Mar 1 -- The Board of Governors of the Federal Reserve System (Board) invites comment on a proposal to extend for three years, with revision, the Survey of Small Business and Farm Lending (FR 2028; OMB No. 7100-0061). Comments must be submitted on or before May 1, 2023.
The Survey of Small Business and Farm Lending (SSBFL) comprises the following three reports:
Survey of Terms of Bank Lending to Farmers (FR 2028B),
Prime Rate Supplement of Survey of Terms of Lending (FR 2028S), and
Small Business Lending Survey (FR 2028D).
Analyses of the SSBFL data provide estimates of the cost of important segments of nonfarm business and agricultural credit at banks that are representative of banking institutions nationwide. Currently, it is the Federal Reserve’s only available source of data on bank loan pricing for individual loans of all sizes to nonfarm businesses and farmers. Since its inception in February 1977, the SSBFL has been periodically revised to accommodate changes in lending practices.
The SSBFL collects unique information concerning price and certain nonprice terms of loans made to businesses and farmers each quarter (February, May, August, and November) from a sample of banks. The FR 2028B collects detailed data on individual loans funded during the first full business week of the mid-month of each quarter, and the FR 2028S collects the prime interest rate for each day of the survey week from FR 2028B respondents. The FR 2028D provides focused and enhanced information on small business lending including rates, terms, credit availability, and reasons for their changes. The FR 2028D collects quarterly average quantitative data on terms of small business loans and qualitative information on changes and the reasons for changes in the terms of lending. From these sample SSBFL data, estimates of the terms of business loans and farm loans extended are constructed. The aggregate estimates for business loans are published in the Federal Reserve Bank of Kansas City's quarterly release, Small Business Lending Survey and aggregate estimates for farm loans are published in the statistical release, Agricultural Finance Databook.
The Federal Reserve proposes to revise the FR 2028D form and instructions, to be effective for the September 30, 2023, as of date with the transmission period beginning on October 1, 2023, based on loan activity over the third quarter 2023. The proposed revisions would add clarity in reporting instructions and requirements, improve data quality, and make slight reductions in reporting burden. These changes include removing items related to credit card lending and net drawdowns on lines of credit. A question requesting information on how respondents define small businesses for the purposes of small business lending would be added. Additionally, three questions were modified to add open-ended text fields offering respondents the opportunity to provide additional information on reasons for changes in lending. Minor wording changes are proposed to the form and instructions to add clarity to the survey or address changes to the form. Additionally, minor changes are proposed to the Frequently Asked Questions section to increase clarity of form definitions.
Questions determined to provide lower value, in comparison to the burden imposed on respondents required to track and respond, would be removed from the survey. Specifically, a survey question requesting net amounts of drawdowns on commercial and industrial (C&I) commitments broken out by fixed rate and variable rate would be removed. Additionally, questions related to new and outstanding credit card loans would be removed, eliminating 6 questions each for fixed rate and variable rate small business C&I loans along with one qualitative question.
An open-ended question would be added to increase clarity in how respondents are defining small business lending for quantitative and qualitative loan data. The question would clarify whether a respondent is utilizing the survey definition of a small business, non-farm businesses domiciled in the U.S. with no more than $5 million in total annual revenue, or another internal definition. Current reporters would be asked to respond annually to the new question or when a change occurs in their internal small business definition. First time reporters would respond in the quarter that they are added to the respondent panel. Additionally, three questions would be modified to add voluntary open-ended text fields, offering respondents the opportunity to provide additional information on reasons for changes in credit standards/terms and credit quality of applicants.
The FR 2028B and FR 2028S panels have an authorized size of 250 domestically chartered commercial banks. The panel of banks has been drawn from a random sample of banks stratified according to farm loan volumes since 1989. The authorized panel for the FR 2028D panel is 398 domestically chartered commercial banks. The size is based on obtaining survey results with a 95% confidence level and 5% standard error, allowing for a 10% nonresponse rate. The panel of banks is a random sample of banks stratified according to the dollar volumes of commercial and industrial loans with original amounts of $1,000,000 or less.
Total estimated number of respondents:
FR 2028B—250.
FR 2028S—250.
FR 2028D—398.
The Federal Reserve Bank of Kansas City publishes aggregated data for the FR 2028B and FR 2028D in separate quarterly statistical releases on its public website at
https://www.kansascityfed.org/research/. Aggregate information on farm loans from the FR 2028B is also published in the quarterly statistical release, National Survey of Terms of Lending to Farmers,
https://www.kansascityfed.org/agriculture/agfinance-updates/. The aggregate survey results are also included in statistical compilations published both within and outside the Federal Reserve. Aggregate information on small business loans from the FR 2028D is published in a quarterly statistical release approximately ten weeks after the transmission period begins on the Federal Reserve Bank of Kansas City’s public website,
https://www.kansascityfed.org/surveys/small-business-lending-survey/, and on the Board’s website,
https://www.federalreserve.gov/data.htm.
Draft supporting statement:
https://www.federalreserve.gov/reportforms/formsreview/FR%202028%20OMB%20SS%202023.pdf
FRN:
https://www.federalregister.gov/d/2023-04136