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Federal Reserve Bank OF DALLAS ROBERT D. M C T E E R , J R . P R E S ID E N T AND C H IE F E X E C U T IV E O F F IC E R November 12, 1993 D A L LA S , T E X A S 7 5 2 6 5 -5 9 0 6 Notice 93-117 TO: The Chief Executive Officer of each member bank and others concerned in the Eleventh Federal Reserve District SUBJECT Report on Indebtedness of Executive Officers and Principal Shareholders and Their Related Interests to Correspondent Banks (Form FFIEC 004) DETAILS Executive officers and principal shareholders subject to the reporting requirements set forth under Regulation 0 (Loans to Executive Officers, Directors, and Principal Shareholders of Member Banks) must file annual reports concerning their indebtedness, and the indebtedness of their related interests, to the correspondent banks of the member bank. These reports should be filed with the member bank’s board of directors by January 31 of each year. The 1994 report covers the period January 1 to December 31, 1993. The enclosed Form FFIEC 004 has been approved by the Federal Financial Institutions Examination Council (FFIEC) to assist your bank and your bank’s executive officers and principal shareholders in complying with the reporting requirements. Please duplicate the form in accordance with your needs. The required information may be provided on other similar forms. Each member bank should notify its executive officers and principal shareholders of the reporting requirements. The persons 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, 1993. Each member bank is also required to make available to its executive officers and princi pal shareholders a list of the member bank’s correspondent banks. A "corre spondent bank" is defined as a bank that maintains one or more correspondent accounts for a member bank during the calendar year, the total of which exceeds certain amounts specified in Regulation 0. Form FFIEC 004, or any 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 For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal Reserve Bank of Dallas: Dallas Office (800) 333-4460; El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012; Houston Branch Intrastate (800) 392-4162, Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810. This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) - 2 - available to the public; however, the reports will be reviewed by examiners during the course of an 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 Deputy Comptroller. ENCLOSURE A copy of Form FFIEC 004 is enclosed. MORE INFORMATION Questions concerning Regulation 0 should be directed to Jane Anne Schmoker at (214) 922-5101. For additional copies of this Bank’s notice, please contact the Public Affairs Department at (214) 922-5254. Sincerely yours, Board of Governors of the Federal Reserve System Office of the Comptroller of the Currency Federal Deposit Insurance Corporation Nam e of Executive Officer or Principal Shareholder Submitting Report Report on Indebtedness of Executive Officers and Principal Shareholders and their Related Interests to Correspondent Banks Nam e of Bank to which Report is Submitted State City For the Calendar Year Ending December 31, 19_____ Status of Reporting Person: A. Maximum amount of indebtedness outstanding during the calendar year: _____ Executive Officer _____ Principal Shareholder Form FFIEC 004 . g Approved by the Federal Financial Institutions Examination Council 11/15/79 OM B No. 7100-0034 (FRB) Expires 9/30/95 1557-0070 (O C C ) Expires 9/30/95 3064-0023 (FD IC ) Expires 9/30/95 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 O (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 Conditions of each extension of credit included as indebted ness in the amount reported in Box A (see Instruction 3). Use additional pages if indebtedness consists of more than three loans and/or more space is needed to report terms and conditions: (In thousands of dollars) $_ Loan 1: If the report is submitted for indebtedness of a related interest, name and address of related interest for which the report is submitted: B. Method used to determine maximum amount of indebtedness outstand ing (check one): _____ i. highest outstanding indebtedness during the calendar year ii. highest end of the month indebtedness outstanding during the calendar year Name and address of the correspondent bank to which the executive officer, principal shareholder, or related interest is indebted: Loan 2: C. Amount of indebtedness outstanding ten business days prior to the date of filing this report: Loan 3: (In thousands of dollars) $_ I hereby certify that the information given above is complete, correct, and true to the best of my knowledge. Signature of official responsible for report D ate Signed Disclosure of Estimated Burden The burden associated with this information collection is estimated to vary from 1 to 2 hours per response, depending on individual circumstances. 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 Management and Budget, Washington, D.C. 20503, and to one of the following: Secretary Board of Governors of the Federal Resen/e 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 Report on Indebtedness to Correspondent Banks (Form FFIEC 004), or a similar form containing identical information, must be completed by each executive officer and each principal shareholder of an insured bank who was indebted, or whose related interests were indebted, during the calendar year for which the report is being submitted to a correspon dent bank of their bank. All insured banks are required by law to make available to their executive officers and principal shareholders a list of the bank’s correspondent banks. “Correspondent bank” means gener ally a bank that maintains a correspondent account in excess of a cer tain amount for the officer’s or shareholder’s bank. The executive officer or principal shareholder must file a separate re port concerning the indebtedness of the officer or shareholder to each correspondent bank and a separate report concerning the indebtedness of each of the related interests of the officer or shareholder to each cor respondent bank. For example, if an executive officer is indebted to two correspondent banks, the officer must file two reports, one for each cor respondent bank. If the executive officer has two related interests that were also both indebted to two correspondent banks, the officer would file six reports, two for the officer’s own indebtedness and four for the indebtedness of the officer’s related interests. If the executive officer is not indebted to a correspondent bank, but a related interest of the offi cer is indebted to a correspondent bank, the executive officer must file a report concerning the indebtedness of the officer’s related interest to the correspondent bank. 2. Where and When Reports are to be Filed The executive officer or principal shareholder must submit the report on indebtedness to correspondent banks to the board of directors of the reporting person’s bank for each calendar year by January 31 of the next year. 3. What Must be Reported The reporting person must include in each report on indebtedness to each correspondent bank: (a) the maximum amount of indebtedness out standing during the calendar year, and (b) the terms and conditions of each extension of credit included in the maximum amount reported. The terms and conditions to be reported are: (1) the original amount and date; (2) the maturity date; (3) the payment terms; (4) the range of interest rates charged during the calendar year; (5) whether the extension of credit is secured or unsecured; (6) if secured, a description of the collateral and its value; and (7) any unusual terms or conditions. In determining the maximum amount of indebtedness of a principal share holder, the indebtedness of a member of the shareholder’s immediate family is to be treated as indebtedness of the principal shareholder. Each maximum amount of indebtedness reported may include several sepa rate extensions of credit. The reporting person must report separately the terms and conditions of each of these extensions of credit. “Immediate family” means the spouse of an individual, the individual’s minor children, and any of the individual’s children (including adults) residing in the individual’s home. For reporting purposes, only one individual in the immediate family must file reports if that individual’s reports include the information on indebtedness of the individual’s immediate family. Each report on indebtedness to each correspondent bank must also include the amount of indebtedness outstanding to the correspondent bank ten business days before the date on which the report on indebt edness is filed. If the information on the amount of indebtedness out standing to a correspondent bank ten business days before the filing of the report is not available or cannot be readily ascertained by the filing date, an estimate of the amount of such indebtedness may be filed, provided that the actual amount of such indebtedness is submitted to the bank’s board of directors within the next thirty days. c. Control of a company is defined in section 215.2(b) of Regulation O as generally ownership or control of 25 percent or more of a com pany’s outstanding voting shares; however, the regulation presumes control in some cases where less than 25 percent ownership or con trol exists. d. “Related interest” means (1) a company that is controlled by a per son or (2) a political or campaign committee that is controlled by a person or the funds or services of which will benefit a person. 4. Definitions The following definitions are intended to provide general guidance in com pleting this report. For precise definitions, see the Federal Reserve Board’s Regulation O (12 CFR Part 215) and Part 349 of the FDIC’s Rules and Regulations (12 CFR Part 349). a. “Executive officer” is defined in section 215.2 of Regulation O and means generally an individual who participates or who has authority to participate (other than in the capacity of a director) in major policymaking functions of the bank. Certain categories of bank officers (e.g., vice presidents) are presumed in Regulation O to be executive officers unless they are excluded by resolution of the board of direc tors of the bank or by its bylaws from participation in major policymak ing functions of the bank and do not participate therein. b. “Principal Shareholder” means any individual or company (other than an insured bank or a foreign bank) that, directly or indirectly, owns, controls, or has the power to vote more than 10 percent of any class of voting securities of the bank. The term includes a person that con trols a principal shareholder (e.g., a person that controls a bank holding company). For the purpose of determining who is a principal shareholder, shares owned or controlled by a member of the individual’s immediate family are presumed to be controlled by the individual. e. “Indebtedness” includes any extension of credit (as defined in sec tion 215.3 of Regulation O), but does not include: i. commercial paper, bonds and debentures issued in the ordinary course of business; and ii. indebtedness in an aggregate amount of $5,000 or less from each correspondent bank, provided the credit is incurred under terms that are not more favorable than those offered the general public. f “Maximum amount of indebtedness” means, at the option of the report ing person, either (i) the highest outstanding indebtedness during the calendar year for which the report is made, or (ii) the highest end of the month indebtedness outstanding during the calendar year for which the report is made. The method chosen should be consistently used for all indebtedness to the same correspondent bank. The report ing person must indicate on the report whether the maximum amount was determined as of the end of the month or on a daily basis. g. “Correspondent bank,” “company,” and other terms pertinent to this report are defined in the Board’s Regulation 0 ,1 2 CFR Part 215 and Part 349 of the Federal Deposit Insurance Corporation’s Rules and Regulations, 12 CFR Part 349.
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