Request for Comment on a Proposal to Amend Regulation K (International Banking Operations) - District

Federal Reserve Bank Of Dallas

Informations

• Publié par: Moveg
• Nombre de lectures: 52
• Langue: English

Extrait

Federal Reserve Bank
ll K
of Dallas
DALLAS, TEXAS
75265-5906
November 2, 2001
Notice 01-82
TO: The Chief Executive Officer of each
financial institution and others concerned
in the Eleventh Federal Reserve District
SUBJECT
Request for Comment on a Proposal to Amend Regulation K
(International Banking Operations)
DETAILS
The Board of Governors of the Federal Reserve System has requested public
comment on a proposal to amend its regulation relating to international lending. The proposal
would simplify the discussion concerning the accounting for fees on international loans by
making the regulation consistent with generally accepted accounting principles.
The Board must receive comments by December 1, 2001. Please address comments to
Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve System, 20th and C
Street, N.W., Washington, DC 20551. Also, you may mail comments electronically to
[e-mail]. All comments should refer to Docket No. R-1114.
ATTACHMENT
A copy of the Board’s notice as it appears on pages 54399–402, Vol. 66, No. 208 of
the Federal Register dated October 26, 2001, is attached.
MORE INFORMATION
For more information, please contact Dick Burda, Banking Supervision Department,
[phone]. For additional copies of this Bank’s notice, contact the Public Affairs
Department at [phone] or access District Notices on our web site at
http://www.dallasfed.org/banking/notices/index.html.
For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal
Reserve Bank of Dallas: Dallas Office [phone]; El Paso Branch Intrastate [phone], Interstate [phone];
Houston Branch Intrastate [phone], Interstate [phone]; San Antonio Branch Intrastate [phone].Federal Register/Vol. 66, No. 208/Friday, October 26, 2001/Proposed Rules 54399
conditions that may lead to increased contained in GAAP were insufficient toFEDERAL RESERVE SYSTEM
transfer risk. Transfer risk may arise due accomplish adequate uniformity in
12 CFR Part 211 to the possibility that an asset of a accounting principles in this area. Since
banking institution cannot be serviced that time, the Financial Accounting
[Regulation K; Docket No. R–1114]
in the currency of payment because of Standards Board (FASB) has revised the
a lack of, or restraints on, the GAAP rules for fee accounting forInternational Banking Operations;
availability of foreign exchange in the international loans in a manner thatInternational Lending Supervision
country of the obligor. Section 905(a) of accommodates the specific requirements
AGENCY: Board of Governors of the ILSA directs each federal banking of section 906 of ILSA. In order to
Federal Reserve System. agency to require banking institutions reduce the regulatory burden on
ACTION: Notice of proposed rulemaking. within its jurisdiction to establish and banking institutions, and simplify its
maintain a special reserve whenever the regulations, the Board proposes to
SUMMARY: The Board of Governors of the agency determines that the quality of an eliminate from the revised version of
Federal Reserve System (Board) is institution’s assets has been impaired by Subpart D the requirements as to the
seeking public comment on a proposal a protracted inability of public or particular accounting method to be
to amend its regulations relating to private borrowers in a foreign country to followed in accounting for fees on
international lending by simplifying the make payments on their external international loans and to require
discussion concerning the accounting indebtedness, or no definite prospects instead that institutions follow GAAP in
for fees on international loans to make exist for the orderly restoration of debt accounting for such fees. The Federal
the regulation consistent with generally service. 12 U.S.C. 3904(a). In keeping Deposit Insurance Corporation and the
accepted accounting principles (GAAP). with the requirements of ILSA, on Office of the Comptroller of the
DATES: Comments should be submitted February 13, 1984, the Board, the Currency have revised their regulations
on or before December 1, 2001. Federal Deposit Insurance Corporation, to eliminate the requirements as to the
and the Office of the Comptroller of the particular accounting method to beADDRESSES: Comments, which should
Currency (collectively, the federal followed in accounting for fees onrefer to Docket No. R–1114, may be
banking agencies) issued a joint notice international loans and to requiremailed to the Board of Governors of the
of final rulemaking requiring banking instead that banking institutions followFederal Reserve System, 20th & C Street,
institutions to establish special reserves, GAAP in accounting for such fees. InNW., Washington, DC 20551, to the
the allocated transfer risk reserve the event that the FASB changes theattention of Jennifer J. Johnson,
(ATRR), against the risks presented in GAAP rules on fee accounting forSecretary. Comments addressed to the
certain international assets. (49 FR international loans, the Board willattention of Ms. Johnson may be
5594). reexamine its regulation in light of ILSAdelivered to the Board’s mail room
ILSA also requires the federal banking to assess the need for a revision to thebetween 8:45 a.m. and 5:15 p.m., and to
agencies to promulgate regulations for regulation.the security control room outside those
accounting for fees charged by bankinghours. Both the mail room and the Initial Regulatory Flexibility Analysisinstitutions in connection withsecurity control room are accessible
The Regulatory Flexibility Act (5international loans. Section 906(a) offrom the courtyard entrance on 20th
U.S.C. 601 et seq.) requires an initialILSA (12 U.S.C. 3905(a)) dealsStreet between Constitution Avenue and
regulatory flexibility analysis with anyspecifically with the restructuring ofC Street, NW. Comments may be
notice of proposed rulemaking. Nointernational loans to avoid excessiveinspected in Room MP–500 between
analysis is required, however, if thedebt service burden on debtor countries.9:00 a.m. and 5:00 p.m. weekdays,
head of the agency certifies that the ruleThis section requires bankingexcept as provided in § 261.8 of the
will not, if promulgated, have ainstitutions, in connection with theBoard’s Rules Regarding Availability of
significant economic impact on arestructuring of an international loan, toInformation, 12 CFR 261.8.
substantial number of small businessamortize any fee exceeding the
FOR FURTHER INFORMATION CONTACT: entities. 5 U.S.C. 605(b). A descriptionadministrative cost of the restructuring
Michael G. Martinson, Associate of the reasons why the action by theover the effective life of the loan.
Director (202/452–3640), Division of agency is being considered and aSection 906(b) of ILSA (12 U.S.C.
Banking Supervision and Regulation; or statement of the objectives of, and the3905(b)) deals with all international
Ann Misback, Assistant General legal basis for, the proposed rule areloans and requires the federal banking
Counsel (202/452–3788), Legal Division, contained in the supplementaryagencies to promulgate regulations for
Board of Governors of the Federal information above. As described moreaccounting for agency, commitment,
Reserve System, 20th & C Street, NW., fully above, the proposed rule revisesmanagement and other fees in
Washington, DC 20551. For users of accounting mechanisms for feesconnection with such loans to assure
Telecommunications Device for the Deaf associated with international loans andthat the appropriate portion of such fees
(‘‘TDD’’) only, contact 202/263–4869. harmonizes their treatment withis accrued in income over the effective
SUPPLEMENTARY INFORMATION: The accounting principles set forth in otherlife of each such loan.
International Lending Supervision Act The Board’s current regulation regulations. Both the underlying
of 1983 (ILSA), 12 U.S.C. 3901, et seq., provides a separate accounting regulation and the rule proposed herein
requires each federal banking agency to treatment for each type of fee charged by primarily affect financial institutions
evaluate the foreign country exposure banking institutions in connection with engaged in significant international loan
and transfer risk of banking institutions their international lending. When ILSA transactions, and the overall impact of
within its jurisdiction for use in was enacted in 1983 and the current the proposed rule will be to reduce
examination and supervision of such regulatory burden. Accordingly,regulation on accounting for
institutions. To implement ILSA, the pursuant to 5 U.S.C. 605(b), the Boardinternational loan fees was promulgated
federal banking agencies, through the hereby certifies that the rule will noton March 29, 1984, Congress and the
Interagency Country Exposure Review federal banking agencies considered that have a significant economic impact on
Committee (ICERC), assess and the application of the broad fee a substantial number of small business
categorize countries on the basis of accounting principles for banks entities.
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Paperwork Reduction Act Solicitation of Comments Regarding Act. It applies to State ba