Agencies give green light to call report changes reflecting new rules on assessments, brokered and sweep deposits

Final changes to bank call reports were announced Tuesday by the federal banking agencies, with few if any revisions to those proposed in December and February; the effective dates for the changes are June 30 and Sept. 30.

The reporting changes finalized apply to three different versions of the call report (formally known as the consolidated reports of condition and income) used by the agencies: FDIC assessments, brokered deposits, and sweep deposits (FFIEC reports 031, 041, and 051). The proposals were issued Dec. 18 (for assessments) and Feb. 5 (for brokered and sweep deposits).

The changes were finalized by the Federal Deposit Insurance Corp. (FDIC), Federal Reserve, and Office of the Comptroller of the Currency (OCC) Monday.

According to the FDIC, it is proceeding with the assessments proposal as issued. The finalized requirements, the FDIC stated, would allow it to implement its recently proposed amendments to the deposit insurance assessment system applicable to large and highly complex insured depository institutions. More specifically, the FDIC removed from its rules the “double counting” of a specified portion of the current expected credit losses (CECL) accounting standard transitional amount or the modified CECL transition amount (as applicable) in certain financial measures that are calculated using the sum of Tier 1 capital and reserves and that are used to determine assessment rates for large and highly complex IDIs.

The reporting change takes effect June 30 (as proposed).

The other two changes to the call reports (dealing with brokered and sweep deposits) take effect Sept. 30 (rather than July 1, as was proposed). The agencies said the effective date was extended to allow institutions time to implement reporting changes to the call report related to sweep deposits on Schedule RC-E, Deposit Liabilities.

The changes to the call report refers to the net stable funding ratio (NSFR) and brokered deposits.

The NSFR final rule applies to certain large U.S. depository institution holding companies, depository institutions, and U.S. intermediate holding companies of foreign banking organizations, together with certain depository institution subsidiaries. The ratio is intended to measure the stability of the funding profile of certain large banking organizations; it requires these banking organizations to maintain minimum amounts of stable funding to support their assets, commitments, and derivatives exposures over a one-year time horizon and increases in stringency based on risk-based measures of the top-tier covered company, according to the agencies.

The brokered deposit rule establishes a framework for determining whether bank deposits made through placement arrangements qualify as brokered deposits. It is designed, the agencies have said, to analyze certain provisions of the “deposit broker” definition, including “facilitating” and “primary purpose.” It also establishes an application and reporting process with respect to the primary purpose exception. The application process is available to insured depository institutions and third parties that wish to utilize the exception, according to a summary of the rule.

Proposed Revisions to the Consolidated Reports of Condition and Income (Call Reports) Related to FDIC Assessments, Brokered Deposits and Sweep Deposits (FDIC FIL-35-2021)