[Federal Register Volume 79, Number 241 (Tuesday, December 16, 2014)]
[Rules and Regulations]
[Pages 74595-74597]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-29345]
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FEDERAL HOUSING FINANCE AGENCY
12 CFR Part 1251
RIN 2590-AA73
Housing Trust Fund
AGENCY: Federal Housing Finance Agency.
ACTION: Interim final rule; request for comments.
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SUMMARY: The Federal Housing Finance Agency (FHFA) is issuing an
interim final rule setting forth requirements related to allocations by
the Federal National Mortgage Association (Fannie Mae) and the Federal
Home Loan Mortgage Corporation (Freddie Mac) (together, the
Enterprises) to the Housing Trust and Capital Magnet Funds created by
the Housing and Economic Recovery Act of 2008. The rule implements a
statutory prohibition against the Enterprises passing the cost of such
allocations through to the originators of loans they purchase or
securitize.
DATES: This interim final rule is effective on December 16, 2014. FHFA
will accept written comments on this interim final rule on or before
January 15, 2015.
ADDRESSES: You may submit your comments on this Interim Final Rule,
identified by regulatory identifier number ``RIN 2590-AA73,'' by any of
the following methods:
Agency Web site: www.fhfa.gov/open-for-comment-or-input.
Federal eRulemaking Portal: www.regulations.gov. Follow
the instructions for submitting comments. If you submit your comment to
the Federal eRulemaking Portal, please also send it by email to FHFA at
[email protected] to ensure timely receipt by the Agency. Please
include ``RIN 2590-AA73'' in the subject line of the message.
Courier/Hand Delivered: The hand delivery address is:
Alfred M. Pollard, General Counsel; Attention: Comments/RIN 2590-AA73,
Federal Housing Finance Agency, Eighth Floor, 400 Seventh Street SW.,
Washington, DC 20024. Deliver the package to the Seventh Street
entrance Guard Desk, First Floor, on business days between 9 a.m. and 5
p.m.
U.S. Mail, United Parcel Service, Federal Express, or
Other Mail Service: The mailing address for comments is: Alfred M.
Pollard, General Counsel; Attention: Comments/RIN 2590-AA73, Federal
Housing Finance Agency, Eighth Floor, 400 Seventh Street SW.,
Washington, DC 20024.
FOR FURTHER INFORMATION CONTACT: Alfred M. Pollard, General Counsel,
(202) 649-3050 (not a toll-free number), Federal Housing Finance
Agency, Eighth Floor, 400 Seventh Street SW., Washington, DC 20024. The
telephone number for the Telecommunications Device for the Hearing
Impaired is (800) 877-8339.
SUPPLEMENTARY INFORMATION:
I. Comments
FHFA invites comments on any aspect of the interim final rule and
will
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take all comments into consideration before issuing a final rule.
Copies of all comments will be posted without change, including any
personal information you provide such as your name, address, email
address and phone number, on the FHFA internet Web site at
www.fhfa.gov. In addition, copies of all comments received will be
available for examination by the public on business days between the
hours of 10:00 a.m. and 3:00 p.m., at the Federal Housing Finance
Agency, Eighth Floor, 400 Seventh Street SW., Washington, DC 20024. To
make an appointment to inspect comments, please call the Office of
General Counsel at (202) 649-3804.
II. Background
Section 1338 of the Federal Housing Enterprises Financial Safety
and Soundness Act of 1992 (Safety and Soundness Act), as added by
section 1131(b) of the Housing and Economic Recovery Act of 2008
(HERA), directs the Secretary of the Department of Housing and Urban
Development to establish and manage a Housing Trust Fund (HTF) that is
funded by amounts allocated by Fannie Mae and Freddie Mac and any other
amounts appropriated, transferred, or credited to the HTF under any
other provision of law. 12 U.S.C. 4568(a); see also id. at 4567(a). The
purpose of the HTF is to provide grants to States ``to increase and
preserve the supply of rental housing for extremely low- and very low-
income families, including homeless families'' and ``to increase
homeownership for extremely low- and very low-income families.'' Id. at
4568(a)(1).
Separately, section 1339 of the Safety and Soundness Act, as added
by section 1131(b) of HERA, establishes the Capital Magnet Fund (CMF)
within the U.S. Treasury as a special account within the Community
Development Financial Institutions Fund. Id. at 4569(a). As with the
HTF, the CMF is also funded by amounts allocated by Fannie Mae and
Freddie Mac and any other amounts appropriated, transferred, or
credited to it under any other provision of law. Id. at 4569(b); see
also id. at 4567(a). Funds in the CMF are available to the Secretary of
the Treasury to carry out a competitive grant program to attract
private capital for, and increase investment in, ``the development,
preservation, rehabilitation, or purchase of affordable housing for
primarily extremely low-, very low-, and low-income families'' and
``economic development activities or community service facilities . . .
which in conjunction with affordable housing activities implement a
concerted strategy to stabilize or revitalize a low-income area or
underserved rural area.'' Id. at 4569(c).
Though the HTF is administered by the Secretary of HUD and the CMF
is administered by the Secretary of the Treasury, Fannie Mae and
Freddie Mac are supervised by FHFA. See generally id., at 4501 et seq.
The Director of FHFA has general regulatory authority over each
Enterprise and is responsible for ensuring that the purposes of the
Safety and Soundness Act, the Enterprises' charter acts, and any other
applicable law are carried out. Id. at 4511(b). The duties of the
Director include ensuring that the operations and activities of each
Enterprise foster liquid, efficient, competitive and resilient national
housing finance markets, including activities relating to mortgages on
housing for low- and moderate-income families; that each Enterprise
complies with the Safety and Soundness Act and any rules, regulations,
orders and guidelines issued under it or the Enterprises' charter acts;
and that the activities of each Enterprise and the manner in which they
are carried out are consistent with the public interest. Id. at
4513(a)(1)(B)(ii), (iii) and (v). The Director is authorized to issue
any regulations, guidelines or orders necessary to carry out the duties
of the Director under the Safety and Soundness Act or the Enterprise
charter acts and to ensure that the purposes of such acts are
accomplished. Id. at 4526.
The Enterprises' allocation obligations to support the HTF and CMF
(together, the Funds) and related requirements are set forth at section
1337 of the Safety and Soundness Act. Id. at 4567. That section
addresses the amount the Enterprises are to set aside and allocate to
the Secretaries of HUD and the Treasury each fiscal year, based on the
unpaid principal balance of their total new business purchases, which
are the single- and multi-family residential mortgage loans or re-
financings acquired by the Enterprises and held in portfolio or that
support securities, notes or other obligations which the Enterprises
guarantee. The section further directs the Director to issue a
regulation prohibiting an Enterprise from redirecting the costs of any
required allocation to the originators of mortgages the Enterprise
purchases or securitizes, addresses enforcement of Enterprise
compliance with the section and any regulation, rule or order issued
pursuant to it, and authorizes the Director temporarily to suspend
allocations if the Director makes any finding among three set forth by
statute. Id.
Pursuant to section 1337 and the Director's general regulatory
authority, the Director has determined to issue an Interim Final Rule
prohibiting each Enterprise from passing through the costs of
allocations to originators of mortgages purchased or securitized by the
Enterprise.
FHFA is issuing this rule as an Interim Final Rule with request for
comments. Section 1337 requires the Director to issue a regulation
regarding the prohibition against passing costs of the allocations
required under the section to originators and how compliance with the
requirements of the regulation and statute is to be enforced. The
Interim Final Rule's substantive provisions are established by statute
and the rule does not deviate from or add to the statutory
requirements. The need for the rule at this time is to support the
implementation process that the Director will provide for the
Enterprises to begin the process of setting aside and allocating monies
for the Funds and to assure that the prohibition on pass through of
costs accompanies the planning and deployment of funds. Further, the
rule will support the development of regulatory oversight mechanisms to
be put in place to assure compliance with the prohibition.\1\
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\1\ FHFA is issuing this Interim Final Rule with a request for
comments to provide transparency on the prohibition and its
implementation, though the Rule itself is not a legislative rule but
is procedural and thus would be excepted from the normal notice and
comment requirements of the Administrative Procedures Act, 5 U.S.C.
553(b) and 5 U.S.C. 553(d)(3).
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Regulatory Impact
Paperwork Reduction Act
The interim final rule does not contain any information collection
requirement that requires the approval of OMB under the Paperwork
Reduction Act (44 U.S.C. 3501 et seq.).
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires that
a rule that has a significant economic impact on a substantial number
of small entities, small businesses, or small organizations must
include an initial regulatory flexibility analysis describing the
rule's impact on small entities. Such an analysis need not be
undertaken if the agency has certified that the rule will not have a
significant economic impact on a substantial number of small entities.
5 U.S.C. 605(b). FHFA has considered the impact of the interim final
rule under the Regulatory Flexibility Act. FHFA certifies that the
Interim Final Rule is not likely to have a significant economic impact
on a substantial number of small business entities because the rule is
applicable
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only to the Enterprises, which are not small entities for purposes of
the Regulatory Flexibility Act.
List of Subjects in 12 CFR Part 1251
Administrative practice and procedure, Capital Magnet Fund,
Government-sponsored enterprises, Housing Trust Fund, Reporting and
recordkeeping requirements.
Authority and Issuance
Accordingly, for the reasons stated in the Supplementary
Information, under the authority of 12 U.S.C. 4567, the Federal Housing
Finance Agency amends Chapter XII of Title 12 of the Code of Federal
Regulations, as follows:
CHAPTER XII--FEDERAL HOUSING FINANCE AGENCY
SUBCHAPTER C--ENTERPRISES
0
1. Add part 1251 to Subchapter C to read as follows:
PART 1251--CONTRIBUTIONS TO THE HOUSING TRUST AND CAPITAL MAGNET
FUNDS
Sec.
1251.1 Purpose.
1251.2 Definitions.
1251.3 Prohibition on pass-through of cost of allocation;
enforcement.
1251.4 Submission of information.
Authority: 12 U.S.C. 1452(c), 1718(b), 4511(b), 4513(a),
4514(a), 4526(a), and 4567.
Sec. 1251.1 Purpose.
The purpose of this part is to implement a prohibition against an
Enterprise redirecting the cost of any allocation to the Housing Trust
Fund or the Capital Magnet Fund to originators of mortgages purchased
or securitized by an Enterprise.
Sec. 1251.2 Definitions.
The following definitions apply to the terms used in and related
specifically to this part. Definitions of other terms may be found in
12 CFR part 1201, General Definitions Applying to All Federal Housing
Finance Agency Regulations:
Capital Magnet Fund means that Fund established at section 1339(a)
of the Safety and Soundness Act, 12 U.S.C. 4569(a).
Housing Trust Fund means that Fund established by section 1338(a)
of the Safety and Soundness Act, 12 U.S.C. 4568(a).
Sec. 1251.3 Prohibition on pass-through of cost of allocation;
enforcement.
(a) In general. No Enterprise shall re-direct or pass through the
cost of any allocation to the Housing Trust Fund or the Capital Magnet
Fund required pursuant to section 1337(a) of the Safety and Soundness
Act, 12 U.S.C. 4567(a), through increased charges or fees, or decreased
premiums, or in any other manner, to the originators of mortgages
purchased or securitized by the Enterprise.
(b) Enforcement. Compliance by each Enterprise with the foregoing
prohibition shall be enforced under subpart 3 of part B of the Safety
and Soundness Act, 12 U.S.C. 4581-89.
Sec. 1251.4 Submission of information.
The Director may issue guidance, orders, or notices on compliance
with section 1337 and this part by the Enterprises, which may include
information submissions by the Enterprises.
Dated: December 10, 2014.
Melvin L. Watt,
Director, Federal Housing Finance Agency.
[FR Doc. 2014-29345 Filed 12-15-14; 8:45 am]
BILLING CODE 8070-01-P