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F ederal R eserve Bank OF DALLAS W IL L IA M H . W ALLACE FIRST V IC E PR ES ID EN T AND C H IE F O PER ATING O FFIC ER November 30, 1988 DALLAS, TE X A S 75222 Circular 88-81 TO: The Chief Executive Officer of all member banks concerned in the Eleventh Federal Reserve District 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 subject to certain reporting and disclosure requirements set forth under the Board of Governors's Regulation 0, requirements established under Titles VIII and IX of th& Financial Institutions Regulatory and Interest Rate Control Act of 1978 (FIRA). The Garn-St Germain Depository Institutions Act of 1982 amended some of the reporting and disclosure requirements. To assist your executive officers and principal shareholders in meeting their continuing reporting requirements, a copy of Form FFIEC 004 is enclosed. Executive officers and principal shareholders subject to the reporting requirements of Title VIII of FIRA must file annual reports concerning their indebtedness, and the indebtedness of their related interests, to the correspondent banks of the member bank. These reports are filed with the member bank's board of directors by January 31 of each year. The 1989 report covers the period January 1 to December 31, 1988. Each member bank should notify its executive officers and principal shareholders of the reporting requirements to Title VIII of FIRA. Those to be notified should include any person who was an executive officer or principal shareholder of the member bank during the period January 1 to December 31, 1988, since all of these persons are subject to reporting requirements if they were indebted to a correspondent bank of the member bank during this period. Each member bank is also required to make available to its executive officers and principal shareholders a list of the member bank's correspondent banks. A correspondent bank is defined as a bank that maintains one or more correspondent accounts for a member bank during the calendar year that in the aggregate exceed certain amounts specified in the regulation. For additional copies of any circu lar please contact the Public A ffairs D ep artm ent at (214) 6 51 -6 2 89 . Banks and others are e ncouraged to use the follow ing incom ing W A TS num bers in c ontacting this Bank (800) 4 4 2 -7 1 4 0 (intrastate) and (800) 5 2 7 -9 2 0 0 (interstate). This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) - 2 - Form FFIEC 004, or a similar form, that is filed by executive officers and principal shareholders, must be kept on file at the member bank for a period of three years. These reports are not required to be made available to the public, however, the reports will be reviewed by examiners during the course of the examination of the member bank. The reports filed by executive officers and principal shareholders are not required to be filed with the Reserve Bank or Regional Administrator. Please duplicate the 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 the FFIEC for use by executive officers and principal shareholders in complying with the reporting requirements of Title VIII of FIRA. ENCLOSURES The FFIEC 004 form is enclosed. MORE INFORMATION Any questions your bank may have on the current forms should be directed to Linda Myers or Gary Krumm at (214) 744-7435 or 744-7434, respectively. Questions regarding the regulation should be directed to Dean A. Pankonien at (214) 651-6228. Sincerely yours, B oard o f G o ve rn o rs o f th e Federal Reserve System C o m p tr o lle r o f th e C u rre n c y Fe d e ral D ep o s it Insurance C o rp o ra tio n N a m e o f E x e c u tiv e O ffic e r or Princip al S h a re h o ld e r S u b m ittin g R e p o rt Report on Indebtedness of Executive Officers and Principal Shareholders and their Related Interests to Correspondent Banks N a m e o f Bank t o w h ic h R e p o rt is S u b m itte d C ity S ta te For the Calendar Year Ending December 31, 19___ Status o f Reporting Person: A. M axim um am ount o f indebtedness outstanding during the calendar year: _____ Executive O fficer Form FFIEC 004 il Approved by the Federal Financial Institutions Examination Council 11/15/79 OMB No. 7100-0034 (FRB) Expires 9/30/89 1557-0070 (OCC) Expires 9/30/89 3064-0023 (FDIC) Expires 9/30/89 To be subm itted by executive office rs and principal shareholders o f Insured banks to the boards of directors o f th e ir banks In s atis fa c tio n o f the reporting requirem ents o f th e Federal Reserve Board’s R eg ulatio n O (12 C .F.R . Part 215) and Part 349 o f the Federal D ep osit Insurance C orporation 's Rules and R egulations (12 C .F.R . Part 349) w ith respect to indebtedness to c orrespondent banks. D. Terms and Conditions o f 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/or 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 in fo rm a tio n given above is complete, correct, tru e to the best o f m y knowledge. S ig na ture o f o ffic ia l respo nsible f o r re p o rt D ate Signed Disclosure of Estimated Burden The estimated average burden associated with this information collection is .75 hours per respon dent and Is estimated to vary from .27 to 2 hours per response, depending on Individual circum stances. Burden estimates Include the time for reviewing Instructions, gathering and maintaining data In the required form, and completing the Information collection, but exclude the time for compiling and maintaining business records In the normal course of a respondent’s activities. Comments concerning the accuracy of this burden estimate and suggestions for reducing this burden should be directed to the Office of Information and Regulatory Affairs, Office of Manage ment and Budget, Washington, D.C. 20503, and to one of the following: Secretary Board of Governors of the Federal Reserve System Washington, D.C. 20551 Legislative and Regulatory Analysis Division Office of the Comptroller of the Currency Washington, D.C. 20219 Assistant Executive Secretary Federal Deposit Insurance Corporation Washington, D.C. 20429 General Instructions 1. Persons Required to File Report A R eport on Indebtedness to Correspondent Banks (Form 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, or whose related interests were indebted, during 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 ffic e r or shareholder to each correspondent bank and a separate report concerning the indebtedness o f each o f the related interests o f the o ffic e r or shareholder to each correspondent bank. For example, if an executive o ffice r is indebted to tw o correspondent banks, the o ffic e 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 o ffic e r’s own indebtedness and fo u r fo r the indebtedness o f the o ffice r'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 o ffice r's related interest to the correspondent bank. 2. Where and When Reports are to be Filed The executive o ffice 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 report on indebtedness to each correspondent bank: (a) the m axim 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 term s and conditions to be reported are: (1) the original am ount 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) whether secured or unsecured; (6) i f secured, a description o f collateral and its value; and (7) any unusual terms or conditions. In determ ining the m axim 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 m axim 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. "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 th a t 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 0 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 defin itio n s are intended to provide general guidance in com pleting this report. For precise de fin itio n s, seethe 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 who 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 0 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 o r ind ire ctly, owns, controls, or 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 com pany). For the purpose o f determ ining w ho is a principal shareholder, shares owned or controlled by a member o f the individual's immediate fa m ily are presumed to be controlled by the individual. as generally ownership or control 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 in te re st" means any company controlled by a person and any political or campaign com m ittee, the funds or 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 or a foreign bank. e. "Indebtedness" includes any extension o f credit (as defined in section 215.3 o f Regulation O), b u t 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, o r less, fro m each corres pondent bank, provided the cre d it is incurred under terms th a t are n o t more favorable than those offered the general public. f. "M a xim u m a m o u n ro 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, or (ii) the highest end o f the m onth 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 maxim um am ount was determined as o f the end o f the m onth or on a daily basis. g. "Correspondent b a n k ," "c o m p a n y ," and other terms p ertinent to this report are defined in the Board's Regulation O, 12 CFR Part 215 and Part 349 o f the Federal Deposit Insurance Corporation's Rules and Regulations, 12 CFR Part 349.
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