Form1680_Form1681_Form1682_Form1683_20160126_omb

Supporting Statement for the
Application for Conversion (Form 1680), Proxy Statement (Form 1681),
Offering Circular (Form 1682), and Order Form (Form 1683) (OMB No. 7100-0335)
Summary
The Board of Governors of the Federal Reserve System, under delegated authority from
the Office of Management and Budget (OMB), proposes to extend for three years, without
revision, the following mandatory mutual stock conversion application forms:
• Application for Conversion (Form 1680; OMB No. 7100-0335),
• Proxy Statement (Form 1681; OMB No. 7100-0335),
• Offering Circular (Form 1682; OMB No. 7100-0335), and
• Order Form (Form 1683; OMB No. 7100-0335).
Sections 5(i) (standard conversions) and 5(p) (supervisory conversions) of the Home
Owners’ Loan Act (HOLA) authorize mutual to stock conversions. The four individual forms
are all one-time submissions that are used by mutual holding companies requesting approval to
convert to a stock institution. The Federal Reserve intends to update and revise the mutual stock
conversion application forms to conform to Federal Reserve standards in the near future. The
total annual reporting burden is estimated to be 5,000 hours.
Background and Justification
Institutions planning to convert from mutual to stock form must first request approval by
submitting an Application for Conversion (Form 1680). The Federal Reserve determines from
the conversion application whether the conversion will be fair and equitable to the mutual
institution’s members.
Mutual members cannot make an informed decision on whether to surrender their
property rights in the converting association unless they are provided with full and accurate
disclosure of the transaction; this information is provided through the Proxy Statement
(Form 1681). Federal securities laws, which are enforced by the Securities and Exchange
Commission (SEC), require that prospective stock purchasers be given full and accurate
disclosure concerning the investment and the financial health of the institution issuing the
securities. This information is provided through the Offering Circular (Form 1682).
In addition, all converting institutions are required to submit a business plan as provided
in 12 C.F.R. § 239.53(b) and 239.55(b)(vii). The Federal Reserve believes that the converting
institutions should be required to demonstrate how they plan to prudently deploy and utilize the
conversion proceeds. Submission of a full appraisal is required, as governed by 12 C.F.R. §
239.55(b)(1)(ii) and 239.55(g)(2).
Description of Information Collection
The four individual forms (Form 1680, Form 1681, Form 1682, and Form 1683) are all
one-time submissions that are used by mutual holding companies requesting approval to convert
to a stock institution.

The Application for Conversion (Form 1680) is used to seek the Board’s approval for a
conversion. The required information includes a plan of conversion, an appraisal report of the
organization, a business plan that describes the converting organization’s use of conversion
proceeds, and financial and managerial information.
The Proxy Statement (Form 1681) provides the mutual members of the applying
organization with the information necessary to vote on the conversion transaction. The required
information includes the notice of meeting, voting rights of the mutual members, the vote
required for approval, and business, financial, and managerial information on the organization.
The Offering Circular (Form 1682) is prepared by the applying mutual organization and
is reviewed by the Federal Reserve to ensure that the public receives adequate information about
the applicant and the securities being offered. The offering circular contains substantially similar
information included in the proxy statement to the members of the mutual organization.
Order Form (Form 1683) is reviewed by the Federal Reserve to ensure subscribers to the
applicant’s stock receive adequate disclosures regarding the purchase of applicant’s stock. The
required information includes instructions explaining how to complete the order form, the
actions required to purchase shares in the offering, the number of shares available for purchase,
and the subscription price of applicant’s stock.
Time Schedule for Data Collection
The applications submitted with these forms are event generated and the data are not part
of any published reporting series. If the application meets established criteria to be processed on
a delegated basis, the Reserve Bank or Secretary of the Board generally acts on the proposal
within 30 calendar days of submission of the application. If the proposal does not meet the
criteria for processing under delegated authority, the application will be processed for action by
the Board. Such an application will generally be acted on within 60 calendar days of submission
of the application, unless an applicant is notified that the processing period is being extended and
informed of the reasons for the extension.
Legal Status
The Board’s Legal Division has determined that the mutual stock conversion forms are
mandatory and authorized by section 10 of the Home Owners’ Loan Act (HOLA), which
provides generally that “the Board is authorized to issue such regulations…as the Board deems
necessary or appropriate to enable the Board to administer and carry out the purposes of this
section, and to require compliance therewith and prevent evasions thereof” (12 U.S.C. §
1467a(g)(1)). With respect to mutual holding companies, HOLA states that a mutual holding
company “shall be subject to such regulations as the Board may prescribe” (12 U.S.C. §
1467a(o)(7)). Section 10 of HOLA also requires a savings and loan holding company to file
“such reports as may be required by the Board” and provides that such reports “shall contain
such information concerning the operations of such savings and loan holding company and its
subsidiaries as the Board may require” (12 U.S.C. § 1467a(b)(2)).

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Forms 1681, 1682, and 1683 are distributed to the owners of the mutual holding
company; no issues of confidentiality should arise in connection with these forms. One of the
elements required for the application on Form 1680 is a consolidated business plan showing how
the capital acquired in the conversion will be used. Business plans are not considered
confidential, although the applicant may request confidential treatment pursuant to sections
(b)(4), of the Freedom of Information Act (5 U.S.C. § 552(b)(4)) for portions of the business
plan if disclosure would likely result in substantial competitive harm. All such requests for
confidential treatment would need to be reviewed on a case-by-case basis and in response to a
specific request for disclosure.
Consultation Outside the Agency
On June 17, 2015, the Federal Reserve published a notice in the Federal Register
(80 FR 34641) requesting public comment for 60 days on the proposal to extend, without
revision, Form 1680, Form 1681, Form 1682, and Form 1683. The comment period for this
notice expired on August 17, 2015. The Federal Reserve did not receive any comments. On
September 11, 2015, the Federal Reserve published a final notice in the Federal Register
(80 FR 54790).
Estimate of Respondent Burden
The current annual reporting burden for this series of reports is estimated to be 5,000
hours as shown in the following table. The annual burden for these applications represents less
than 1 percent of total Federal Reserve System paperwork burden.
Estimated
average hours
per response
299

Estimated
annual burden
hours
2,990

Number of
respondents1

Annual
frequency

Form 1680

10

1

Form 1681

10

1

50

500

Form 1682

10

1

150

1,500

Form 1683

10

1

1

10

Total

5,000

The total cost to the public is estimated to be $258,750 for the mutual stock conversion forms.2

1

Of these respondents, none are estimated to be small entities as defined by the Small Business Administration (i.e.,
entities with less than $550 million in total assets) www.sba.gov/content/table-small-business-size-standards.
2
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 $17, 45% Financial Managers at
$63, 15% Lawyers at $64, and 10% Chief Executives at $87). Hourly rates for each occupational group are the
(rounded) mean hourly wages from the Bureau of Labor and Statistics (BLS), Occupational Employment and Wages
May 2014, published March 25, 2015, www.bls.gov/news.release/ocwage.t01.htm. Occupations are defined using
the BLS Occupational Classification System, 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 information submitted in the applications is not automated. The cost to the Federal
Reserve System of printing and mailing instructions is negligible.

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