Agency Information Collection Activities: Proposed Information Collection Renewal; Comment Request

AGENCY:

Federal Deposit Insurance Corporation (FDIC).

ACTION:

Notice and request for comment.

SUMMARY:

The FDIC, as part of its obligations under the Paperwork Reduction Act of 1995 (PRA), invites the general public and other Federal agencies to take this opportunity to comment on the renewal of the existing information collections described below (OMB Control No. 3064-0183; -0195; and -0200).

DATES:

Comments must be submitted on or before October 12, 2021.

ADDRESSES:

Interested parties are invited to submit written comments to the FDIC by any of the following methods:

• Agency website: https://www.fdic.gov/resources/regulations/federal-register-publications/.
• Email: comments@fdic.gov. Include the name and number of the collection in the subject line of the message.
• Mail: Manny Cabeza (202-898-3767), Regulatory Counsel, MB-3128, Federal Deposit Insurance Corporation, 550 17th Street NW, Washington, DC 20429.
• Hand Delivery: Comments may be hand-delivered to the guard station at the rear of the 17th Street building (located on F Street), on business days between 7:00 a.m. and 5:00 p.m.

All comments should refer to the relevant OMB control number. A copy of the comments may also be submitted to the OMB desk officer for the FDIC: Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT:

Manny Cabeza, Regulatory Counsel, 202-898-3767, mcabeza@fdic.gov, MB-3128, Federal Deposit Insurance Corporation, 550 17th Street NW, Washington, DC 20429.

SUPPLEMENTARY INFORMATION:

Proposal to renew the following currently approved collections of information:

1. Title: Credit Risk Retention.

OMB Number: 3064-0183.

Form Number: None.

Affected Public: Insured state nonmember banks, state savings institutions, insured state branches of foreign banks, and any subsidiary of the aforementioned entities.

General Description of Collection: This information collection request comprises disclosure and recordkeeping requirements under the credit risk retention rule issued pursuant to section 15G of the Securities Exchange Act of 1934 (15 U.S.C. 78o-11), as added by Section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). The Credit Risk Retention rule (“the Rule”) was jointly issued in 2015 by the Federal Deposit Insurance Corporation (“FDIC”), the Office of the Comptroller of the Currency (“OCC”), the Federal Reserve Board (“Board”), the Securities and Exchange Commission (“SEC”) and, with respect to the portions of the Rule addressing the securitization of residential mortgages, the Federal Housing Finance Agency (“FHFA”) and the Department of Housing and Urban Development (“HUD”). The FDIC regulations corresponding to the Rule are found at 12 CFR part 373.

Section 941 of Dodd-Frank requires the Board, the FDIC, the OCC (collectively, the “Federal banking agencies”), the Commission and, in the case of the securitization of any “residential mortgage asset,” together with HUD and FHFA, to jointly prescribe regulations that (i) require a an issuer of an asset-backed security or a person who organizes and initiates an asset backed securities transaction by selling or transferring assets, either directly or indirectly, including through an affiliate, to the issuer (“issuer or organizer”) to retain not less than five percent of the credit risk of any asset that the issuer or organizer, through the issuance of an asset-backed security (“ABS”), transfers, sells or conveys to a third party and (ii) prohibit an issuer or organizer from directly or indirectly hedging or otherwise transferring the credit risk that the issuer or organizer is required to retain under section 941 and the agencies' implementing rules. Exempted from the credit risk retention requirements of section 941 are certain types of securitization transactions, including ABS collateralized solely by qualified residential mortgages (“QRMs”), as that term is defined in the Rule. In addition, Section 941 provides that the agencies must permit an issuer or organizer to retain less than five percent of the credit risk of residential mortgage loans, commercial real estate (“CRE”) loans, commercial loans and automobile loans that are transferred, sold or conveyed through the issuance of ABS by the issuer or organizer, if the loans meet underwriting standards established by the Federal banking agencies.

The FDIC implemented Section 941 of Dodd-Frank through 12 CFR part 373 (the “Rule”). The Rule defines a securitizer as (1) The depositor of the asset-backed securities (if the depositor is not the sponsor); or (2) The sponsor of the asset-backed securities. The Rule provides a menu of credit risk retention options from which securitizers can choose and sets out the standards, including disclosure, recordkeeping, and reporting requirements, for each option; identifies the eligibility criteria, including certification and disclosure requirements, that must be met for ABS offerings to qualify for the QRM and other exemptions; specifies the underwriting standards for CRE loans, commercial loans and automobile loans, as well as disclosure, certification and recordkeeping requirements, that must be met for ABS issuances collateralized by such loans to qualify for reduced credit risk retention; and sets forth the circumstances under which retention obligations may be allocated by sponsors to originators, including disclosure and monitoring requirements.

Part 373 contains several requirements that qualify as information collections under the Paperwork Reduction Act of 1995 (“PRA”). The information collection requirements are found in sections 373.4; 373.5; 373.6; 373.7; 373.8; 373.9; 373.10; 373.11; 373.13; 373.15; 373.16; 373.17; 373.18; and 373.19(g). The recordkeeping requirements relate primarily to (i) the adoption and maintenance of various policies and procedures to ensure and monitor compliance with regulatory requirements and (ii) certifications, including as to the effectiveness of internal supervisory controls. The required disclosures for each risk retention option are intended to provide investors with material information concerning the sponsor's retained interest in a securitization transaction (e.g., the amount, form and nature of the retained interest, material assumptions and methodology, representations and warranties). Compliance with the information collection requirements is mandatory, responses to the information collections will not be kept confidential and, with the exception of the recordkeeping requirements in sections 373.4(d), 373.5(k)(3) and 373.15(d), the Rule does not specify a mandatory retention period for the information.

Burden Estimate:

Change Is Burden Estimation Methodology

(1) Prior Methodology

To determine the total paperwork burden for the requirements contained in the Credit Risk Retention Rule, FDIC first estimated the universe of sponsors that would be required to comply with the disclosure and recordkeeping requirements. FDIC estimated that approximately 270 unique sponsors conduct ABS offerings each year. This estimate was based on the average number of ABS offerings from 2007 through 2017 reported by the ABS database Asset-Backed Alert for all non-CMBS transactions and by Commercial Mortgage Alert for all CMBS transactions. Of the 270 sponsors, the agencies assigned 8 percent of these sponsors to the Board, 12 percent to FDIC, 13 percent to the OCC, and 67 percent to the Commission.

Next, FDIC estimated how many respondents keep records and make required disclosures by estimating the proportionate amount of offerings per year for each agency. The estimate was based on the average number of ABS offerings from 2007 through 2017. The agencies estimated the total number of annual offerings per year to be 1,400 which resulted in the following:

(a) 13 offerings per year will be subject to disclosure and recordkeeping requirements under § 373.11, which are divided equally among the four agencies (i.e., 3.25 offerings per year per agency);

(b) 110 offerings per year were estimated to be subject to disclosure and recordkeeping requirements under §§ 373.13 and 373.19(g), which were divided proportionately among the agencies based on the entity percentages described above:

(i) Nine (9) offerings per year for the Board (8%);

(ii) 13 offerings per year for the FDIC (12%);

(iii) 14 offerings per year for the OCC (13%);

(iv) 74 offerings per year for the Commission (67%).

(c) 132 offerings per year were estimated to be subject to the disclosure requirements under § 373.15, which were divided proportionately among the agencies based on the entity percentages described above:

(i) 11 offerings per year for the Board (8%);

(ii) 16 offerings per year for the FDIC (12%);

(iii) 17 offerings per year for the OCC (13%);

(iv) 88 offerings per year for the Commission (67%).

(d) Of these 132 offerings per year, 44 offerings per year were estimated to be subject to disclosure and recordkeeping requirements under §§ 373.16, 373.17, and 373.18, respectively, which were divided proportionately among the agencies based on the entity percentages described above:

(i) 4 offerings per year for each section for the Board (8%);

(ii) 6 offerings per year for each section for the FDIC (12%);

(iii) 6 offerings per year for each section for the OCC (13%);

(iv) 29 offerings per year for each section for the Commission (67%).

To obtain the estimated number of responses (equal to the number of offerings) for each option in subpart B of the rule, FDIC multiplied the number of offerings estimated to be subject to the base risk retention requirements (i.e., 1,158) by the sponsor percentages described above. The result was the number of base risk retention offerings per year per agency. For the FDIC, this was calculated by multiplying 1,158 offerings per year by 12 percent, which equals 139 offerings per year. This number was then divided by the number of base risk retention options under subpart B of the rule (i.e., nine) to arrive at the estimate of the number of offerings per year per agency per base risk retention option. For the FDIC, this was calculated by dividing 139 offerings per year by nine options, resulting in 15 offerings per year per base risk retention option.

The agencies assumed that 90% of institutions use the vertical interest form of risk retention while the remaining 10% use the combined vertical and horizontal form of risk retention. The burden tables above use this allocation and of the 45 responses attributed to § 373.4, we allocated 40 (90%) to the vertical form of risk retention and 5 (10%) to the other two options (1 response to the horizontal form of risk retention and 4 responses to the combined vertical and horizontal form of risk retention.

FDIC believes that the burden estimation methodology previously used overestimates the number of ABS offerings by FDIC-supervised institutions. Furthermore, the OCC has confirmed that the estimates it used for its 2021 renewal of OCC's Credit Risk Retention information collection are based on the expertise of the OCC's subject matter experts rather than the 2015 interagency methodology. As a result of these two factors, the FDIC has decided to diverge from the interagency methodology used in 2015 and 2018 and instead use the new methodology described below to estimate burden for this information collection.

(2) New Methodology

Potential respondents to this information collection (IC) are FDIC-supervised insured depository institutions (“IDIs”) including state nonmember banks, state savings institutions, insured state branches of foreign banks, and any subsidiary of the aforementioned entities. As of December 31, 2020, the FDIC supervised 3,227 state nonmember banks, state savings institutions, and insured state branches of foreign banks. Of these 3,227 IDIs, 2,382 are small for the purposes of the Regulatory Flexibility Act (RFA).

Respondents to this information collection are FDIC-supervised IDIs that are securitizers of ABS. To generate a universe of potential securitizers, FDIC obtained data from Call Reports for the quarter ending on December 31 for the years 2018, 2019, and 2020, for all FDIC-supervised IDIs that reported a non-zero amount in either: (a) Outstanding principal balance of assets sold and securitized with servicing retained or with recourse or other seller-provided credit enhancements; or (b) amount of loans and leases held for investment, net of allowance, and held for sale held by consolidated variable interest entities (VIEs). This search resulted in a list of 79 IDIs that were potential securitizers. Using this list, FDIC searched for each IDI's name in FitchConnect's repository of ABS offerings (“deals”) and compiled a list of deals for which an IDI was listed as the issuer, sponsor, originator, or servicer of the offering. For IDIs for which deals were not found on FitchConnect, the following method was followed: The queried Call Report item labeled “(a)” above includes assets sold with recourse or other seller-provided credit enhancements, which are outside the scope of the Credit Risk Retention rule. To identify IDIs which securitized from those that did not, a $75 million threshold of year over year growth in that item is used to identify new securitizations in 2018, 2019, and 2020, as FDIC assumes that growth of less than $75 million would be unlikely to reflect sponsorship or issuance of new term ABS offerings during that period. This method yielded a list of 20 institutions. FDIC reviewed examination records for the 20 IDIs identified as potential securitizers to determine which institutions actually securitize. FDIC cross-referenced the list of securitizing IDIs and the list of aforementioned ABS offering naming conventions found using FitchConnect with Intex's database of prospectuses. From this cross-referencing, FDIC found a count of deals associated with each deal name. Finally, FDIC determined whether the sponsor or depositor for each deal was an FDIC-supervised IDI or subsidiary of an FDIC-supervised institution by reading the prospectus of each deal.

Once the set of deals, with corresponding FDIC-supervised securitizers, was constructed, FDIC matched each deal with the sections in Part 373 that imposed one or more PRA requirements on that deal. Most sections impose both disclosure and recordkeeping requirements. For those sections, FDIC separately estimated the burdens for each of the two types of PRA requirements. The following details the estimated respondent counts for each of these sections:

(a) Two FDIC-supervised IDIs were involved in deals in which credit risk was retained through horizontal interest (§ 373.4(a)(2) Standard Risk Retention—Horizontal Interest). These two IDIs were involved in four, three, and four such deals in 2018, 2019, and 2020, respectively. FDIC therefore estimates two annual respondents, with an average annual response rate of two responses per respondent, for the disclosure requirement associated with § 373.4(a)(2) and the corresponding reporting requirement in § 373.4(d).

(b) Two FDIC-supervised IDIs were involved in deals in which credit risk was retained through vertical interest (§ 373.4(a)(1) Standard Risk Retention—Vertical Interest). These two IDIs were involved in 0, 0, and 13 such deals in 2018, 2019, and 2020, respectively. FDIC therefore estimates two annual respondents, with an average annual response rate of two responses per respondent, for the disclosure requirement associated with § 373.4(a)(1) and the corresponding reporting requirement in § 373.4(d).

(c) Three FDIC-supervised IDIs were involved in deals in which credit risk was retained through revolving master trusts (§ 373.5 Revolving Master Trusts). These three IDIs were involved in eight, six, and zero such deals in 2018, 2019, and 2020, respectively. FDIC therefore estimates three annual respondents, with an average annual response rate of two responses per respondent, for the disclosure requirement associated with § 373.5 and the corresponding reporting requirement in § 373.5(k)(3).

Using the above methodology, FDIC could not find any ABS offerings that (1) involved an FDIC-supervised IDI or subsidiary of an FDIC-supervised IDI as a securitizer and (2) were subject to the PRA requirements listed in one or more of the following ten sections: §§ 373.4(a)(3); 373.6; 373.7; 373.10; 373.11; 373.13; 373.15; 373.16; 373.17; and 373.18. It is possible that an FDIC-supervised IDI or subsidiary of an FDIC-supervised IDI would be a respondent to burden items related to these sections in the next three years. As such, FDIC is using one respondent and one annual response per respondent for the disclosure and recordkeeping requirements related to each of these ten sections to preserve the associated burden estimate.

Of the seven unique institutions with securitizations between 2018 and 2020, none are considered small for the purposes of the RFA.

The estimated time per response varies by burden item, and these estimates are unchanged from the previous renewal which remains in line with the burden estimated adopted by the agencies.

Two burden items included in the 2018 information collection request have been removed from this renewal request. The disclosure burden related to § 373.8 Fannie Mae and Freddie Mac was removed as FDIC has determined that it is not possible for FDIC-supervised IDIs or subsidiaries of FDIC-supervised IDIs to be respondents to this burden item. The disclosure burden related to § 373.9 Open Market Collateralized Loan Obligations (“CLOs”) was removed because the D.C. Circuit Court invalidated section 941 of Dodd-Frank as it applies to CLOs.

The estimated annual burden, in hours, is the product of the estimated number of respondents, number of responses per respondent, and time per response, as summarized in the table below. The total estimated annual burden for this information collection is 376 hours, a 3,075-hour reduction from the 2018 burden estimate, which reflects the aforementioned change in methodology.

2. Title: Minimum Requirements for Appraisal Management Companies

OMB Number: 3064-0195.

Form Number: None.

Affected Public: Individuals or households; business or other for profit.

General Description of Collection: This information collection comprises recordkeeping and disclosure requirements under regulations issued by the Federal Deposit Insurance Corporation (FDIC), jointly with the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (FRB), the National Credit Union Administration (NCUA), the Bureau of Consumer Financial Protection (CFPB), and the Federal Home Finance Agency (FHFA) (collectively, “the agencies”) that implement the minimum requirements in Section 1473 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act or the Act) to be applied by states in the registration and supervision of appraisal management companies (AMCs). The regulations also implement the requirement in Section 1473 of the Dodd-Frank Act for states to report to the Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council (FFIEC) the information required by the ASC to administer the new national registry of appraisal management companies (AMC National Registry or Registry). The information collection (IC) requirements are established in Part 323 of the FDIC's codified regulations.

This information collection was last approved for renewal on October 16, 2018 (“2018 ICR”) with a total annual burden estimate of 421 hours. The 2018 ICR contains two recordkeeping and two reporting IC requirements. The FDIC notes that the ASC has issued its own regulations or guidance implementing the requirements from the Act related to the information to be presented to the ASC by the participating states, and submitted an IC related to this reporting requirement. Accordingly, the FDIC is not taking PRA burden for the associated IC (previously included as “State Reporting Requirements to Appraisal Subcommittee”) and has removed it from its current ICR submission.

For each of the remaining ICs, FDIC's estimation methodology is to compute the total estimated burden hours for that IC and then assign an agreed-upon share of the burden hours to each of the regulatory agencies (FDIC, FRB, OCC, and FHFA). The FDIC's estimated annual burden is calculated by finding the product of the estimated annual number of respondents, the estimated annual number of responses per respondent, the estimated burden hours per response and the share of the burden attributable to the FDIC.

Burden Estimate:

Estimated Number of Respondents

IC #1: Written Notice of Appraiser Removal From Network or Panel

This IC relates to the written notice of appraiser removal from the network or panel pursuant to § 323.10. The number of respondents is estimated to be equal to the number of appraisers who leave the profession each year multiplied by the estimated percentage of appraisers who work for AMCs. The number of appraisers who leave is calculated by adding the number of appraisers who are laid off or resign to the number of appraisers that have had their licenses revoked or surrendered. This estimation methodology is similar to the methodology used in the 2018 ICR.

The number of appraisers who are laid off or resign each year is estimated by multiplying the annual rate of “Total separations” by the number of appraisers for each year. Using data from the Bureau of Labor Statistics (BLS) for the finance and insurance industry, shown in Table 1 below, the annual rate of “Total separations” in 2020 is 25.1 percent. The rate for 2020 is within the range of annual rates between 2011 and 2020 (20.4 to 26.0 percent, with a median of 24.8 percent) and is a reasonable estimate for future periods.

The number of appraisers is estimated by using the number of appraisers in 2020 as a proxy for the level of appraiser employment over the next three years. In 2020, the total number of appraisers was 86,000 and is similar to the annual average of 87,000 appraisers between 2011 and 2020. Table 2 contains data on annual employment level for appraisers in the U.S. between 2011 and 2020:

Given the data summarized above, the number of appraisers who are laid off or resign is estimated by multiplying the annual number of appraisers by the annual separation rate 86,000 × 25.1 percent = 21,586.

As stated above, respondents to this IC also include appraisers who have their license revoked or surrendered each year. According to the ASC, between January 1, 2010 and December 31, 2019, the counts of appraisers who have had their license revoked or surrendered are 804 and 576, respectively. Therefore, the annual average over the ten-year span is 138 licenses revoked or surrendered per year.

The number of appraisal removal notices for AMCs is then calculated by adding the estimate of appraisers who are laid off or resign to the number of appraisers who have their licenses revoked or surrendered, and multiplying by the estimated percent of total appraisers who work for AMCs. According the Appraisal Institute, approximately 81 percent of appraisers are sole proprietors, executives in a firm, or are listed as having other forms of employment status. The remaining 19 percent of appraisers are employees or staff members in firms such as AMCs, appraisal services companies, or other companies. Using 19 percent as the estimate of the percentage of appraisers who work for AMCs, the estimated total number of appraiser removal notices for AMCs is 4,130 notices per year, rounded to the nearest ten. Thus, the estimated number of annual respondents for this information collection is 4,130. The respondents to this IC are either natural persons or AMCs. There are no data available currently on the number of AMCs that are considered “small,” for the purposes of the Regulatory Flexibility Act (RFA), and none of the respondents who are natural persons are small for the purposes of the RFA. As a rough approximation, to estimate the number of small respondents to this IC FDIC uses the percentage of insured depository institutions that are small (70 percent) for purposes of the RFA, and assume that all respondents are AMCs. Thus, FDIC estimates that 2,891 respondents to this IC are small for purposes of the RFA. This is likely a conservative estimate of small respondents for this information collection because not all respondents to this IC are AMCs.

The estimated number of notices per year is lower than the 2018 ICR estimate by 5,751 notices. Two factors contributed to the drop in estimated notices: First, the number of appraisers who are laid off or resign, and the number that have had their licenses revoked or surrendered (138 and 21,586, respectively) are lower than the estimates in the 2018 ICR (245 and 23,280); second, there is more granular data available to calculate the share of appraisers employed by AMCs, appraisal services companies, or other companies. The most recent data from the Appraisal Institute contains nine separate categories for Appraiser Employment Status, whereas the data available for the 2018 ICR contained only four categories. Given the level of aggregation available in 2018, the estimate of the share of appraisers in the 2018 ICR likely included appraisers who are employees or staff members in a government or regulatory agency, and individuals with employment statuses such as valuation consultant, professor or other academic professional, semi-retired or retired, or student. The FDIC notes that appraisers or individuals with the five employment statuses listed above would not be subject to this IC. Consequently, the share (19 percent) is much lower than the share (42 percent) used in the 2018 ICR.

IC #2: Develop and Maintain a State Licensing Program

The second information collection pertains to developing and maintaining a state licensing program for AMCs pursuant to Section 323.14. Section 323.14 requires that each state electing to register AMCs for purposes of permitting AMCs to provide appraisal management services relating to covered transactions in the state must submit to the ASC certain information required under the Rule and any additional information required by the ASC concerning AMCs. Thus, this burden falls on the states, especially those that have not developed a system to register and oversee AMCs. According to the ASC there are four states (the territories of Guam, Mariana Islands, Puerto Rico, and the U.S. Virgin Islands) that have not developed a system to register and oversee AMCs. Thus, the estimated number of annual respondents for this burden is four. Since respondents to this IC are states, none of the respondents are considered “small” for purposes of the RFA.

IC #3: AMC Disclosure Requirements (State-Regulated AMCs) ³⁷

The third information collection relates to disclosure requirements for AMCs that are not federally regulated AMCs (“state-regulated AMCs”) pursuant to Section 323.12, which involves information sent by AMCs to third parties, including states and the AMC National Registry. The disclosure requirement for this IC includes registration limitations/requirements. According to the National Registry, accessed on June 2, 2021, there are 3,854 active AMCs, of which 3,817 are state-regulated AMCs. FDIC does not have the data to estimate the change in the number of active state-regulated AMCs using historical information because the National Registry became available for the states to populate in July 2018, and the states' reporting characteristics vary over time. For the purposes of this analysis FDIC assumes the number of state-regulated AMCs to remain approximately the same over the next three years. Thus, the estimated number of annual respondents for this burden is 3,820, after rounding up to the nearest ten. There are no data available currently on the number of AMCs that are small. As a rough approximation, FDIC uses the percentage of insured depository institutions that are small (70 percent) for purposes of the RFA to estimate the number of small respondents to this IC. Using this methodology FDIC estimates that 2,674 respondents to this IC are small for purposes of the RFA.

IC #4: AMC Disclosure Requirements (Federally Regulated AMCs)

The fourth information collection relates to AMC disclosure requirements for federally regulated AMCs pursuant to Section 323.13(c). The disclosure requirements for this IC include registration limitations/requirements as well as information regarding the determination of the AMC National Registry fee. Of the 3,854 active AMCs, 37 are federally regulated AMCs. FDIC does not have the data to estimate the change in the number of active federally regulated AMCs using historical information because the National Registry became available for the states to populate in July 2018, and the states' reporting characteristics vary over time. For the purposes of this analysis FDIC assumes the number of federally regulated AMCs to remain approximately the same over the next three years. Thus, the estimated number of annual respondents for this burden is 39, after rounding up to the nearest multiple of three. There are no data available currently on the number of AMCs that are small. As a rough approximation, FDIC uses the percentage of insured depository institutions that are small (70 percent) for purposes of the RFA to estimate the number of small respondents to this IC. Accordingly, FDIC estimates that 27 respondents to this IC are small for purposes of the RFA.

Estimated Number of Responses

For IC #1, FDIC assumes an AMC receives one written notice from each appraiser asking to be removed from the appraiser panel, or sends one notice to each appraiser removing him/her from the panel. Thus, the estimated number of responses per respondent is one.

For IC #2, FDIC assumes that states without a registration and licensing program would develop and maintain a single program for each state. Thus, the estimated number of responses per respondent is one.

For IC #3 and IC #4, FDIC estimates the number of responses per respondent as the number of states that do not have an AMC registration program in which the average state-regulated or federally regulated AMC operates. As discussed previously, there are four states that currently do not have an AMC registration program. As noted in the Supporting Statement accompanying the 2018 ICR, a 2013 survey conducted by the CFPB found that the average AMC operates in 19.56 states. Thus, the average state-regulated or federally regulated AMC operates in approximately 2 states that do not have AMC registration systems: (4 states/55 states) × 19.56 states = 1.422 states ~ rounded up to 2 states.

Frequency of Responses

For IC #1, as discussed above, the AMC receives (or sends) a written notice in the event an appraiser no longer serves on the panel. Since this event occurs on occasion, FDIC uses “On Occasion” as the Frequency of Reponses for this IC and assumes a frequency of one.

For IC #2, FDIC assumes the states that have currently elected not to register and oversee AMCs could choose to do so at any time. Since this event occurs on occasion, FDIC uses “On Occasion” as the Frequency of Reponses for this IC and assumes a frequency of one.

For IC #3 and IC #4, FDIC assumes the state-regulated or federally regulated AMCs that are currently operating in a state but have not yet registered with that state could choose to do so any time. Since this event occurs on occasion, FDIC uses “On Occasion” as the Frequency of Reponses for this IC and assumes a frequency of one.

Estimated Time per Response

The 2018 ICR estimate of the hour burden per written notice of appraiser removal was 0.08 hours. The FDIC believes this estimate remains reasonable and appropriate for this IC and uses 0.08 hours as the estimated time per response for IC #1.

The 2018 ICR estimate of the hour burden for a state without a registration program or system to establish one was 40 hours. The FDIC believes this estimate remains reasonable and appropriate for this IC and uses 40 hours as the estimated time per response for IC #2.

The 2018 ICR estimate of the hour burden for a state-regulated or federally regulated AMC to register in a state in which it operates was one hour. The FDIC believes this estimate remains reasonable and appropriate for IC #3 and IC #4 and uses one hour each as the estimated time per response for IC #3 and IC #4.

The estimated annual burden, in hours, for the four agencies (FDIC, FRB, OCC, and FHFA) is the product of the estimated number of respondents per year allocated to each agency, the number of responses per respondent per year, and the hours per response, as summarized in Tables 3 and 4 below. For IC #1, and IC #3, the estimated respondents are split between the four agencies the FDIC, FRB, OCC, and FHFA, at a ratio of 3:3:3:1. Thus, the estimated number of annual respondents attributable to the FDIC, FRB, and OCC for IC #1, and IC #3 are 1,239, and 1,146 each, respectively. Similarly, the estimated number of annual respondents attributable to the FHFA for IC #1, and IC #3 are 413, and 382, respectively. For IC #2, the estimated number of respondents is split equally amongst the four agencies which amounts to one respondent each. For IC #4, the estimated number of respondents (39) is split equally amongst the three banking agencies (13 each) as Section 323.9 defines a federally regulated AMC as an AMC owned and controlled by an insured depository institution, which is regulated by the FDIC, FRB, or OCC. The total estimated annual burden for this information collection is 8,208 hours. The FDIC, FRB, and OCC will each have equally-sized shares of the total estimated burden, with each agency responsible for 2,457 hours. The FHFA is responsible for the remaining 837 hours.

3. Title: Joint Standards for Assessing Diversity Policies and Practices.

OMB Number: 3064-00200.

Form Number: 2710/05—Diversity Self-Assessment (paper form).

2710/06—Diversity Self-Assessment (electronic form).

Affected Public: Insured state nonmember banks, and insured state savings associations.

Burden Estimate: FDIC is revising the burden estimates associated with this information collection as a result of the update of the electronic version of the reporting form. The update will allow respondents who have previously completed a diversity self-assessment (DSA) to copy and clone their previous submission. This copy/clone capability reduces the reporting burden for returning respondents. However, it does not change the burden for respondents who fill out the electronic form for the first time or respondents who choose an alternative method of assessing their diversity policies and practices. As such, this ICR revises the IC line items to distinguish between the implementation burden incurred by first time respondents from the ongoing burden incurred by returning respondents. This ICR also updates the respondent count estimates for the other line items in this IC. Finally, this ICR adds a line to cover the burdens of non-material (not responsive) submissions.

In October 2020, the FDIC implemented a copy/clone feature in FID-SA for submissions covering the 2020 reporting period and beyond. This feature allows the respondent to pre-populate a new diversity self-assessment with the information that was previously completed and submitted. In addition, the FDIC Office of Minority and Women Inclusion (OMWI) have identified several submissions that complete the pro forma form but do not provide the FDIC with any material self-assessments. With the addition of these two submission types, there are now five distinct submission types for this IC:

1. Paper Form Submissions, which are DSA submissions that use the “Diversity Self-Assessment of Financial Institutions Regulated by the FDIC” form and submit the form as an email attachment or via the United States Postal Service;

2. Electronic Form (Implementation) Submissions, which are DSA submissions that utilize the online FID-SA application, and the financial institution has not previously submitted a DSA;

3. Electronic Form (Ongoing) Submissions, which are DSA submissions that utilize the online FID-SA application and are able to use the copy/clone feature in FID-SA;

4. Free-Form Submissions, which are submissions that do not use the “Diversity Self-Assessment of Financial Institutions Regulated by the FDIC” form; and

5. Non-Material Submissions, which are pro forma submissions that do not provide any material self-assessments.

Estimated Number of Respondents and Responses

Responses to this information collection are voluntary and may be submitted by any FDIC-regulated financial institution. As such, potential respondents to this IC are all FDIC-regulated financial institutions. As of December 31, 2020, the FDIC regulates 3,227 insured depository institutions (IDIs). Of these institutions, 2,380 are considered small for the purposes of the Regulatory Flexibility Act (RFA).

Respondents submit a single response per year. To estimate the number of respondents for this ICR, FDIC reviewed and summarized data from historical submissions by FDIC-regulated IDIs covering diversity activities in the reporting periods 2016-2019. Submissions were categorized as a first-time submission if no prior submission was made by the same IDI. Otherwise, the submission was categorized as a repeat submission. FDIC did not categorize 2016 submissions since 2016 was the first year for which the agency has submission data. A summary of these results is provided in Table 1 below:

As Table 1 shows, there were 152 total submissions in 2019, the most recent reporting year. This is an increase of approximately 20 submissions from the previous year. This increase is due to the introduction of the online FID-SA application and an expanded outreach effort by the FDIC to educate and increase awareness about the DSA. The FDIC expects that submission counts will continue to climb upwards due to continued expanded outreach efforts as well as the introduction of the copy/clone feature to facilitate responses. Based on the historical submission counts and the expected rise in submissions, the FDIC expects it will receive 195 submissions per year with the majority of these submissions using the online FID-SA application. Based on the historical trends of first-time and repeating submissions future expectations, the FDIC anticipates annual respondent counts of 45 Electronic Form (Implementation) and 130 Electronic Form (Ongoing) submissions. In addition, the FDIC anticipates annual counts of five Free-Form Submissions and ten Non-material Submissions. Finally, FDIC recognizes that some IDIs may prefer to continue providing Paper Submissions and anticipate five such submissions per year.

Estimated Hourly Burden

The FDIC estimates that Electronic Form (Implementation) Submissions will take seven hours, the same burden that was recorded in the Electronic Form line item in the 2020 ICR. For Electronic Form (Ongoing) Submissions, the FDIC estimates that the copy/clone feature will save respondents an average of four hours per submission, for a net burden of three hours per response. For Non-material Submissions, the FDIC estimates that the pro forma completion of the submission application will take six minutes, or 0.1 hours. The FDIC has reviewed the hourly burden estimates for Paper Submissions and for Free-Form Submissions and found that the estimates from the 2020 ICR remain reasonable and appropriate. Finally, the FDIC estimates that each respondent will incur one hour of burden per year, on average, to disclose a portion of its submission to the public, in a manner reflective of the entity's size and other characteristics.

The estimated annual burden for each submission type, in hours, is the product of the estimated number of respondents, number of responses per respondent per year, and time per response, as summarized in Table 2 below. The total estimated annual burden for this information collection is 100, 106 hours, a reduction of 559 hours from the previously approved ICR.

General Description of Collection

Section 342 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Act) required the Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (Board), Federal Deposit Insurance Corporation (FDIC), Bureau of Consumer Financial Protection (CFPB), National Credit Union Administration (NCUA), and Securities and Exchange Commission (SEC) (together, Agencies and separately, Agency) each to establish an Office of Minority and Women Inclusion (OMWI) to be responsible for all matters of the Agency relating to diversity in management, employment, and business activities. The Act also instructed each OMWI Director to develop standards for assessing the diversity policies and practices of entities regulated by the Agency. The Agencies worked together to develop joint standards and, on June 10, 2015, they jointly published in the Federal Register the “Final Interagency Policy Statement Establishing Joint Standards for Assessing the Diversity Policies and Practices of Entities Regulated by the Agencies” (Policy Statement).

The Policy Statement contains a “collection of information” within the meaning of the Paperwork Reduction Act of 1995 (PRA). The Policy Statement includes Joint Standards that cover “Practices to Promote Transparency of Organizational Diversity and Inclusion.” These Joint Standards contemplate that a regulated entity is transparent about its diversity and inclusion activities by making certain information available to the public annually on its website or through other appropriate communications methods, in a manner reflective of the entity's size and other characteristics. The specific information referenced in these standards is: (a) Leadership commitment to diversity and inclusion; (b) workforce diversity and employment practices; (c) progress toward achieving diversity and inclusion in its procurement activities; and (d) opportunities available at the entity that promote diversity.

In addition, the Policy Statement includes Joint Standards that address “Entities' Self-Assessment.” The Joint Standards for Entities' Self-Assessment envision that a regulated entity, in a manner reflective of its size and other characteristics, (a) conducts annually a voluntary self-assessment of its diversity policies and practices; (b) monitors and evaluates its performance under its diversity policies and practices on an ongoing basis; (c) provides information pertaining to its self-assessment to the OMWI Director of its primary federal financial regulator; and (d) publishes information pertaining to its efforts with respect to the Joint Standards.

The collection of information described above is reported to the FDIC via the form entitled “Diversity Self-Assessment of Financial Institutions Regulated by the FDIC,” which can be submitted in paper or electronic format. To facilitate DSA submissions, the FDIC has developed the automated Financial Institution Diversity Self-Assessment (FID-SA) application. FID-SA provides FDIC-regulated financial institutions an easy and efficient way to electronically complete the diversity self-assessment; work with multiple users; view previous submissions; attach supporting material; and print and save in pdf format.

Request for Comment

Comments are invited on: (a) Whether the collection of information is necessary for the proper performance of the FDIC's functions, including whether the information has practical utility; (b) the accuracy of the estimates of the burden of the information collection, including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. All comments will become a matter of public record.