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Financial Services Law Insights and Observations

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  • FDIC issues final rule on special assessment, moves to collect $16.3 billion

    On November 16, the FDIC approved a final rule to implement a special assessment to recover Deposit Insurance Fund (DIF) losses from protecting uninsured depositors, following the failure of two banks earlier this year. According to the fact sheet, banks that benefited most from assistance provided under systemic risk determination will pay to recover the losses. The FDIC aims to collect $16.3 billion from 114 financial institutions at a quarterly rate of 3.36 basis points over eight quarterly assessment periods, and an annual rate of 13.4 basis points “an increase from the 12.5 basis point annual rate in the [May] proposal.”

    The FDIC stated that if enough funds were collected to cover actual or estimated losses, it could cease collection efforts early. Alternatively, if losses surpass the collected amount within the initial eight-quarter collection period, the collection period can be extended for additional quarters. The FDIC also added that if actual losses exceed the collected amounts after the receiverships for both banks end, it can impose a one-time final shortfall assessment.

    The special assessment does not apply to any financial institution with less than $5 billion in total assets. The final rule will be effective April 1, 2024, and the first collection for the special assessment is due June 28, 2024. 

    Bank Regulatory FDIC Credit Risk Deposit Insurance Call Report

  • FDIC highlights inaccurate reporting of uninsured deposits by IDIs

    On July 24, the FDIC released a letter reporting that some insured depository institutions (IDIs) are not accurately reporting their estimated uninsured deposits as per the instructions on the Call Report. According to the letter, some IDIs are wrongly decreasing the reported amount based on the collateralization of uninsured deposits, even though the presence of collateral does not affect the portion covered by federal deposit insurance. The FDIC also noted that by excluding intercompany deposit balances of their subsidiaries, some IDIs are incorrectly reducing the reported amount of deposits on Schedule RC-O. The FDIC stated that “in reporting uninsured deposits, if an IDI has deposit accounts with balances in excess of the federal deposit insurance limit that it has collateralized by pledging assets…the IDI should make a reasonable estimate of the portion of these deposits that is uninsured using the data available from its information systems.” IDIs should refer to the general instructions for Call Reports on how to accurately submit data. The FDIC recommended that IDIs that have incorrectly reported uninsured deposits make appropriate changes to the data and submit a revised data file to the Central Data Repository.

    Bank Regulatory Federal Issues FDIC Depository Institution Call Report Deposit Insurance

  • Agencies propose Call Report revisions

    On February 22, the FDIC, Federal Reserve Board, and the OCC announced the publication of a joint notice and request for comment proposing changes to three versions of the Call Report (FFIEC 031, FFIEC 041, and FFIEC 051), as well as changes to the Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks (FFIEC 002), as applicable. Section 604 of the Financial Services Regulatory Relief Act of 2006 mandates agency review of information collected in the Call Reports “to reduce or eliminate any requirement to file certain information or schedules if the continued collection of such information or schedules is no longer necessary or appropriate.” The proposed changes would eliminate and consolidate certain items in the Call Reports based on an evaluation of responses to a user survey addressing the Call Report schedules. The agencies are also requesting comments on certain technical clarifications made last year concerning the reporting of certain debt securities issued by Freddie Mac and proposed Call Report process revisions. The proposed changes if approved, will take effect as of the June 30, 2023, report date. Comments are due April 24.

    Bank Regulatory Agency Rule-Making & Guidance Federal Issues Federal Reserve FDIC OCC Call Report FFIEC Of Interest to Non-US Persons

  • Fed streamlines reporting requirements for member banks

    On January 10, the Federal Reserve announced a final rule regarding reporting requirements for member banks related to adjusting subscriptions to Federal Reserve Bank capital stock. Specifically, the Fed noted that the “technical rule” amends Regulation I to decrease the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to Federal Reserve Bank capital stock, except in the context of mergers. Under the new process, Reserve Banks will adjust a member bank’s stock subscription each time the member bank files a Call Report, eliminating the need for member banks to file applications to adjust their stock subscriptions (except in the context of mergers). Additionally, the Fed codified its current practices of requiring a surviving member bank to apply to adjust its stock subscription prior to merging or consolidating with another bank. The final rule is effective 30 days after publication in the Federal Register.

    Bank Regulatory Federal Register Federal Reserve Call Report Agency Rule-Making & Guidance

  • Agencies adopt standardized approach for counterparty credit risk Call Report

    Agency Rule-Making & Guidance

    On November 9, the FDIC, Federal Reserve Board, and the OCC announced the publication of final regulatory reporting changes in the Federal Register applicable to three versions of the Call Report (FFIEC 031, FFIEC 041, and FFIEC 051). In July, the agencies proposed to revise and extend the Call Report for three years, and requested public comments on proposed changes to clarify instructions for reporting of deferred tax assets (DTAs) and to add a new item related to the standardized approach for counterparty credit risk (SA–CCR). (See FIL-53-2021.) Following the comment period, the agencies are proceeding with the proposed SA-CCR-related reporting change to the Call Report, which will take effect with the December 31, 2021 report date, subject to approval by the Office of Management and Budget. However, proposed instruction revisions related to DTAs are not final as the agencies continue to consider comments received on the proposed rule on tax allocation agreements. (See FIL-29-2021.) Supervised financial institutions are encouraged to review the proposed regulatory change. Redline copies of the Call Report and related draft reporting instructions are available on the FFIEC’s webpage here.

    Agency Rule-Making & Guidance FDIC Federal Reserve OCC Call Report OMB FFIEC Bank Regulatory

  • Agencies to proceed with Call Report revisions

    Agency Rule-Making & Guidance

    On May 24, the FDIC, Federal Reserve Board, and the OCC published a joint notice and request for comments on information collections published last December and this February (covered by InfoBytes here). The proposed reporting changes would revise and extend three versions of the Call Report—FFIEC 031, FFIEC 041, and FFIEC 051—as well as FFIEC 002, “Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks,” and FFIEC 002S, “Report of Assets and Liabilities of a Non-U.S. Branch that is Managed or Controlled by a U.S. Branch or Agency of a Foreign (Non-U.S.) Bank.” After considering comments received on the information collections, the agencies announced their intention to proceed with the proposed revisions and will submit a request to Office of Management and Budget for approval. The proposed revisions to the reporting forms, along with revised instructions related to FDIC amendments to the deposit insurance assessment system, will be effective with the June 30, 2021, report date. Additionally, the agencies noted that the exclusion of sweep deposits and certain other deposits from reporting as brokered deposits will be effective with the September 30, 2021, report date. Comments on the joint notice must be received by June 23.

    Agency Rule-Making & Guidance Federal Issues OCC CRA Bank Compliance Call Report FFIEC Of Interest to Non-US Persons Federal Reserve FDIC Bank Regulatory

  • Agencies propose Call Report asset threshold relief

    Agency Rule-Making & Guidance

    On February 18, the FDIC, Federal Reserve Board, and the OCC published a joint notice and request for comments on changes to three versions of the Call Report—FFIEC 031, FFIEC 041, and FFIEC 051. The reporting changes, first proposed by the agencies last year, will provide relief to financial institutions with under $10 billion in total assets as of December 31, 2019, by allowing them “to use the lesser of the total consolidated assets reported in its Call Report as of December 31, 2019, or June 30, 2020, when determining whether the institution has crossed certain total asset thresholds to report additional data items in its Call Reports for report dates in calendar year 2021.” The agencies also outline specific thresholds that limit certain eligibility for streamlined Call Reports or that require the reporting of certain additional data items. This relief will only be allowed for calendar year 2021. The agencies will also allow financial institutions that temporarily exceed the $10 billion total asset threshold to use the community bank leverage ratio framework in Call Report Schedule RC R from December 31, 2020, through December 31, 2021, provided the institution meets the other qualifying criteria for this framework. Comments on the proposed changes are due March 22.

    Agency Rule-Making & Guidance FDIC Federal Reserve OCC Call Report FFIEC Bank Regulatory

  • FFIEC releases updated instructions for call reports and FFIEC 101

    Federal Issues

    On April 9, the FFIEC released two depository institution reports—Capital-related Revisions to the Consolidated Reports of Condition and Income (Call Report) and the FFIEC 101 Report, and Consolidated Reports of Condition and Income for First Quarter 2020. The reports reiterate the agencies’ March 25 statement (covered by InfoBytes here) that March 31, 2020 Call Reports submitted after the filing deadline will not result in agency action, if “the report is submitted within 30 days of the official filing date.” Additionally, they explain that Call Report instructions were impacted by three interim final rules (IFRs) the agencies recently released due to issues caused by Covid-19. The regulatory capital IFRs cover: (i) the Money Market Mutual Fund Liquidity Facility (MMLF) IFR (covered here); (ii) the Standardized Approach for Calculating the Exposure Amount of Derivative Contracts (SA-CCR rule) IFR (covered here); and (iii) the transition of Current Expected Credit Losses (CECL) IFR (covered here). A notice regarding eligible retained income, along with the three IFRs, not only affected the instructions for March 31, 2020 Call Reports, but also impacted calculation instructions for regulatory capital on Schedule RC-R, and FFIEC 101 for regulatory capital reporting for institutions that use the advanced capital adequacy framework. The FFIEC’s updated instructions for the first quarter call report may be found here, and the updated instructions for the first quarter FFIEC 101 may be found here.

    CARES Act information was also added to the appendix of the Quarterly Call Report Supplemental Instructions to include section 2302, “Modifications for Net Operating Losses,” section 4013, “Temporary Relief from Troubled Debt Restructurings,” and section 4014, “Optional Temporary Relief from Current Expected Credit Losses.”

    Federal Issues Federal Reserve FDIC OCC CARES Act Call Report Agency Rule-Making & Guidance FFIEC Covid-19

  • Massachusetts Division of Banks updates extensions for licensee filings

    State Issues

    On March 30, the Massachusetts Division of Banks (DOB) issued an update for licensees to clarify the filing deadlines for financial statements and call reports in light of the NMLS policy decision. The DOB is providing a 60-day extension to file financial statements, a 30-day extension to submit Call Reports and the MCR Standard Financial Condition Report, and a 60-day extension for Annual Reports.

    State Issues Licensing NMLS Covid-19 Call Report Massachusetts

  • Idaho regulator provides updates on agency operations

    State Issues

    On March 26, the Idaho Department of Finance Consumer Finance Bureau (Department) issued updated guidance to its registrants and licensees regarding the Department’s current operations during the Covid-19 outbreak. In particular, the Department noted that though the offices will be closed to the public for the next 21 days, staff are continuing to process licensing and registration applications. The Department suggested that companies may choose to transition their license records to the NMLS to avoid delays. In addition, the Department noted that field examinations continue remotely, using phone and email in lieu of onsite reviews. Finally, the Department indicated deadlines were extended for mortgage companies to file mortgage call reports and financial statements, and that deadlines will be reviewed for required license renewals and reports as needed.

    State Issues Covid-19 Idaho Licensing Call Report Examination

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