Reduced reporting (call reports) proposal in Federal Register Monday

A proposal allowing banking institutions under $5 billion in assets to use a streamlined call report form and to reduce the amount of reporting required in the first and third calendar quarters is finally headed for publication in the Federal Register, scheduled Monday.

The proposal will be out for a 60-day comment period, ending about Jan. 18. But one lawmaker has already said the proposal doesn’t go far enough.

The proposal was issued earlier this month by the Federal Deposit Insurance Corp. (FDIC), the Federal Reserve and the Office of the Comptroller of the Currency (OCC). Its aim is to implement section 205 of the financial institution regulatory relief statute enacted this spring, the Economic Growth, Regulatory Relief and Consumer Protection Act (EGRRCPA, S. 2155).

Section 205 requires regulators to provide for reduced reporting in call reports for the first and third quarters of the year for banks with less than $5 billion in consolidated assets and which meet other criteria the regulators deem appropriate. To carry that out, the agencies propose that covered institutions file their call reports on the most streamlined call report form, the FFIEC 051 Call Report, and to report less information on the form – 37% fewer data items – for the first and third quarters. The Fed and OCC propose similar relief to uninsured but federally supervised institutions.

Federal Reserve Vice Chairman for Supervision Randal Quarles discussed this and other actions being undertaken during hearings this week before House and Senate committees. In the Senate Banking Committee hearing, held Thursday, one senator said the agencies haven’t eased reporting sufficiently under the Section 205 measure.

Sen. John Kennedy (R-La.) told Quarles that all the proposal does is remove data items for which the smaller banks already report “zero.”

Quarles told Kennedy that the Fed wanted to reduce burden for banks but ensure it receives the information it needs for effective supervision. Kennedy, however, said the proposed changes would only save banks 1.18 hours per quarter.

“You’re not doing anything; I’d like you to give it another lick,” he said, referring to the Fed’s proposal. Right now, he said, it’s “all hat and no cattle.”

Quarles said the agency would take another look at it.

Banks covered by the proposal include those under $5 billion in consolidated assets and which are not engaged in “certain complex” or international activities. This means institutions that have no foreign offices, are not required to or have not elected to use Subpart E (Internal Ratings-Based and Advanced Measurement Approaches) of the agencies’ regulatory capital rules to calculate their risk-based capital requirements, and are not large or highly complex institutions for purposes of the FDIC’s assessment regulations.

The principal areas of reduced reporting in the first and third calendar quarters generally would include data items related to categories of risk-weighting of various types of assets and other exposures under the agencies’ regulatory capital rules, fiduciary and related services assets and income, and troubled debt restructurings by loan category.

Reduced reporting for covered depository institutions (Federal Register notice)