Proposed Call Report revisions that would take effect as of March 31, 2010 include:

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1 Summary of Key Provisions of the Joint Agencies Proposed Revisions to the Bank Call Report and Related Schedules (See 74 Federal Register ) Comments due by October 19, 2009 The OCC, FRB, and FDIC ( agencies ) propose to revise and extend for three years, the bank Call Report. The agencies request comment on proposed revisions to the Call Report that they are making in response to the temporary increase in the deposit insurance limit, a change in accounting standards, and credit availability concerns. All proposed reporting changes would take effect on March 31, 2010, except the proposed revisions for collecting information annually on reverse mortgages would be effective on December 31, Details of the revisions on located in sections II.A. J. (pages ) of the request for comment. Proposed Call Report revisions that would take effect as of March 31, 2010 include: OTTI: New reporting items to identify the components of other-than-temporary impairment (OTTI) losses on debt securities, consistent with the presentation requirements of a recent accounting standard FASB Staff Position No The new items would include total OTTI losses on debt securities for the calendar year-to-date reporting period, the portion of these total losses recognized in other comprehensive income, and the net losses recognized in earnings. (See proposed insert A to Schedule RI.) The agencies state that the new accounting presentation would provide additional information about the amounts that a bank does not expect to collect related to its investments in debt securities held for purposes other than trading. Thus, to enhance the agencies ability to evaluate the factors affecting bank earnings, they propose three new memorandum items to the Call Report income statement to mirror the new accounting presentation requirements of FSP FAS Unused commitments: 1. Clarification of instructions for reporting unused commitments on Schedule RC-L, item 1. Proposed new instructions include when a commitment to issue a commitment needs to be reported. The instructions would state that commitments to issue a commitment at some future point are those where the bank has extended terms and the borrower has accepted the offered terms, even though the related loan agreement has not yet been signed. The instructions would also be modified to address situations when commitments have been conveyed or participated to others. Unused commitments would be reported gross; including the unused amount of commitments acquired from and conveyed or participated to others. However, banks would exclude commitments conveyed or participated to others that the bank is not legally obligated to fund, even if the party to whom the commitment has been conveyed or participated fails to perform in accordance with the commitment terms. The instructions would also define commitments to include nine items, and further clarify what is included and excluded from the reporting of an unused commitment (See page 41976, columns 1 and 2 of the proposed revisions.) 2. Breakdown of existing items for unused commitments associated with credit card lines and other unused commitments to split consumer credit card lines from credit lines for business and other entities. The agencies propose splitting Schedule RC-L, item1.b into unused consumer credit card lines and other unused credit card lines. This new breakout would be reported by institutions with either $300 million or more in assets or $300 million or more in unused credit card commitments. Similarly, Schedule RC-L, item 1.e currently aggregates all other unused commitments, and includes unused commitments to fund C & I loans. The agencies propose separating these C & I lending commitments from the other unused commitments to enhance their ability to analyze business credit conditions. The agencies propose splitting Schedule RC-L, item 1.e, into three 1

2 categories: (1) unused commitments to fund C & I loans, (2) unused commitments to fund loans to financial institutions, and (3) all other unused commitments. 3. A related breakdown of the existing item for other loans. The agencies propose to revise Schedule RC-C, Part I, item 9, Other loans by breaking out a new category for loans to nondepository financial institutions. The agencies feel these separate reporting categories will allow them to more closely monitor the exposure of individual banks to financial institutions and to assess the impact that changes in the credit availability to this sector have on the economy. Brokered deposits: 1. Breakdown of the existing reporting item for time deposits of $100,000 or more (in domestic offices). Since the standard maximum deposit insurance amount (SMDIA) has been temporarily increased to $250,000 per depositor through December 31, 2013, and the agencies anticipate increased growth in time deposits with balances in excess of $100,000, but less than or equal to the $250,000 limit on deposit insurance coverage, they propose revising Schedule RC-E to allow closer monitoring of bank time deposits with balances within the temporarily increased limit on deposit insurance coverage. Thus, the agencies propose replacing Schedule RC-E (Deposit Liabilities) Part I, deposits in domestic offices, Memorandum item 2.c, Total time deposits of $100,000 or more, with a revised Memorandum item 2.c, Total time deposits of $100,000 through $250,000, and a new Memorandum item 2.d,Total time deposits of more than $250,000. Existing Memorandum item 2.c.(1), Individual Retirement Accounts (IRAs) and Keogh Plan accounts included in Memorandum item 2.c. Total time deposits of $100,000 or more, above, would be renumbered and recaptioned as Memorandum item 2.e, Individual Retirement Accounts (IRAs) and Keogh Plan accounts of $100,000 or more included in Memorandum items 2.c and 2.d above. The scope of the latter proposed revision would not change. (See proposed insert E to Schedule RC-E.) 2. Revisions of existing items for brokered deposits resulting from the temporarily increased deposit insurance coverage. The agencies propose to revise the reporting of fully insured brokered deposits in Schedule RC-E, Memorandum item 1.c, and footnote the item to state that the specific dollar amounts used as the basis for reporting in new Memorandum items 1.c. (1) and 1.c. (2) reflect the deposit insurance limits in effect on the report date. Notably, the proposed revisions would require that brokered deposits would be reported based on their balances rather than the denominations in which they were issued. Thus, Schedule RC-E, Part I, Memorandum items 1.c. (1) and 1.c. (2) and their instructions would be revised as follows (See proposed insert D to Schedule RC-E): Memorandum item 1.c. (1), Brokered deposits of less than $100,000: banks would report in this item brokered deposits with balances of less than $100,000, and time deposits issued to deposit brokers in the form of large ($100,000 or more) certificates of deposit that have been participated out by the broker in shares with balances of less than $100,000. Banks would also report in this new item, brokered deposits that represent retirement deposit accounts (as defined in Schedule RC-O, Memorandum item 1) eligible for $250,000 in deposit insurance coverage, only if their balances are less than $100,000. Memorandum item 1.c. (2), Brokered deposits of $100,000 through $250,000 and certain brokered retirement deposit accounts: banks would report in this item brokered deposits (including brokered retirement deposit accounts) with balances of $100,00 through $250,000, and brokered deposits that represent retirement deposit accounts (as defined in Schedule RC-O, Memorandum 1) eligible for 2

3 $250,000 in deposit insurance coverage that have been issued by the bank in denominations of more than $250,000 and have been participated out by the broker in shares of $100,000 through $250, New items for the interest expense on and quarterly averages for fully insured brokered time deposits and other brokered time deposits. New reporting items would be added to Schedule RC-K, Quarterly Averages, and Schedule RI, Income Statement, to reflect changes related to the FDIC s final rule, effective on January 1, 2010, on the FDIC s revised Section restrictions on interest rates that less than well-capitalized banks may pay on brokered deposits. The agencies have proposed these new items to enhance their ability to evaluate funding costs and the impact of brokered time deposits on these costs. The agencies propose to add two new Memorandum items to both Schedules RC-K, and RI. (See proposed insert F to Schedule RC-K, and proposed insert A, new item 15 to Schedule RI.) Banks would report the interest expense on and quarterly averages for fully insured brokered time deposits and other brokered time deposits. The definition of fully insured brokered time deposits would be based on the definitions of fully insured brokered deposits and time deposits in Schedule RC-E. Other brokered time deposits would include all brokered time deposits that are not fully insured brokered deposits.) The proposed new Memorandum item 15 to Schedule RI relates to interest expense on brokered time deposits included in the existing Schedule RI items 2.a.(1)(b)(2) and (3), which are interest expense on time deposits for nontransaction accounts. Change in reporting frequency for loans to small businesses and small farms: A change in the reporting frequency from annually (June 30) to quarterly for small business and small farm lending data. The agencies propose to require banks to submit Schedule RC-C, Part II, Loans to Small Businesses and Small Farms on a quarterly reporting period beginning on March 31, This Schedule requests information on the number and amount currently outstanding of loans to small businesses and small farms. The proposed increased frequency of reporting is in response to the Treasury Secretary s request, and the agencies desire to monitor and assess more closely the availability of credit to these small businesses and farms. No substantive revisions are proposed to the information that banks are required to report on these items. Change in reporting frequency for the number of deposit accounts with balances of $250,000 or less: A change in the reporting frequency from annually (June 30) to quarterly for the number of deposit accounts with balances of $250,000 or less. The agencies propose to require all the existing Call Report items in Schedule RC-O, Other Data for Deposit Insurance and FICO Assessments, Memorandum item1, on the number of deposit accounts to be reported quarterly beginning March 31, Currently, Memorandum items 1.a. (2) and c. (2) on the number of deposit accounts (excluding retirement accounts), and the number of retirement deposit accounts, respectively, of $250,000 or less, are only required to be reported annually on the June report. These revisions would require that the quarterly reporting frequency of the number of deposit accounts and the number of retirement deposit accounts of $250,000 or less would be reported with the same quarterly frequency as such deposit accounts that exceed the $250,000 deposit insurance limit. These proposed quarterly reporting revisions to the Call Report would also conform with the quarterly reporting frequency on the number of all deposit accounts required in the Thrift Financial Report (TFR). 3

4 Internal income and expense allocations applicable to foreign offices: Elimination of the Call Report item for internal allocations of income and expense applicable to foreign offices from Schedule RI-D, item 11, since the reporting of this item is of limited usefulness to the agencies. Proposed Call Report revisions that would commence on December 31, 2010 include: Reverse mortgages: New reporting items on reverse mortgage data that would be collected annually, beginning on December 31, 2010, relating to loan volumes, dollar amounts outstanding, and the institutions offering reverse mortgages or participating in reverse mortgage activity for: (1) proprietary products designed and originated by financial institutions, and (2) a federally insured Home Equity Conversion Mortgage (HECM) product. The agencies propose to collect data for several items to be added to Schedule RC-C, Part I, and Schedule RC-L. New items for Schedule RC-C, Part I, would include in new Memorandum Item 15 (See proposed insert C to Schedule RC-C): 1. Reverse mortgages outstanding that are held for investment, separately reporting the amount of HECM reverse mortgages and the amount of proprietary reverse mortgages that are held for investment and included in Schedule RC-C, Part I, item 1.c, Loans Secured by 1-4 family residential properties. 2. Estimated number of reverse mortgages for which fee-paid referrals were received during the year from each bank making referrals, beginning on December 31, Banks would report separately the estimated number of fee-paid referrals for HECM reverse mortgages and proprietary reverse mortgages. The agencies also request specific feedback from reporting institutions on their ability to provide fee-paid referral information for reverse mortgages. 3. The principal amount of reverse mortgages originated for sale that have been sold during the year. HECM and proprietary reverse mortgages sold would be reported separately. The agencies note that these items are distinct and different from the items for the estimated number of referrals because a referring bank is not funding the loan, whereas this item would capture the principal amount of funded reverse mortgages originated by banks that are sold in the secondary market during the year. New Items for Schedule RC-L, Derivatives and Off-Balance Sheet Items (See proposed insert G to Schedule RC-L): 1. Amounts of unused commitments for HECM reverse mortgages outstanding that are held for investment, and unused commitments for proprietary reverse mortgages outstanding that are held for investment. Each of these new items are also reportable in existing item 1.a of Schedule RC-L, Revolving, open-end lines secured by 1-4 family residential properties. The proposed new unused commitment items would be reported as subsets of item 1.a. Other: On pages , the proposal also discusses: The effect that new FASB accounting standards Nos. 166 and 167, which revise the standards governing accounting for financial asset transfers and the consolidation of variable interest entities, will have on the information that banks report in existing Schedule RC-S, Servicing, Securitization, and Asset Sale Activities. The agencies note that the revised standards are expected to cause a large volume of assets in bank-sponsored entities associated with securitization and structured finance activities to be brought back onto bank balance sheets. Thus, the agencies clarify the continued reporting requirements by banks for numerous specific items on Schedule RC-S, following the January 1, 2010 effective date of FASB 166 and 167 as follows: 4

5 1. Banks should continue to complete Schedule RC-S after the effective date of FASB 166 and 167, in accordance with existing instructions, taking into account the changes in accounting required by the two FASB statements. 2. Relating to Schedule RC-S, items 1-8, reporting of bank information for securitizations that the reporting bank has accounted for as sales: after the effective date of FASB 166 & 167, a bank should report information in these 8 items only for securitizations for which the transferred assets qualify for sale accounting or are otherwise not carried on the bank s consolidated balance sheet. a. If a securitization transaction that qualified for sale accounting prior to the FASB 166 & 167 effective date must be brought back onto the reporting banks consolidated balance sheet upon the adoption of these FASBs, then the bank would no longer report the securitization information in RC-S, items Schedule RC-S, Item 11 & 12, apply to assets that the reporting bank has sold with recourse or other sell-provided credit enhancements, but has not securitized the assets. a. In Memorandum item 1 to Schedule RC-S, a bank currently reports transfers of small business obligations with recourse that qualify for sale accounting. The scope of these items will continue to be limited to the sold financial assets after the effective date of FASB 166 & 167. b. In Memorandum item 2 of Schedule RC-S, a bank currently reports the outstanding principal balance of loans and other financial assets that it services for others when the services are purchased or when the assets have been originated or purchased and then sold with servicing retained. After the FASB 166 & 167 effective date, a bank should report retained servicing for those assets or portions of assets reported as sold as well as purchased servicing in Memorandum item 2. c. In Memorandum item 3 of Schedule RC-S, a bank currently reports data on assetbacked commercial paper conduits regardless of whether the reporting bank must consolidate the conduit. The agencies state that this reporting requirement will continue after the effective date of FASB 166 & The agencies will monitor reporting and practices under FASB 166 & 167 in determining the need for revisions to Schedule RC-S to assist them in assessing the nature and scope of banks involvement with securitization and structured finance activities, including those accounted for as sales and those accounted for as secured borrowings. Additional requests for comment may follow related to these issues, as well as any new Call Report data items the agencies feel may become necessary pertaining to securitization and structured finance transactions for capital calculation purposes after FASB 166 & 167 become effective. Trading assets that are past due or in nonaccrual status (Schedule RC- N, item 9) and (Schedule RC-D, Memorandum item 3) (no changes will be implemented). Unpaid premiums on certain credit derivatives (Schedule RC-R) (no changes will be implemented). The proposed revisions are reflected in the draft March 2010 call report forms (including the proposed December 2010 items), located on the FFIEC's Web site at: The direct FFIEC website link to the draft forms are at: Draft instructions for the proposed changes will be posted on the FFIEC's Web site later. 5

6 For the March 31 and December 31, 2010 report dates, banks may provide reasonable estimates for any new or revised Call Report item initially required to be reported as of that date for which the requested information is not readily available. The specific wording of the captions for the new or revised Call Report data items discussed in this proposal and the numbering of these data items should be regarded as preliminary. September 4,

Proposed Changes to Call Report Form 041 for June 30, 2012 As of April 23, Table of Contents

Proposed Changes to Call Report Form 041 for June 30, 2012 As of April 23, Table of Contents Table of Contents Schedule RC-N Past Due and Nonaccrual Loans, Leases, and Other Assets New: Memorandum items 9, 9.a, and 9.b Schedule RC-O Other Data for Deposit Insurance and FICO Assessments New: Item