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F ederal R e ser v e Bank OF DALLAS W IL L IA M H . W ALLACE f i r s t v ic e DALLAS, TEXAS 7 5 2 2 2 p r e s id e n t AND CH IE F O P ER ATIN G O FFIC E R December 7, 1987 C i r c u l a r 87-84 TO: The Chief Executive O f f i c e r of a l l member banks concerned in the Eleventh Federal Reserve D i s t r i c t SUBJECT Form FFIEC 004, Report of Indebtedness of Executive Officers and Principal Shareholders and Their Related Interests to Correspondent Banks DETAILS Since 1979 member banks have been s u b j e c t to c e r t a i n r e p o r t i n g and d i s c l o s u r e requirem en ts s e t f o r t h under th e B oard's Regul ation 0, such require me nts e s t a b l i s h e d under T i t l e s VIII and IX of t h e Fin a nc ia l I n s t i t u t i o n s Regu latory and I n t e r e s t Rate Control Act o f 1978 (FIRA). The Garn-St Germain Depository I n s t i t u t i o n s Act of 1982 amended c e r t a i n o f th e r e p o r t i n g and d i s c l o s u r e re q u ir e m e n ts . A copy of Form FFIEC 004 i s enclosed to a s s i s t your bank and your ban k's e x e c u t i v e o f f i c e r s and p r i n c i p a l s h a r e h o l d e r s re g a r d in g compliance with th e r e p o r t i n g and d i s c l o s u r e requirem en ts s e t f o r t h in Regulation 0. Executive o f f i c e r s and p r i n c i p a l s h a r e h o l d e r s s u b j e c t t o th e r e p o r t i n g req uirements o f T i t l e VIII o f FIRA must f i l e annual r e p o r t s concerning t h e i r in d e b t e d n e s s , and th e inde bte dness of t h e i r r e l a t e d i n t e r e s t s , to th e c orr e sp ond e nt banks o f the member bank. These r e p o r t s are f i l e d with t h e member ba n k 's board of d i r e c t o r s by January 31 of each y e a r . The 1988 r e p o r t covers th e perio d Janu ary 1 t o December 31, 1987. Each member bank should n o t i f y i t s e x e c u t i v e o f f i c e r s and p r i n c i p a l s h a r e h o ld e r s o f t h e r e p o r t i n g requ ire me nts to T i t l e VIII of FIRA. The persons n o t i f i e d should in c lu de any person who was an e x e c u t i v e o f f i c e r or p r i n c i p a l s h a r e h o l d e r o f t h e member bank during th e pe rio d Ja n u a ry 1 to December 31, 1987, s i n c e a l l of t h e s e persons a r e s u b j e c t to r e p o r t i n g requ ire me nts i f they were indebted to a c or re sp on de nt bank o f th e member bank during t h i s p e r i o d . For additional copies of any circular please contact the Public Affairs Department at (214) 651-6289. Banks and others are encouraged to use the following incoming WATS numbers in contacting this Bank (800) 442-7140 (intrastate) and (800) 527-9200 (interstate). This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) - 2 - Each member bank i s a l s o r e q u i r e d to make a v a i l a b l e t o i t s e xe c u ti v e o f f i c e r s and p r i n c i p a l s h a r e h o l d e r s a l i s t o f t h e member b a n k 's c or re sp on de nt banks. A c or re sp on de nt bank i s d e fi n e d as a bank t h a t m a in ta in s one or more c orr e sp on de nt accounts f o r a member bank during t h e c a l e n d a r y e a r t h a t in th e a ggre gat e exceed c e r t a i n amounts s p e c i f i e d in the r e g u l a t i o n . Form FFIEC 004, o r a s i m i l a r form, t h a t i s f i l e d by e xe c u ti v e o f f i c e r s and p r i n c i p a l s h a r e h o l d e r s , must be kep t on f i l e a t th e member bank f o r a pe rio d o f t h r e e y e a r s . These r e p o r t s a r e not r e q u i r e d to be made a v a i l a b l e to th e p u b l i c ; however, th e r e p o r t s w i l l be reviewed by examiners du ring th e course o f th e examination of th e member bank. The r e p o r t s f i l e d by e x e c u t i v e o f f i c e r s and p r i n c i p a l s h a r e h o l d e r s a re not r e q u i r e d to be f i l e d with th e Reserve Bank o r Regional A d m i n i s t r a t o r . The encl ose d Form FFIEC 004 i s provided to your bank t o a s s i s t your e x e c u t i v e o f f i c e r s and p r i n c i p a l s h a r e h o l d e r s in meeting t h e i r c o n ti n u in g r e p o r t i n g requ ireme nts under T i t l e VIII o f FIRA. The e x e c u t i v e o f f i c e r s and p r i n c i p a l s h a r e h o l d e r s can, i f they wish, provide th e re q u i r e d in fo rm a tio n on o t h e r forms. P le a se d u p l i c a t e th e form in accordance with your needs. Forms are being provided to national banks at the request of the Comptroller of the Currency. Form FFIEC 004 has been approved by t h e FFIEC f o r use by e x e c u ti v e o f f i c e r s and p r i n c i p a l s h a r e h o l d e r s in complying with the r e p o r t i n g require me nts o f T i t l e VIII of FIRA. ENCLOSURES The FFIEC 004 form i s en cl ose d. MORE INFORMATION Any q u e s t i o n s your bank may have on t h e c u r r e n t forms should be d i r e c t e d to Linda Myers o r Gary Krumm a t (214) 651-6670 or 651-6671, r e s p e c t i v e l y . Questions re g a r d in g th e r e g u l a t i o n should be d i r e c t e d t o Dean A. Pankonien o f t h i s Bank's Legal Department a t (214) 651-6228. Sincerely yours, Board of Governors of the Federal Reserve System Comptroller of the Currency Federal Deposit Insurance Corporation _____________________________________________________________________ N a m e o f E x e c u tiv e O ffic e r o r Princip al S hareh old er S u b m itt in g R e p o r t Report on Indebtedness of Executive Officers and Principal Shareholders and their Related Interests tO ___________ _________________________________ N e of Bank to w Report is Subm am hich itted Correspondent Banks State For th e Calendar Year Ending December 31, 1 9 ___ Status o f Reporting Person: A. Maxim um am ount o f indebtedness outstanding during the calendar year: Executive O fficer Form FFIEC 004 < , A pproved by the Federal F inancial In s titu tio n s 1 E x a m ination C o uncil 11/15/79 O M B No. 7100-0034 (FRB) Expires 9/30/89 1557-0070 (OCC) Expires 9/30/89 3064-0023 (FDIC) Expires 9/30/89 To be submitted by executive officers and principal shareholders of Insured banks to the boards of directors of their banks in satisfaction of the reporting requirements of the Federal Reserve Board's Regulation 0 (12 C.F.R. Part 215) and Part 349 of the Federal Deposit Insurance Corporation’s Rules and Regulations (12 C.F.R. Part 349) with respect to indebtedness to correspondent banks. D. Terms and C onditions of each extension o f credit included as indebtedness in the am ount reported in Box A (see Instruction 3). Use additional pages if indebtedness consists o f more than three loans and /o r more space is needed to report terms and conditions: Principal Shareholder If the report is subm itted fo r indebtedness o f a related interest, name and address o f related interest fo r w hich the report is subm itted: (In thousands o f dollars) $ B. Method used to determine m axim um am ount o f indebtedness outstand ing (check one): Loan 1: i. highest outstanding indebtedness during the calendar year ii. highest end o f the m onth indebtedness outstanding during the calendar year Name and address o f the correspondent bank to which the executive o ffice r, principal shareholder, or related interest is indebted: Loan 2: C. A m o u n t o f indebtedness outstanding 10 business days p rio r to the date o f filin g this Report: Loan 3: (In thousands o f dollars) $ I hereby c e rtify th a t info rm a tio n given above is complete, correct, true to the best o f m y knowledge. S ignature o f o ffic ia l responsible f o r re p o rt D ate Signed General Instructions 1. Persons Required to File Report A Report on Indebtedness to Correspondent Banks (F orm FFIEC 004), or a sim ilar fo rm containing identical info rm a tio n , must be completed by each executive o ffic e r and each principal shareholder o f an insured bank w ho was indebted, o r whose related interests were indebted, d uring the calendar year fo r which the report is being subm itted to a correspondent bank o f th e ir bank. A ll insured banks are required by law to make available to their executive officers and principal shareholders a list o f the bank's correspondent banks. "Correspondent b a n k " means generally a bank th a t maintains a correspondent account in excess o f a certain am ount fo r the officer's or shareholder's bank. The executive o ffic e r or principal shareholder must file a separate report concerning the indebtedness o f the o ffice r o r shareholder to each correspondent bank and a separate report concerning the indebtedness o f each o f the related interests o f the o ffice r or shareholder to each correspondent bank. For example, if an executive o ffic e r is indebted to tw o correspondent banks, the o ffice r must file tw o reports, one fo r each correspondent bank. If the executive o ffic e r has tw o related interests th a t were also both indebted to tw o correspondent banks, the o ffic e r w ould file six reports, tw o fo r the officer's own indebtedness and fo u r fo r the indebtedness o f the officer's related interests. If the executive o ffic e r is n o t indebted to a correspondent bank, but a related interest o f the o ffice r is indebted to a correspondent bank, the executive o ffic e r must file a report concerning the indebtedness o f the office r's related interest to the correspondent bank. 2. Where and When Reports are to be Filed The executive o ffic e r or principal shareholder must subm it the report on indebtedness to correspondent banks to the board o f directors o f the reporting person's bank fo r each calendar year by January 31 o f the next year. 3. What Must be Reported The reporting person must include in each re p o rt on indebtedness to each correspondent bank: (a) the maxim um am ount o f indebtedness outstanding during the calendar year, and (b) the terms and conditions o f each extension o f cre d it included in the m axim um am ount reported. The terms and conditions to be reported are: (1) the original amount and date; (2) the m a tu rity date; (3) the paym ent terms; (4) the range o f interest rates charged during the calendar year; (5) w hether secured or unsecured; (6) if secured, a description o f collateral and its value; and (7) any unusual terms or conditions. In determ ining the maxim um am ount o f indebtedness o f a principal shareholder, the indebtedness o f a member o f the shareholder's immediate fa m ily is to be treated as indebtedness o f the principal shareholder. Each maxim um am ount o f indebtedness reported may include several separate extensions o f credit. The reporting person must report separately the terms and conditions o f each o f these extensions o f credit. Each report on indebtedness to each correspondent bank must also include the am ount o f indebtedness outstanding to the correspondent bank 10 business days before the date the report on indebtedness is filed . If the info rm a tio n on the am ount o f indebtedness outstanding to a correspondent bank 10 business days before the filin g o f the report is n o t available or cannot be readily ascertained by the filin g date, an estimate o f the am ount o f such indebtedness may be filed, provided th a t the actual am ount o f such indebtedness is subm itted to the bank's board o f directors w ith in the next 30 days. 4. Definitions The fo llo w in g definitions are intended to provide general guidance in com pleting this report. For precise de fin itio n s, see the Federal Reserve Board's Regulation O (12 CFR Part 215) and Part 349 o f the FDIC's Rules and Regulations (12 CFR Part 349). a. "E xecutive o ffic e r" is defined in section 215.2 o f Regulation O and means generally an individual w ho participates o r w ho has a u th o rity to participate (other than in the capacity o f a director) in major policym aking functions o f the bank. Certain categories o f bank officers (e.g., vice presidents) are presumed in Regulation O to be executive officers unless they are excluded by resolution o f the board o f directors o f the bank or by its bylaws fro m participation in m ajor policym aking functions o f the bank and do n o t participate therein. b. "P rincipal Shareholder" means any individual o r company (other than an insured bank or a foreign bank) th a t, d ire c tly or ind ire ctly, owns, controls, o r has the power to vote more than 10 per cent o f any class o f voting securities o f the bank. The term includes a person th a t controls a principal shareholder (e.g., a person th a t controls a bank holding company). For the purpose o f determ ining w ho is a principal shareholder, shares owned o r controlled by a member o f the individual's immediate fa m ily are presumed to be controlled by the individual. "Im m ediate fa m ily " means the spouse o f an individual, the individual's m inor children, and any o f the individual's children (including adults) residing in the individual's home. For reporting purposes, o n ly one individual in the immediate fa m ily must file reports, if that individual's reports include the in fo rm a tio n on indebtedness o f the individual's immediate fa m ily . c. Control o f a company is defined in section 215.2(b) o f Regulation O as generally ownership or co n tro l o f 25 per cent o r more o f a company's outstanding voting shares. However, the regulation presumes control in some cases where less than 25 per cent ownership or control exists. d. "Related inte re st" means any company controlled by a person and any political or campaign com m ittee, the funds o r services o f which w ill benefit a person or th a t is controlled by a person. However, a related interest does n o t include a bank o r a foreign bank. e. "Indebtedness” includes any extension o f credit (as defined in section 215.3 o f Regulation O), but does n o t include: i. commercial paper, bonds and debentures issued in the ordinary course o f business; and ii. consumer credit (as defined in section 226.2 o f Regulation Z) in an aggregate am ount o f $5,000, or less, fro m each corres pondent bank, provided the cre d it is incurred under terms th a t are not more favorable than those offered the general public. f. "M a xim u m am ount o f indebtedness" means, at the o p tio n o f the reporting person, either (i) the highest outstanding indebtedness during the calendar year fo r w hich the report is made, o r (ii) the highest end o f the m o n th indebtedness outstanding during the calendar year fo r w hich the report is made. The method chosen should be consistently used fo r all indebtedness to the same correspondent bank. The reporting person must indicate on the report w hether the m axim um am ount was determined as o f the end o f the m onth or on a d a ily basis. g. "Correspondent b a n k ," "c o m p a n y ," and other terms p e rtin e n t to this report are defined in the Board's Regulation O, 12 CFR Part 215 and Part 349 o f the Federal Deposit Insurance C orporation's Rules and Regulations, 12 CFR Part 349.
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