Supervision and Reporting for Savings and Loan Holding Companies

By David Powers and Tim Pudner

Effective July 21, 2011, Title III of the Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA) transferred the supervisory authority of savings and loan holding companies (SLHCs) from the Office of Thrift Supervision (OTS) to the Federal Reserve (Fed). Since the enactment of the law 18 months ago, two dedicated supervisory teams were created at the Richmond Fed. These teams have visited SLHCs and coordinated with other regulators to learn about the unique aspects of these holding companies and their subsidiaries. The teams have also collaborated closely with Federal Reserve System colleagues, as well as the local Legal and Statistics departments to help ensure a smooth transition to Fed oversight.

In addition to the transfer of supervisory authority, DFA mandated that all regulations and other advisory materials issued by the OTS before the transfer date will be enforceable until modified or superseded. Therefore, the Home Owners' Loan Act (HOLA) and outstanding OTS regulatory guidance remain in place. The Federal Reserve Board of Governors (Board) continues to review legacy OTS guidance and has found that much of it is similar to existing Board or interagency guidance.

Recent guidance (SR 11-11/CA 11-5) outlines the approach that the Federal Reserve will use during the first supervisory cycle for SLHCs. In particular, the guidance asserts the intention to apply consolidated supervision in a manner that is consistent with the Fed's established risk-based approach to bank holding company (BHC) supervision. The Fed intends to supervise SLHCs in the designated supervisory portfolios of holding companies with similar characteristics and risk profiles. The first supervisory cycle will be used by each Federal Reserve Bank to learn more about SLHCs and to acquaint these companies with the Board's supervisory policies and expectations. The guidance also describes the intended inspection and supervisory rating methods to be used to facilitate this transition, including the plan for transitioning SLHCs from the CORE rating system to the RFI/C(D) rating system.

One important aspect of the Federal Reserve's consolidated supervision of holding companies is the collection of the appropriate standardized financial and regulatory data needed to properly monitor financial conditions and identify possible risks. After analyzing the needs associated with the new supervisory mandate, the Fed determined that the reports currently filed by bank holding companies would provide the necessary data to understand and evaluate conditions impacting enterprisewide safety and soundness. The Board published an official report proposal in August 2011 and, after carefully reviewing the public comments received, announced the finalized SLHC regulatory reporting requirements on December 23, 2011.

The final requirements mandate that most SLHCs begin filing certain new regulatory reports in 2012, while delaying implementation of the other reports until 2013. This phased-in approach is designed to allow institutions more time to develop appropriate reporting systems and processes to handle the new requirements. Domestic SLHCs will begin filing the FR Y-9 series and FR Y-6 reports in 2012. A limited number of commercial and insurance SLHCs may qualify for an initial exemption from these new reports. Additional information is contained in the December 23, 2011, Federal Reserve press release, which describes the exemption criteria and the upcoming transition schedule for both exempt and nonexempt SLHCs.

The first new report that will be filed by most SLHCs will be the applicable FR Y-9 report. This series of reports is used to assess and monitor the financial condition of holding companies off-site. The financial information on these reports takes the form of an income statement, a balance sheet and supplemental schedules. The specific FR Y-9 report(s) required by an individual SLHC will generally be based on its asset size. Institutions with consolidated assets less than $500 million will begin filing the Parent Company Only Financial Statements for Small Bank Holding Companies (FR Y-9SP). This semiannual report is filed as of June 30 and December 31 each year and collects limited information about shell holding companies.

Meanwhile, SLHCs with consolidated assets of $500 million or more will need to provide further detailed financial information. Those SLHCs will begin filing the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) and the Parent Company Only Financial Statements for Large Bank Holding Companies (FR Y-9LP) reports quarterly as of March, June, September and December. The FR Y-9C report captures consolidated financial information in a format that closely mirrors the Call Report. There is also a special report, the FR Y-9ES, for any employee stock ownership plan (ESOP) that meets the definition of a savings and loan holding company. ESOP SLHCs are exempt from filing the other FR Y-9 reports previously discussed. All FR Y-9 reports must be submitted electronically using the Federal Reserve's IESUB system.

SLHCs will also start filing the Annual Report of Bank Holding Companies (FR Y-6) in 2012. The information obtained from this report will be used to monitor the activities and organizational information about the SLHC. This free-form report consists of a cover page and several other items, including an entity's legal entity organizational chart and information about executives and other insiders. Unlike the FR Y-9 reports, the FR Y-6 is filed as of each company's fiscal year-end. Due to the free-form layout, it cannot be submitted electronically. The report forms and instructions for each report provide detailed information about each of these Federal Reserve reports and are available on the Board of Governors website.

Converting to these new reports will require time and resources for savings and loan holding companies. To help SLHCs prepare for this transition, the Federal Reserve Bank of Richmond will be conducting in-person and web-based seminars in early 2012. Information about these sessions will be sent to the reporting contacts at each SLHC located in the Fifth District. Staff members in our Statistics department are happy to answer any questions about the new reports or the upcoming training events. Additionally, the SLHC's designated supervisory examiner can answer any questions about other supervisory issues.

David Powers is a supervisory examiner for SLHC supervision with the Federal Reserve Bank of Richmond. He can be reached at

Tim Pudner is a manager in the Statistics department with the Federal Reserve Bank of Richmond. He can be reached at

James Trotta is a central point of contact for large SLHC supervision with the Federal Reserve Bank of Richmond. He can be reached at


The analyses and conclusions set forth in this publication are those of the authors and do not necessarily indicate concurrence by the Board of Governors, the Federal Reserve Banks, or the members of their staffs. Although we strive to make the information in this publication as accurate as possible, it is made available for educational and informational purposes only. Accordingly, for purposes of determining compliance with any legal requirement, the statements and views expressed in this publication do not constitute an interpretation of any laws, rule or regulation by the Board or by the officials or employees of the Federal Reserve System.

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