On September 18, 2015, a proposal was formally published for comment on proposed changes to simplify and streamline aspects of the Report of Condition (“Call Report”) used by the federal banking agencies (the Federal Reserve Board, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency) to monitor the financial condition, performance and risk profile of the banks under their jurisdiction. The proposals are aimed primarily at easing the compliance burden on “community banks,” a term which is not formally defined but generally can be regarded as those banks having assets under $10 billion and whose operations are focused on more traditional banking activities. Comments are due on or before November 17, 2015.

The Call Report form currently is over 80 pages and its instructions run more than 700 pages.  The forms are reviewed on a periodic basis and must be reauthorized every few years. While US banks file many financial reports on a regular basis, it is the Call Report, filed quarterly, that likely yields the most critical information for a bank regulator to review and analyze.

Smaller banks are concerned about the ever-increasing costs of compliance and in an attempt to address those concerns, the banking agencies are proposing various changes to the form, including elimination of outdated provisions, increases in certain reporting thresholds, clarification of instructions on how certain items should be reported, and conformance of certain items to changes in law or regulations. A sample of the proposed changes in graphic form can be accessed here.

This proposal is part of a process being undertaken by the banking agencies (i) to accelerate the review periods to identify further improvements that could be made to the form and instructions, including through ongoing dialogue with community banks to assist in that process; (ii) to evaluate the possible development of a separate version of the Call Report aimed at community banks; and (iii) to do more outreach in the banking community to train bankers on changes to the form.