WASHINGTON - Federal regulators plan to revamp the quarterly call report, adding 80 questions about securitizations and 18 on subprime lending.
The changes, to be unveiled in late April and take effect in the first quarter of 2001, will hit the 500 largest banks hardest. Details are still being finalized, but it is expected that banks will have to report the dollar amount of assets securitized and subprime loans made, broken down as either real estate, credit card, auto, or other. For securitizations, banks will also have to report on credit enhancements. For subprime, past-due data will be required.
However, regulators are also planning to reduce, by roughly 10%, the information they demand from the roughly 7,000 smaller banks. This streamlining includes consolidating requests for some basic information about deposits, loans, and municipal securities.
For instance, rather than listing the number of savings, checking, and money market accounts, banks would simply lump them together and report one figure for all deposit accounts. Similar moves are expected for loans and municipal securities. In addition, a separate report filed by bank trust departments is expected to be shortened and folded into the call report.
Regulators said the changes are designed to make the call report leaner, yet more risk-focused, while providing much-needed data on growing markets.
"We supervise banks differently now," Zane Blackburn, the chief accountant at the Office of the Comptroller of the Currency, said Wednesday. "The proposed call report focuses on risk, which seems to be housed in the larger banks involved in securitization and new high-risk areas like subprime lending."
While bankers have yet to see the proposed call report, reaction to its early description was mixed.
"My initial reaction is they didn't cut deep enough. We're going to have to look at it, but my guess is that we'll find more items they could cut," said Paul Smith, senior counsel at the American Bankers Association. "Regulators are going to have to make the case that anything they add is needed for supervision."
Karen Thomas, director of regulatory affairs at the Independent Community Bankers of America, was less critical. "Community banks should require less supervision and oversight because of their less-complex nature and less-risky activities," she said. "It seems the direction the regulators are going on the call reports is in keeping with this philosophy."
The call-report proposal was approved this month by the Federal Financial Institutions Examination Council, an umbrella group for the five banking, thrift, and credit union agencies.
The agencies generally tweak the call report, a quarterly statement of their financial condition, every year, but held off in 1999 to let banks focus on preparing their systems for the year-2000 date change.
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