[Federal Register Volume 75, Number 151 (Friday, August 6, 2010)]
[Proposed Rules]
[Pages 47495-47499]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-19424]
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FEDERAL HOUSING FINANCE AGENCY
12 CFR Part 1213
RIN 2590-AA20
Office of the Ombudsman
AGENCY: Federal Housing Finance Agency.
ACTION: Notice of proposed rulemaking; request for comments.
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SUMMARY: The Federal Housing Finance Agency (FHFA) is seeking comment
on a proposed regulation to implement section 1317(i) of the Federal
Housing Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4517(i)). The proposed regulation would establish within FHFA an
Office of the Ombudsman, which would be responsible for considering
complaints and appeals from the Federal National Mortgage Association,
the Federal Home Loan Mortgage Corporation, the Federal Home Loan Banks
(collectively, regulated entities), the Office of Finance, and any
person that has a business relationship with a regulated entity or the
Office of Finance, regarding any matter relating to the regulation and
supervision of the regulated entities or Office of Finance by FHFA.
DATES: Written comments on the proposed regulation must be received on
or before September 7, 2010. For additional information, see
SUPPLEMENTARY INFORMATION.
ADDRESSES: You may submit your comments on the proposed regulation,
identified by regulatory information number ``RIN 2590-AA20,'' by any
of the following methods:
E-mail: Comments to Alfred M. Pollard, General Counsel,
may be sent by e-mail to [email protected]. Please include ``RIN
2590-AA20'' in the subject line of the message.
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments. If you submit your
comment to the Federal eRulemaking Portal, please also send it by e-
mail to FHFA at [email protected] to ensure timely receipt by the
Agency. Please include ``RIN 2590-AA20'' in the subject line of the
message.
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-AA20, Federal
Housing Finance Agency, Fourth Floor, 1700 G Street, NW., Washington,
DC 20552.
Hand Delivered/Courier: The hand delivery address is:
Alfred M. Pollard, General Counsel, Attention: Comments/RIN 2590-AA20,
Federal Housing Finance Agency, Fourth Floor, 1700 G Street, NW.,
Washington, DC 20552. The package should be logged at the Guard Desk,
First Floor, on business days between 9 a.m. and 5 p.m.
FOR FURTHER INFORMATION CONTACT: Sandy Comenetz, Executive Advisor to
the Chief Operating Officer and Senior Deputy Director, (202) 414-3771,
or Andra Grossman, Senior Counsel, (202) 343-1313 (not toll-free
numbers), Federal Housing Finance Agency, Fourth Floor, 1700 G Street,
NW., Washington, DC 20552. The telephone number for the
Telecommunications Device for the Deaf is (800) 877-8339.
SUPPLEMENTARY INFORMATION:
I. Comments
FHFA invites comments on all aspects of the proposed regulation and
will take all comments into consideration before issuing the final
regulation. Copies of all
[[Page 47496]]
comments will be posted without change, including any personal
information you provide, such as your name and address, on the FHFA Web
site at http://www.fhfa.gov. In addition, copies of all comments will
be available for examination by the public on business days between the
hours of 10 a.m. and 3 p.m., at the Federal Housing Finance Agency,
Fourth Floor, 1700 G Street, NW., Washington, DC 20552. To make an
appointment to inspect comments, please call the Office of General
Counsel at (202) 414-6924.
II. Background
The Housing and Economic Recovery Act of 2008 (HERA), Public Law
110-289, 122 Stat. 2654 (2008), amended the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.)
(Safety and Soundness Act) to establish FHFA as an independent agency
of the Federal Government.\1\ FHFA was established to oversee the
prudential operations of the Federal National Mortgage Association and
the Federal Home Loan Mortgage Corporation (collectively, Enterprises),
and the Federal Home Loan Banks (FHLBanks); and to ensure that they
operate in a safe and sound manner; remain adequately capitalized;
foster liquid, efficient, competitive and resilient national housing
finance markets; comply with the Safety and Soundness Act and their
respective authorizing statutes, as well as all rules, regulations,
guidelines, and orders and carry out their missions through activities
that are authorized by their respective statutes and are consistent
with the public interest. FHFA also has regulatory authority over the
Office of Finance under section 1311(b)(2) of the Safety and Soundness
Act (12 U.S.C. 4511(b)(2)).
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\1\ See Division A, titled the ``Federal Housing Finance
Regulatory Reform Act of 2008,'' Title I, Section 1101 of HERA.
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III. Proposed Regulation
Section 1105(e) of HERA amended section 1317(i) of the Safety and
Soundness Act (12 U.S.C. 4517(i)) by requiring the Director of FHFA to
establish, by regulation, an Office of the Ombudsman (Office). The
Office is to be headed by an Ombudsman who is responsible for
considering complaints and appeals from any regulated entity and any
person that has a business relationship with a regulated entity on any
matter relating to the regulation and supervision of a regulated
entity. Section 1317(i) (12 U.S.C. 4517(i)) further provides that the
regulation must specify the authority and duties of the Office. FHFA
proposes this regulation to implement section 1317(i) (12 U.S.C.
4517(i)) by establishing the Office and setting forth the authorities
and duties of the Ombudsman.
In developing this proposed regulation, FHFA considered the role,
scope, and function of the ombudsman across the federal banking
agencies and the rest of the federal government. FHFA found there was
no one, uniform approach followed. The approach taken in this proposed
regulation draws from these various practices.
The Office of Finance is a joint office of the FHLBanks that was
established by a predecessor to FHFA. The Office of Finance is governed
by a board of directors consisting of all of the FHLBank presidents and
five independent members. Under the regulations of FHFA, the Office of
Finance is subject to the same regulatory oversight authority and
enforcement powers as are the FHLBanks and their respective directors,
officers, and employees.\2\ The Office of Finance is also subject to
the cease-and-desist authority of FHFA and its directors, officers and
management are subject to the removal and prohibition authority of
FHFA.\3\ Although the Office of Finance is not directly covered by the
Safety and Soundness Act, it is subject to the Director's ``general
regulatory authority'' under section 1311(b)(2) of the Safety and
Soundness Act (12 U.S.C. 4511(b)(2)), as amended by HERA. The Director
is required to exercise that authority as necessary to ensure that the
purposes of the Safety and Soundness Act, the authorizing statutes, and
other applicable law are carried out. Based on its general regulatory
authority over the Office of Finance, FHFA is proposing that this
regulation apply to the Office of Finance.
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\2\ 12 CFR 1273.4 and 1273.7.
\3\ 12 U.S.C. 4631(a) and 4636a(a).
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Section 1313(f) of the Safety and Soundness Act (12 U.S.C.
4513(f)), requires the Director, when promulgating regulations relating
to the Banks, to consider the differences between the FHLBanks and the
Enterprises with respect to the FHLBanks' cooperative ownership
structure, liquidity mission, affordable housing and community
development mission, capital structure, and joint and several
liabilities. The Director may also consider any other differences that
are deemed appropriate. In preparing the proposed regulation, the
Director considered the differences between the FHLBanks and the
Enterprises as they relate to the above factors. The Director believes
that none of the unique factors relating to the FHLBanks warrants
establishing different treatment under the proposed regulation.
Nonetheless, the Director requests comments about whether it would be
appropriate to include in a final rule any provisions relating to the
differences between the FHLBanks and the Enterprises.
IV. Section-by-Section Analysis
Section 1213.1 Purpose and Scope
Proposed Sec. 1213.1 would provide that the purpose of the
proposed part is to establish the Office under section 1317(i) of the
Safety and Soundness Act (12 U.S.C. 4517(i)) and to set forth the
authorities and duties of the Ombudsman. The proposed part would also
apply to complaints and appeals regarding any matter relating to the
regulation and supervision of any regulated entity or the Office of
Finance. The proposed establishment of the Office would not alter or
limit any other right or procedure associated with appeals, complaints,
or administrative matters submitted by a person regarding any matter
relating to the regulation and supervision of a regulated entity or the
Office of Finance under any other law or regulation.
Section 1213.2 Definitions
This proposed section would set forth definitions applicable to
this part.
Business relationship would mean a relationship or potential
relationship between a person and a regulated entity or the Office of
Finance that involves the provision of goods or services. The term
business relationship would not mean a relationship between a mortgagor
and a regulated entity that directly or indirectly owns, purchased,
guarantees, or sold the mortgage.
Director would mean the Director of FHFA or his or her designee.
FHFA would mean the Federal Housing Finance Agency.
Office of Finance would mean the Office of Finance of the Federal
Home Loan Bank System.
Person would mean an organization, business entity, or individual
that has a business relationship with a regulated entity or the Office
of Finance, or that represents directly or indirectly the interests of
a person that has a business relationship with a regulated entity or
the Office of Finance. The term person would not include an individual
borrower.
Regulated entity would mean the Federal National Mortgage
Association and any affiliate, the Federal Home Loan Mortgage
Corporation and any affiliate, or any Federal Home Loan Bank. The term
regulated entities would
[[Page 47497]]
mean, collectively, the Federal National Mortgage Association and any
affiliate, the Federal Home Loan Mortgage Corporation and any
affiliate, and the Federal Home Loan Banks.
Safety and Soundness Act would mean the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992, (12 U.S.C. 4501 et seq.),
as amended by the Housing and Economic Recovery Act of 2008, Public Law
No. 110-289, 122 Stat. 2654 (2008).
Section 1213.3 Authorities and Duties of the Ombudsman
Proposed Sec. 1213.3 would provide that the Office be headed by an
Ombudsman. The Ombudsman would be required to consider complaints or
appeals submitted by a regulated entity, the Office of Finance, or any
person regarding any matter relating to the regulation and supervision
of the regulated entity or the Office of Finance by FHFA.
In considering any complaint or appeal, the proposed section would
authorize the Ombudsman to (i) conduct inquiries and make findings of
fact and nonbinding recommendations to the Director concerning the
complaint or appeal, and (ii) act as a facilitator and mediator for the
resolution of the complaint or appeal. Proposed duties of the Ombudsman
would be to (i) establish procedures for carrying out the functions of
the Office, (ii) establish and publish procedures for the submission of
complaints and appeals, and (iii) report annually to the Director on
the activities of the Office, or more frequently, as determined by the
Director.
Section 1213.4 Complaints and Appeals by a Regulated Entity or the
Office of Finance
Proposed Sec. 1213.4 would provide that FHFA encourages informal
resolution of matters in dispute between a regulated entity or the
Office of Finance and FHFA. If a matter could not be resolved
informally, a regulated entity or the Office of Finance may submit a
complaint or appeal. As proposed, any regulated entity or the Office of
Finance may submit a complaint in accordance with procedures
established by the Ombudsman regarding any matter relating to the
regulation and supervision of a regulated entity or the Office of
Finance that is not a matter subject to appeal. Proposed Sec. 1213.4
would provide that the Ombudsman may further define what matters are
subject to complaint.
Proposed Sec. 1213.4 would further provide that any regulated
entity or the Office of Finance may submit an appeal in accordance with
procedures established by the Ombudsman on any final written regulatory
or supervisory conclusion, decision, or examination rating by FHFA. The
proposed section also would provide that the Ombudsman may further
define what matters are subject to appeal. Section 1213.4, as proposed
would provide that for matters for which there is an existing avenue of
appeal or for which there is another forum, and non-final decisions or
conclusions may not be appealed to the Ombudsman. Such matters would
include, but would not be limited to, appointments of conservators or
receivers, preliminary examination conclusions, formal enforcement
decisions, formal and informal rulemakings, Freedom of Information Act
appeals, final FHFA decisions subject to judicial review, and matters
within the jurisdiction of the FHFA Inspector General. In addition, the
proposed section would provide that the Ombudsman may further define
what matters are not subject to appeal.
Finally, proposed Sec. 1213.4 would provide that an appeal would
not excuse a regulated entity or the Office of Finance from complying
with any regulatory or supervisory decision while the appeal is
pending. The proposed section would provide that the Director, upon
written request, may relieve a regulated entity or the Office of
Finance of the obligation to comply with a regulatory or supervisory
decision or action while an appeal is pending.
Section 1213.5 Complaints by a Person
Proposed Sec. 1213.5 would allow any person to submit a complaint
in accordance with procedures established by the Ombudsman regarding
any matter relating to the regulation and supervision of a regulated
entity or the Office of Finance. The proposed section also would
provide that the Ombudsman may further define what matters are subject
to complaints.
Section 1213.6 No Retaliation
Under proposed Sec. 1213.6, neither FHFA nor any FHFA employee
would be permitted to retaliate against a regulated entity, the Office
of Finance, or a person for submitting a complaint or appeal. The
proposed section would require the Ombudsman to receive and address
complaints of retaliation and investigate the basis of the alleged
retaliation. Upon completion of the investigation, the Ombudsman would
report the findings to the Director with recommendations, including a
recommendation to take disciplinary action against any FHFA employee
found to have retaliated.
Section 1213.7 Confidentiality
Proposed Sec. 1213.7 would require the Ombudsman to ensure that
safeguards exist to preserve confidentiality. If a party requests that
information and materials remain confidential, the Ombudsman would be
required not to disclose the information and materials, without
approval of the party, except to appropriate reviewing or investigating
officials, or as required by law. The proposed section notes that the
resolution of certain complaints (such as complaints of retaliation
against a regulated entity or the Office of Finance) may not be
possible if the identity of the party remains confidential and thus
would require the Ombudsman to discuss with the party the circumstances
limiting confidentiality.
Regulatory Impact
Paperwork Reduction Act
The proposed regulation does not contain any information collection
requirement that requires the approval of the Office of Management and
Budget 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 regulation 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
regulation's impact on small entities. Such an analysis need not be
undertaken if the agency has certified that the regulation will not
have a significant economic impact on a substantial number of small
entities. 5 U.S.C. 605(b). FHFA hereby certifies that the proposed
regulation is not likely to have a significant economic impact on a
substantial number of small entities for purposes of the Regulatory
Flexibility Act.
List of Subjects
12 CFR Part 1213
Administrative practice and procedure, Federal home loan banks,
Government-sponsored enterprises.
Authority and Issuance
Accordingly, for the reasons stated in the preamble, under the
authority of 12 U.S.C. 4511(b)(2), 4517(i), and 4526, the Federal
Housing Finance Agency proposes to amend Chapter XII of Title 12, Code
of Federal Regulations, by adding a new part 1213 to subchapter A to
read as follows:
[[Page 47498]]
PART 1213--OFFICE OF THE OMBUDSMAN
Sec.
1213.1 Purpose and scope.
1213.2 Definitions.
1213.3 Authorities and duties of the Ombudsman.
1213.4 Complaints and appeals by a regulated entity or the Office of
Finance.
1213.5 Complaints by a person.
1213.6 No retaliation.
1213.7 Confidentiality.
Authority: 12 U.S.C. 4511(b)(2), 4517(i), and 4526.
Sec. 1213.1 Purpose and scope.
(a) Purpose. The purpose of this part is to establish within FHFA
the Office of the Ombudsman (Office) under section 1317(i) of the
Safety and Soundness Act (12 U.S.C. 4517(i)) and to set forth the
authorities and duties of the Ombudsman.
(b) Scope.--(1) This part applies to complaints and appeals
regarding any matter relating to the regulation and supervision of any
regulated entity or the Office of Finance.
(2) The establishment of the Office does not alter or limit any
other right or procedure associated with appeals, complaints, or
administrative matters submitted by a person regarding any matter
relating to the regulation and supervision of a regulated entity or the
Office of Finance under any other law or regulation.
Sec. 1213.2 Definitions.
For purposes of this part, the term:
Business relationship means a relationship or potential
relationship between a person and a regulated entity or the Office of
Finance that involves the provision of goods or services. The term
business relationship does not mean a relationship between a mortgagor
and a regulated entity that directly or indirectly owns, purchased,
guarantees, or sold the mortgage.
Director means the Director of FHFA or his or her designee.
FHFA means the Federal Housing Finance Agency.
Office of Finance means the Office of Finance of the Federal Home
Loan Bank System.
Person means an organization, business entity, or individual that
has a business relationship with a regulated entity or the Office of
Finance, or that represents directly or indirectly the interests of a
person that has a business relationship with a regulated entity or the
Office of Finance. The term person does not include an individual
borrower.
Regulated entity means the Federal National Mortgage Association
and any affiliate, the Federal Home Loan Mortgage Corporation and any
affiliate, or any Federal Home Loan Bank. The term regulated entities
means, collectively, the Federal National Mortgage Association and any
affiliate, the Federal Home Loan Mortgage Corporation and any
affiliate, and the Federal Home Loan Banks.
Safety and Soundness Act means the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.), as
amended by the Housing and Economic Recovery Act of 2008, Public Law
No. 110-289, 122 Stat. 2654 (2008).
Sec. 1213.3 Authorities and duties of the Ombudsman.
(a) General. The Office shall be headed by an Ombudsman, who shall
consider complaints or appeals submitted by a regulated entity, the
Office of Finance, or any person regarding any matter relating to the
regulation and supervision of the regulated entities or the Office of
Finance by FHFA. In considering any complaint or appeal submitted under
this part, the Ombudsman may:
(1) Conduct inquiries and make findings of fact and nonbinding
recommendations to the Director concerning the complaint or appeal, and
(2) Act as a facilitator and mediator for the resolution of the
complaint or appeal.
(b) Other duties. The Ombudsman shall:
(1) Establish procedures for carrying out the functions of the
Office.
(2) Establish and publish procedures for the submission of
complaints and appeals, and
(3) Report annually to the Director on the activities of the
Office, or more frequently, as determined by the Director.
Sec. 1213.4 Complaints and appeals by a regulated entity or the
Office of Finance.
(a) Informal resolution. FHFA encourages informal resolution of
matters in dispute between a regulated entity or the Office of Finance
and FHFA. If a matter cannot be resolved informally, a regulated entity
or the Office of Finance may submit a complaint or appeal, as
appropriate, to the Ombudsman for consideration under procedures
established by the Ombudsman.
(b) Complaints.--(1) General. Any regulated entity or the Office of
Finance may submit a complaint in accordance with procedures
established by the Ombudsman.
(2) Matters subject to complaint. A regulated entity or the Office
of Finance may submit a complaint regarding any matter relating to the
regulation and supervision of a regulated entity or the Office of
Finance that is not a matter subject to appeal. The Ombudsman may
further define what matters are subject to complaint.
(c) Appeals.--(1) General. Any regulated entity or the Office of
Finance may submit an appeal in accordance with procedures established
by the Ombudsman.
(2) Matters subject to appeal. A regulated entity or the Office of
Finance may submit an appeal on any final written regulatory or
supervisory conclusion, decision, or examination rating by FHFA. The
Ombudsman may further define what matters are subject to appeal.
(3) Matters not subject to appeal. Matters for which there is an
existing avenue of appeal or for which there is another forum, and non-
final decisions or conclusions may not be appealed. Such matters
include but are not limited to appointments of conservators or
receivers, preliminary examination conclusions, formal enforcement
decisions, formal and informal rulemakings, Freedom of Information Act
appeals, final FHFA decisions subject to judicial review, and matters
within the jurisdiction of the FHFA Inspector General. The Ombudsman
may further define what matters are not subject to appeal.
(4) Effect of initiating an appeal. An appeal under this section
does not excuse a regulated entity or the Office of Finance from
complying with any regulatory or supervisory decision while the appeal
is pending. The Director, upon written request, may relieve a regulated
entity or the Office of Finance of the obligation to comply with a
regulatory or supervisory decision or action while the appeal is
pending.
Sec. 1213.5 Complaints by a person.
(a) General. Any person may submit a complaint in accordance with
procedures established by the Ombudsman.
(b) Matters subject to complaint. A person may submit a complaint
regarding any matter relating to the regulation and supervision of a
regulated entity or the Office of Finance. The Ombudsman may further
define what matters are subject to complaints.
Sec. 1213.6 No retaliation.
Neither FHFA nor any FHFA employee may retaliate against a
regulated entity, the Office of Finance, or a person for submitting a
complaint or appeal under this part. The Ombudsman shall receive and
address
[[Page 47499]]
complaints of retaliation. Upon receiving a complaint, the Ombudsman
shall investigate the basis of the alleged retaliation. Upon completion
of the investigation, the Ombudsman shall report the findings to the
Director with recommendations, including a recommendation to take
disciplinary action against any FHFA employee found to have retaliated.
Sec. 1213.7 Confidentiality.
The Ombudsman shall ensure that safeguards exist to preserve
confidentiality. If a party requests that information and materials
remain confidential, the Ombudsman shall not disclose the information
and materials, without approval of the party, except to appropriate
reviewing or investigating officials, or as required by law. However,
the resolution of certain complaints (such as complaints of retaliation
against a regulated entity or the Office of Finance) may not be
possible if the identity of the party remains confidential. In such
cases, the Ombudsman shall discuss with the party the circumstances
limiting confidentiality.
Dated: August 1, 2010.
Edward J. DeMarco,
Acting Director, Federal Housing Finance Agency.
[FR Doc. 2010-19424 Filed 8-5-10; 8:45 am]
BILLING CODE 8070-01-P