Federal Agencies Propose Call Report Revisions to Address Reciprocal Deposits Under New Housing Act Provisions

Washington DC - Three key federal financial regulatory bodies, the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board), and the Federal Deposit Insurance Corporation (FDIC), have jointly announced a proposal to revise and extend the Consolidated Reports of Condition and Income, commonly known as Call Reports. These reports, identified as FFIEC 031, FFIEC 041, and FFIEC 051, are essential quarterly filings for banks and savings associations across the nation. The proposed revisions are a direct consequence of an interim final rule issued by the FDIC that implements Section 902 of the 21st Century ROAD to Housing Act. This legislative change specifically addresses the reporting and classification of reciprocal deposits, a subset of brokered deposits, with significant implications for how financial institutions manage and report their funding structures. The agencies are now inviting public comment on these changes, with a deadline of December 28, 2026.

The Cornerstone of Financial Oversight: Call Reports

For decades, Call Reports have served as a critical tool for federal regulators to monitor the financial health, performance, and risk profiles of individual institutions and the broader banking industry. Submitted quarterly, these mandatory reports provide granular data that informs regulatory actions, risk assessments, and policy decisions. The data from Call Reports assists the OCC, Board, and FDIC in their shared missions of ensuring the safety and soundness of financial institutions and protecting consumer financial rights. They are also used to calculate risk-based assessments for insured depository institutions and to evaluate corporate applications, such as mergers and acquisitions.

Addressing Reciprocal Deposits: A Legislative Mandate

The impetus for the current revisions lies in the treatment of reciprocal deposits under Section 29 of the Federal Deposit Insurance Act (FDI Act). This section imposes restrictions on insured depository institutions that are less than well capitalized, limiting their ability to accept brokered deposits. Reciprocal deposits, obtained through mediation or assistance of a deposit broker, are generally classified as brokered deposits. However, Section 29(i) of the FDI Act provides a limited exception. This exception allows an insured depository institution that qualifies as an 'agent institution' to exclude a specified amount of reciprocal deposits from being categorized as brokered deposits. Institutions that do not meet the criteria for an agent institution must treat all their reciprocal deposits as brokered deposits.

The FDIC's interim final rule, implementing Section 902 of the 21st Century ROAD to Housing Act, refines the definitions and reporting requirements related to these deposits. This rule necessitates updates to the Call Report forms to ensure that financial institutions accurately report their reciprocal deposit figures in accordance with the new statutory framework. The changes aim to provide regulators with a clearer picture of institutions' funding sources and their compliance with brokered deposit regulations, particularly important for institutions operating under capital constraints.

The Regulatory Process and Opportunity for Public Input

These proposed revisions fall under the purview of the Paperwork Reduction Act of 1995 (PRA), which requires federal agencies to seek public comment on information collection activities. The Federal Financial Institutions Examination Council (FFIEC), composed of the agencies, approved the publication of this proposal. The agencies previously received emergency approval from the Office of Management and Budget (OMB) for these revisions, indicating the urgency of integrating these reporting changes. The current notice initiates a 60-day comment period, ending on December 28, 2026, allowing interested parties to provide feedback. A subsequent 30-day comment period will follow. The agencies emphasize that while these revisions are significant, they do not materially impact the existing estimated burden hours for institutions filing Call Reports.

The estimated burden for preparing and submitting Call Reports varies by agency, reflecting the diverse composition of institutions under their supervision. For example, national banks and federal savings associations overseen by the OCC face an estimated 41.38 burden hours per quarter, while state member banks under the Board average 45.21 hours. Insured state nonmember banks and state savings associations regulated by the FDIC face an average of 38.81 hours. These figures account for the different types of Call Reports FFIEC 031, FFIEC 041, and FFIEC 051.

Implications for Financial Institutions and the Financial System

The careful classification of reciprocal deposits is crucial for many financial institutions. For institutions that are less than well capitalized, an accurate accounting of non-brokered reciprocal deposits can impact their ability to attract and retain certain funding sources. The changes to the Call Report forms ensure regulatory transparency and provide a standardized method for reporting. This standardization is vital for consistent regulatory oversight and for assessing systemic risks. The clarification provided by Section 902 of the 21st Century ROAD to Housing Act, through the FDIC's interim rule, offers a clearer framework for institutions navigating the complexities of brokered deposit regulations.

The agencies' request for comment provides an important opportunity for banks, savings associations, legal professionals, and other stakeholders to contribute to the finalization of these reporting requirements. Their input will help ensure that the revised Call Reports effectively capture the necessary data while minimizing undue burden on reporting institutions. Once finalized, these revisions will be integrated into the quarterly reporting cycle, impacting financial institutions across the federal regulatory landscape.