BNK-37-11-00004-A Filing and Certification of Call Reports
1/18/12 N.Y. St. Reg. BNK-37-11-00004-A
NEW YORK STATE REGISTER
VOLUME XXXIV, ISSUE 3
January 18, 2012
RULE MAKING ACTIVITIES
DEPARTMENT OF FINANCIAL SERVICES
NOTICE OF ADOPTION
I.D No. BNK-37-11-00004-A
Filing No. 1432
Filing Date. Dec. 28, 2011
Effective Date. Jan. 18, 2012
Filing and Certification of Call Reports
PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:
Action taken:
Amendment of Part 23; and addition of Part 342 to Title 3 NYCRR.
Statutory authority:
Banking Law, sections 14(1)(l), 37 and 204
Subject:
Filing and certification of call reports.
Purpose:
Requires all banks, trust companies, private bankers, savings banks, savings and loan associations and branches and agencies of foreign banking organizations to file and certify the correctness of call reports.
Text of final rule:
Amendments to General Regulations of the Banking Board
Part 23
CALL REPORTS
(Statutory authority: Banking Law §§ 14(1)(l), 37)
23.1 Call Reports
(a) Section 14(1)(l) of the Banking Law empowers the Banking Board to prescribe the form and contents of periodical reports of condition ("Call Reports") to be rendered to the S[s]uperintendent by banks, trust companies and private bankers. [A periodical report of condition shall be deemed rendered to the superintendent if the superintendent shall have such access as he or she deems appropriate at either the principal office of the bank or trust company, or through the facilities of the Federal Deposit Insurance Corporation or Federal Reserve Board, as the case may be, to such reports of condition as have been rendered to the Federal Deposit Insurance Corporation or Federal Reserve Board, as the case may be, in compliance with their rules and regulations. With respect to reports of banks and trust companies not otherwise reporting to the Federal Reserve or FDIC, such reports shall be rendered to the superintendent on the forms prescribed by the Banking Board.]
(b) Such reports shall be in the form and shall include the content required by the Consolidated Reports of Condition and Income promulgated by the Federal Financial Institutions Examination Council ("FFIEC"), whether or not such reporting entity is otherwise required to file a Call Report with a federal banking regulator. Forms and instructions for such reports may be found on the website of the FFIEC (www.ffiec.gov/).
23.2 Filing; Deemed Filing
[A reporting entity that is not required to file a periodical report of condition with a federal banking regulator shall file such report, either electronically or in hard copy, with the Superintendent.]
(a) A reporting entity shall render a periodical report of condition, either electronically or in hard copy, to the Superintendent.
(b) A Call Report shall be deemed rendered to the Superintendent if the Superintendent shall have such access as he or she deems appropriate through the facilities of the Federal Deposit Insurance Corporation or Federal Reserve Board, as the case may be (the "appropriate federal regulatory authority"), to such Call Reports as have been rendered to such appropriate federal regulatory authority, in compliance with rules and regulations of such appropriate federal regulatory authority.
23.3 Certification
By virtue of filing its Call Report with the appropriate federal regulatory authority, the reporting entity, through its Chief Financial Officer (or equivalent officer), and its attesting directors or trustees, shall be deemed to have made the appropriate certification set forth below; provided, however, that if there is a change in the wording of the attestation required in the applicable form of Call Report promulgated by the FFIEC, a comparable change shall be deemed to have been made in such form of certification:
(a) CFO (or equivalent):
I attest that the Reports of Condition and Income (including the supporting schedules) for this report date have been prepared in conformance with the instructions issued by the appropriate federal regulatory authority and are true and correct to the best of my knowledge and belief.
(b) Each director or trustee:
I attest to the correctness of the Reports of Condition and Income (including the supporting schedules) for this report date and declare that the Reports of Condition and Income have been examined by me and to the best of my knowledge and belief have been prepared in conformance with the instructions issued by the appropriate federal regulatory authority and are true and correct.
23.4 Corrected Filings
If the reporting entity files a corrected Call Report with the appropriate federal regulatory authority, it will immediately notify the Superintendent in writing of such corrected filing.
New Superintendent's Regulations
Part 342
CALL REPORTS
(Statutory authority: Banking Law §§ 37, 204, 255, 404)
342.1 Call Reports
(a) Section 204 of the Banking Law requires every foreign banking corporation doing business in this state to make written reports to the Superintendent under oath showing the amount of its assets and liabilities and containing such other matters as the superintendent shall prescribe.
(b) Section 255 of the Banking Law requires savings banks to make a written report to the superintendent annually which shall contain a statement of its condition and shall include such information and be in such form as the superintendent may prescribe. This section also requires savings banks to make such other special reports as the superintendent shall from time to time require.
(c) Section 404 of the Banking Law requires every savings and loan association to make a written report to the superintendent annually which shall contain a statement of its condition and shall include such information and be in such form as the superintendent may prescribe. This section also requires savings and loan associations to make such other special reports as the superintendent shall from time to time require.
(d) Such reports shall be in the form and shall include the content required by the Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks or the Consolidated Report of Condition and Income promulgated by the Federal Financial Institutions Examination Council ("FFIEC"), whichever is applicable, whether or not such reporting entity is otherwise required to file a report of condition with a federal banking regulator. Forms and instructions for such reports may be found on the website of the FFIEC (http://www.ffiec.gov/).
342.2 Filing; Deemed Filing
(a) A reporting entity shall render a periodical report of condition, either electronically or in hard copy, to the superintendent..
(b) A periodical report of condition shall be deemed rendered to the superintendent if the superintendent shall have such access as he or she deems appropriate through the facilities of the Federal Deposit Insurance Corporation or the Federal Reserve Board, as the case may be (the "appropriate federal regulatory authority"), to such reports of condition as have been rendered to the appropriate federal regulatory authority, in compliance with the rules and regulations of such appropriate federal regulatory authority.
342.3 Certification
By virtue of filing its periodical report of condition with the appropriate federal regulatory authority, the reporting entity, through its Chief Financial Officer (or equivalent officer), and its attesting senior executive officer, shall be deemed to have made the appropriate certification set forth below; provided, however, that if there is a change in the wording of the attestation required in the applicable form of Call Report promulgated by the FFIEC, a comparable change shall be deemed to have been made in such form of certification:
(a) CFO (or equivalent):
I attest that this Report of Assets and Liabilities or Report of Condition, whichever is applicable, (including the supporting schedules and supplement) for this report date has been prepared in conformance with the instructions issued by the appropriate federal regulatory authority and is true and correct to the best of my knowledge and belief.
(b) Attesting Senior Executive Officer of foreign bank branch or agency or Each Director or Trustee of Savings Bank or Savings and Loan Association
I attest to the correctness of this Report of Assets and Liabilities or Report of Condition, whichever is applicable, (including the supporting schedules and supplement) for this report date and declare that it has been examined by me and to the best of my knowledge and belief has been prepared in conformance with the instructions issued by the appropriate federal regulatory authority and is true and correct.
342.4 Corrected Filings
If the reporting entity files a corrected Report of Assets and Liabilities or Report of Condition with the appropriate Federal regulatory authority, it will immediately notify the superintendent in writing of such corrected filing.
Final rule as compared with last published rule:
Nonsubstantive changes were made in sections 23.3 and 342.3.
Text of rule and any required statements and analyses may be obtained from:
Sam L. Abram, Assistant Counsel, New York State Department of Financial Services, One State Street, New York, NY 10004, (212) 709-1658, email: sam.abram@dfs.ny.gov
Revised Regulatory Impact Statement
1. Statutory authority.
Section 14(1)(l) of the Banking Law authorizes the Banking Board to adopt rules and regulations to, among other things, prescribe the form and contents of periodical reports of condition to be rendered to the Superintendent by banks and trust companies.
Section 37(4) of the Banking Law authorizes the Superintendent to prescribe the form and content of all periodical and special reports, except as otherwise expressly provided in the Banking Law.
Section 204 of the Banking Law requires every foreign banking corporation licensed by the Superintendent to engage in business in this state to make written reports to the Superintendent at such times and in such form as the Superintendent shall prescribe, under the oath of one of its officers, managers or agents transacting business in this state, showing the amount of its assets and liabilities and containing such other matters as the Superintendent shall prescribe.
Section 255 of the Banking Law requires every savings bank, on or before the first day of February in each year, to make a written report to the Superintendent which shall contain a statement of its condition as of the morning of the first day of January of such year and shall contain such information and be in such form as the Superintendent may prescribe. That section also requires every savings bank to make such other special reports to the Superintendent as he may from time to time require, in such form and as of such date as may be prescribed by him.
Section 404 of the Banking Law requires every savings and loan association, on or before the first day of February in each year, to make a written report to the Superintendent which shall contain a statement of its condition as of the morning of the first day of January of such year and shall contain such information and be in such form as the Superintendent may prescribe. That section also requires every savings and loan association to make such other special reports to the Superintendent as he may from time to time require, in such form and as of such date as may be prescribed by him.
2. Legislative objectives.
The periodic reports of condition filed by regulated banking organizations are generally referred to as "call reports".
The provisions of the Banking Law cited in the previous section reflect the Legislature's understanding that the Department and other bank supervisory agencies use call reports in connection with the on-site examination of regulated banking organizations and for analysis of their operations. Call report data is also used by the Department, as well as other public and private sector organizations, in tracking conditions in the banking system and the financial markets.
Periodic, consistent and accurate data about the financial condition of regulated institutions is an essential tool of effective bank supervision and regulation. The Banking Law provisions requiring regulated institutions to render call reports to the Department recognize this fundamental element of banking regulation.
By having the individuals signing the call report, as well as the institution, certify the accuracy and completeness of the report directly to the Department, whether the entity files its call report with its primary federal regulator or directly with the Department, these amendments further the underlying legislative objective.
3. Needs and benefits.
As noted in the previous section, the Department and other bank supervisory agencies use call reports in connection with the on-site examination of regulated banking organizations and for analysis of their operations. Call report data is also used by the Department in the process of assessing regulated institutions for the expenses of the Department pursuant to Section 17 of the Banking Law, and is used by the Department as well as other public and private sector organizations, in tracking conditions in the banking system and the financial markets. For all of these purposes, consistent and accurate periodic data about the financial condition of regulated institutions is essential.
Most banking institutions regulated by the Department, including licensed branches and agencies of foreign banking organizations, are required to file call reports with their primary federal regulator on forms specified by the Federal Financial Institutions Examination Council (FFIEC). The regulatory changes here proposed will have the effect of (1) formalizing the requirement that such reports also be filed with the Department, (2) formalizing the requirement that those relatively few banking institutions regulated by the Department which are not required to file call reports with a federal regulator file such reports with the Department using the same forms as the federal filers, and (3) requiring that banking institutions filing call reports with the Department provide the same certification as to the accuracy and completeness of the reports that federal filers provide to their principal federal regulator.
Taken together, these requirements will ensure that the Department has an explicit and direct legal basis on which to take appropriate enforcement action against any of its regulated banking institutions which fails to file a call report or files a report which is not true and correct, or against any individual who certifies an inaccurate report.
4. Costs.
Most banking institutions regulated by the State are already required to file call reports in the form specified by the FFIEC with their principal federal regulator. The Department has access to such reports through the Board of Governors of the Federal Reserve System ("Federal Reserve") or the Federal Deposit Insurance Corporation ("FDIC"), as the case may be.
Existing Part 23 minimizes the cost and burden of compliance with the State's reporting requirements by providing that a call report is deemed rendered to the Superintendent if appropriate access to the institution's federally filed call report is available.
The amendments to Part 23 and new Part 342 retain this basic approach. They provide, among other things, that entities which are not federal filers should file their call reports with the Department on the FFIEC forms. Acceptance of the FFIEC forms by the Department will minimize the cost and burden associated with the reporting process. These forms are well known throughout the banking industry and have very detailed and extensive instructions. Moreover, accounting software and other forms of technical assistance in filling out the forms is readily available from accounting and consulting firms that work with the industry.
While the proposed amendments require that call reports be certified to the Department as true and correct, they do so in a way that minimizes regulatory cost and burden. Federal filers are deemed to have made the appropriate certification to the Department by virtue of filing their reports of condition with the appropriate federal entity. Any future changes in the attestation required by the federal call report forms will also change the applicable deemed certification made to the Department. Entities that are not federal filers will also file using the FFIEC call report forms, which include a form of certification.
5. Local government mandates.
None.
6. Paperwork.
Under the regulation, entities that are federal filers are deemed to have met the State filing requirement so long as the Department has adequate access to the federally filed call reports. At present, the Department can access the complete reports of federal filers as soon as the reports are filed.
The regulation gives entities that are not federal filers the option of filing their reports with the Department electronically.
7. Duplication.
The regulation effectively avoids duplication by specifying that Department access to an institution's federal call report filing satisfies State filing and certification requirements.
8. Alternatives.
The Department could continue its present regulatory regime, under which a call report is deemed rendered to the Department as long as the Department has appropriate access to the federally filed report.
Under that regime, however, it is not entirely clear that the individuals certifying that the report is true and correct are making the certification to the Department as well as to the federal regulatory agency with which the report is filed.
While the Department could presumably take enforcement action regarding failure to file a true and correct call report under various provisions of the Banking Law, these amendments make it clear that the individuals signing the call report, as well as the institution, are directly certifying its accuracy and completeness to the Department.
The Department could have developed its own call report form, including its own form of certification, for use by institutions that do not file federally. However, as discussed in Section 4 on "Costs" above, acceptance of the FFIEC forms by the Department should reduce the cost and burden associated with the reporting process. These forms are well known throughout the banking industry and have very detailed and extensive instructions. Moreover, accounting software and other forms of technical assistance in filling out the forms are readily available from accounting and consulting firms that work with the industry.
9. Federal standards.
Federally insured depositary institutions, as well as U.S. branches and agencies of foreign banking organizations, are required to file call reports on the forms specified by the FFIEC with their appropriate federal regulator.
The regulation permits institutions subject to a federal filing requirement to use compliance with that requirement to satisfy the state's requirement. It permits institutions which are not federal filers to file using the FFIEC forms.
10. Compliance schedule.
The regulatory changes are effective upon adoption.
Revised Regulatory Flexibility Analysis, Rural Area Flexibility Analysis and Job Impact Statement
The changes made to the last published rule simply provide that any future changes in the attestation required by the federal call report forms will also change the applicable deemed certification made to the Department.
Such changes do not affect the accuracy of the above impact statements as attached to the Notice of Proposed Rule Making.
Assessment of Public Comment
One comment was received from association of banking organizations doing business in the state, While appreciative of the Department's intention to minimize the regulatory cost and burden of the proposed call report certification requirement by incorporating the language of the comparable current federal certifications, the commenter expressed concern that future changes in the federal certification language could lead to inconsistencies between the required state and federal certifications.
To deal with this possible future problem, the Department has adopted the commenter's suggestion and added language to automatically conform the deemed certifications in the regulations to future changes in the federal certification forms.
