FFIEC031_FFIEC041_20160713_omb

Supporting Statement for the
Consolidated Reports of Condition and Income
(FFIEC 031 and FFIEC 041; OMB No. 7100-0036)
Summary
The Board of Governors of the Federal Reserve System (Board) requests approval from
the Office of Management and Budget (OMB) to extend for three years, with revision, the
Federal Financial Institutions Examination Council (FFIEC) Consolidated Reports of Condition
and Income (Call Reports) (FFIEC 031 and FFIEC 041; OMB No. 7100-0036). These data are
required of state member banks and are filed on a quarterly basis. The revisions to the Call
Reports that are the subject of this request have been approved by the FFIEC. The Federal
Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC)
have also submitted a similar request for OMB review to request this information from banks
under their supervision.
The Board requires information collected on the Call Reports to fulfill its statutory
obligation to supervise state member banks. State member banks are required to file both
detailed schedules of assets, liabilities, and capital accounts in the form of a condition report and
summary statement as well as detailed schedules of operating income and expense, sources and
disposition of income, and changes in equity capital.
The Board, the FDIC, and the OCC (the agencies) propose to revise the Call Reports for
the September 30, 2016, or March 31, 2017, report dates, depending on the nature of the
proposed reporting change, by (1) deleting certain existing data items, (2) revising certain
reporting thresholds and certain existing data items, (3) adding certain new data items, and (4)
revising certain instruction sections. The current annual burden for the Call Reports is estimated
to be 201,595 hours and the proposed revisions are estimated to decrease the annual burden by
604 hours.
Background and Justification
Banks that are members of the Federal Reserve System are required by law to file reports
of condition with the Federal Reserve System. Section 9(6) of the Federal Reserve Act
(12 U.S.C. § 324) states:
... banks ... shall be required to make reports of condition and of the payment of dividends
to the Federal Reserve Bank of which they become a member. Not less than three of
such reports shall be made annually on call of the Federal Reserve Bank on dates to be
fixed by the Board of Governors of the Federal Reserve System. ...Such reports of
condition shall be in such form and shall contain such information as the Board of
Governors of the Federal Reserve System may require and shall be published by the
reporting banks in such manner and in accordance with such regulations as the said Board
may prescribe.

In discharging this statutory responsibility, the Board of Governors, acting in concert
with the other federal banking supervisory agencies since 1979 through the FFIEC, requires
banks to submit on the quarterly Reports of Condition and Income such financial data as are
needed by the Federal Reserve System to: (1) supervise and regulate banks through monitoring
of their financial condition, ensuring the continued safety of the public’s monies and the overall
soundness of the nation’s financial structure, and (2) contribute information needed for
background for the proper discharge of the Federal Reserve’s monetary policy responsibilities.
The use of the data is not limited to the federal government, but extends to state and local
governments, the banking industry, securities analysts, and the academic community.
Description of Information Collection
The Call Reports collect basic financial data from commercial banks in the form of a
balance sheet, income statement, and supporting schedules. The Report of Condition contains
supporting schedules that provide detail on assets, liabilities, and capital accounts. The Report of
Income contains supporting schedules that provide detail on income and expenses.
Within the Call Report information collection system as a whole, there are two reporting
forms that apply to different categories of banks: (1) all banks that have domestic and foreign
offices (FFIEC 031), and (2) banks with domestic offices only (FFIEC 041). Prior to March
2001, there were four categories of banks and four reporting forms. The FFIEC 031 was filed by
banks with domestic and foreign offices and the FFIEC 032, FFIEC 033, and FFIEC 034 were
filed by banks with domestic offices only and were filed according to the asset size of the bank.
There is no other series of reporting forms that collect from all commercial and savings
banks the information gathered through the Reports of Condition and Income. There are other
information collections that tend to duplicate certain parts of the Call Reports; however, the
information they provide would be of limited value as a replacement for the Call Reports. For
example, the Board collects various data in connection with its measurement of monetary
aggregates, of bank credit, and of flow of funds. Reporting banks supply the Board with detailed
information relating to such balance sheet accounts as balances due from depository institutions,
loans, and deposit liabilities. The Board also collects financial data from bank holding
companies on a regular basis. Such data are presented for the holding company on a
consolidated basis, including its banking and nonbanking subsidiaries, and on a parent company
only basis.
However, Board reporting forms from banks are frequently obtained on a sample basis
rather than from all insured banks. Moreover, these reporting forms are often prepared as of
dates other than the last business day of each quarter, which would seriously limit their
comparability. Institutions below a certain size are exempt entirely from some Board reporting
requirements. Data collected from bank holding companies on a consolidated basis reflect an
aggregate amount for all subsidiaries within the organization, including banking and nonbanking
subsidiaries, so that the actual dollar amounts applicable to any bank subsidiary are not
determinable from the holding company reporting forms. Hence, these reporting forms could not
be a viable replacement for even a significant portion of the Call Reports since the Board, in its
role as supervisor of insured state member banks, would be lacking the data necessary to assess

2

the financial condition of individual insured banks to determine whether there had been any
deterioration in their condition.
Beginning March 1998, all banks were required to transmit their Call Report data
electronically. Banks do not have to submit hard copy Call Reports to any federal bank
supervisory agency unless specifically requested to do so.
Proposed Revisions
The FFIEC launched a formal initiative in December 2014 to identify potential
opportunities to reduce burden associated with Call Report requirements for community banks.
In embarking on this effort, the FFIEC was responding to industry concerns about the cost and
burden associated with the Call Report. The FFIEC’s formal initiative comprises actions in five
areas, which are discussed below. In addition, as a foundation for the actions it is undertaking,
the FFIEC has developed a set of guiding principles for use in evaluating potential additions and
deletions of Call Report data items and other revisions to the Call Report. In general, any Call
Report changes must meet three guiding principles: (1) The data items serve a long-term
regulatory or public policy purpose by assisting the FFIEC’s member entities in fulfilling their
missions of ensuring the safety and soundness of financial institutions and the financial system
and the protection of consumer financial rights, as well as entity-specific missions affecting
national and state-chartered institutions; (2) The data items to be collected maximize practical
utility and minimize, to the extent practicable and appropriate, burden on financial institutions;
and (3) Equivalent data items are not readily available through other means.
As a first action under the FFIEC’s Call Report burden-reduction initiative, the agencies
are publishing this Federal Register notice and requesting comment on a number of proposed
burden-reducing changes and certain other proposed Call Report revisions identified during their
most recent statutorily mandated review of the information collected in the Call Report.1
Implementation of the revisions identified during that review had been deferred while the
agencies adopted changes to the reporting of regulatory capital information in the Call Report to
implement the revised regulatory capital rules issued in July 2013 that took effect as of
January 1, 2014, and January 1, 2015.2
The FFIEC and the agencies also identified and incorporated into this proposal certain
other burden-reducing changes to the Call Report in addition to those identified in the most
recent statutorily mandated review of the Call Report. The burden-reducing changes included as
part of this first action are not intended to be the only group of Call Report revisions designed to
lessen reporting burden for reporting institutions and, in particular, for community banks.
Additional burden-reducing changes to the Call Report are expected to result from the other
actions being taken by the agencies under the FFIEC’s Call Report burden-reduction initiative.
As the second action, the agencies have accelerated the start of the next statutorily
1

This review is mandated by section 604 of the Financial Services Regulatory Relief Act of 2006 (12 U.S.C. §
1817(a)(11)).
2
See 78 FR 48932 (August 12, 2013); 79 FR 2527 (January 14, 2014); 79 FR 35634 (June 23, 2014); and
80 FR 5618 (February 2, 2015).

3

mandated review of the existing Call Report data items, which otherwise would have
commenced in 2017. Users of Call Report data items at the FFIEC’s member entities are
participating in a series of surveys being conducted over an 18-month period that began in midJuly 2015. As an integral part of these surveys, users are being asked to fully explain the need
for each Call Report data item, how it is used, the frequency with which it is needed, and the
population of institutions from which it is needed. Call Report schedules have been placed into
groups and prioritized for review, generally based on perceived burden as cited by banking
industry representatives. Based on the results of the surveys, the agencies will identify data
items that will be considered for elimination, less frequent collection, or new or upwardly revised
reporting thresholds. Burden-reducing reporting changes will be proposed for implementation
on a flow basis as they are identified during the sequential reviews of groups of Call Report
schedules rather than waiting until the completion of the entire review.
As a third action, the agencies are considering the feasibility and merits of creating a less
burdensome version of the quarterly Call Report for institutions that meet certain criteria, which
may include an asset-size reporting threshold or activity limitations. For example, a report for
eligible institutions could exclude the Call Report schedules and items not applicable to
institutions below the specified asset-size threshold. The agencies plan to complete their analysis
regarding the concept of such a Call Report by year-end 2015. Any plan for a new version of the
Call Report would need to be approved by the FFIEC and implemented by the agencies in
compliance with the applicable requirements under the Paperwork Reduction Act (PRA).
A fourth action for the agencies is to better understand, through industry dialogue, the
aspects of reporting institutions’ Call Report preparation process that are significant sources of
reporting burden, including where manual intervention by an institution’s staff is necessary to
report particular information. As an initial step toward gaining this understanding,
representatives from the FFIEC’s member entities plan to visit a limited number of institutions
that have expressed their willingness to host a visit during the third quarter of 2015. Institution
staff would be asked to show how they prepare their Call Reports and explain which schedules or
data items take a significant amount of time or manual processes to complete and the reasons for
this. Findings from on-site visits would help the agencies determine the nature and form of
further banker outreach. The information obtained from these activities would assist the
agencies in evaluating whether and how it may be possible to reduce reporting burden by
revising or redefining Call Report data items.
As the fifth action, the agencies plan to offer periodic training to bankers via
teleconferences and webinars that would explain upcoming reporting changes and could also
provide guidance on areas of the Call Report bankers find challenging to complete. These events
should benefit institutions by reducing Call Report preparation training costs. The first training
session was a banker teleconference on February 25, 2015, that included a presentation on the
revised Call Report Schedule RC-R regulatory capital reporting requirements that took effect on
March 31, 2015, followed by a question-and-answer session. The slide presentation used during
the teleconference, an audio recording of this presentation, and a transcript of the entire
teleconference have been posted on the FFIEC’s website.

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Overview
The agencies are proposing to implement a number of revisions to the Call Report
requirements in September 2016 or March 2017, depending on the nature of the proposed
revision. The following proposed Call Report revisions would take effect September 30, 2016:
• Deletions of certain existing data items pertaining to troubled debt restructurings from
Schedules RC-C, Part I, and RC-N; loans covered by FDIC loss-sharing agreements from
Schedules RC-M and RC-N; and unused commitments to asset-backed commercial paper
conduits with an original maturity of one year or less in Schedule RC-R, Part II;
• Increases in existing reporting thresholds for certain data items in Schedules RI-E, RC-D,
RC-F, RC-G, and RC-Q and the establishment of a reporting threshold for certain data
items in Schedule RC-S;
• An instructional revision addressing the reporting of the custodial bank deduction in
Schedule RC-O;
• New and revised data items and information of general applicability, including:
o Adding contact information for the reporting institution’s Chief Executive Officer;
o Reporting the Legal Entity Identifier for the reporting institution (on the Call Report
cover page) if the institution already has one;
o Creating additional preprinted captions for itemizing and describing components of
certain items that exceed reporting thresholds in Schedules RC-F and RI-E; and
o Eliminating the concept of extraordinary items and revising affected data items in
Schedules RI and RI-E; and
• New and revised data items of limited applicability, including:
o Adding a new item on “dually payable” deposits in foreign branches of U.S. banks to
Schedule RC-O on the FFIEC 031 report; and
o Revising the information reported about the supplementary leverage ratio by
advanced approaches institutions in Schedule RC-R, Part I.
•
•
•

•

The following proposed Call Report revisions would take effect March 31, 2017:
Deletions of certain existing data items pertaining to other-than-temporary impairments
from Schedule RI;
An instructional revision addressing the reporting of net gains (losses) and other-thantemporary impairments on equity securities that do not have readily determinable fair
values on the Call Report income statement;
New and revised data items of general applicability, including:
o Increasing the time deposit size threshold used to report certain deposit information
from $100,000 to $250,000 in Schedules RC-E, RI, and RC-K;
o Revising the statements used to describe the level of external auditing work
performed for the reporting institution during the preceding year in Schedule RC; and
New and revised data items of limited applicability, including:
o Moving the existing Memorandum items for the fair value and unpaid principal
balance of loans (not held for trading) measured under a fair value option from
Schedule RC-C, Part I, to Schedule RC-Q; and
o Revising the information reported in Schedule RI by certain institutions with total
assets of $100 billion or more on the impact on trading revenues of changes in credit
and debit valuation adjustments and adding a new item for gross trading revenue.

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Discussion of Proposed Call Report Revisions
A. Deletions of Existing Data Items
Based on the agencies’ review of the information that institutions are required to report in
the Call Report, the agencies have determined that the continued collection of the following
items is no longer necessary and are proposing to eliminate them:
(1) Schedule RI, Income Statement: Memorandum items 14.a and 14.b, on other-thantemporary impairments;3
(2) Schedule RC-C, Part I, Loans and Leases: Memorandum items 1.f.(2), 1.f.(5), and 1.f.(6)
(and 1.f.(7) on the FFIEC 031), on troubled debt restructurings in certain loan categories
that are in compliance with their modified terms;
(3) Schedule RC-N, Past Due and Nonaccrual Loans, Leases, and Other Assets:
Memorandum items 1.f.(2), 1.f.(5), and 1.f.(6) (and 1.f.(7) on the FFIEC 031), on
troubled debt restructurings in certain loan categories that are 30 days or more past due or
on nonaccrual;
(4) Schedule RC-M, Memoranda: Items 13.a.(5)(a) through (d) (and (e) on the FFIEC 031),
on loans in certain loan categories that are covered by FDIC loss-sharing agreements; and
(5) Schedule RC-N: Items 11.e.(1) through (4) (and (5) on the FFIEC 031), on loans in
certain loan categories that are covered by FDIC loss-sharing agreements and are 30 days
or more past due or on nonaccrual.
In addition, when Schedule RC-R, Part II, is completed properly, item 18.b on unused
commitments to asset-backed commercial paper conduits with an original maturity of one year or
less is not needed because such commitments should already have been reported in item 10 as
off-balance sheet securitization exposures. The instructions for item 18.b explain that these
unused commitments should be reported in item 10 and that amounts should not be reported in
item 18.b. Accordingly, the agencies are proposing to delete existing item 18.b from Schedule
RC-R, Part II. Existing item 18.c of Schedule RC-R, Part II, for unused commitments with an
original maturity exceeding one year would then be renumbered as item 18.b.
B. New Reporting Threshold and Increases in Existing Reporting Thresholds
In five Call Report schedules, institutions are currently required to itemize and describe
each component of an existing item when the component exceeds both a specified percentage of
the item and a specified dollar amount.4 Based on a preliminary evaluation of the existing
reporting thresholds, the agencies have concluded that the dollar portion of the thresholds that
currently apply to these items can be increased to provide a reduction in reporting burden
without a loss of data that would be necessary for supervisory or other public policy purposes.
The percentage portion of the existing thresholds would not be changed. Accordingly, the
3

Institutions would continue to complete Schedule RI, Memorandum item 14.c, on net impairment losses
recognized in earnings. Memorandum item 14.c would be renumbered Memorandum item 14.
4
The data items for which components in excess of specified reporting thresholds are required to be itemized and
described are included in Schedule RI-E, Explanations; Schedule RC-D, Trading Assets and Liabilities; Schedule
RC-F, Other Assets; Schedule RC-G, Other Liabilities; and Schedule RC-Q, Assets and Liabilities Measured at Fair
Value on a Recurring Basis.

6

agencies are proposing to raise from $25,000 to $100,000 the dollar portion of the threshold for
itemizing and describing components of:
(1) Schedule RI-E, item 1, “Other noninterest income;”
(2) Schedule RI-E, item 2, “Other noninterest expense;”
(3) Schedule RC-F, item 6, “All other assets;”
(4) Schedule RC-G, item 4, “All other liabilities;”
(5) Schedule RC-Q, Memorandum item 1, “All other assets;” and
(6) Schedule RC-Q, Memorandum item 2, “All other liabilities.”
The agencies also are proposing to raise from $25,000 to $1,000,000 the dollar portion of
the threshold for itemizing and describing components of “Other trading assets” and “Other
trading liabilities” in Schedule RC-D, Memorandum items 9 and 10.
In addition, because institutions with less than $1 billion in total assets typically do not
provide support for asset-backed commercial paper conduits, the agencies are proposing to
exempt such institutions from completing Schedule RC-S, Servicing, Securitization, and Asset
Sale Activities, Memorandum items 3.a.(1), 3.a.(2), 3.b.(1), and 3.b.(2), on credit enhancements
and unused liquidity commitments provided to asset-backed commercial paper conduits.
C. Instructional Revisions
1. Net Gains (Losses) on Sales of, and Other-Than-Temporary Impairments on, Equity
Securities That Do Not Have Readily Determinable Fair Values
Institutions report investments in equity securities that do not have readily determinable
fair values and are not held for trading (and to which the equity method of accounting does not
apply) in Schedule RC-F, item 4, and on the Call Report balance sheet in Schedule RC, item 11,
“Other assets.” If such equity securities are held for trading, they are reported in Schedule RC,
item 5, and in Schedule RC-D, item 9 and Memorandum item 7.b, if applicable. In contrast,
investments in equity securities with readily determinable fair values that are not held for trading
are reported as available-for-sale securities in Schedule RC, item 2.b, and in Schedule RC-B,
item 7, whereas those held for trading are reported in Schedule RC, item 5, and in Schedule RCD, item 9 and Memorandum item 7.a, if applicable.
In general, investments in equity securities that do not have readily determinable fair
values are accounted for in accordance with ASC Subtopic 325-20, Investments-Other – Cost
Method Investments (formerly Accounting Principles Board Opinion No. 18, “The Equity
Method of Accounting for Investments in Common Stock”), but are subject to the impairment
guidance in ASC Topic 320, Investments-Debt and Equity Securities (formerly FASB Staff
Position No. FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-ThanTemporary Impairments”).
The Call Report instructions for Schedule RI, Income Statement, address the reporting of
realized gains (losses), including other-than-temporary impairments, on held to-maturity and
available-for-sale securities as well as the reporting of realized and unrealized gains (losses) on
trading securities and other assets held for trading. However, the Schedule RI instructions do not

7

specifically explain where to report realized gains (losses) on sales or other disposals of, and
other-than-temporary impairments on, equity securities that do not have readily determinable fair
values and are not held for trading (and to which the equity method of accounting does not
apply).
The instructions for Schedule RI, item 5.k, “Net gains (losses) on sales of other assets
(excluding securities),” direct institutions to “[r]eport the amount of net gains (losses) on sales
and other disposals of assets not required to be reported elsewhere in the income statement
(Schedule RI).” The instructions for item 5.k further advise institutions to exclude net gains
(losses) on sales and other disposals of securities and trading assets. The intent of this wording
was to cover securities designated as held-to-maturity, available-for-sale, and trading securities
because there are separate specific items elsewhere in Schedule RI for the reporting of realized
gains (losses) on such securities (items 6.a, 6.b, and 5.c, respectively). Thus, the agencies are
proposing to revise the instructions for Schedule RI, item 5.k, by clarifying that the exclusions
from this item of net gains (losses) on securities and trading assets apply to held-to-maturity,
available-for-sale, and trading securities and other assets held for trading. At the same time, the
agencies are proposing to add language to the instructions for Schedule RI, item 5.k, that
explains that net gains (losses) on sales and other disposals of equity securities that do not have
readily determinable fair values and are not held for trading (and to which the equity method of
accounting does not apply), as well as other-than-temporary impairments on such securities,
should be reported in item 5.k. The agencies also are proposing to remove the parenthetic
“(excluding securities)” from the caption for item 5.k and add in its place a footnote to this item
advising institutions to exclude net gains (losses) on sales of trading assets and held-to-maturity
and available-for-sale securities.
2. Custodial Bank Deduction
The agencies propose to revise the instructions for Schedule RC-O, item 11.a, “Custodial
bank deduction,” to state that if a custodial bank’s deduction limit as reported in Schedule RC-O,
item 11.b, is zero, the custodial bank may leave item 11.a blank rather than calculating and
reporting the amount of its deduction.
D. New and Revised Data Items and Information of General Applicability
1. Increase in the Time Deposit Size Threshold
Section 335 of the Dodd-Frank Wall Street Reform and Consumer Protection Act
(Pub. L. No. 111-203) permanently increased the standard maximum deposit insurance amount
(SMDIA) from $100,000 to $250,000 effective July 21, 2010. The SMDIA had been increased
temporarily from $100,000 to $250,000 by Section 136 of the Emergency Economic
Stabilization Act of 2008 (Pub. L. No. 110-343). In response to the increase in the limit of
deposit insurance coverage, the reporting of the amount of “Total time deposits of $100,000 or
more” in Memorandum item 2.c of Schedule RC-E, Deposit Liabilities, was revised as of the
March 31, 2010, report date. As of that date, institutions began to separately report their “Total
time deposits of $100,000 through $250,000” (Memorandum item 2.c) and their “Total time
deposits of more than $250,000” (Memorandum item 2.d).

8

However, the reporting of the quarterly averages, interest expense, and maturity and
repricing data for time deposits of $100,000 or more in Schedules RC-K, RI, and RC E,
respectively, have not been updated to reflect the permanent $250,000 deposit insurance limit.
In this regard, in its comment letter to the agencies in response to their first request for comments
under the Economic Growth and Regulatory Paperwork Reduction Act of 1996,5 the American
Bankers Association recommended revising the Schedule RC-E deposit reporting items to reflect
the new FDIC insurance limit of $250,000. Accordingly, the agencies are proposing to revise the
time deposit size threshold that applies to the reporting of this information to bring it into
alignment with the SMDIA. These proposed changes are illustrated in the following table:
Call Report Schedule
Schedule RC-K, Quarterly
Averages

Schedule RI, Income
Statement6

Schedule RC-E, Deposit
Liabilities

Current Item
Item 11.b, “Time deposits
of $100,000 or more”
Item 11.c, “Time deposits
of less than $100,000”
Item 2.a.(2)(b), Interest
expense on “Time deposits
of $100,000 or more”
Item 2.a.(2)(c), Interest
expense on “Time deposits
of less than $100,000”
Memorandum item 3.a,
“Time deposits of less than
$100,000 with a remaining
maturity or next repricing
date of”
Memorandum item 3.b,
“Time deposits of less than
$100,000 with a remaining
maturity of one year or
less”
Memorandum item 4.a,
“Time deposits of $100,000
or more with a remaining
maturity or next repricing
date of”
Memorandum item 4.b,
“Time deposits of $100,000
through $250,000 with a
remaining maturity of one
year or less”
Memorandum item 4.c,

5

Proposed Revised Item
Item 11.b, “Time deposits
of $250,000 or less”
Item 11.c, “Time deposits
of more than $250,000”
Item 2.a.(2)(b), Interest
expense on “Time deposits
of $250,000 or less”
Item 2.a.(2)(c), Interest
expense on “Time deposits
of more than $250,000”
Memorandum item 3.a,
“Time deposits of $250,000
or less with a remaining
maturity or next repricing
date of”
Memorandum item 3.b,
“Time deposits of $250,000
or less with a remaining
maturity of one year or
less”
Memorandum item 4.a,
“Time deposits of more
than $250,000 with a
remaining maturity or next
repricing date of”

Memorandum item 4.b,
“Time deposits of more
than $250,000 with a
remaining maturity of one

See 79 FR 32172 (June 4, 2014).
The item numbers shown for Schedule RI are from the FFIEC 041 report form for institutions with domestic
offices only. On the FFIEC 031 report form for institutions with domestic and foreign offices, the item numbers are
items 2.a.(1)(b)(2) and 2.a.(1)(b)(3).
6

9

“Time deposits of more
than $250,000 with a
remaining maturity of one
year or less”

year or less”

2. Level of External Auditing Work Performed for the Reporting Institution During the
Preceding Year
Each year in the March Call Report, each institution indicates in Schedule RC, Balance
Sheet, Memorandum item 1, the most comprehensive level of auditing work performed by
independent external auditors during the preceding calendar year for the institution or its parent
holding company. In completing Memorandum item 1, each institution selects from nine
statements describing a range of levels of auditing work the one statement that best describes the
level of auditing work performed for it. Certain statements from which an institution must
choose do not reflect current auditing practices performed in accordance with applicable
standards and procedures promulgated by the U.S. auditing standard setters, namely the Public
Company Accounting Oversight Board (PCAOB) and the Auditing Standards Board (ASB) of
the American Institute of Certified Public Accountants. The PCAOB establishes auditing and
related professional practice standards to be used in the performance and reporting of audits of
the financial statements of public companies. The ASB establishes auditing, attestation, and
quality control standards applicable to the performance and issuance of audit and attestation
reports for entities that are not public companies, e.g. private companies.
The PCAOB’s Auditing Standard No. 5 (AS 5), An Audit of Internal Control Over
Financial Reporting That Is Integrated with An Audit of Financial Statements, became effective
for fiscal years ending on or after November 15, 2007, and provides guidance regarding the
integration of audits of internal control over financial reporting with audits of financial
statements. To further emphasize the integration of these two audits, the PCAOB revised AS 5
in December 2010 by adding a statement that “the auditor cannot audit internal control over
financial reporting without also auditing the financial statements.” Those public companies not
required to undergo an audit of internal control over financial reporting must have an audit of
their financial statements.
The ASB has separately provided similar guidance in Attestation Section 501 (AT 501),
An Examination of an Entity’s Internal Control over Financial Reporting That Is Integrated with
an Audit of Its Financial Statements, which became effective for integrated audits for periods
ending on or after December 15, 2008. Consistent with the PCAOB, the ASB states in AT 501
that “[t]he examination of internal control should be integrated with an audit of financial
statements” and “[a]n auditor should not accept an engagement to review an entity’s internal
control or a written assertion thereon.” Under the ASB’s previous attestation standards, an entity
could engage an external auditor to examine and attest to the effectiveness of its internal control
over financial reporting without auditing the entity’s financial statements. Thus, at present,
unless a private company is required to or elects to have an integrated internal control
examination and financial statement audit, the private company may be required to or can choose
to have an external auditor perform an audit of its financial statements, but it may not engage an
external auditor to perform a standalone internal control examination. More recently, the ASB

10

concluded that, because engagements performed under AT 501 are required to be integrated with
an audit of financial statements, it would be appropriate to move the content of AT 501 from the
attestation standards into U.S. generally accepted auditing standards (GAAP). As a
consequence, the ASB issued Statement on Auditing Standards No. 130, An Audit of Internal
Control Over Financial Reporting That Is Integrated With an Audit of Financial Statements (SAS
130), in October 2015. SAS 130 is effective for integrated audits of private companies for
periods ending on or after December 15, 2016, at which time AT 501 will be withdrawn.
The existing wording of statements 1, 2, and 3 of Schedule RC, Memorandum item 1,
reads as follows:
1 = Independent audit of the bank conducted in accordance with generally accepted
auditing standards by a certified public accounting firm which submits a report on the
bank.
2 = Independent audit of the bank’s parent holding company conducted in accordance
with generally accepted auditing standards by a certified public accounting firm
which submits a report on the consolidated holding company (but not on the bank
separately).
3 = Attestation on bank management’s assertion on the effectiveness of the bank’s
internal control over financial reporting by a certified public accounting firm.
Because these three statements no longer fully and properly describe the types of external
auditing services performed for institutions or their parent holding companies under current
professional standards and to enhance the information institutions provide the agencies annually
about the level of auditing external work performed for them, the agencies are proposing to
replace existing statements 1 and 2 with new statements 1a, 1b, 2a, and 2b and to eliminate
existing statement 3. The revised statements would read as follows:
1a = An integrated audit of the reporting institution’s financial statements and internal
control over financial reporting conducted in accordance with the standards of the
American Institute of Certified Public Accountants (AICPA) or the Public Company
Accounting Oversight Board (PCAOB) by an independent public accountant that
submits a report on the institution.
1b = An audit of the reporting institution’s financial statements conducted in accordance
with auditing standards of the AICPA or the PCAOB by an independent public
accountant that submits a report on the institution.
2a = An integrated audit of the reporting institution’s parent holding company’s
consolidated financial statements and internal control over financial reporting
conducted in accordance with the standards of the AICPA or the PCAOB by an
independent public accountant that submits a report on the consolidated holding
company (but not on the institution separately).7
2b = An audit of the reporting institution’s parent holding company’s consolidated
financial statements conducted in accordance with the auditing standards of the
7

The instructions for statement 2a would indicate this statement also applies to a reporting institution with $5
billion or more in total assets and a rating lower than 2 under the Uniform Financial Institutions Rating System that
is required by Section 36(i)(1) of the Federal Deposit Insurance Act (12 U.S.C. § 1831m(i)(1)) to have its internal
control over financial reporting audited at the institution level, but undergoes a financial statement audit at the
consolidated holding company level.

11

AICPA or the PCAOB by an independent public accountant that submits a report on
the consolidated holding company (but not on the institution separately).
3. Chief Executive Officer Contact Information
All reporting institutions have been requested to provide “Emergency Contact
Information” as part of their Call Report submissions since September 2002. This information
request was added to the Call Report so that the agencies could distribute critical, time-sensitive
information to emergency contacts at institutions should such a need arise. The primary contact
should be a senior official of the institution who has decision-making authority. The primary
contact may or may not be the institution’s Chief Executive Officer (CEO). Information for a
secondary contact also should be provided if such a person is available at an institution. The
emergency contact information is for the confidential use of the agencies and is not released to
the public.
The agencies periodically need to communicate with the CEOs of reporting institutions
via email, but they currently do not have a complete list of CEO email addresses that would
enable an agency to communicate directly to institutions’ CEOs. The CEO communications are
initiated or approved by persons at the agencies’ senior management levels and would involve
topics including new initiatives, policy notifications, and assessment information. For example,
the FDIC initiates distributions of deposit insurance assessment notifications addressed to the
CEOs of insured depository institutions, which are posted to each institution’s FDICconnect
account. However, in the absence of an up-to-date database of CEO email addresses that can be
used for sending assessment notifications, the FDIC currently sends an email to each institution’s
FDICconnect user or users and requests that they download the notification and any attachments,
and provide them to their CEO.
To streamline the agencies’ CEO communication process, the agencies are proposing to
request CEO contact information, including email addresses, in the Call Report separately from,
but in a manner similar to, the currently requested “Emergency Contact Information”. As with
the “Emergency Contact Information,” the proposed CEO contact information would be for the
confidential use of the agencies and would not be released to the public. The agencies intend for
CEO email addresses to be used judiciously and only for significant matters requiring CEO-level
attention. Having a comprehensive database of CEO contact information, including email
addresses, would allow the agencies to communicate important and time-sensitive information
directly to CEOs.
4. Reporting the Legal Entity Identifier
The Legal Entity Identifier (LEI) is a 20-digit alpha-numeric code that uniquely identifies
entities that engage in financial transactions. The recent financial crisis spurred the development
of a Global LEI System (GLEIS). Internationally, regulators and market participants have
recognized the importance of the LEI as a key improvement in financial data systems. The
Group of Twenty (G-20) nations directed the Financial Stability Board (FSB) to lead the
coordination of international regulatory work and deliver concrete recommendations on the
GLEIS by mid-2012, which in turn were endorsed by the G-20 later that same year. In January

12

2013, the LEI Regulatory Oversight Committee (ROC), including participation by regulators
from around the world, was established to oversee the GLEIS on an interim basis. With the
establishment of the full Global LEI Foundation in 2014, the ROC continues to review and
develop broad policy standards for LEIs. The OCC, the Board, and the FDIC are all members of
the ROC.
The LEI system is designed to facilitate several financial stability objectives, including
the provision of higher quality and more accurate financial data. In the United States, the
Financial Stability Oversight Council (FSOC) has recommended that regulators and market
participants continue to work together to improve the quality and comprehensiveness of financial
data both nationally and globally. In this regard, the FSOC also has recommended that its
member agencies promote the use of the LEI in reporting requirements and rulemakings, where
appropriate.8
Effective beginning October 31, 2014, the Board started requiring holding companies to
provide their LEI on the cover pages of the FR Y-6, FR Y-7, and FR Y-10 reports9 only if a
holding company already has an LEI. Thus, if a reporting holding company does not have an
LEI, it is not required to obtain one for purposes of these Board reports. Additionally, on
July 2, 2015, the Board published in the Federal Register notice of final approval of a proposal
to expand the collection of the LEI to all holding company subsidiary banking and nonbanking
legal entities reportable on certain schedules of the FR Y-10 and in one section of the FR Y-6
and FR Y-7 if an LEI has already been issued for the reportable entity. With respect to the Call
Report, the agencies are proposing to have institutions provide their LEI on the cover page of the
report only if an institution already has an LEI. As with the Board reports, an institution that
does not have an LEI would not be required to obtain one for purposes of reporting it on the Call
Report.
5. Additional Preprinted Captions for Itemizing and Describing Components of Certain
Items That Exceed Reporting Thresholds
Institutions are required to itemize and describe each component of certain items in five
Call Report schedules when the component exceeds both a specified percentage of the item and a
specified dollar amount. To simplify and streamline the reporting of these components and
thereby reduce reporting burden, preprinted captions have been provided for those components
of each of these items that, based on the agencies’ review of the components previously reported
for these items, institutions most frequently itemize and describe. When a preprinted caption is
provided for a particular component of an item, an institution is not required to report the amount
of that component when the amount falls below the applicable reporting thresholds.
Based on the most recent review of the component descriptions manually entered by
reporting institutions because preprinted captions were not available, the agencies plan to add
one new preprinted caption to Schedule RI-E, item 1, “Other noninterest income,” two new
8

Financial Stability Oversight Council 2015 Annual Report, page 14 (www.treasury.gov/initiatives/fsoc/studiesreports/Documents/2015%20FSOC%20Annual%20Report.pdf).
9
FR Y-6, Annual Report of Holding Companies; FR Y-7, Annual Report of Foreign Banking Organizations; and
FR Y-10, Report of Changes in Organizational Structure (OMB Control No. 7100-0297).

13

preprinted captions to Schedule RI-E, item 2, “Other noninterest expense,” and three new
preprinted captions to Schedule RC-F, item 6, “All other assets.”10 The introduction of these
new preprinted captions is intended to simplify institutions’ compliance with the requirement to
itemize and describe those components of these items that exceed the applicable reporting
thresholds (which are being proposed to be revised effective September 30, 2016). The new
preprinted caption for “Other noninterest income” is “Income and fees from wire transfers.” The
two new preprinted captions for “Other noninterest expense” are “Other real estate owned
expenses” and “Insurance expenses (not included in employee benefits, premises and fixed assets
expenses, and other real estate owned expenses).” The three new preprinted captions for “All
other assets” are “Computer software,” “Accounts receivable,” and “Receivables from foreclosed
government-guaranteed mortgage loans.”
6. Extraordinary Items
In January 2015, the FASB issued ASU No. 2015-01, “Simplifying Income Statement
Presentation by Eliminating the Concept of Extraordinary Items.” This ASU eliminates the
concept of extraordinary items from U.S. generally accepted accounting principles. At present,
ASC Subtopic 225-20, Income Statement – Extraordinary and Unusual Items (formerly
Accounting Principles Board Opinion No. 30, “Reporting the Results of Operations”), requires
an entity to separately classify, present, and disclose extraordinary events and transactions. An
event or transaction is presumed to be an ordinary and usual activity of the reporting entity
unless evidence clearly supports its classification as an extraordinary item. For Call Report
purposes, if an event or transaction currently meets the criteria for extraordinary classification,
an institution must segregate the extraordinary item from the results of its ordinary operations
and report the extraordinary item in its income statement in Schedule RI, item 11, “Extraordinary
items and other adjustments, net of income taxes.”
ASU 2015-01 is effective for fiscal years, and interim periods within those fiscal years,
beginning after December 15, 2015. Thus, for example, institutions with a calendar year fiscal
year must begin to apply the ASU in their Call Reports for March 31, 2016, unless it chose to
early adopt the ASU. After an institution adopts ASU 2015-01, any event or transaction that
would have met the criteria for extraordinary classification before the adoption of the ASU
should be reported in Schedule RI, item 5.l, “Other noninterest income,” or item 7.d, “Other
noninterest expense,” as appropriate, unless the event or transaction would otherwise be
reportable in another item of Schedule RI.
Consistent with the elimination of the concept of extraordinary items in ASU 2015-01,
the agencies plan to revise the instructions for Schedule RI, item 11,11 and remove the term
“extraordinary items” from and revise the captions for Schedule RI, item 8, “Income (loss)
before income taxes and extraordinary items and other adjustments,” item 10, “Income (loss)
10

The addition of one of the new preprinted captions to Schedule RC-F, item 6, is based on the expected usage of a
component resulting from the FASB’s issuance of Accounting Standards Update (ASU) No. 2014-14,
“Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure,” that is or soon will be in
effect for all institutions depending, in part, on their fiscal years.
11
The outdated reference to the reporting of the cumulative effect of certain changes in accounting principles in the
instructions for item 11, which is inconsistent with the guidance in the Call Report Glossary entry for “Accounting
Changes,” would be deleted from the instructions.

14

before extraordinary items and other adjustments,” and item 11, as well as Schedule RI-E,
item 3, “Extraordinary items and other adjustments and applicable income tax effect.”12
As an interim measure because ASU 2015-01 is already in effect for most institutions, a
footnote was added to item 11 on Schedule RI and item 3 on Schedule RI-E on the Call Report
forms for March 31, 2016, addressing the elimination of the concept of extraordinary items. The
footnote explains that the captions will be revised at a later date and only the results of
discontinued operations should be reported in these two items.
E. New and Revised Data Items of Limited Applicability
1. Changes to Schedule RC-Q, Assets and Liabilities Measured at Fair Value on a
Recurring Basis
Schedule RC-Q is completed by institutions that had:
• Total assets of $500 million or more as of the beginning of their fiscal year; or
• Total assets of less than $500 million as of the beginning of their fiscal year and
either:
o Have elected to report financial instruments or servicing assets and liabilities at
fair value under a fair value option with changes in fair value recognized in
earnings, or
o Are required to complete Schedule RC-D, Trading Assets and Liabilities.
Institutions required to complete Schedule RC-Q are currently required to treat securities
they have elected to report at fair value under a fair value option as part of their trading
securities. As a consequence, institutions must include fair value information for their fair value
option securities, if any, in Schedule RC-Q two times: first, as part of the fair value information
they report for their “Other trading assets” in item 5.b of the schedule, and then on a standalone
basis in item 5.b.(1), “Nontrading securities at fair value with changes in fair value reported in
current earnings.” This reporting treatment flows from the existing provision of the Glossary
entry for “Trading Account” that, as discussed above, requires an institution that has elected to
report securities at fair value under a fair value option to classify the securities as trading
securities. However, as further discussed above, the agencies are proposing to remove this
requirement because it is not consistent with current U.S. GAAP. As a result, an institution’s fair
value option securities can be classified as held-to-maturity, available-for-sale, or trading
securities in accordance with the guidance in Topic 320, Investments-Debt and Equity Securities.
In its current form, Schedule RC-Q contains an item for available-for-sale securities
along with the items identified above for “Other trading assets,” which includes securities
designated as trading securities, and “Nontrading securities at fair value with changes in fair
value reported in current earnings.” However, Schedule RC-Q does not include an item for heldto-maturity securities because, given the existing instructional requirements for fair value option
securities, the held-to-maturity category includes only securities reported at amortized cost. By
removing the requirement to report all fair value option securities within the scope of ASC Topic
320 as trading securities, as proposed earlier in this notice, the agencies are further proposing to
12

Items 3.c.(1) and (2) also would be removed from Schedule RI-E.

15

replace item 5.b.(1) of Schedule RC-Q for nontrading securities accounted for under a fair value
option with a new item for any “Held-to-maturity securities” to which a fair value option is
applied. In this regard, existing item 1 for “Available-for-sale securities” would be renumbered
as item 1.b and fair value information for any fair value option securities designated as “Held-tomaturity securities” would be reported in a new item 1.a of Schedule RC-Q.
In addition, at present, institutions that have elected to measure loans (not held for
trading) at fair value under a fair value option are required to report the fair value and unpaid
principal balance of such loans in Memorandum items 10 and 11 of Schedule RC C, Part I,
Loans and Leases. Because Schedule RC-C, Part I, must be completed by all institutions,
Memorandum items 10 and 11 also must be completed by all institutions although only a
nominal number of institutions with less than $500 million in assets have disclosed reportable
amounts for any of the categories of fair value option loans reported in the subitems of these two
Memorandum items. Accordingly, the agencies are proposing to move Memorandum items 10
and 11 on the fair value and unpaid principal balance of fair value option loans from Schedule
RC-C, Part I, to Schedule RC-Q and to designate them as Memorandum items 3 and 4. With
only a limited number of institutions with less than $500 million in assets meeting the criteria for
completing Schedule RC-Q, moving Memorandum items 10 and 11 from Schedule RC-C, Part I,
to Schedule RC-Q should simplify Schedule RC C, Part I, and thereby mitigate some of the
reporting burden associated with Schedule RC-C, Part I.
2. Revisions to the Reporting of the Impact on Trading Revenues of Changes in Credit
and Debit Valuation Adjustments by Institutions with Total Assets of $100 Billion or
More
Institutions that reported average trading assets of $2 million or more for any quarter of
the preceding calendar year must report a breakdown of their trading revenue (as reported in
Schedule RI, item 5.c) by underlying risk exposure in Schedule RI, Memorandum items 8.a
though 8.e. The five types of risk exposure are interest rate, foreign exchange, equity security
and index, credit, and commodity and other. Institutions required to provide this five-way
breakdown of their trading revenue that have $100 billion or more in total assets must also report
the “Impact on trading revenue of changes in the creditworthiness of the bank’s derivative
counterparties on the bank’s derivative assets” and the “Impact on trading revenue of changes in
the creditworthiness of the bank on the bank’s derivative liabilities” in Schedule RI,
Memorandum items 8.f and 8.g, respectively. Memorandum items 8.f and 8.g were intended to
capture the amounts included in trading revenue that resulted from calendar year-to-date changes
in the reporting institution’s credit valuation adjustments (CVA) and debit valuation adjustments
(DVA).
The agencies have found inconsistent reporting of CVAs and DVAs by the institutions
completing Memorandum items 8.f and 8.g of Schedule RI, which affects the analysis of
reported trading revenues. Some institutions report CVAs and DVAs in these two items on a
gross basis while other institutions report these adjustments on a net (of hedging) basis.
Furthermore, at present, institutions may report a net CVA and DVA of hedges under only one of
the five types of underlying risk exposures (e.g., the overall net CVA and DVA amount is
reported entirely with trading revenue from credit exposures) when the net CVA and net DVA

16

should be properly allocated to each of the five different underlying types of risk exposures.
Consistent reporting of the impact on trading revenue from year-to-date changes in CVAs
and DVAs is necessary to ensure the accuracy of the data available to examiners for planning
and conducting safety and soundness examinations of institutions’ trading activities and to the
agencies for their analyses of derivatives and trading activities, and changes therein, at the
industry and institution level. Furthermore, proper allocations of CVAs and DVAs (net of
hedging) to the appropriate type of underlying risk exposure are necessary to avoid overstating
the trading revenue from some types of underlying risk exposure and understating the trading
revenue from other types, which may result in examiners and agency analysts reaching improper
conclusions about the effectiveness of institutions’ trading activities and their management of
CVA and DVA risks.
To enhance the quality of the trading revenue information reported by the largest
institutions in the U.S., promote consistency across institutions in the reporting of CVAs and
DVAs, enable examiners to make more informed judgments about institutions’ effectiveness in
managing CVA and DVA risks, and provide a more complete picture of reported trading
revenue, the agencies are proposing to replace existing Memorandum items 8.f and 8.g of
Schedule RI with a tabular set of data items. In this proposed table, those institutions that meet
the criteria for completing these two Memorandum items would separately present their gross
CVAs and DVAs (Memorandum items 8.f.(1) and 8.g.(1)) and any related CVA and DVA
hedging results (Memorandum items 8.f.(2) and 8.g.(2)) by type of underlying risk exposure
(columns A through E). The institutions also would report its gross trading revenue
(Memorandum item 8.h) by type of underlying risk exposure before including positive or
negative net CVAs and net DVAs (columns A through E). For purposes of this proposed tabular
set of data items, the agencies are further proposing to require CVA and DVA amounts, as well
as their hedges, to be allocated to the type of underlying risk exposure (e.g., interest rates,
foreign exchange, and equity) that gives rise to the CVA and the DVA.
In proposing that certain institutions with assets of $100 billion or more report expanded
information on the impact on trading revenues of changes in CVAs and DVAs, related hedging
results, and gross trading revenues, the agencies requested comment on the availability of these
data by type of underlying risk exposure at those institutions that would be subject to this
reporting requirement.
3. Dually Payable Deposits in Foreign Branches of U.S. Banks
Under the Federal Deposit Insurance Act (FDI Act), deposit obligations carried on the
books and records of foreign branches of U.S. banks are not considered deposits, unless the
funds are payable both in the foreign branch and at an office of the bank in the United States
(that is, they are dually payable). In September 2013, the FDIC issued a final rule amending its
deposit insurance regulations to clarify that deposits carried on the books and records of a
foreign branch of a U.S. bank are not insured deposits even if they are made payable both at that
branch and at an office of the bank in any state of the United States.13 In addition, the final rule
provides an exception for Overseas Military Banking Facilities operated under Department of
13

See 78 FR 56583 (September 13, 2013).

17

Defense regulations.
The final rule does not affect the ability of a U.S. bank to make a foreign deposit dually
payable. Should a bank do so, its foreign branch deposits would be treated as deposit liabilities
under the FDI Act’s depositor preference regime in the same way as, and on an equal footing
with, domestic uninsured deposits. In general, “depositor preference” refers to a resolution
distribution regime in which the claims of depositors have priority over (that is, are satisfied
before) the claims of general unsecured creditors. Thus, if deposits held in foreign branches of
U.S. banks located outside the United States are made dually payable, that is, made payable at
both the foreign office and a branch of the bank located in the United States, the holders of such
deposits would receive depositor preference in the event of the U.S. bank’s failure.
To enable the FDIC to monitor the volume and trend of dually payable deposits in the
foreign branches of U.S. banks, the agencies are proposing to add a new Memorandum item 2 to
Schedule RC-E, Part II, on the FFIEC 031 Call Report. The FFIEC 031 is applicable only to
banks with foreign offices. The proposed new information on the amount of dually payable
deposits at foreign branches of U.S. banks would enable the FDIC to determine, as required by
statute, the least costly method of resolving a particular bank if it fails and the potential loss to
the Deposit Insurance Fund. This requires the FDIC to plan for the distribution of the proceeds
from the liquidation of the failed bank’s assets, including consideration not only of insured
deposits, but also other deposit liabilities for purposes of depositor preference, such as domestic
uninsured deposits and dually payable deposits in foreign branches of the particular U.S. bank,
which take priority over general unsecured liabilities.
4. Revisions to Implement the Supplementary Leverage Ratio for Advanced Approaches
Institutions
Schedule RC-R, Part I, Regulatory Capital Components and Ratios, item 45, applies to
the reporting of the supplementary leverage ratio (SLR) by advanced approaches institutions.14
In the sample Call Report forms and the Call Report instruction book for report dates before
March 31, 2015, the caption for item 45 and the instructions for this item both indicated that,
effective for report dates on or after January 1, 2015, advanced approaches institutions should
begin to report their SLR in the Call Report as calculated for purposes of Schedule A, item 98, of
the FFIEC 101, Regulatory Capital Reporting for Institutions Subject to the Advanced Capital
Adequacy Framework.15 However, the agencies temporarily suspended the collection of
Schedule RC-R, Part I, item 45, before it took effect March 31, 2015, due to amendments to the

14

In general, an advanced approaches institution (i) has consolidated total assets (excluding assets held by an
insurance underwriting subsidiary) on its most recent year-end regulatory report equal to $250 billion or more; (ii)
has consolidated total on-balance sheet foreign exposure on its most recent year-end regulatory report equal to $10
billion or more (excluding exposures held by an insurance underwriting subsidiary); (iii) is a subsidiary of a
depository institution that uses the advanced approaches to calculate its total risk-weighted assets; (iv) is a
subsidiary of a bank holding company or savings and loan holding company that uses the advanced approaches to
calculate its total risk-weighted assets; or (v) elects to use the advanced approaches to calculate its total riskweighted assets.
15
OMB control numbers for the FFIEC 101: For the OCC, 1557-0239; for the Board, 7100-0319; and for the FDIC,
3064-0159.

18

SLR rule16 and the need for updates to the associated SLR data collection in the FFIEC 101.
In July 2015, the agencies finalized the most recent revisions to the SLR rule, which
requires all advanced approaches institutions to disclose three items: the numerator of the SLR
(Tier 1 capital, which is already reported in Call Report Schedule RC-R), the denominator of the
SLR (total leverage exposure), and the ratio itself.17 As part of the revisions to the FFIEC 101,
the SLR section of the FFIEC 101 will apply only to top-tier advanced approaches institutions
(generally, bank and savings and loan holding companies), and not to their subsidiary depository
institutions.18 Therefore, lower tier advanced approaches depository institutions generally will
not report SLR data in the FFIEC 101, and will need to do so in the Call Report, which would
satisfy the SLR disclosure requirement in the revised SLR rule.19
Thus, the agencies are proposing to add a new item 45.a to Schedule RC-R, Part I, in
which an advanced approaches depository institution (regardless of parallel run status) would
report total leverage exposure as calculated under the agencies’ SLR rule.
The agencies also are proposing to renumber current item 45 of Schedule RC-R, Part I, as
item 45.b, to collect an institution’s SLR. The ratio to be reported in item 45.b would equal Tier
1 capital reported on Schedule RC-R, Part I, item 26, divided by total leverage exposure reported
in proposed item 45.a. Renumbered item 45.b would no longer reference the FFIEC 101 because
lower tier depository institutions would no longer be calculating or reporting their SLRs on the
FFIEC 101.
Time Schedule for Information Collection
The Call Reports are collected quarterly as of the end of the last calendar day of March,
June, September, and December. Less frequent collection of Call Reports would reduce the
Federal Reserve’s ability to identify on a timely basis those banks that are experiencing adverse
changes in their condition so that appropriate corrective measures can be implemented to restore
their safety and soundness. State member banks must submit the Call Reports to the appropriate
Federal Reserve Bank within 30 calendar days following the as-of date; a five-day extension is
given to banks with more than one foreign office.
Aggregate data are published in the Federal Reserve Bulletin and the Annual Statistical
Digest. Additionally, data are used in the Uniform Bank Performance Report (UBPR) and the
Annual Report of the FFIEC. Individual respondent data, excluding confidential information,
are available to the public from the National Technical Information Service in Springfield,
Virginia, upon request approximately twelve weeks after the report date. Data are also available
from the FFIEC Central Data Repository Public Data Distribution (CDR PDD) website
(https://cdr.ffiec.gov/public/). Data for the current quarter are made available, shortly after a
16

See 79 FR 57725 (September 26, 2014). The amendments to the SLR rule took effect January 1, 2015.
See 80 FR 41409 (July 15, 2015). The disclosure requirement is set forth in the agencies’ regulatory capital rules
(12 CFR 3.172 (OCC); 12 CFR 217.172 (Board), and 12 CFR 324.172 (FDIC)).
18
See 81 FR 22702 (April 18, 2016) as corrected in 81 FR 24940 (April 27, 2016).
19
Because certain depository institutions are exempt from filing the FFIEC 101, but must still report their SLR
numerator, denominator, and ratio, the agencies proposed the depository institution-level collection of SLR data in
the Call Report rather than in the FFIEC 101.
17

19

bank’s submission, beginning the first calendar day after the report date. Updated or revised data
may replace data already posted at any time thereafter.
Legal Status
The Board’s Legal Division has determined that section 9 of the Federal Reserve Act
(12 U.S.C. § 324) authorizes the Board to require these reports from all state member banks.
The obligation to respond is mandatory. Most of the information provided on the Call Reports is
publicly available. However, the following items are confidential: (1) the FDIC deposit
insurance assessment information reported in response to item 2.g on Schedule RI-E, (2) the
prepaid deposit insurance assessments information reported in response to item 6.f on schedule
RC-F, and (3) the information regarding other data for deposit insurance and FICO assessments
reported in respond to memorandum items 6-9, 14-15, and 18 on schedule RC-O. This
information can be exempt from disclosure pursuant to the Freedom of Information Act (FOIA)
(5 U.S.C. §§ 552 (b)(4) and (8)) for periods beginning June 30, 2009. The individual respondent
information contained in the trust schedule, RC-T are exempt from disclosure (5 U.S.C. §§
552(b)(4) and (8)) for periods prior to March 31, 2009. Finally, Column A and memorandum
item 1 to Schedule RC-N, Past Due and Nonaccrual Loans, Leases, and Other Assets are exempt
from disclosure (5 U.S.C. §§ 552(b)(4) and (8)) for periods prior to March 31, 2001.
Consultation Outside the Agency and Discussion of Public Comments
On September 18, 2015, the agencies, under the auspices of the FFIEC, published an
initial notice in the Federal Register (80 FR 56539) requesting public comment for 60 days on
the extension, with revision, of the Call Reports. The comment period for this notice expired on
November 17, 2015. The agencies collectively received comments on the September 2015
proposal from 13 entities: seven banking organizations, four bankers’ associations, and two
consulting firms. In addition, two banking organizations commented about the burden imposed
on them by the Call Report. Furthermore, all four bankers’ associations and one consulting firm
specifically addressed the community bank Call Report burden-reduction initiative described in
the September 2015 proposal, expressing support for this initiative and encouraging the FFIEC
and the agencies to pursue the development of a small bank Call Report. One other banking
organization provided its recommendation for reducing the information collected in the Call
Report, but did not refer to the burden-reduction initiative.
For example, one bankers’ association described the FFIEC’s formal initiative as “the
right answer” for addressing the increased regulatory burden of the Call Report and commended
the FFIEC for its consideration of a less burdensome Call Report for community banks. Another
bankers’ association welcomed the agencies’ Call Report streamlining efforts and sought prompt
implementation of measures to reduce regulatory burden. The two other bankers’ associations
commented favorably on the FFIEC’s recognition of the reporting burden imposed by the Call
Report and encouraged the FFIEC to create a less burdensome Call Report for smaller
institutions. They also recommended that the Call Report could be streamlined for smaller
institutions because they typically do not engage in many of the activities about which data must
be reported in the Call Report.

20

The FFIEC’s 2015 Annual Report describes the status of the actions being undertaken in
the five areas within the community bank Call Report burden-reduction initiative as of year-end
2015.20 In this regard, the annual report notes that the FFIEC’s Task Force on Reports (TFOR)
“reported to the Council in December 2015 on options for proceeding with a less burdensome
Call Report for eligible institutions and other Call Report streamlining methods. The additional
feedback about sources of Call Report burden and these options from the TFOR’s community
banker outreach activities in February 2016 will help inform a subsequent TFOR
recommendation to the Council regarding a streamlining proposal for eligible small institutions
that can be issued for industry comment in 2016.” Thus, the agencies anticipate that they will
publish a proposal later this year that will extend the burden-reducing changes to the Call Report
beyond those included in the September 2015 proposal and discussed in this notice.
Two bankers’ associations presented some additional recommendations to the FFIEC and
the agencies in their comments on the September 2015 proposal. These recommendations
included establishing “an industry advisory committee to provide the FFIEC with advice and
guidance on issues related to FFIEC reports.” As one of the actions under the burden-reduction
initiative, the FFIEC and the agencies have committed to pursue industry dialogue regarding Call
Report matters such as activities enabling the agencies to better understand the burdensome
aspects of the Call Report. This is evidenced by community banker outreach activities with
small groups of community bankers that were organized by two bankers’ associations and
conducted via conference call meetings in February 2016. The FFIEC and the agencies believe
their existing dialogue with the industry, in addition to the opportunity for public participation in
the Call Report revision process, allows ample avenues to provide input concerning revisions to
FFIEC reports.
The two associations also recommended that the FFIEC “work to ensure other required
regulatory reporting forms are updated simultaneously,” which they further described as ensuring
consistency between definitions and reporting treatments used in the Call Report and in other
regulatory reports that institutions file.21 The agencies will seek to be more conscious of
relationships between the Call Report requirements and other FFIEC regulatory reports,
particularly when considering revisions to the data collected in the Call Report.
Another recommendation from the two bankers’ associations was for the FFIEC and the
agencies to allow sufficient time for institutions to implement any reporting changes. They
stated that the proposed effective dates in the September 2015 proposal would not provide
sufficient time for implementing the reporting changes. One of the banking organizations
expressed a similar concern. The two associations urged the FFIEC and the agencies to
implement changes to non-income line items no earlier than a full quarter after the quarter in
which the notice requesting OMB approval is published in the Federal Register. For data on
income and quarterly averages, they suggested that such changes take effect at the beginning of a
reporting year.

20

FFIEC 2015 Annual Report, pages 16-18 (www.ffiec.gov/PDF/annrpt15.pdf).
As an example, the associations cited an apparent inconsistency between the definition of “domicile” in the Call
Report and certain other regulatory reports.
21

21

In recognition of the impact of the September 2015 proposal on institutions from a
systems standpoint, the agencies deferred the effective dates for the reporting changes in that
proposal to no earlier than September 30, 2016. As will be discussed below with respect to the
implementation of the specific proposed Call Report changes that are the subject of this notice,
the agencies have sought to set the effective dates for these changes in a manner consistent with
the timing suggested by the two bankers’ associations. To assist institutions in preparing for the
reporting changes in this proposal, drafts of the reporting instructions for the new and revised
Call Report items will be made available to institutions on the FFIEC’s website when the
Federal Register notice requesting OMB approval is published.
Discussion of Proposed Call Report Revisions
A. Deletions of Existing Data Items
Based on the agencies’ review of the information that institutions are required to report in
the Call Report, the agencies determined that the continued collection of the following items is
no longer necessary and proposed to eliminate them:
(1) Schedule RI, Income Statement: Memorandum items 14.a and 14.b, on other-thantemporary impairments;
(2) Schedule RC-C, Part I, Loans and Leases: Memorandum items 1.f.(2), 1.f.(5), and 1.f.(6)
(and 1.f.(7) on the FFIEC 031), on troubled debt restructurings in certain loan categories
that are in compliance with their modified terms;
(3) Schedule RC-N, Past Due and Nonaccrual Loans, Leases, and Other Assets:
Memorandum items 1.f.(2), 1.f.(5), and 1.f.(6) (and 1.f.(7) on the FFIEC 031), on
troubled debt restructurings in certain loan categories that are 30 days or more past due or
on nonaccrual;
(4) Schedule RC-M, Memoranda: Items 13.a.(5)(a) through (d) (and (e) on the FFIEC 031),
on loans in certain loan categories that are covered by FDIC loss-sharing agreements; and
(5) Schedule RC-N: Items 11.e.(1) through (4) (and (5) on the FFIEC 031), on loans in
certain loan categories that are covered by FDIC loss-sharing agreements and are 30 days
or more past due or on nonaccrual.
In addition, the agencies proposed to eliminate Schedule RC-R, Part II, Risk-Weighted
Assets, item 18.b, on unused commitments to asset-backed commercial paper conduits with an
original maturity of one year or less. Because the Schedule RC-R instructions state that such
commitments should to be reported in item 10 as off-balance sheet securitization exposures, item
18.b is not needed. Upon the elimination of item 18.b, existing item 18.c of Schedule RC-R, Part
II, for unused commitments with an original maturity exceeding one year would be renumbered
as item 18.b.
The agencies received comments from two consulting firms and one banking
organization regarding these proposed deletions. The banking organization stated that these
revisions would have no impact on its reporting. One consulting firm agreed with all of the
proposed deletions except the one involving information on other-than-temporary impairment
(OTTI) losses in Schedule RI, Memorandum items 14.a and 14.b. The firm believes the deletion
of the two OTTI items will eliminate important information about the performance of

22

institutions’ securities portfolios and how they recognize OTTI. While the agencies
acknowledge that this proposal would result in the loss of information on the total year-to-date
amount of OTTI losses and the portion of these losses recognized in other comprehensive
income, institutions would continue to report the portion of OTTI losses recognized in earnings.
It is this portion of OTTI losses that is of greatest interest and concern to the agencies. Because
some or all of each OTTI loss must be recognized in earnings, when an institution reports a
substantial amount of OTTI losses in earnings, it is this item that serves as a red flag for further
supervisory follow-up by an institution’s primary federal regulator (or, if applicable, its state
supervisor). Additionally, the portion of OTTI losses that passes through other comprehensive
income and accumulates in other comprehensive income is excluded from regulatory capital for
the vast majority of institutions.
One consulting firm expressed concern about the proposed deletion of Memorandum
items on troubled debt restructurings in certain loan categories in Schedules RC-C, Part I, and
RC-N. This firm stated that this information is important for understanding the specific nature of
troubled loans relative to restructured loans and suggested that the loan categories being deleted
may need to be added back to the Call Report if there is a significant economic downturn. The
agencies note that each of the loan categories proposed for deletion is a subset of the larger loan
category “All other loans,” which institutions would continue to report. Furthermore, the amount
of troubled debt restructurings in each of these subset categories is reported only when it exceeds
10 percent of the total amount of troubled debt restructurings in compliance with their modified
terms (Schedule RC-C, Part I) or not in compliance with their modified terms (Schedule RC-N),
as appropriate. Thus, the total amount of an institution’s troubled debt restructurings, both those
in compliance with their modified terms and those that are not, would continue to be reported.
After considering these comments, all of the items proposed for deletion would be
removed from the Call Report effective September 30, 2016, except for the deletion relating to
other-than-temporary impairments, which would take effect March 31, 2017.
B. New Reporting Threshold and Increases in Existing Reporting Thresholds
In five Call Report schedules, institutions are currently required to itemize and describe
each component of an existing item when the component exceeds both a specified percentage of
the item and a specified dollar amount. Based on a preliminary evaluation of the existing
reporting thresholds, the agencies concluded that the dollar portion of the thresholds that
currently apply to these items can be increased to provide a reduction in reporting burden
without a loss of data that would be necessary for supervisory or other public policy purposes.
The percentage portion of the existing thresholds would not be changed. Accordingly, the
agencies proposed to raise from $25,000 to $100,000 the dollar portion of the threshold for
itemizing and describing components of:
(1) Schedule RI-E, item 1, “Other noninterest income;”
(2) Schedule RI-E, item 2, “Other noninterest expense;”
(3) Schedule RC-F, item 6, “All other assets;”
(4) Schedule RC-G, item 4, “All other liabilities;”
(5) Schedule RC-Q, Memorandum item 1, “All other assets;” and
(6) Schedule RC-Q, Memorandum item 2, “All other liabilities.”

23

The agencies also proposed to raise from $25,000 to $1,000,000 the dollar portion of the
threshold for itemizing and describing components of “Other trading assets” and “Other trading
liabilities” in Schedule RC-D, Memorandum items 9 and 10.
In addition, because institutions with less than $1 billion in total assets typically do not
provide support for asset-backed commercial paper conduits, the agencies proposed to exempt
such institutions from completing Schedule RC-S, Servicing, Securitization, and Asset Sale
Activities, Memorandum items 3.a.(1), 3.a.(2), 3.b.(1), and 3.b.(2), on credit enhancements and
unused liquidity commitments provided to asset-backed commercial paper conduits.
The agencies received comments from two bankers’ associations, two consulting firms,
and two banking organizations regarding the proposed changes involving reporting thresholds.
One banking organization supported the higher thresholds, stating that raising the thresholds
would reduce reporting burden, but the other said that this change would not have an impact on
its reporting. The two bankers’ associations expressed support for the targeted approach to
increasing the reporting thresholds, but observed that an increase from $25,000 to $100,000 for
six items would do little to reduce reporting burden for most institutions. The associations
recommended that the FFIEC consider increasing the percentage portion of the reporting
threshold from the present three percent to five to seven percent of the total amount of an income
statement item for which components must be itemized and described. At present, the
percentage portion of the reporting threshold applicable to reporting components of “Other
noninterest income” and “Other noninterest expense” in Schedule RI-E is three percent.
Because of the interaction between the dollar and percentage portions of the reporting
thresholds on the total amount of an item that is subject to component itemization and
description, the agencies acknowledge that the proposed increase in the dollar portion of the
reporting threshold from $25,000 to $100,000 may not benefit all institutions, particularly larger
institutions. While these threshold changes may not reduce reporting burden for all institutions,
they will not increase the amount of information to be reported by any institution. In addition, as
stated in the September 2015 proposal, the agencies are conducting the statutorily mandated
review of the existing Call Report data items, which may result in additional new or upwardly
revised reporting thresholds.
One consulting firm supported the increase in the dollar portion of the reporting threshold
for Schedules RC-F, RC-G, and RC-Q, but recommended retaining the $25,000 threshold for the
“Other noninterest income” and “Other noninterest expense” in Schedule RI-E. The consulting
firm commented that, for smaller banks, information on the components of these noninterest
items “is an important indicator of the activity of the bank, its style and management ability” and
“provide[s] regulators with a clearer insight into the activities of a bank.” This firm also
observed that the component information is or should be captured in institutions’ internal
accounting systems. The agencies recognize that the proposed increase in the dollar portion of
the threshold for reporting components of other noninterest income and expense will result in a
reduced number of their components being itemized and described in Call Report Schedule RI-E,
particularly by smaller institutions. However, in carrying out their on- and off-site supervision of
individual institutions, the agencies are able to follow up directly with an individual institution
when the level and trend of noninterest income and expense, and other elements of net income

24

(or loss), that are reflected in its Call Reports raise questions about the quality of, and the factors
affecting, the institution’s reported earnings. The agencies do not believe the proposed increase
in the dollar portion of the reporting thresholds in Schedule RI-E will impede their ability to
evaluate institutions’ earnings.
Another consulting firm questioned the proposed increase from $25,000 to $1,000,000 in
the dollar portion of the threshold for itemizing and describing components of “Other trading
assets” and “Other trading liabilities” in Schedule RC-D, Memorandum items 9 and 10. In
addition to meeting the dollar portion of the threshold, a component must exceed 25 percent of
the total amount of “Other trading assets” or “Other trading liabilities” in order to be itemized
and described in Memorandum item 9 or 10, respectively. The agencies further note that these
two memorandum items are to be completed only by institutions that reported average trading
assets of $1 billion or more in any of the four preceding calendar quarters. Thus, at $1,000,000,
the proposed higher dollar threshold for component itemization and description in Memorandum
items 9 and 10 of Schedule RC-D would represent one tenth of one percent of the amount of
average trading assets that an institution must have in order to be subject to the requirement to
report components of its other trading assets and liabilities that exceed the reporting threshold.
As a result, the agencies believe that raising the dollar portion of the threshold for reporting
components of Memorandum items 9 and 10 of Schedule RC-D to $1,000,000 will continue to
provide meaningful data while reducing burden for institutions that must complete these items.
After considering the comments about the proposed new and increased reporting
thresholds, the agencies propose to implement these changes effective September 30, 2016.22
C. Instructional Revisions
1. Reporting Home Equity Lines of Credit that Convert from Revolving to Non-revolving
Status
Institutions report the amount outstanding under revolving, open-end lines of credit
secured by 1-4 family residential properties (commonly known as home equity lines of credit or
HELOCs) in item 1.c.(1) of Schedule RC-C, Part I, Loans and Leases. Closed-end loans secured
by 1-4 family residential properties are reported in Schedule RC-C, Part I, item 1.c.(2)(a) or (b),
depending on whether the loan is a first or a junior lien.23
A HELOC is a line of credit secured by a lien on a 1-4 family residential property that
generally provides a draw period followed by a repayment period. During the draw period, a
borrower has revolving access to unused amounts under a specified line of credit. During the
repayment period, the borrower can no longer draw on the line of credit, and the outstanding
principal is either due immediately in a balloon payment or is repaid over the remaining loan
22

Although the proposed reporting threshold changes would take effect as of September 30, 2016, institutions may
choose, but are not required, to continue using $25,000 as the dollar portion of the threshold for reporting
components of the specified items in the five previously identified schedules rather than the higher dollar thresholds.
23
Information also is separately reported for open-end and closed-end loans secured by 1-4 family residential
properties in Schedule RI-B, Part I, Charge-offs and Recoveries on Loans and Leases; Memorandum items in
Schedule RC-C, Part I; Schedule RC-D; Schedule RC-M; and Schedule RC-N.

25

term through monthly payments. Because the Call Report instructions do not address the
reporting treatment for a home equity line of credit when it reaches its end-of-draw period and
converts from revolving to nonrevolving status, the agencies noted in their September 2015
proposal that they have found diversity in how these credits are reported in Schedule RC-C,
Part I.
To address this absence of instructional guidance and promote consistency in reporting,
the agencies proposed to clarify the instructions for reporting loans secured by 1-4 family
residential properties by specifying that after a revolving open-end line of credit has converted to
non-revolving closed-end status, the loan should be reported as closed-end in Schedule RC-C,
Part I, item 1.c.(2)(a) or (b), as appropriate. In their September 2015 proposal, the agencies also
requested comment on whether an instructional requirement to recategorize HELOCs as closedend loans for Call Report purposes would create difficulties for institutions’ loan recordkeeping
systems.
The agencies received comments from two bankers’ associations, one consulting firm,
and one banking organization regarding the proposed instructional clarification for HELOCs.
The consulting firm agreed with this clarification because of the consistency in reporting that it
would provide. The two bankers’ associations stated that they appreciated the proposed
clarification, but noted that “material definitional changes would require a whole recoding of
these credits.” The associations observed that the proposed clarification would likely have
implications for other regulatory requirements such as the Comprehensive Capital Analysis and
Review, which evaluates the capital planning processes and capital adequacy of the largest U.S.based bank holding companies. They also described two situations involving HELOCs for
which further guidance would be needed if the proposed instructional change were to be
implemented and encouraged the agencies to provide examples with the instructions for
reporting HELOCs.
The banking organization opposed the proposed instructional clarification for HELOCs
and requested that it be withdrawn, citing several difficulties it would encounter in preparing its
Call Report if the clarification were made. These difficulties include identifying when a HELOC
has begun the repayment period and the lien position of a HELOC at that time because the
bank’s loan system for HELOCs has not been set up to generate this information. The banking
organization requested that the agencies provide time for systems reprogramming if the proposed
instructional clarification were to be adopted.
Based on the issues raised in the comments received on the proposed HELOC
instructional clarification, the agencies are giving further consideration to this proposal,
including its effect on and relationship to other regulatory reporting requirements. Accordingly,
the agencies are not proceeding with this proposed instructional clarification at this time and the
existing instructions for reporting HELOCs in item 1.c.(1) of Schedule RC-C, Part I, will remain
in effect. Once the agencies complete their consideration of this instructional matter and
determine whether and how the Call Report instructions should be clarified with respect to the
reporting of revolving open-end lines of credit that have converted to non-revolving closed-end
status, any proposed instructional clarification will be published in the Federal Register for
comment.

26

2. Reporting Treatment for Securities for Which a Fair Value Option is Elected
The Call Report Glossary entry for “Trading Account” currently states that “all securities
within the scope of the Financial Accounting Standards Board’s (FASB) Accounting Standards
Codification (ASC) Topic 320, Investments-Debt and Equity Securities (formerly FASB
Statement No. 115, “Accounting for Certain Investments in Debt and Equity Securities”), that a
bank has elected to report at fair value under a fair value option with changes in fair value
reported in current earnings should be classified as trading securities.” This reporting treatment
was based on language contained in Financial Liabilities,” but that language was not codified
when Statement No. 159 was superseded by current ASC Topic 825, Financial Instruments.
Accordingly, the agencies proposed to revise the Glossary entry language quoted above by
replacing “should be classified” with “may be classified.” The agencies also proposed to include
comparable language in the Glossary entry for “Securities Activities.”
The agencies received comments from two bankers’ associations and one consulting firm
regarding the proposed instructional revision for the classification of securities for which the fair
value option is elected. The consulting firm welcomed the proposal. The two bankers’
associations stated that they understood the purpose of the proposed instructional revision, but
they requested further clarification of the reporting treatment for “securities for which an
institution has elected to use the trading measurement classification,” i.e., fair value through
earnings.
The agencies have reconsidered this proposed instructional revision in light of the
comments received, including the requested further clarification. Based on this reconsideration,
the agencies have decided not to implement the proposed instructional revision and to retain the
existing Call Report instructions directing institutions to classify securities reported at fair value
under a fair value option as trading securities.
3. Net Gains (Losses) on Sales of, and Other-Than-Temporary Impairments on, Equity
Securities That Do Not Have Readily Determinable Fair Values
As noted in the September 2015 proposal,13 the Call Report instructions for Schedule RI,
Income Statement, address the reporting of realized gains (losses), including other-thantemporary impairments, on held-to-maturity and available-for-sale securities as well as the
reporting of realized and unrealized gains (losses) on trading securities and other assets held for
trading. However, the Schedule RI instructions do not specifically explain where to report
realized gains (losses) on sales or other disposals of, and other-than-temporary impairments on,
equity securities that do not have readily determinable fair values and are not held for trading
(and to which the equity method of accounting does not apply).
The instructions for Schedule RI, item 5.k, “Net gains (losses) on sales of other assets
(excluding securities),” direct institutions to “[r]eport the amount of net gains (losses) on sales
and other disposals of assets not required to be reported elsewhere in the income statement
(Schedule RI).” The instructions for item 5.k further advise institutions to exclude net gains
(losses) on sales and other disposals of securities and trading assets. The intent of this wording
was to cover securities designated as held-to-maturity, available-for-sale, and trading securities

27

because there are separate specific items elsewhere in Schedule RI for the reporting of realized
gains (losses) on such securities (items 6.a, 6.b, and 5.c, respectively). Thus, the agencies
proposed to revise the instructions for Schedule RI, item 5.k, by clarifying that the exclusions
from this item of net gains (losses) on securities and trading assets apply to held-to-maturity,
available-for-sale, and trading securities and other assets held for trading. The agencies also
proposed to add language to the instructions for Schedule RI, item 5.k, that explains that net
gains (losses) on sales and other disposals of equity securities that do not have readily
determinable fair values and are not held for trading (and to which the equity method of
accounting does not apply), as well as other-than-temporary impairments on such securities,
should be reported in item 5.k. In addition, the agencies proposed to remove the parenthetic
“(excluding securities)” from the caption for item 5.k on the Call Report forms and to add in its
place a footnote to this item advising institutions to exclude net gains (losses) on sales of trading
assets and held-to-maturity and available-for-sale securities.
The agencies received no comments on these proposed changes to the instructions and
report form caption for Schedule RI, item 5.k. Accordingly, the agencies propose to implement
these changes effective for reporting purposes in the first quarter of 2017.
4. Custodial Bank Deduction
One banking organization that meets the definition of a custodial bank for deposit
insurance assessment purposes24 submitted a comment on the September 2015 proposal in which
it proposed a revision to the reporting of custodial bank data in Schedule RC-O that had not been
included in that proposal. The banking organization recommended that a custodial bank that
reports that its custodial bank deduction limit is zero in Schedule RC-O, item 11.b, should not
need to calculate and report its custodial bank deduction in Schedule RC-O, item 11.a, because
no amount can be deducted. The banking organization stated that this proposed revision “would
eliminate unnecessary time and effort.”
The agencies agree with the banking organization’s proposal. Accordingly, the agencies
will revise the instructions for Schedule RC-O, item 11.a, “Custodial bank deduction,” to state
that if a custodial bank’s deduction limit as reported in Schedule RC-O, item 11.b, is zero, the
custodial bank may leave item 11.a blank rather than calculating and reporting the amount of its
deduction. This instructional revision would take effect September 30, 2016.
D. New and Revised Data Items and Information of General Applicability
1. Increase in the Time Deposit Size Threshold
Section 335 of the Dodd-Frank Wall Street Reform and Consumer Protection Act
(Pub. L. No. 111-203) permanently increased the standard maximum deposit insurance amount
(SMDIA) from $100,000 to $250,000 effective July 21, 2010. The SMDIA had been increased
temporarily from $100,000 to $250,000 by Section 136 of the Emergency Economic
Stabilization Act of 2008 (Pub. L. No. 110-343). In response to the increase in the limit of
deposit insurance coverage, the reporting of the amount of “Total time deposits of $100,000 or
24

See 12 CFR 327.5(c)(1).

28

more” in Memorandum item 2.c of Schedule RC-E, Deposit Liabilities, was revised as of the
March 31, 2010, report date. As of that date, institutions began to separately report their “Total
time deposits of $100,000 through $250,000” (Memorandum item 2.c) and their “Total time
deposits of more than $250,000” (Memorandum item 2.d).
However, the reporting of the quarterly averages, interest expense, and maturity and
repricing data for time deposits of $100,000 or more in Schedules RC-K, RI, and RC-E,
respectively, have not been updated to reflect the permanent $250,000 deposit insurance limit.
In this regard, in its comment letter to the agencies in response to their first request for comments
under the Economic Growth and Regulatory Paperwork Reduction Act of 1996, the American
Bankers Association recommended revising the Schedule RC-E deposit reporting items to reflect
the new FDIC insurance limit of $250,000. Accordingly, the agencies proposed to revise the
time deposit size threshold that applies to the reporting of this information to bring it into
alignment with the SMDIA. These proposed changes are illustrated in the following table:
Call Report Schedule
Schedule RC-K, Quarterly
Averages

Schedule RI, Income
Statement

Schedule RC-E, Deposit
Liabilities

Current Item
Item 11.b, “Time deposits
of $100,000 or more”
Item 11.c, “Time deposits
of less than $100,000”
Item 2.a.(2)(b), Interest
expense on “Time deposits
of $100,000 or more”
Item 2.a.(2)(c), Interest
expense on “Time deposits
of less than $100,000”
Memorandum item 3.a,
“Time deposits of less than
$100,000 with a remaining
maturity or next repricing
date of”
Memorandum item 3.b,
“Time deposits of less than
$100,000 with a remaining
maturity of one year or
less”
Memorandum item 4.a,
“Time deposits of $100,000
or more with a remaining
maturity or next repricing
date of”
Memorandum item 4.b,
“Time deposits of $100,000
through $250,000 with a
remaining maturity of one
year or less”

29

Proposed Revised Item
Item 11.b, “Time deposits
of $250,000 or less”
Item 11.c, “Time deposits
of more than $250,000”
Item 2.a.(2)(b), Interest
expense on “Time deposits
of $250,000 or less”
Item 2.a.(2)(c), Interest
expense on “Time deposits
of more than $250,000”
Memorandum item 3.a,
“Time deposits of $250,000
or less with a remaining
maturity or next repricing
date of”
Memorandum item 3.b,
“Time deposits of $250,000
or less with a remaining
maturity of one year or
less”
Memorandum item 4.a,
“Time deposits of more
than $250,000 with a
remaining maturity or next
repricing date of”

Memorandum item 4.b,
“Time deposits of more
than $250,000 with a

Memorandum item 4.c,
“Time deposits of more
than $250,000 with a
remaining maturity of one
year or less”

remaining maturity of one
year or less”

The agencies received comments on the proposed increase in the time deposit size
threshold for the identified items in Schedules RI, RC-K, and RC-E from four banking
organizations, one consulting firm, and two bankers’ associations. Three banking organizations
and the two bankers’ associations supported the proposed increase and further recommended
adjusting the deposit size threshold used for certain other data items in Schedule RC-E or
combining certain Schedule RC-E deposit items. Specifically, the commenters suggested
addressing the reporting of brokered deposit information in Memorandum items 1.c.(1), 1.c.(2),
1.d.(1), 1.d.(2), and 1.d.(3); the reporting of total time deposits in Memorandum items 2.b and
2.c; and the reporting of Individual Retirement Accounts (IRAs) and Keogh Plan accounts in
Memorandum item 2.e. In its comments on the time deposit proposal, the fourth banking
organization described the systems changes it would need to make to accommodate the proposed
change in the reporting of interest expense on and the quarterly averages for time deposits.
In response to these comments, the agencies have reviewed their collection and use of
brokered deposit information reported in Memorandum items 1.c.(1), 1.c.(2), 1.d.(1), 1.d.(2), and
1.d.(3), and have determined that these items can be revised to reflect only the $250,000 deposit
size threshold. Accordingly, the agencies propose to combine Memorandum items 1.c.(1),
“Brokered deposits of less than $100,000,” and 1.c.(2), “Brokered deposits of $100,000 through
$250,000 and certain brokered retirement deposit accounts,” and to collect only “Brokered
deposits of $250,000 or less (fully insured brokered deposits).”25 Further, the agencies propose
to combine Memorandum item 1.d.(1), “Brokered deposits of less than $100,000 with a
remaining maturity of one year or less,” and Memorandum item 1.d.(2), “Brokered deposits of
$100,000 through $250,000 with a remaining maturity of one year or less,” and to collect only
“Brokered deposits of $250,000 or less with a remaining maturity of one year or less.”26 Current
Memorandum item 1.d.(3), “Brokered deposits of more than $250,000 with a remaining maturity
of one year or less,” would be retained without change.
The agencies have also reviewed their collection and use of the deposit information
reported in Memorandum item 2.b, “Total time deposits of less than $100,000”; Memorandum
item 2.c, “Total time deposits of $100,000 through $250,000”; and Memorandum item 2.e,
“Individual Retirements Accounts (IRAs) and Keogh Plan accounts of $100,000 or more
included in Memorandum items 2.c and 2.d above.”27 The agencies have determined that the
information reported in Memorandum items 2.b and 2.e is necessary for the calculation of the
small-denomination time deposits component of the monetary aggregate M2. The smalldenomination time deposits component of M2 consists of certain time deposits at banks and
thrifts with balances less than $100,000. In this regard, the small-denomination time deposits
component of M2 excludes IRA and Keogh Plan account balances at depository institutions
25
26
27

This item would be designated Memorandum item 1.c.
This item would be designated Memorandum item 1.d.(1).
Memorandum item 2.d collects data on “Total time deposits of more than $250,000.”

30

because heavy penalties for pre-retirement withdrawals make these balances too illiquid to be
included in the monetary aggregates. Because Memorandum item 2.b includes IRA and Keogh
Plan account balances held in time deposits of less than $100,000, the data reported in
Memorandum item 2.e is used in conjunction with the data reported in Memorandum item 1.a,
“Total Individual Retirement Accounts (IRAs) and Keogh Plan accounts,” to determine IRA and
Keogh Plan account balances of less than $100,000, which are netted from Memorandum item
2.b for M2 calculation purposes. Given the aforementioned need for the continued collection of
total time deposits of less than $100,000 in Memorandum item 2.b, the agencies have determined
that the information reported in Memoranda item 2.c on total time deposits of $100,000 through
$250,000 remains necessary in order for the agencies to measure total time deposits within the
FDIC deposit insurance limit of $250,000.
The proposed changes to Schedules RC-K, RI, and RC-E shown in the table above as
well as the proposed combining of Memorandum items 1.c.(1) and 1.c.(2) and Memorandum
items 1.d.(1) and 1.d.(2) in Schedule RC-E would take effect March 31, 2017.
2. Level of External Auditing Work Performed for the Reporting Institution During the
Preceding Year
Each year in the March Call Report, each institution indicates in Schedule RC, Balance
Sheet, Memorandum item 1, the most comprehensive level of auditing work performed by
independent external auditors during the preceding calendar year for the institution or its parent
holding company. In completing Memorandum item 1, each institution selects from nine
statements describing a range of levels of auditing work the one statement that best describes the
level of auditing work performed for it. Certain statements from which an institution must
choose do not reflect current auditing practices performed in accordance with applicable
standards and procedures promulgated by the U.S. auditing standard setters, namely the Public
Company Accounting Oversight Board (PCAOB) and the Auditing Standards Board (ASB) of
the American Institute of Certified Public Accountants.
The PCAOB’s Auditing Standard No. 5 (AS 5), An Audit of Internal Control Over
Financial Reporting That Is Integrated with An Audit of Financial Statements, became effective
for fiscal years ending on or after November 15, 2007, and provides guidance regarding the
integration of audits of internal control over financial reporting with audits of financial
statements for public companies. To further emphasize the integration of these two audits, the
PCAOB revised AS 5 in December 2010 by adding a statement that “the auditor cannot audit
internal control over financial reporting without also auditing the financial statements.” Those
public companies not required to undergo an audit of internal control over financial reporting
must have an audit of their financial statements.
The ASB provided similar guidance in Attestation Section 501 (AT 501), An
Examination of an Entity’s Internal Control over Financial Reporting That Is Integrated with an
Audit of Its Financial Statements, which became effective for integrated audits of private
companies for periods ending on or after December 15, 2008. Consistent with the PCAOB, the
ASB stated in AT 501 that “[t]he examination of internal control should be integrated with an
audit of financial statements” and “[a]n auditor should not accept an engagement to review an

31

entity’s internal control or a written assertion thereon.” Under the ASB’s previous attestation
standards, an entity could engage an external auditor to examine and attest to the effectiveness of
its internal control over financial reporting without auditing the entity’s financial statements.
Thus, at present, unless a private company is required to or elects to have an integrated internal
control examination and financial statement audit, the private company may be required to or can
choose to have an external auditor perform an audit of its financial statements, but it may not
engage an external auditor to perform a standalone internal control examination. More recently,
the ASB concluded that, because engagements performed under AT 501 are required to be
integrated with an audit of financial statements, it would be appropriate to move the content of
AT 501 from the attestation standards into U.S. generally accepted auditing standards. As a
consequence, the ASB issued Statement on Auditing Standards No. 130, An Audit of Internal
Control Over Financial Reporting That Is Integrated With an Audit of Financial Statements (SAS
130), in October 2015. SAS 130 is effective for integrated audits of private companies for
periods ending on or after December 15, 2016, at which time AT 501 will be withdrawn.
The existing wording of statements 1, 2, and 3 of Schedule RC, Memorandum item 1,
reads as follows:
1 = Independent audit of the bank conducted in accordance with generally accepted auditing
standards by a certified public accounting firm which submits a report on the bank.
2 = Independent audit of the bank’s parent holding company conducted in accordance with
generally accepted auditing standards by a certified public accounting firm which submits
a report on the consolidated holding company (but not on the bank separately).
3 = Attestation on bank management’s assertion on the effectiveness of the bank’s internal
control over financial reporting by a certified public accounting firm.
Because these three statements no longer fully and properly describe the types of external
auditing services performed for institutions or their parent holding companies under current
professional standards and to enhance the information institutions provide the agencies annually
about the level of external auditing work performed for them, the 2 with new statements 1a, 1b,
2a, and 2b and to eliminate existing statement 3. The revised statements would read as follows:
1a = An integrated audit of the reporting institution’s financial statements and its internal
control over financial reporting conducted in accordance with the standards of the
American Institute of Certified Public Accountants (AICPA) or the Public Company
Accounting Oversight Board (PCAOB) by an independent public accountant that
submits a report on the institution.
1b = An audit of the reporting institution’s financial statements only conducted in accordance
with the auditing standards of the AICPA or the PCAOB by an independent public
accountant that submits a report on the institution.
2a = An integrated audit of the reporting institution’s parent holding company’s consolidated
financial statements and its internal control over financial reporting conducted in
accordance with the standards of the AICPA or the PCAOB by an independent public
accountant that submits a report on the consolidated holding company (but not on the
institution separately).
2b = An audit of the reporting institution’s parent holding company’s consolidated financial
statements only conducted in accordance with the auditing standards of the AICPA or

32

the PCAOB by an independent public accountant that submits a report on the
consolidated holding company (but not on the institution separately).
The agencies received comments on the proposed revisions to the statements about level
of auditing external worked performed for an institution from one banking organization and two
bankers’ associations. One banking organization stated that it did not oppose the proposed
revision. The two bankers’ associations stated that they did not object to this change, but
requested that the definition of “integrated” be clarified and expanded. The agencies will
provide additional explanatory information about the meaning of an “integrated audit” in the
revised instructions for Schedule RC, Memorandum item 1. This proposed reporting change
would take effect March 31, 2017.
3. Chief Executive Officer Contact Information
All reporting institutions have been requested to provide “Emergency Contact
Information” as part of their Call Report submissions since September 2002. This information
request was added to the Call Report so that the agencies could distribute critical, time-sensitive
information to emergency contacts at institutions should such a need arise. The primary contact
should be a senior official of the institution who has decision-making authority. The primary
contact may or may not be the institution’s Chief Executive Officer (CEO). Information for a
secondary contact also should be provided if such a person is available at an institution. The
emergency contact information is for the confidential use of the agencies and is not released to
the public.
The agencies periodically need to communicate with the CEOs of reporting institutions
via e-mail, but they currently do not have a complete list of CEO e-mail addresses that would
enable an agency to communicate directly to institutions’ CEOs. The CEO communications are
initiated or approved by persons at the agencies’ senior management levels and would involve
topics including new initiatives, policy notifications, and assessment information.
To streamline the agencies’ CEO communication process, the agencies proposed to
request CEO contact information, including e-mail addresses, in the Call Report separately from,
but in a manner similar to, the currently requested “Emergency Contact Information.” As with
the “Emergency Contact Information,” the proposed CEO contact information would be for the
confidential use of the agencies and would not be released to the public. The agencies intend for
CEO e-mail addresses to be used judiciously and only for significant matters requiring CEOlevel attention. Having a comprehensive database of CEO contact information, including e-mail
addresses, would allow the agencies to communicate important and time-sensitive information
directly to CEOs.
One banking organization commented on the proposed reporting of CEO contact
information, stating that it was not opposed to this proposal. The agencies propose to implement
the collection of this information as of the September 30, 2016, report date.

33

4. Reporting the Legal Entity Identifier
The Legal Entity Identifier (LEI) is a 20-digit alpha-numeric code that uniquely identifies
entities that engage in financial transactions. The recent financial crisis spurred the development
of a global LEI system. The LEI system is designed to facilitate several financial stability
objectives, including the provision of higher quality and more accurate financial data. In the
United States, the Financial Stability Oversight Council (FSOC) has recommended that
regulators and market participants continue to work together to improve the quality and
comprehensiveness of financial data both nationally and globally. In this regard, the FSOC also
has recommended that its member agencies promote the use of the LEI in reporting requirements
and rulemakings, where appropriate.
Effective in 2014 and 2015, the Board began collecting LEIs from holding companies
and certain holding company subsidiary banking and nonbanking legal entities in the FR Y-6,
FR Y-7, and FR Y-10 reports only if a holding company or subsidiary entity already has an LEI.
With respect to the Call Report, the agencies proposed to have institutions provide their LEI on
the cover page of the report only if an institution already has an LEI. As with the Board reports,
an institution that does not have an LEI would not be required to obtain one for purposes of
reporting it on the Call Report.
One banking organization commented on the proposed LEI reporting, stating that it was
not opposed to this proposal as long as an institution without an LEI would not be required to
obtain one for Call Report purposes. The agencies propose to implement the collection of LEIs
on the Call Report cover page only from institutions that already have LEIs as of the
September 30, 2016, report date. The LEI must be a currently issued, maintained, and valid LEI,
not an LEI that has lapsed.
5. Additional Preprinted Captions for Itemizing and Describing Components of Certain
Items That Exceed Reporting Thresholds
As mentioned above, institutions are required to itemize and describe each component of
certain items in five Call Report schedules when the component exceeds both a specified
percentage of the item and a specified dollar amount. To simplify and streamline the reporting
of these components and thereby reduce reporting burden, preprinted captions have been
provided for those components of each of these items that, based on the agencies’ review of the
components previously reported for these items, institutions most frequently itemize and
describe. When a preprinted caption is provided for a particular component of an item, an
institution is not required to report the amount of that component when the amount falls below
the applicable reporting thresholds.
Based on the most recent review of the component descriptions manually entered by
reporting institutions because preprinted captions were not available, the agencies stated in their
September 2015 proposal that they were planning to add one new preprinted caption to Schedule
RI-E, item 1, “Other noninterest income,” two new preprinted captions to Schedule RI-E, item 2,
“Other noninterest expense,” and three new preprinted captions to Schedule RC-F, item 6, “All
other assets.” The introduction of these new preprinted captions is intended to simplify

34

institutions’ compliance with the requirement to itemize and describe those components of these
items that exceed the applicable reporting thresholds (which are being revised effective
September 30, 2016). The new preprinted caption for “Other noninterest income” is “Income
and fees from wire transfers.” The two new preprinted captions for “Other noninterest expense”
are “Other real estate owned expenses” and “Insurance expenses (not included in employee
benefits, premises and fixed assets expenses, and other real estate owned expenses).” The three
new preprinted captions for “All other assets” are “Computer software,” “Accounts receivable,”
and “Receivables from foreclosed government-guaranteed mortgage loans.”
Two banking organizations commented on the introduction of new preprinted captions,
but raised no objection. The agencies propose to add the preprinted captions to the Call Report
effective September 30, 2016.
6. Extraordinary Items
In January 2015, the FASB issued ASU No. 2015-01, “Simplifying Income Statement
Presentation by Eliminating the Concept of Extraordinary Items.” This ASU eliminates the
concept of extraordinary items from U.S. generally accepted accounting principles. Until the
effective date of this ASU, an entity was required under ASC Subtopic 225-20, Income
Statement – Extraordinary and Unusual Items (formerly Accounting Principles Board Opinion
No. 30, “Reporting the Results of Operations”), to separately classify, present, and disclose
extraordinary events and transactions. An event or transaction was presumed to be an ordinary
and usual activity of the reporting entity unless evidence clearly supports its classification as an
extraordinary item. For Call Report purposes, if an event or transaction met the criteria for
extraordinary classification, an institution had to segregate the extraordinary item from the
results of its ordinary operations and report the extraordinary item in its income statement in
Schedule RI, item 11, “Extraordinary items and other adjustments, net of income taxes.”
ASU 2015-01 is effective for fiscal years, and interim periods within those fiscal years,
beginning after December 15, 2015. Thus, for example, an institution with a calendar year fiscal
year had to begin applying the ASU in its Call Report for March 31, 2016, unless it chose to
early adopt the ASU. After an institution adopts ASU 2015-01, any event or transaction that
would have met the criteria for extraordinary classification before the adoption of the ASU
should be reported in Schedule RI, item 5.l, “Other noninterest income,” or item 7.d, “Other
noninterest expense,” as appropriate, unless the event or transaction would otherwise be
reportable in another item of Schedule RI.
Consistent with the elimination of the concept of extraordinary items in ASU 2015-01,
the agencies stated in the September 2015 proposal that they planned to revise the instructions
for Schedule RI, item 11, and remove the term “extraordinary items” from and revise the
captions for Schedule RI, item 8, “Income (loss) before income taxes and extraordinary items
and other adjustments,” item 10, “Income (loss) before extraordinary items and other
adjustments,” and item 11, as well as Schedule RI-E, item 3, “Extraordinary items and other
adjustments and applicable income tax effect.”

35

As an interim measure because ASU 2015-01 is already in effect for most institutions, a
footnote was added to item 11 on Schedule RI and item 3 on Schedule RI-E on the Call Report
forms for March 31, 2016, addressing the elimination of the concept of extraordinary items. The
footnote explains that the captions will be revised at a later date and only the results of
discontinued operations should be reported in these two items.
The agencies received no comments on the planned changes related to extraordinary
items. Accordingly, effective September 30, 2016, the captions for Schedule RI, items 8, 10, and
11, would be revised to say “Income (loss) before income taxes and discontinued operations,”
“Income (loss) before discontinued operations,” and “Discontinued operations, net of applicable
income taxes,” respectively. Similarly, the caption for Schedule RI-E, item 3, would be revised
to say, “Discontinued operations and applicable income tax effect.”
E. New and Revised Data Items of Limited Applicability
1. Changes to Schedule RC-Q, Assets and Liabilities Measured at Fair Value on a
Recurring Basis
Schedule RC-Q is completed by institutions that had total assets of $500 million or more
as of the beginning of their fiscal year and by smaller institutions that either are required to
complete Schedule RC-D, Trading Assets and Liabilities, or have elected to report financial
instruments or servicing assets and liabilities at fair value under a fair value option.
Institutions that complete Schedule RC-Q are currently required to treat securities they
have elected to report at fair value under a fair value option as part of their trading securities. As
a consequence, institutions include fair value information for their fair value option securities, if
any, in Schedule RC-Q two times: first, as part of the fair value information they report for their
“Other trading assets” in item 5.b of the schedule, and then on a standalone basis in item 5.b.(1),
“Nontrading securities at fair value with changes in fair value reported in current earnings.” This
reporting treatment flows from the existing provision of the Glossary entry for “Trading
Account” that requires an institution that has elected to report securities at fair value under a fair
value option to classify the securities as trading securities. However, as discussed above, the
agencies proposed in their September 2015 proposal to remove this requirement, which would
have permitted an institution to classify fair value option securities as held-to-maturity,
available-for-sale, or trading securities.
In its current form, Schedule RC-Q contains an item for available-for-sale securities
along with the items identified above for “Other trading assets,” which includes securities
designated as trading securities, and “Nontrading securities at fair value with changes in fair
value reported in current earnings.” However, given the existing instructional requirements for
fair value option securities, Schedule RC-Q does not include an item for reporting held-tomaturity securities because only securities reported at amortized cost are included in this
category of securities. By proposing to remove the requirement to report fair value option
securities as trading securities, the agencies also proposed in their September 2015 proposal to
eliminate item 5.b.(1) of Schedule RC-Q for nontrading securities accounted for under a fair

36

value option and add a new item to Schedule RC-Q to capture data on “Held-to-maturity
securities” to which a fair value option is applied.
In addition, at present, institutions that have elected to measure loans (not held for
trading) at fair value under a fair value option are required to report the fair value and unpaid
principal balance of such loans in Memorandum items 10 and 11 of Schedule RC-C, Part I,
Loans and Leases. Because Schedule RC-C, Part I, must be completed by all institutions,
Memorandum items 10 and 11 also must be completed by all institutions although only a
nominal number of institutions with less than $500 million in assets have disclosed reportable
amounts for any of the categories of fair value option loans reported in the subitems of these two
Memorandum items. Accordingly, to mitigate some of the reporting burden associated with
Schedule RC-C, Part I, the agencies proposed to move Memorandum items 10 and 11 on the fair
value and unpaid principal balance of fair value option loans from Schedule RC-C, Part I, to
Schedule RC-Q and to designate them as Memorandum items 3 and 4.
The agencies received comments from two bankers’ associations seeking further
clarification of the proposed reporting of held-to-maturity securities, available-for-sale securities,
and securities for which a trading measurement classification has been elected in Schedule RCQ. As stated above, the agencies reconsidered, and decided not to implement, the proposed
instructional revision that would no longer have required an institution to classify fair value
option securities as trading securities. Based on this decision, the agencies also will not
implement the proposed elimination of the existing Schedule RC-Q item for nontrading
securities accounted for under a fair value option and their proposed addition to the schedule of a
new item for held-to-maturity securities.
The agencies received no comments on the proposal to move the Memorandum items in
Schedule RC-C, Part I, on the fair value and unpaid principal balance of fair value option loans
to Schedule RC-Q, where they would be designated as Memorandum items 3 and 4. Therefore,
the agencies propose to proceed with this change effective March 31, 2017.
2. Revisions to the Reporting of the Impact on Trading Revenues of Changes in Credit
and Debit Valuation Adjustments by Institutions with Total Assets of $100 Billion or
More
Institutions that reported average trading assets of $2 million or more for any quarter of
the preceding calendar year must report a breakdown of their trading revenue (as reported in
Schedule RI, item 5.c) by underlying risk exposure in Schedule RI, Memorandum items 8.a
though 8.e. The five types of risk exposure are interest rate, foreign exchange, equity security
and index, credit, and commodity and other. Institutions required to provide this five-way
breakdown of their trading revenue that have $100 billion or more in total assets must also report
the “Impact on trading revenue of changes in the creditworthiness of the bank’s derivative
counterparties on the bank’s derivative assets” and the “Impact on trading revenue of changes in
the creditworthiness of the bank on the bank’s derivative liabilities” in Schedule RI,
Memorandum items 8.f and 8.g, respectively. Memorandum items 8.f and 8.g were intended to
capture the amounts included in trading revenue that resulted from calendar year-to-date changes

37

in the reporting institution’s credit valuation adjustments (CVA) and debit valuation adjustments
(DVA).
The agencies have found inconsistent reporting of CVAs and DVAs by the institutions
completing Memorandum items 8.f and 8.g of Schedule RI, which affects the analysis of
reported trading revenues. For example, some institutions report CVAs and DVAs in these two
items on a gross basis while other institutions report these adjustments on a net (of hedging)
basis.
Consistent reporting of the impact on trading revenue from year-to-date changes in CVAs
and DVAs is necessary to ensure the accuracy of the data available to examiners for planning
and conducting safety and soundness examinations of institutions’ trading activities and to the
agencies for their analyses of derivatives and trading activities, and changes therein, at the
industry and institution level.
To enhance the quality of the trading revenue information reported by the largest
institutions in the United States, promote consistency across institutions in the reporting of CVAs
and DVAs, enable examiners to make more informed judgments about institutions’ effectiveness
in managing CVA and DVA risks, and provide a more complete picture of reported trading
revenue, the agencies proposed in their September 2015 proposal to replace existing
Memorandum items 8.f and 8.g of Schedule RI with a tabular set of data items. As proposed by
the agencies, institutions meeting the criteria for completing Memorandum items 8.f and 8.g
would begin to separately present their gross CVAs and DVAs (Memorandum items 8.f.(1) and
8.g.(1)) and any related CVA and DVA hedging results (Memorandum items 8.f.(2) and 8.g.(2))
in the table by type of underlying risk exposure (columns A through E). These institutions also
would report their gross trading revenue by type of underlying risk exposure before including
positive or negative net CVAs and net DVAs in columns A through E of a proposed new
Memorandum item 8.h, “Gross trading revenue.” For purposes of this proposed tabular set of
data items, the September 2015 proposal would have required CVA and DVA amounts, as well
as their hedges, to be allocated to the type of underlying risk exposure (e.g., interest rates,
foreign exchange, and equity) that gives rise to the CVA and the DVA.
In proposing that certain institutions with assets of $100 billion or more report expanded
information on the impact on trading revenues of changes in CVAs and DVAs, related hedging
results, and gross trading revenues, the agencies requested comment on the availability of these
data by type of underlying risk exposure.
The agencies received comments on this trading revenue proposal from one consulting
firm and two bankers’ associations. The consulting firm welcomed the proposal. The bankers’
associations commented that the agencies’ proposed approach for reporting the impact on trading
revenues of changes in CVAs and DVAs differs from currently have the capability to calculate
this information by type of underlying risk exposures.” The associations stated that building and
testing the systems and processes necessary to enable banks to report the trading revenue
information in the manner proposed by the agencies would require a delay in the implementation
date of not less than one year beyond the effective date proposed by the agencies for the initial
reporting of this information. The associations also requested that the agencies provide greater

38

clarity and specificity in the instructions for the proposed expansion of trading revenue
information by type of underlying risk exposure.
To address the bankers’ associations’ comments, the agencies have revised their proposal
to eliminate the reporting by type of underlying risk exposure. As revised, institutions required
to complete Schedule RI, Memorandum items 8.f and 8.g (i.e., institutions that reported average
trading assets of $2 million or more for any quarter of the preceding calendar year and have $100
billion or more in total assets), would separately present the year-to-date changes in gross CVAs
and DVAs in new Memorandum items 8.f.(1) and 8.g.(1), respectively, and any related year-todate CVA and DVA hedging results in Memorandum items 8.f.(2) and 8.g.(2), respectively. The
instructions for these items would explain that when CVA and DVA are components in a
bilateral valuation adjustment calculation for a derivatives counterparty, the year-to-date change
in the gross CVA component and the gross DVA component for that counterparty should be
reported in items 8.f.(1) and 8.g.(1), respectively.
Institutions required to complete Memorandum items 8.f and 8.g also would report as
“Gross trading revenue” in new Memorandum item 8.h the year-to-date results of their trading
activities before the impact of any year-to-date changes in valuation adjustments, including, but
not limited to, CVA and DVA. The amount reported as gross trading revenue in Memorandum
item 8.h plus or minus all year-to-date changes in valuation adjustments should equal Schedule
RI, item 5.c, “Trading revenue.”
The agencies propose to implement Memorandum items 8.f and 8.g and new
Memorandum item 8.h of Schedule RI, as revised in response to comments received, in the Call
Report for March 31, 2017.
3. Dually Payable Deposits in Foreign Branches of U.S. Banks
Under the Federal Deposit Insurance Act (FDI Act), deposit obligations carried on the
books and records of foreign branches of U.S. banks are not considered deposits, unless the
funds are payable both in the foreign branch and at an office of the bank in the United States
(that is, they are dually payable). In September 2013, the FDIC issued a final rule amending its
deposit insurance regulations to clarify that deposits carried on the books and records of a
foreign branch of a U.S. bank are not insured deposits even if they are made payable both at that
branch and at an office of the bank in any state of the United States. In addition, the final rule
provides an exception for Overseas Military Banking Facilities operated under Department of
Defense regulations.
The final rule does not affect the ability of a U.S. bank to make a foreign deposit dually
payable. Should a bank do so, its foreign branch deposits would be treated as deposit liabilities
under the FDI Act’s depositor preference regime in the same way as, and on an equal footing
with, domestic uninsured deposits. In general, “depositor preference” refers to a resolution
distribution regime in which the claims of depositors have priority over (that is, are satisfied
before) the claims of general unsecured creditors. Thus, if deposits held in foreign branches of
U.S. banks located outside the United States are made dually payable, that is, made payable at

39

both the foreign office and a branch of the bank located in the United States, the holders of such
deposits would receive depositor preference in the event of the U.S. bank’s failure.
To enable the FDIC to monitor the volume and trend of dually payable deposits in the
foreign branches of U.S. banks, the agencies proposed to add a new Memorandum item 2 to
Schedule RC-E, Part II, Deposits in Foreign Offices, on the FFIEC 031 Call Report. The
FFIEC 031 is applicable only to banks with foreign offices. The proposed new information on
the amount of dually payable deposits at foreign branches of U.S. banks would enable the FDIC
to determine, as required by statute, the least costly method of resolving a particular bank if it
fails and the potential loss to the Deposit Insurance Fund. This requires the FDIC to plan for the
distribution of the proceeds from the liquidation of the failed bank’s assets, including
consideration not only of insured deposits, but also other deposit liabilities for purposes of
depositor preference, such as domestic uninsured deposits and dually payable deposits in foreign
branches of the particular U.S. bank, which take priority over general unsecured liabilities.
The agencies received no comments on the proposed reporting of dually payable deposits
at foreign branches of U.S. banks. The collection of this data item would be implemented as of
September 30, 2016, but it would be added to the FFIEC 031 Call Report as Memorandum
item 4 of Schedule RC-O, Other Data for Deposit Insurance and FICO Assessments, rather than
as Memorandum item 2 of Schedule RC-E, Part II.
4. Revisions to Implement the Supplementary Leverage Ratio for Advanced Approaches
Institutions
Schedule RC-R, Part I, Regulatory Capital Components and Ratios, item 45, applies to
the reporting of the supplementary leverage ratio (SLR) by advanced approaches institutions. In
the sample Call Report forms and the Call Report instruction book for report dates before
March 31, 2015, the caption for item 45 and the instructions for this item both indicated that,
effective for report dates on or after January 1, 2015, advanced approaches institutions should
begin to report their SLR in the Call Report as calculated for purposes of Schedule A, item 98, of
the FFIEC 101, Regulatory Capital Reporting for Institutions Subject to the Advanced Capital
Adequacy Framework. However, the agencies suspended the collection of Schedule RC-R,
Part I, item 45, before it took effect March 31, 2015, due to amendments to the SLR rule and the
need for updates to the associated SLR data collection in the FFIEC 101.
In July 2015, the agencies finalized the most recent revisions to the SLR rule, which
requires all advanced approaches institutions to disclose three items: the numerator of the SLR
(Tier 1 capital, which is already reported in Call Report Schedule RC-R), the denominator of the
SLR (total leverage exposure), and the ratio itself. As part of the proposed revisions to the
FFIEC 101, the SLR section of the FFIEC 101 will apply only to top-tier advanced approaches
institutions (generally, bank and savings and loan holding companies), and not to their subsidiary
depository institutions. Therefore, lower tier advanced approaches depository institutions
generally will not report SLR data in the FFIEC 101, but will need to do so in the Call Report,
which would satisfy the SLR disclosure requirement in the revised SLR rule.

40

Thus, the agencies proposed to add a new item 45.a to Schedule RC-R, Part I, in which
an advanced approaches depository institution (regardless of parallel run status) would report
total leverage exposure as calculated under the agencies’ SLR rule.
The agencies also proposed to renumber current item 45 of Schedule RC-R, Part I, as
item 45.b, to collect an institution’s SLR. The ratio to be reported in item 45.b would equal
Tier 1 capital reported on Schedule RC-R, Part I, item 26, divided by total leverage exposure
reported in proposed item 45.a. Renumbered item 45.b would no longer reference the
FFIEC 101 because lower tier depository institutions would no longer be calculating or reporting
their SLRs in the FFIEC 101.
The agencies received one comment from a consulting firm that welcomed the
reinstatement of SLR information in the Call Report. The reporting of SLR information in items
45.a and 45.b of Call Report Schedule RC-R would take effect September 30, 2016.
On July 13, 2016, the agencies published a final notice in the Federal Register
(81 FR 45357).
Estimate of Respondent Burden
The current annual reporting burden for the Call Report is estimated to be 201,595 hours
and would decrease to 200,991 hours as shown in the following table. The average estimated
hours per response for Call Report filers would decrease from 60.07 hours to 59.89 hours due to
the proposed changes. These reporting requirements represent 1.6 percent of the total Federal
Reserve paperwork burden.
Number of
respondents28

Annual
frequency

Estimated
average hours
per response

Estimated
annual burden
hours

Current

839

4

60.07

201,595

Proposed

839

4

59.89

200,991

FFIEC 031 and
FFIEC 041

Change

( 604)

The current total annual cost to state member banks is estimated to be $10,714,774 and
with the proposed revisions would decrease to $10,682,672.29 This estimate represents costs
28

Of these respondents, 632 respondents are considered a small entity as defined by the Small Business
Administration (i.e., entities with $550 million or less in total assets) www.sba.gov/contracting/getting-startedcontractor/make-sure-you-meet-sba-size-standards/table-small-business-size-standards.
29
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
$65, 15% Lawyers at $66, and 10% Chief Executives at $89). 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 2015, published March 30, 2016 www.bls.gov/news.release/ocwage.t01.htm. Occupations are defined using
the BLS Occupational Classification System, www.bls.gov/soc/.

41

associated with recurring salary and employee benefits, and expenses associated with software,
data processing, and bank records that are not used internally for management purposes but are
necessary to complete the Call Reports.
With respect to the changes that are the subject of this submission, banks would incur a
capital and start-up cost component, but the amount would vary from bank to bank depending
upon its individual circumstances and the extent of its involvement, if any, with the particular
type of activity or product about which information would begin to be collected. An estimate of
this cost component cannot be determined at this time.
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 current annual cost to the Federal Reserve System for collecting and processing the
Call Reports are estimated to be $1,500,837 per year. This amount includes the routine annual
cost of personnel, printing, and computer processing, as well as internal software development
cost for maintaining and modifying existing operating systems used to edit and validate
submitted data.

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