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Community banks with less than $1 billion in assets must complete 51 pages of call report forms each quarter. Banks above this threshold must complete 80 pages of forms each quarter. Ever-expanding schedules fail to support the utility of the call report as a vital safety and soundness metric for prudential regulators.
ICBA’s call report survey found that the annual cost of preparing the call report has increased for 86 percent of survey respondents over ten years. The call report now represents a significant regulatory burden that diverts critical staff from completing other important tasks within the institution.
The most effective short-term solution to this problem is 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 intervals.
ICBA continues to believe that regulatory reporting through the call reporting process should be tailored to the size and complexity of the financial institution. Smaller banking organizations like community banks should require very little quantitative reporting requirements simply because their community-driven business models keep them from taking excessive risk or acquiring leverage exposure that is difficult to unwind in a financial downturn. Regulators should continue their efforts to shrink call reporting items for smaller community banks to ensure that the call report does not burden these banks.