WASHINGTON - The day may be in sight when banks can write their quarterly call reports in the same accounting language as their annual reports.

The Federal Financial Institutions Examination Council is expected to decide this week, possibly today, whether to adopt "generally accepted accounting principles" for the call reports.

Banks currently use "regulatory accounting principles," or RAP, to complete call reports. Regulatory accounting had been more lenient than GAAP, but in 1989 Congress mandated that RAP be as stringent. Since then, banking agencies have toughened regulatory accounting.

Currently, one of the most significant differences between RAP and GAAP involves loans sold with recourse.

Under regulatory accounting, bank assets sales with recourse are treated as financings and must be backed with capital. But under GAAP, such transactions are treated simply as sales, and can be taken off a bank's books.

The Office of the Comptroller of the Currency is concerned that moving to GAAP could lower to dangerous levels the capital requirements for loans sold with recourse. Agency officials said the would not comment, because the accounting change is pending before the exam council.

However, in an interview done by OCC personnel, the agency's chief accountant, Zane Blackburn, said that though he "endorses the move to GAAP, we want to be certain before we commit to it completely that our supervisory concerns are addressed in the accounting principles or by other means."

The interview was to appear in the agency's internal publication, SuperVisions, but was pulled.

Robert Storch, chief accountant at the Federal Deposit Insurance Corp., admitted the proposal has caused some friction among the agencies.

"Some feel there would still be a need to collect supplemental information," said Mr. Storch, who is also the chairman of the exam council's task force on reports.

In the interview, Mr. Blackburn said the recourse issue may require banks to supply extra data along with the call report.

"If we remain concerned about, say, sales of loans with recourse, we might require of banks ... a memorandum item reporting all transactions subject to recourse," he said.

Mr. Storch added that if any supplemental reporting changes take place, they would affect all types of financial institutions.

"The agencies have tried to do everything on a uniform basis, so it would be highly unlikely that any agency do something different than the others," he said.

But wouldn't adding supplemental reporting requirements just bring banks back to square one, and in essence retain RAP?

"Taken as a whole, banks would definitely see a reduction in burden," Mr. Storch said.

The Comptroller's office has two other major concerns.

Under RAP, a bank is required to mark to market any change in value of futures and forward contracts that are designated as hedges. GAAP allows banks to defer the recognition of these fluctuations in value.

Regulatory accounting also prohibits banks from recognizing excess mortgage servicing fees until they are actually received. GAAP, however, allows banks to account for some of that income right away.

While these differences could be expensive, the banking industry is backing a move to uniform accounting methods because it would lighten their regulatory load.

If call reports are converted to GAAP, banks could simply prepare their financial statements using one set of accounting guidelines, rather than two.

"My first reaction to that would be 'Yippee!'" said Donna Fisher, the American Bankers Association's director of tax and accounting. "It would be a terrific step towards reducing regulatory burden."

David M. Morris, senior vice president of Chase Manhattan Bank, said that his institution has been lobbying to bring call reports under GAAP for years.

"Having to follow two sets of accounting principles creates a real process burden for us, and the costs have been very substantial," Mr. Morris said.

"Chase prepares the financial statements we send to our investors with GAAP, so I really don't see why we can't use the same thing for the regulators," Mr. Morris added.

The regulators are being driven by the Riegle Community Development and Regulatory Improvement Act of 1994, which told them to design uniform call reports for bank holding companies, thrifts, and banks.

Holding companies and thrifts already follow GAAP in their reports to regulators. As a step toward uniform call reports, the exam council's task force on reports recently recommended the adoption of GAAP for bank call reports, too.

The exam council is the umbrella organization for the five banking, thrift, and credit union agencies. Each regulator was sent a copy of the proposal last week, and must report his or her vote this week.

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