WASHINGTON — Federal regulators are working to streamline call reports for community banks in response to industry complaints that some of the requirements are unnecessary and increasingly burdensome.

While an essential tool to monitor banks and identify trends, reporting requirements have surged since the financial crisis and many small institutions, with few compliance staff, find it difficult to keep up. Some also say that data they are being asked to report is antiquated or has little bearing on their bank.

"We're looking at whether we can create a short form call report for community banks," Comptroller of the Currency Thomas Curry said in a brief interview recently, comparing it to the 1040 EZ tax filing form for personal filers. "We're doing some analysis to see how that would work, how institutions would fall out on the schedules."

The current undertaking is a coordinated effort between the federal agencies working through the Federal Financial Institutions and Examinations Council.

While exactly how the FFIEC plans to change the data is unclear, one idea under discussion is removing call report items "for which substantially all institutions or groups of institutions report zero," according to Robert Storch, the chief accountant at the Federal Deposit Insurance Corp., who mentioned the plan last year during a community bank advisory meeting.

But industry representatives are seeking more. Christopher Cole, senior vice president and senior regulatory counsel at the Independent Community Bankers of America, said regulators should create a short form report that would be submitted twice a year, during the first and third quarters. It should include basic information about an institution's balance sheet, income statement, and a statement of the changes to a banks' equity capital.

A provision creating a short-form call report for smaller institutions was part of a regulatory relief bill passed by the Senate Banking Committee last week. But the legislation's future is uncertain, and industry representatives are hopeful the regulators will still act on their own.

Banks argue that the report has become unwieldy and expensive. A 2014 ICBA survey found that more than three quarters of community banks spend $60,000 annually preparing the reports when taking into account staff compensation and that 72% said a short-form report would substantially reduce their regulatory reporting burden.

Alison Touhey, senior regulatory advisor at the American Bankers Association, also noted that reports have nearly doubled in size from almost 40 pages in 2000 to more than 80 pages for the most recent report. The instructions, meanwhile, have ballooned to nearly 700 pages, with Basel III capital reporting requirements accounting for roughly 60 pages of instructions by themselves.

"[Regulators] don't typically go back and review obsolete line items," Touhey said, explaining how the report has grown in size. "In part, that is because the call reports are widely used by academia, policymakers and the industry and they don't want to hurt anyone's data analysis."

But the failure to delete obsolete data items hurts small banks, she said.

"The small institutions don't have a lot of the businesses or the products that are being added so they have to build out the reporting when the data isn't really applicable to them," Touhey said. "Obviously there is a cost to that."

Jamie Deterding, senior vice president for the Bank Solutions division at Fiserv, which provides software and services that help banks prepare the reports, said the problem also lies with the time crunch that banks are under when expected to comply with the new reporting requirements.

"What used to be a period of 18 months or maybe two years to put something in has been collapsed and shortened," Deterding said. "In some cases it is not even possible to put the changes in, because it does not give you enough time to put it in the software get it out there and start collecting it."

But speaking on the issue last year, FDIC officials defended the extensive data collection as an asset to examiners and the supervision of banks.

"The lack of the collection of the data doesn't necessarily mean we have a lack of the need of the data for supervisory purposes," said Charles Collier, chief of risk analysis at the FDIC, during the community bank advisory meeting.

Collier suggested that one reason that small banks can receive less frequent exams is because of the data in the call report, which allows examiners to assess a bank offsite between exams. Some banks could be subject to more frequent exams if key data was excised from reporting requirements.

Federal Reserve Board Gov. Daniel Tarullo made a similar point in a speech last year, in which he said the availability of certain data "was a factor in raising the threshold for eligibility for the 18-month examination cycle from $250 million to $500 million."

But he added that "there may be some opportunities to streamline the content or frequency of reporting for smaller banks."

In an interview last week, Curry said regulators could lose obsolete data without such an effect.

"If we can eliminate unnecessary call report items we'll do it," Curry said. "We've made some significant progress."

He also added that the agencies have "established principles for determining whether information should be added and what the criteria should be for deleting information in the call report."

While regulators work to cut out some of the excess fat from the reports, it will likely involve some compromise among the agencies which likely have differing views on what data is expendable.

"I wouldn't say it is easy, because the FFIEC is comprised of all the different banking regulators who each has its own data agenda," said Touhey. "Then you have the research community that has its own data agenda so managing that to an efficient streamlined report is difficult. But I believe they have heard the issues and understand them and are making a concerted effort to try and reduce the burden."

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