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FFIEC031, RC-C, line 8: Logic For Reporting Of Industrial Development Bonds (IDB)- Party Type POLSUB (Doc ID 2658637.1)

Last updated on APRIL 20, 2020

Applies to:

Oracle Financial Services - Regulatory Reporting for US Federal Reserve - Lombard Risk Integration Pack - Version 8.0.8 and later
Information in this document applies to any platform.

Goal

FFIEC031 Fed instructions have text: "Treatment of industrial development bonds (IDBs): Industrial development bonds (IDBs) sometimes referred to as "industrial revenue bonds," are issued under the auspices of states or political subdivisions for the benefit of a private party or enterprise where that party or enterprise, rather than the government entity, is obligated to pay the principal and interest on the obligation. For purposes of these reports, all IDBs should be reported as securities in Schedule RC-B, item 3, or as loans in this item (Schedule RC-C, part I, item 8), consistent with the asset category in which the bank reports IDBs on its balance sheet for other financial reporting purposes."

Current configuration logic: For RC-C line 8 (Obligations (other than securities and leases) of states and political subdivisions in the U.S) is reports based on reclassifications of Standard Party Type of POLSUB (Political Subdivision OR SG - State Government) using DIM_REG_PRODUCT_CLASSIFICATION.V_REG_PROD_CLASSIFICATION_CODE of LOANSTASUBDIVUS.

Enhancement required- There is a data scenarios of IDBs where the party to the transaction is not a POLSUB, yet due to the classification of IDB, is required to be reported on RC_C line 8. Contracts for these examples state that, upon issuance of the bonds, the POLSUB assigns the loan agreement to bank. In this case, both the party and repayer are a non-POLSUB. Hence, bank expectation is that an alternate logic should be available to support such data scenario.
 

Solution

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Goal
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