SUPPORTING STATEMENT
REAL ESTATE LENDING STANDARDS
(OMB No. 3064-0112)
INTRODUCTION
The Federal Deposit Insurance Corporation (FDIC) requests OMB approval to extend, without revision, the above-captioned collection of information, which consists of recordkeeping requirements contained in the FDIC Rules and Regulations at 12 CFR 365. The current clearance for the collection expires on March 31, 2014.
JUSTIFICATION
1. Circumstances and Need
Section 1828(o) of the Federal Deposit Insurance Act requires each federal banking agency to adopt uniform regulations prescribing real estate lending standards. Part 365 of the FDIC Rules and Regulations, which implements section 1828(o), requires institutions to have real estate lending policies that include (a) limits and standards consistent with safe and sound banking practices; (b) prudent underwriting standards, including loan-to-value ratio (LTV) limits that are clear and measurable; (c) loan administration policies; (d) documentation, approval and reporting requirements; and (e) a requirement for annual review and approval by the board of directors. The rule also establishes supervisory LTV limits and other underwriting considerations in the form of guidelines. Since banks generally have written policies on real estate lending, the additional burden imposed by this regulation is limited to modifications to existing policies necessary to bring those policies into compliance with the regulation and the development of a system to report loans in excess of the guidelines to the board of directors.
2. Use of the Information Collected
Institutions will use the lending policies to guide their lending operations in a manner that is consistent with safe and sound banking practices and appropriate to their size and nature and scope of their operations. These policies should address certain lending considerations, including loan-to-value limits, loan administration policies, portfolio diversification standards, and documentation, approval, and reporting requirements. The agencies will use this information in their examination of institutions to ensure that the real estate loans made by those institutions are consistent with existing statutory and regulatory criteria, with principles of safety and soundness, and with relevant policy guidance.
3. Use of Technology to Reduce Burden
Banks may use any technology they wish in order to lessen the burden of meeting this recordkeeping requirement.
4. Effort to Identify Duplication
To the extent that banks already have policies in place that comply with the requirements of the proposal, no new policies would be necessary. Generally, this requirement would be a supplement to a bank's existing loan policies. Institutions that have comprehensive policies that satisfy the requirements of this collection have no additional burden other than periodic reports to the board. Many institutions have made modifications to their existing policies to cover the requirements of the regulation.
5. Minimizing the Burden on Small Entities
Small banks generally have a more narrow range of real estate loan products and a less complex loan portfolio and loan approval process. The loan policy required is commensurate with the type and complexity of the loans granted by the institutions.
6. Consequence of Less Frequent Collections
This is a recordkeeping requirement.
7. Special Circumstances
None.
8. Consultation with Persons Outside the FDIC
A notice seeking public comment for a 60-day period was published in the Federal Register on November 4, 2013 (78 FR66004). No comments were received.
9. Payment or Gift to Respondents
None.
10. Confidentiality
This collection imposes no special confidentiality requirements.
11. Information of a Sensitive Nature
This collection contains no sensitive information.
12. Estimates of Hour Burden and Annualized Cost
Hour Burden
Number of Recordkeepers 4,375
Number of Responses per Record keeper 1
Total Annual Responses 4,375
Average hours per Record keeper 20
Total Annual Burden Hours 87,500
Annualized Cost
FDIC: None
Banks: Number of Recordkeepers 4,375
Total Annual Responses 4,375
Hours per Record keeper 20
Total Annual Burden Hours: 87,500
Cost: 87,500 hours X $25 per hour= $2,187,500
Capital, Start-Up and Maintenance Costs
None.
Estimated Annual Cost to the Federal Government
None.
15. Reason for Change in Burden
The change in burden of -8,500 hours is a burden adjustment due to a decrease in the number of FDIC-supervised institutions.
16. Publication
No publication is made of the information.
Display of Expiration Dates
Not
applicable.
Exceptions to Certification
None.
| File Type | application/msword |
| File Title | SUPPORTING STATEMENT |
| Author | FDIC |
| Last Modified By | elle |
| File Modified | 2014-01-23 |
| File Created | 2014-01-23 |