34751Federal Register / Vol. 61, No. 129 / Wednesday, July 3, 1996 / Proposed Rules
1 Technically, each Oakar transaction generates
its own AADA. Oakar institutions typically
participate in several Oakar transactions.
Accordingly, and Oakar institution generally has an
overall or composite AADA that consists of all the
individual AADAs generated in the various Oakar
transactions, plus the growth attributable to each
individual AADA. The composite AADA can
generally be treated as a unit as a practical matter,
because all the constituent AADAs (except initial
AADAs) grow at the same rate.
sale of securities on behalf of others in
the open market is not engaged in the
business referred to in section 32.
By order of the Board of Governors of the
Federal Reserve System.
Date: June 26, 1996.
William W. Wiles,
Secretary of the Board.
[FR Doc. 96–16841 Filed 7–02–96; 8:45am]
Billing Code 6210–01–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 327
RIN 3064–AB59
Assessments
AGENCY: Federal Deposit Insurance
Corporation.
ACTION: Proposed Rule.
SUMMARY: The Federal Deposit
Insurance Corporation (FDIC) is
proposing to amend its assessment
regulations by adopting interpretive
rules regarding certain provisions
therein that pertain to so-called Oakar
institutions: institutions that belong to
one insurance fund (primary fund) but
hold deposits that are treated as insured
by the other insurance fund (secondary
fund). Recent merger transactions and
branch-sale cases have revealed
weaknesses in the FDIC’s procedures for
attributing deposits to the two insurance
funds and for computing the growth of
the amounts so attributed. The
interpretive rules would repair those
weaknesses.
In addition, the FDIC is proposing to
simplify and clarify the existing rule by
making changes in nomenclature.
DATES: Comments must be received by
the FDIC on or before September 3,
1996.
ADDRESSES: Send comments to the
Office of the Executive Secretary,
Federal Deposit Insurance Corporation,
550 17th Street, N.W., Washington, D.C.
20429. Comments may be hand-
delivered to Room F–400, 1776 F Street,
N.W., Washington, D.C., on business
days between 8:30 a.m. and 5:00 p.m.
(FAX number: 202/898–3838. Internet
address: comments@fdic.gov).
Comments will be available for
inspection in the FDIC Public
Information Center, Room 100, 801 17th
Street, N.W., Washington, D.C. between
9:00 a.m. and 4:30 p.m. on business
days.
FOR FURTHER INFORMATION CONTACT:
Allan K. Long, Assistant Director,
Division of Finance, (703) 516–5559;
Stephen Ledbetter, Chief, Assessments
Evaluation Section, Division of
Insurance (202) 898–8658; Jules
Bernard, Counsel, Legal Division, (202)
898–3731, Federal Deposit Insurance
Corporation, Washington, D.C. 20429.
SUPPLEMENTARY INFORMATION: This
proposed interpretive regulation would
alter the method for determining the
assessments that Oakar institutions pay
to the two insurance funds.
Accordingly, the proposed regulation
would directly affect all Oakar
institutions. The proposed regulation
would also indirectly affect non-Oakar
institutions, however, by altering the
business considerations that non-Oakar
institutions must take into account
when they transfer deposits to or from
an Oakar institution (including an
institution that becomes an Oakar
institution as a result of the transfer).
I. Background
Section 5(d)(2) of the FDI Act, 12
U.S.C. 1815(d)(2), places a moratorium
on inter-fund deposit-transfer
transactions: mergers, acquisitions, and
other transactions in which an
institution that is a member of one
insurance fund (primary fund) assumes
the obligation to pay deposits owed by
an institution that is a member of the
other insurance fund (secondary fund).
The moratorium is to remain in place
until the reserve ratio of the Savings
Association Insurance Fund (SAIF)
reaches the level prescribed by statute.
Id. 1815(d)(2)(A)(ii); see id.
1817(b)(2)(A)(iv) (setting the target ratio
at 1.25 percentum).
The next paragraph of section 5(d)—
section 5(d)(3) of the FDI Act—is known
as the Oakar Amendment. See Financial
Institutions Reform, Recovery and
Enforcement Act of 1989 (FIRREA), Pub.
L. 101–73 section 206(a)(7), 103 Stat.
183, 199–201 (Aug. 9, 1989); 12 U.S.C.
1815(d)(3). The Amendment permits
certain deposit-transfer transactions that
would otherwise be prohibited by
section 5(d)(2) (Oakar transactions).
The Oakar Amendment introduces the
concept of the ‘‘adjusted attributable
deposit amount’’ (AADA). An AADA is
an artificial construct: a number,
expressed in dollars, that is generated in
the course of an Oakar transaction, and
that pertains to the buyer. The initial
value of a buyer’s AADA is equal to the
amount of the secondary-fund deposits
that the buyer acquires from the seller.
The Oakar Amendment specifies that
the AADA then increases at the same
underlying rate as the buyer’s overall
deposit base—that is, at the rate of
growth due to the buyer’s ordinary
business operations, not counting
growth due to the acquisition of
deposits from another institution (e.g.,
in a merger or a branch purchase). Id.
1815(d)(3)(C)(iii). The FDIC has adopted
the view that ‘‘growth’’ and ‘‘increases’’
can refer to ‘‘negative growth’’ under the
FDIC’s interpretation of the
Amendment, an AADA decreases when
the institution’s deposit base shrinks.
An AADA is used for the following
purposes:
—Assessments. An Oakar institution
pays two assessments to the FDIC—
one for deposit in the institution’s
secondary fund, and the other for
deposit in its primary fund. The
secondary-fund assessment is based
on the portion of the institution’s
assessment base that is equal to its
AADA. The primary-fund assessment
is based on the remaining portion of
the assessment base.
—Insurance. The AADA measures the
volume of deposits that are ‘‘treated
as’’ insured by the institution’s
secondary fund. The remaining
deposits are insured by the primary
fund. If an Oakar institution fails, and
the failure causes a loss to the FDIC,
the two insurance funds share the loss
in proportion to the amounts of
deposits that they insure.
For assessment purposes, the AADA
is applied prospectively, as is the
assessment base. An Oakar institution
has an AADA for a current semiannual
period, which is used to determine the
institution’s assessment for that period.1
The current-period AADA is calculated
using deposit-growth and other
information from the prior period.
II. The proposed rule
A. Attribution of transferred deposits
1. The FDIC’s Current Interpretation:
The ‘‘Rankin’’ Rule
The FDIC has developed a
methodology for attributing deposits to
the Bank Insurance Fund (BIF) on one
hand and to the SAIF on the other when
the seller is an Oakar institution. See
FDIC Advisory Op. 90–22, 2 FED.
DEPOSIT INS. CORP., LAW,
REGULATIONS, RELATED ACTS 4452
(1990) (Rankin letter). The Rankin letter
adopts the following rule: an Oakar
institution transfers its primary-fund
deposits first, and only begins to
1 Technically, each Oakar transaction generates
its own AADA. Oakar institutions typically
participate in several Oakar transactions.
Accordingly, and Oakar institution generally has an
overall or composite AADA that consists of all the
individual AADAs generated in the various Oakar
transactions, plus the growth attributable to each
individual AADA. The composite AADA can
generally be treated as a unit as a practical matter,
because all the constituent AADAs (except initial
AADAs) grow at the same rate.
sale of securities on behalf of others in
the open market is not engaged in the
business referred to in section 32.
By order of the Board of Governors of the
Federal Reserve System.
Date: June 26, 1996.
William W. Wiles,
Secretary of the Board.
[FR Doc. 96–16841 Filed 7–02–96; 8:45am]
Billing Code 6210–01–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 327
RIN 3064–AB59
Assessments
AGENCY: Federal Deposit Insurance
Corporation.
ACTION: Proposed Rule.
SUMMARY: The Federal Deposit
Insurance Corporation (FDIC) is
proposing to amend its assessment
regulations by adopting interpretive
rules regarding certain provisions
therein that pertain to so-called Oakar
institutions: institutions that belong to
one insurance fund (primary fund) but
hold deposits that are treated as insured
by the other insurance fund (secondary
fund). Recent merger transactions and
branch-sale cases have revealed
weaknesses in the FDIC’s procedures for
attributing deposits to the two insurance
funds and for computing the growth of
the amounts so attributed. The
interpretive rules would repair those
weaknesses.
In addition, the FDIC is proposing to
simplify and clarify the existing rule by
making changes in nomenclature.
DATES: Comments must be received by
the FDIC on or before September 3,
1996.
ADDRESSES: Send comments to the
Office of the Executive Secretary,
Federal Deposit Insurance Corporation,
550 17th Street, N.W., Washington, D.C.
20429. Comments may be hand-
delivered to Room F–400, 1776 F Street,
N.W., Washington, D.C., on business
days between 8:30 a.m. and 5:00 p.m.
(FAX number: 202/898–3838. Internet
address: comments@fdic.gov).
Comments will be available for
inspection in the FDIC Public
Information Center, Room 100, 801 17th
Street, N.W., Washington, D.C. between
9:00 a.m. and 4:30 p.m. on business
days.
FOR FURTHER INFORMATION CONTACT:
Allan K. Long, Assistant Director,
Division of Finance, (703) 516–5559;
Stephen Ledbetter, Chief, Assessments
Evaluation Section, Division of
Insurance (202) 898–8658; Jules
Bernard, Counsel, Legal Division, (202)
898–3731, Federal Deposit Insurance
Corporation, Washington, D.C. 20429.
SUPPLEMENTARY INFORMATION: This
proposed interpretive regulation would
alter the method for determining the
assessments that Oakar institutions pay
to the two insurance funds.
Accordingly, the proposed regulation
would directly affect all Oakar
institutions. The proposed regulation
would also indirectly affect non-Oakar
institutions, however, by altering the
business considerations that non-Oakar
institutions must take into account
when they transfer deposits to or from
an Oakar institution (including an
institution that becomes an Oakar
institution as a result of the transfer).
I. Background
Section 5(d)(2) of the FDI Act, 12
U.S.C. 1815(d)(2), places a moratorium
on inter-fund deposit-transfer
transactions: mergers, acquisitions, and
other transactions in which an
institution that is a member of one
insurance fund (primary fund) assumes
the obligation to pay deposits owed by
an institution that is a member of the
other insurance fund (secondary fund).
The moratorium is to remain in place
until the reserve ratio of the Savings
Association Insurance Fund (SAIF)
reaches the level prescribed by statute.
Id. 1815(d)(2)(A)(ii); see id.
1817(b)(2)(A)(iv) (setting the target ratio
at 1.25 percentum).
The next paragraph of section 5(d)—
section 5(d)(3) of the FDI Act—is known
as the Oakar Amendment. See Financial
Institutions Reform, Recovery and
Enforcement Act of 1989 (FIRREA), Pub.
L. 101–73 section 206(a)(7), 103 Stat.
183, 199–201 (Aug. 9, 1989); 12 U.S.C.
1815(d)(3). The Amendment permits
certain deposit-transfer transactions that
would otherwise be prohibited by
section 5(d)(2) (Oakar transactions).
The Oakar Amendment introduces the
concept of the ‘‘adjusted attributable
deposit amount’’ (AADA). An AADA is
an artificial construct: a number,
expressed in dollars, that is generated in
the course of an Oakar transaction, and
that pertains to the buyer. The initial
value of a buyer’s AADA is equal to the
amount of the secondary-fund deposits
that the buyer acquires from the seller.
The Oakar Amendment specifies that
the AADA then increases at the same
underlying rate as the buyer’s overall
deposit base—that is, at the rate of
growth due to the buyer’s ordinary
business operations, not counting
growth due to the acquisition of
deposits from another institution (e.g.,
in a merger or a branch purchase). Id.
1815(d)(3)(C)(iii). The FDIC has adopted
the view that ‘‘growth’’ and ‘‘increases’’
can refer to ‘‘negative growth’’ under the
FDIC’s interpretation of the
Amendment, an AADA decreases when
the institution’s deposit base shrinks.
An AADA is used for the following
purposes:
—Assessments. An Oakar institution
pays two assessments to the FDIC—
one for deposit in the institution’s
secondary fund, and the other for
deposit in its primary fund. The
secondary-fund assessment is based
on the portion of the institution’s
assessment base that is equal to its
AADA. The primary-fund assessment
is based on the remaining portion of
the assessment base.
—Insurance. The AADA measures the
volume of deposits that are ‘‘treated
as’’ insured by the institution’s
secondary fund. The remaining
deposits are insured by the primary
fund. If an Oakar institution fails, and
the failure causes a loss to the FDIC,
the two insurance funds share the loss
in proportion to the amounts of
deposits that they insure.
For assessment purposes, the AADA
is applied prospectively, as is the
assessment base. An Oakar institution
has an AADA for a current semiannual
period, which is used to determine the
institution’s assessment for that period.1
The current-period AADA is calculated
using deposit-growth and other
information from the prior period.
II. The proposed rule
A. Attribution of transferred deposits
1. The FDIC’s Current Interpretation:
The ‘‘Rankin’’ Rule
The FDIC has developed a
methodology for attributing deposits to
the Bank Insurance Fund (BIF) on one
hand and to the SAIF on the other when
the seller is an Oakar institution. See
FDIC Advisory Op. 90–22, 2 FED.
DEPOSIT INS. CORP., LAW,
REGULATIONS, RELATED ACTS 4452
(1990) (Rankin letter). The Rankin letter
adopts the following rule: an Oakar
institution transfers its primary-fund
deposits first, and only begins to
34752 Federal Register / Vol. 61, No. 129 / Wednesday, July 3, 1996 / Proposed Rules
transfer its secondary-fund deposits
after its primary-fund deposits have
been exhausted.
The chief virtue of this approach is
that of simplicity. Sellers rarely transfer
all their primary-fund deposits. A seller
ordinarily has the same AADA after the
transaction as before, and a buyer does
not ordinarily become an Oakar
institution. The Rankin letter’s approach
also has the virtue of being a well-
established and well-understood
interpretation.
Nevertheless, the Rankin letter’s
approach has certain weaknesses. For
example, if a seller transfers a large
enough volume of deposits, the seller
becomes insured and assessed entirely
by its secondary fund—even though it
remains a member of its primary fund
in name, and even though its business
has not changed in character.
The Rankin letter’s approach may also
lend itself to ‘‘gaming’’ by Oakar
institutions. Oakar banks—and their
owners—have an incentive to eliminate
their AADAs, because the SAIF
assessment rates are currently much
higher than the BIF rates. If an Oakar
bank belonged to a holding company
system, the holding company could
purge the AADA from the system as a
whole by having the Oakar bank transfer
all its BIF-insured deposits to an
affiliate, and then allowing the remnant
of the Oakar bank to wither away.
2. ‘‘Blended’’ deposits
An alternative approach would be to
adopt the view that an Oakar institution
transfers a blend of deposits to the
assuming institution. The transferred
deposits would be attributed to the two
insurance funds in the same ratio as the
Oakar institution’s overall deposits were
so attributed immediately prior to the
transfer. This ‘‘blended deposits’’
approach would have the virtue of
maintaining the relative proportions of
the seller’s primary-fund deposit-base
and the secondary-fund deposit base,
just as they are preserved in the
ordinary course of business.
As a general rule, the ratio would be
fixed at the start of the quarter in which
the transfer takes place. If the institution
were to acquire deposits after the start
of the quarter but prior to the transfer,
the acquired deposits would be added to
the institution’s store of primary-fund
and secondary-fund deposits as
appropriate, and the resulting amounts
would be used to determine the ratio.
This procedure would be designed to
exclude intra-quarter growth from the
calculation of the ratio. The FDIC
considers that it would be desirable to
do so for two main reasons: it would
keep the methodology simple; and (in
the ordinary case) it would make use of
numbers that are readily available to the
parties.
At the same time, the ‘‘blended
deposits’’ approach would create a new
Oakar institution each time a non-Oakar
institution acquired deposits from an
Oakar institution. Accordingly, this
approach would generally subject
buyers to more complex reporting and
tracking requirements. This approach
would also require more disclosure on
the part of sellers, because buyers would
have to be made aware that they were
acquiring high-cost SAIF deposits. But
the ‘‘blended deposits’’ approach could
remove some uncertainty because the
buyer would know that it was acquiring
such deposits whenever the seller was
an Oakar institution.
In cases where the seller has acquired
deposits prior to the sale but during the
same semiannual period as the sale, the
blended-deposit approach could be
more complex. The acquisition of
deposits would change the seller’s
AADA-to-deposits ratio, which would
need to be calculated and made
available in conjunction with the sale.
At first, the FDIC considered that this
problem could be addressed by using
the ratio at the beginning of the quarter
for all transactions during that quarter.
But the FDIC later came to the view that
this technique could open up the
blended-deposit approach to gaming
strategies that institutions could use to
decrease their AADAs.
Finally, under the blended-deposit
approach, Oakar banks—which are BIF
members—could find it difficult (or
expensive) to transfer deposits to other
institutions, due to market uncertainty
regarding the prospect of a special
assessment to capitalize SAIF and the
alternative prospect of a continued
premium differential between BIF and
SAIF.
Any change to a blended-deposit
approach would only apply to transfers
that take place on and after January 1,
1997. Accordingly, the change would
not affect any assessments that Oakar
institutions have paid in prior years.
Nor would it affect the business aspects
of transactions that have already
occurred, or that may occur during the
remainder of 1996.
B. FDIC Computation of the AADA;
Reporting Requirements
The FDIC currently requires all
institutions that assume secondary-fund
deposits in an Oakar transaction to
submit an Oakar transaction worksheet
for the transaction. The FDIC provides
the worksheet. The FDIC provides the
name of the buyer and the seller, and
the consummation date of the
transaction. The buyer provides the total
deposits acquired, and the value of the
AADA thereby generated. In addition,
Oakar institutions must complete a
growth adjustment worksheet to re-
calculate their AADA as of December 31
of each year. Finally, Oakar banks report
the value of their AADA, on a quarterly
basis, in their quarterly reports of
condition (call reports).
To implement the proposal to adjust
AADAs on a quarterly basis, and to
ensure compliance with the statutory
requirement that an AADA does not
grow during the semiannual period in
which it is acquired, see 12 U.S.C.
1815(d)(3)(C)(iii), the FDIC initially
considered replacing the current annual
growth adjustment worksheet with a
slightly more detailed quarterly
worksheet. The FDIC was concerned
that this approach might impose a
burden on Oakar institutions, however.
The FDIC was further concerned that
this approach could result in an
increase in the frequency of errors
associated with these calculations.
Accordingly, the FDIC now believes it
might be more appropriate to relieve
Oakar institutions of this burden by
assuming the responsibility for
calculating each Oakar institution’s
AADA, and eliminating the growth
adjustment worksheet entirely. The
FDIC would calculate the AADA as part
of the current quarterly payment
process. The calculation, with
supporting documentation, would
accompany each institution’s quarterly
assessment invoice.
If the FDIC assumes the responsibility
for calculating the AADA, Oakar
institutions would no longer have to
report their AADAs in their call reports.
But they would have to report three
items on a quarterly basis. Oakar
institutions already report two of the
items as part of their annual growth
adjustment worksheets: total deposits
acquired in the quarter, and secondary-
fund deposits acquired in the quarter.
Oakar institutions would therefore have
to supply one other item: total deposits
sold in the quarter.
These items will be zero in most
quarters. Even in quarters in which
some transactions have occurred, the
FDIC considers that the items should be
readily available and easy to calculate.
While for operational purposes, the
FDIC would prefer to add these three
items to the call report, an alternative
approach would be simply to replace
the current growth adjustment
worksheet with a very simple quarterly
worksheet essentially consisting only of
these items. The FDIC expects this
specific issue to be addressed in a
Request for Comment on Call Report
transfer its secondary-fund deposits
after its primary-fund deposits have
been exhausted.
The chief virtue of this approach is
that of simplicity. Sellers rarely transfer
all their primary-fund deposits. A seller
ordinarily has the same AADA after the
transaction as before, and a buyer does
not ordinarily become an Oakar
institution. The Rankin letter’s approach
also has the virtue of being a well-
established and well-understood
interpretation.
Nevertheless, the Rankin letter’s
approach has certain weaknesses. For
example, if a seller transfers a large
enough volume of deposits, the seller
becomes insured and assessed entirely
by its secondary fund—even though it
remains a member of its primary fund
in name, and even though its business
has not changed in character.
The Rankin letter’s approach may also
lend itself to ‘‘gaming’’ by Oakar
institutions. Oakar banks—and their
owners—have an incentive to eliminate
their AADAs, because the SAIF
assessment rates are currently much
higher than the BIF rates. If an Oakar
bank belonged to a holding company
system, the holding company could
purge the AADA from the system as a
whole by having the Oakar bank transfer
all its BIF-insured deposits to an
affiliate, and then allowing the remnant
of the Oakar bank to wither away.
2. ‘‘Blended’’ deposits
An alternative approach would be to
adopt the view that an Oakar institution
transfers a blend of deposits to the
assuming institution. The transferred
deposits would be attributed to the two
insurance funds in the same ratio as the
Oakar institution’s overall deposits were
so attributed immediately prior to the
transfer. This ‘‘blended deposits’’
approach would have the virtue of
maintaining the relative proportions of
the seller’s primary-fund deposit-base
and the secondary-fund deposit base,
just as they are preserved in the
ordinary course of business.
As a general rule, the ratio would be
fixed at the start of the quarter in which
the transfer takes place. If the institution
were to acquire deposits after the start
of the quarter but prior to the transfer,
the acquired deposits would be added to
the institution’s store of primary-fund
and secondary-fund deposits as
appropriate, and the resulting amounts
would be used to determine the ratio.
This procedure would be designed to
exclude intra-quarter growth from the
calculation of the ratio. The FDIC
considers that it would be desirable to
do so for two main reasons: it would
keep the methodology simple; and (in
the ordinary case) it would make use of
numbers that are readily available to the
parties.
At the same time, the ‘‘blended
deposits’’ approach would create a new
Oakar institution each time a non-Oakar
institution acquired deposits from an
Oakar institution. Accordingly, this
approach would generally subject
buyers to more complex reporting and
tracking requirements. This approach
would also require more disclosure on
the part of sellers, because buyers would
have to be made aware that they were
acquiring high-cost SAIF deposits. But
the ‘‘blended deposits’’ approach could
remove some uncertainty because the
buyer would know that it was acquiring
such deposits whenever the seller was
an Oakar institution.
In cases where the seller has acquired
deposits prior to the sale but during the
same semiannual period as the sale, the
blended-deposit approach could be
more complex. The acquisition of
deposits would change the seller’s
AADA-to-deposits ratio, which would
need to be calculated and made
available in conjunction with the sale.
At first, the FDIC considered that this
problem could be addressed by using
the ratio at the beginning of the quarter
for all transactions during that quarter.
But the FDIC later came to the view that
this technique could open up the
blended-deposit approach to gaming
strategies that institutions could use to
decrease their AADAs.
Finally, under the blended-deposit
approach, Oakar banks—which are BIF
members—could find it difficult (or
expensive) to transfer deposits to other
institutions, due to market uncertainty
regarding the prospect of a special
assessment to capitalize SAIF and the
alternative prospect of a continued
premium differential between BIF and
SAIF.
Any change to a blended-deposit
approach would only apply to transfers
that take place on and after January 1,
1997. Accordingly, the change would
not affect any assessments that Oakar
institutions have paid in prior years.
Nor would it affect the business aspects
of transactions that have already
occurred, or that may occur during the
remainder of 1996.
B. FDIC Computation of the AADA;
Reporting Requirements
The FDIC currently requires all
institutions that assume secondary-fund
deposits in an Oakar transaction to
submit an Oakar transaction worksheet
for the transaction. The FDIC provides
the worksheet. The FDIC provides the
name of the buyer and the seller, and
the consummation date of the
transaction. The buyer provides the total
deposits acquired, and the value of the
AADA thereby generated. In addition,
Oakar institutions must complete a
growth adjustment worksheet to re-
calculate their AADA as of December 31
of each year. Finally, Oakar banks report
the value of their AADA, on a quarterly
basis, in their quarterly reports of
condition (call reports).
To implement the proposal to adjust
AADAs on a quarterly basis, and to
ensure compliance with the statutory
requirement that an AADA does not
grow during the semiannual period in
which it is acquired, see 12 U.S.C.
1815(d)(3)(C)(iii), the FDIC initially
considered replacing the current annual
growth adjustment worksheet with a
slightly more detailed quarterly
worksheet. The FDIC was concerned
that this approach might impose a
burden on Oakar institutions, however.
The FDIC was further concerned that
this approach could result in an
increase in the frequency of errors
associated with these calculations.
Accordingly, the FDIC now believes it
might be more appropriate to relieve
Oakar institutions of this burden by
assuming the responsibility for
calculating each Oakar institution’s
AADA, and eliminating the growth
adjustment worksheet entirely. The
FDIC would calculate the AADA as part
of the current quarterly payment
process. The calculation, with
supporting documentation, would
accompany each institution’s quarterly
assessment invoice.
If the FDIC assumes the responsibility
for calculating the AADA, Oakar
institutions would no longer have to
report their AADAs in their call reports.
But they would have to report three
items on a quarterly basis. Oakar
institutions already report two of the
items as part of their annual growth
adjustment worksheets: total deposits
acquired in the quarter, and secondary-
fund deposits acquired in the quarter.
Oakar institutions would therefore have
to supply one other item: total deposits
sold in the quarter.
These items will be zero in most
quarters. Even in quarters in which
some transactions have occurred, the
FDIC considers that the items should be
readily available and easy to calculate.
While for operational purposes, the
FDIC would prefer to add these three
items to the call report, an alternative
approach would be simply to replace
the current growth adjustment
worksheet with a very simple quarterly
worksheet essentially consisting only of
these items. The FDIC expects this
specific issue to be addressed in a
Request for Comment on Call Report