qas-assessments-dividends-assessment-base-and-large-bank-pricing-updated-1-20-15.pdf

Here are the key points summarized:

Teaser Rate Loans

• A teaser rate loan is a loan with an initial interest rate that is lower than the market rate.
• If the current interest rate is a discounted interest rate, the loan is classified as a teaser rate loan.

Nontraditional Mortgage Loans

• Some banks offer discounted mortgage rate loans to employees, which are subject to reset to market rates if the employee leaves the bank. These loans need to be reported as nontraditional mortgage loans.
• Autodraft arrangements that reduce interest rates and increase them when cancelled are not considered teaser rate loans.

Preferred Banking Discounts

• Discounts offered for preferred banking services do not constitute teaser rate loans.
• These discounts should be disclosed in the underlying agreement.

Reporting of Nontraditional Mortgage Loans

• Banks must evaluate mortgage loans to determine if they meet the characteristics of both higher-risk consumer loans and nontraditional mortgage loans. If so, report them as nontraditional mortgage loans on the Call Report.

Counterparty Exposure

• Counterparty exposure excludes fully guaranteed exposures by the US Government.
• Excludes due from accounts, federal funds sold, securities, and credit protection purchased or sold where the counterparty is a reference entity in the calculation of counterparty exposure.

Criticized and Classified Items

• Consumer and retail loans that would be classified under the Uniform Retail Credit Classification and Account Management Policy are included in criticized and classified items for purposes of the Scorecard.
• Criticized and classified items information remains confidential.