Letter notes changes from reg relief law (EGRRCPA) effective for June 30 call reports

Revised versions of all three call reports, which took effect June 30 and include changes made by recently enacted regulatory relief legislation, must be submitted by July 30, a Financial Institution Letter (FIL) from the federal bank deposit insurance agency released Tuesday stated.

In the letter, the Federal Deposit Insurance Corp. (FDIC) noted that all three versions of the Consolidated Reports of Condition and Income (call report) were revised to “reduce data reporting and other burdens for institutions, particularly small institutions.”

However, the letter also noted that the May 24-enacted regulatory relief legislation (S.2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, or EGRRCPA) contained two sections, effective upon enactment, that further affect June 30 reporting.

According to the letter, those sections apply to reciprocal deposits and acquisition, development, or construction loans for high-volatility commercial real estate exposures (HVCRE).

Regarding the latter, according to the supplemental instructions (an attachment to the FIL), the agency notes that the EGRRCPA provides that, effective upon enactment, the banking agencies may only require a depository institution to assign a heightened risk weight to an HVCRE exposure if such exposure is an “HVCRE ADC Loan,” as defined under the new law. “Accordingly, an institution is permitted to risk weight at 150 percent only those commercial real estate exposures it believes meet the statutory definition of an ‘HVCRE ADC Loan,’” the instructions state.

For reciprocal deposits and acquisitions, the instructions state that the new law amends the Federal Deposit Insurance (FDI) Act to exclude a capped amount of reciprocal deposits from treatment as brokered deposits for qualifying institutions, “effective upon enactment.” The current call report instructions, the letter states (consistent with the law prior to the enactment of EGRRCPA), treat all reciprocal deposits as brokered deposits.

Regarding eligible small institutions, the letter notes that “generally those with domestic offices only and total assets less than $1 billion as of June 30, 2017, should file the same report form, either the FFIEC 051 or the FFIEC 041, for the second quarter of 2018 as they filed for the first quarter of 2018,” the letter states.

FIL 40-2018: Consolidated Reports of Condition and Income