To Whom It May Concern:
The Bank Policy Institute (BPI) [1] appreciates the opportunity to comment on the notice and request for comment by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation to extend the Country Exposure Report (FFIEC 009) and the Country Exposure Information Report (FFIEC 009a).[2] While the current Notice does not contain any proposed revisions, the questions posed invite responses on “[w]ays to minimize the burden of information collections on respondents, including through the use of automated collection techniques or other forms of information technology.” Our comments in Section I reinforce points made in our prior comment letters, and our comments in Sections II and III aim to answer this question and provide methods to reduce the burden on respondents in providing the reporting sought by the information collection.
I. The FFIEC 009 should expressly permit risk transfer for the reporting of securities financing transactions (SFTs) and should align the reporting of non-depository financial institutions with the Call Report.
BPI previously submitted an unsolicited comment letter to the agencies requesting revisions to the reporting of SFT claims on the FFIEC 009,[3] which the notice states “is under review by the agencies.” [4] For the reasons stated in that letter and summarized herein, we continue to believe that recognizing risk-transfer is appropriate for the reporting of SFTs and the FFIEC 009 should align the reporting treatment of SFT claims with that of other collateralized claims in the FFIEC 009. Reporting these transactions based on the collateral, rather than the counterparty, for the purpose of guarantor basis reporting in Schedule C Part II Colum 1-11 would standardize reporting for all collateralized claims within the report, more closely align the reporting of SFTs with their actual risk, reduce the need for dual processes and be consistent with the reporting of SFTs in other regulatory reports, as well as their treatment under the regulatory capital rules.
In practice, if the counterparty to an SFT claim were to default, the reporting firm would liquidate the collateral held, making the underlying collateral the most relevant basis for reporting. If SFT claims were aligned with other collateralized claims and reported by underlying collateral, the Agencies would have the benefit of a more holistic view of a claim’s collateral as a risk mitigate, without the need for the added FFIEC 009 Schedule C, Part II columns 17 and 18. This approach to the reporting of SFT claims would also be consistent with the comparative treatment of SFTs under the Agencies’ capital rules which calculate exposure by using the collateral haircut method, offsetting the collateral against the exposure to the counterparty.
Requiring banking organizations to report the same SFT claims in multiple ways within the FFIEC 009 creates unnecessary burden as it requires firms to have multiple processes and systems in place. These additional processes further necessitate supplemental controls, testing and operational overhead that contribute to the burden on reporters. If the Agencies were to streamline the reporting standards by aligning all reporting on the approach to report based on the underlying collateral, they could both reduce burden on firms by eliminating the need for these dual processes, and also eliminate items from the FFIEC 009, further reducing overall burden.
Additionally, over the last few years, the agencies have proposed incorporating additional information regarding bank exposures to NDFIs across a variety of regulatory reports including the Call Report, the FR Y-9C and the FR Y-14 report series. BPI is supportive of the intent of the revisions to provide more insight into bank exposures to NDFIs and more consistent reporting across institutions. As we’re previously written, [5] to minimize burden and enhance reporting comparability it’s critical that reporting is aligned across the suite of reporting forms capturing similar information. While the Call Report NDFI revisions are final, the proposed changes to the other forms remain outstanding, and inconsistent (as proposed) with the Call Report changes. We continue to urge the agencies to finalize the outstanding NDFI reporting proposals in a timely and consistent manner and to implement them across other relevant reporting forms, such as the FFIEC 009.
To read the full comment letter, please click here, or click on the download button below.
[1] The Bank Policy Institute is a nonpartisan public policy, research, and advocacy group that represents universal banks, regional banks, and the major foreign banks doing business in the United States. The Institute produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud, and other information security issues.
[2] 90 Fed. Reg. 19789 (May 9, 2025).
[3] Bank Policy Institute, BPI Comment Letter: Requesting revisions to the reporting of SFT claims on the FFIEC 009 (OMB Control No. 3064-0017) (Apr. 11, 2024), available at https://fdic.gov/system/files/2024-06/2022-country-exposure-report-3064-0017-c-001.pdf
[4] Notice at 19791.
[5] Bank Policy Institute & Institute of International Bankers, Comment Letter on FR Y-9C NDFI Revisions (Nov. 27, 2024), available at https://bpi.com/wp-content/uploads/2024/11/BPI-IIB-FR-Y-9-OMB-No.-7100-0128-Comment-Letter-11.27.24.pdf.; Bank Policy Institute Comment Letter on Reporting Requirement Changes for Holding Companies and Edge and Agreement Corporations (Aug. 6, 2024), available at https://bpi.com/wp-content/uploads/2024/08/BPI-Comments-on-Reporting-Requirement-Changes-for-Holding-Companies-and-Edge-and-Agreement-Corporations.pdf; Bank Policy Institute, Comment Letter on Proposed Revisions to Call Report and FFIEC 002 Regarding NDFI Reporting (Feb. 26, 2024), available at https://bpi.com/wp-content/uploads/2024/02/BPI-Comment-Letter-Call-Report-and-FFIEC-002-Revisions.pdf
