QUARTERLY CALL REPORT
- Community banks that are highly rated and well capitalized should be permitted to file abbreviated short-form call reports with only key financial information for the first and third quarters of the calendar year. At mid-year and year-end, these banks would file the full form call report.
- Recent expanded use of the community bank call report as an information gathering tool for consumer protection regulation damages the effectiveness of the information provided and diminishes the use of the call report as an effective safety and soundness measurement metric.
- A short-form call report with basic schedules such as the income statement, balance sheet, and changes in shareholders’ equity in the first and third quarters will reduce the time required to meet call reporting obligations and will assist in reducing the overall regulatory burden faced by community banks.
Community banks are now tasked with completing 80 pages of call report forms each quarter supported by almost 700 pages of instructions. Ever-expanding schedules fail to support the utility of the call report as a vital safety and soundness metric for prudential regulators. ICBA’s recent call report survey finds that the annual cost of preparing the call report has increased for 86 percent of survey respondents over the last ten years. Because regulators use third party service providers to streamline their review of call reports, they have not effectively engaged the community banks themselves to assess the impact. The call report now represents a significant regulatory burden that diverts critical staff from completing other important tasks within the institution. The introduction of Basel III regulatory requirements, along with the Consumer Financial Protection Bureau’s data collection requests, which are inundating basis schedules with new data points, is a further strain on community banks.
The most effective short-term solution to this problem is for regulators to permit highly rated and well-capitalized community banks to file a short-form call report for the first and third quarters of each calendar year with full call reports filed at mid-year and year end. The short-form call report would include the income statement, balance sheet, and statement of changes in shareholders’ equity, which provides the information needed by regulators to provide prudent oversight over such short reporting periods. More importantly, implementation of the short-from call report would allow community banks to return critical staff resources to serving the needs of their customers and communities. In ICBA’s recent call report survey, 98 percent of survey respondents stated that a short-form call report would reduce their regulatory burden with 72 percent of respondents describing the reduction as substantial.
Staff Contact: James Kendrick