items to determine its year-end capital and assets for
purposes of daylight overdraft monitoring. Four items, converted into U.S. dollars, are collected
for the capital and assets determination: worldwide capital for the reporting FBO (item 1), an
adjustment to avoid double counting of capital used by any direct or indirect subsidiary of the
FBO that also has access to Fedwire and has its own net debit cap (item 2), the FBO’s total
daylight overdraft capital base for the U.S. branch and agency family (item 3), which is used to
calculate the net debit cap, and the reporting FBO’s total worldwide assets (item 4). The Reserve
Banks use items 1 and 2 as supplemental information to clarify the data reported in item 3. The
Federal Reserve uses the assets data reported in item 4 for analytical purposes.
The reporting panel comprises FBOs with U.S. branches or agencies that wish to or are
eligible to have a non-zero net debit cap for their U.S. branches and agencies under the PSR
policy. Pursuant to the PSR policy, an FBO requesting a non-zero net debit cap is required to file
the FR 2225. The FR 2225 must be submitted annually, following the end of the FBO’s fiscal
year. An FBO may voluntarily submit the report more frequently to have its overdraft limit
revised based on current data. The net debit cap for an FBO’s U.S. branches and agencies is
calculated on a consolidated basis for the FBO as a whole. Therefore, an FBO with multiple
offices in the U.S. submits only one form for the U.S. “family” of offices.
Respondents submit the FR 2225 to their Administrative Reserve Bank. The completed
FR 2225 forms are submitted to Reserve Banks via electronic communications using a portable
document format (PDF).

Under Section II.D.1 of the PSR policy, the cap multiple for the “high” category is 2.25, for the “above average”
category is 1.875, for the “average” category is 1.125, for the “de minimis” category is 0.4, for the “exempt-fromfiling” category is 0.2 or $10 million, and for the “zero” category is 0. Note that the net debit cap for the exemptfrom-filing category is equal to the lesser of $10 million or 0.2 multiplied by the capital measure.
U.S. branches and agencies of foreign banks are entities contained within and controlled by a foreign banking
organization. For the definition of “branch” and “agency,” refer to 12 U.S.C. § 3101 and 12 CFR 211.21.
The Administrative Reserve Bank is the Reserve Bank responsible for the administration of Federal Reserve credit,
reserves, and risk-management policies for a given depository institution or other legal entity.


Respondent Panel
The FR 2225 panel comprises FBOs with U.S. branches or agencies that wish to and are
eligible to establish a non-zero net debit cap for their U.S. branches and agencies under the PSR
The FR 2225 is submitted annually.
Time Schedule for Information Collection
The FR 2225 is due 90 days after the respondent’s fiscal year-end. The U.S. office of the
reporting FBO submits the data directly to the Administrative Reserve Bank stated in the
reporting instructions. If the reporting FBO has more than one U.S. office, the FBO designates
one office as the reporting office and this office serves as the FBO’s representative on all matters
involving compliance with the PSR policy.7
Public Availability of Data
Unless a reporting FBO requests confidential treatment, the FR 2225 is a public report
and is available through the Board’s Freedom of Information Act Office.
Legal Status
This information collection is authorized pursuant to section 7(a) of the International
Banking Act of 1978 (12 U.S.C. § 3105(a)), which establishes reserve requirements for U.S.
branches and agencies of foreign banks, and pursuant to section 13(14) of the Federal Reserve
Act (FRA) (12 U.S.C. § 347d), which provides that “each Federal Reserve bank may receive
deposits from, discount paper endorsed by, and make advances to any branch or agency of a
foreign bank in the same manner and to the same extent that it may exercise such powers with
respect to a member bank if such branch or agency is maintaining reserves with such Reserve
bank pursuant to section 7 of the International Banking Act of 1978.” In addition, sections 11(i),
16, and 19(f) of the FRA (12 U.S.C. §§ 248(i), 248-1, and 464), which permit Reserve Banks to
provide payment services to member banks, provide authority for the collection of the FR 2225
report in conjunction with the provisions above providing that Federal Reserve Banks may
provide certain services to certain FBOs to the same extent that it may provide these services to a
member bank. The FR 2225 is required to obtain a benefit, specifically a non-zero net debit cap.
The Board generally does not consider the information collected on the FR 2225 report to
be confidential, and the completed version of this report generally is made available to the public
upon request. However, in certain instances, specific information collected on an individual
FBO’s FR 2225 report may be exempt from disclosure, for example, pursuant to exemption 4 of
the Freedom of Information Act (FOIA), which protects from public disclosure “trade secrets

The Board will determine the Federal Reserve District in which the institution is located after consultation with the
institution and the relevant Federal Reserve Banks. See 12 CFR 204.3.


and commercial or financial information obtained from a person and privileged or confidential”
(5 U.S.C. § 552(b)(4)). In order to obtain confidential treatment, a request for confidential
treatment must be submitted by the FBO in writing concurrently with the submission of the
FR 2225 report. This written request must identify the specific data for which confidential
treatment is sought and must provide the legal justification for the confidentiality request, as
provided in the Board’s Rules Regarding Availability of Information (12 CFR Part 261). The
Federal Reserve will review each request for confidential treatment on a case-by-case basis to
determine if confidential treatment is appropriate.
Consultation Outside the Agency
There has been no consultation outside the Federal Reserve System.
Public Comments
On November 29, 2022, the Board published an initial notice in the Federal Register (87
FR 73307) requesting public comment for 60 days on the extension, without revision, of the
FR 2225. The comment period for this notice expired on January 30, 2023. The Board did not
receive any comments. The Board adopted the extension, without revision, of the FR 2225 as
originally proposed. On March 30, 2023, the Board published a final notice in the Federal
Register (88 FR 19144).
Estimate of Respondent Burden
As shown in the table below, the estimated total annual burden for the FR 2225 is 51
hours. The number of respondents is based on the Board’s current count of institutions that have
a positive net debit cap. These reporting requirements represent less than 1 percent of the
Board’s total paperwork burden.

FR 2225

number of





average hours annual burden
per response


The estimated total annual cost to the public for the FR 2225 is $3,379.9


Of these respondents, 7 are considered small entities as defined by the Small Business Administration (i.e., entities
with less than $850 million in total assets), There are
no special accommodations given to mitigate the burden on small institutions.
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 $22, 45% Financial Managers at
$80, 15% Lawyers at $79, and 10% Chief Executives at $118). Hourly rates for each occupational group are the
(rounded) mean hourly wages from the Bureau of Labor Statistics (BLS), Occupational Employment and Wages,
May 2022, published April 25, 2023, Occupations are defined
using the BLS Standard Occupational Classification System,


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
report is negligible.


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File Modified2023-05-23
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