Instructions For Schedule Rc-L (Form Ffiec 031 And 041) - Derivatives And Pff-Balance Sheet Items Page 9
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18FFIEC 031 and 041
RC-L – DERIVATIVES AND OFF-BALANCE SHEET
Item No.
Caption and Instructions
Year-to-date merchant credit card sales volume. Merchant processing is the settlement of
11
credit card transactions for merchants. It is a separate and distinct business line from credit
card issuing. Merchant processing activity involves obtaining authorization for credit card
sales transactions, gathering sales information from the merchant, collecting funds from the
card-issuing bank or business, and crediting the merchants' accounts for their sales.
An acquiring bank is a bank that initiates and maintains contractual agreements with
merchants, agent banks, and third parties (e.g., independent sales organizations and member
service providers) for the purpose of accepting and processing credit card transactions. An
acquiring bank has liability for chargebacks for the merchants' sales activity.
An agent bank with risk is a bank that, by agreement, participates in another bank’s merchant
credit card acceptance program. An agent bank with risk assumes liability for chargebacks
for all or a portion of the loss for the merchants' sales activity.
For purposes of items 11.a and 11.b, banks should include credit card sales transactions
involving bank credit cards, e.g., MasterCard and Visa.
For banks with total assets of $10 billion or more, the year-to-date sales volume may be
reported to the nearest million, with zeros reported in the thousands column, rather than to the
nearest thousand.
Sales for which the reporting bank is the acquiring bank. Report the year-to-date volume
11.a
of sales (in U.S. dollars) generated through the bank's merchant processing activities where
the reporting bank is the acquiring bank. This will include amounts processed for merchants
contracted directly by the acquiring bank, amounts processed for agent banks with risk, and
amounts processed for third parties (e.g., independent sales organizations and member
service providers). Banks that are required to report sales data to the credit card associations
of which they are members (e.g., MasterCard and Visa) should measure sales volume in the
same manner for purposes of this item.
Sales for which the reporting bank is the agent bank with risk. Report the year-to-date
11.b
volume of sales (in U.S. dollars) generated through the bank's merchant processing activities
where the reporting bank is acting as an agent bank with risk. Include all sales transactions
for which the acquiring bank with whom the reporting bank contracted may hold the bank
responsible.
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Gross amounts (e.g., notional amounts) of derivatives . Report in the appropriate column
and subitem the gross par value (stated in U.S. dollars) (e.g., for futures, forwards, and option
contracts) or the notional amount (stated in U.S. dollars) (e.g., for forward rate agreements
and swaps), as appropriate, of all contracts that meet the definition of a derivative and must
be accounted for in accordance with FASB Statement No. 133. Include both freestanding
derivative contracts and embedded derivatives that must be accounted for separately from their
host contract under Statement No. 133. Report each contract according to its underlying risk
exposure: (a) interest rate, (b) foreign exchange, (c) equity, or (d) commodity and other.
Contracts with multiple risk characteristics should be classified based upon the predominant
risk characteristics at the origination of the derivative. However, exclude from
Schedule RC-L, items 12 through 15, all credit derivatives, which should be reported in
Schedule RC-L, item 7, above.
FFIEC 031 and 041
RC-L-9
RC-L – DERIVATIVES AND OFF-BALANCE SHEET
(3-03)
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