[The Regulatory Plan and Unified Agenda of Federal Regulations]
[Federal Housing Finance Board Regulatory Plan]
[From the U.S. Government Printing Office, www.gpo.gov]
FEDERAL HOUSING FINANCE BOARD (FHFB)
Statement of Regulatory Priorities
The Finance Board's three major regulatory priorities for fiscal 1995
are: to ensure that the FHLBanks operate in a financially safe and
sound manner; to ensure that they carry out their housing finance
mission; and to address what governance authorities currently exercised
by the Finance Board may be more appropriately exercised by the
FHLBanks, thereby reducing their regulatory burden. Within these
``super'' priorities, the Finance Board has a number of 1994-95
priority projects, two of which are expected to result in significant
regulatory actions (as defined in E.O. 12866) in fiscal 1995. However,
it is important to note that the Finance Board will be without
authority to take action on regulations or new policy initiatives until
a quorum is restored to the Finance Board.
FHLBank Safety And Soundness Priority
The Finance Board's highest priority is to continue to ensure the
safety and soundness of the FHLBank System. This priority entails the
ongoing examination and supervision of the 12 FHLBanks and the FHLBank
System's funding agent, the Office of Finance, and all matters relating
to safety and soundness. While none of the projects within this
priority is expected to result in a significant regulatory action in
fiscal year 1995, the following interrelated matters are the most
important components of this top priority for the agency:
1. The execution of the Finance Board-adopted strategic plan for on-
site examination of the 12 FHLBanks and the Office of Finance;
2. The development and adoption by the Finance Board of the agency's
examination handbook, which will articulate the policies and procedures
to be followed by examiners in conducting examinations; and
3. In connection with a comprehensive project to review the capital
standards and structure of the FHLBank System, further modifications
to, and modernization of, the Financial Management Policy governing
investments and other nonadvance financial activities of the FHLBank
System--which modifications may include the development of a regulation
in place of the existing policy.
FHLBank Housing Finance Mission Priority
The second major Finance Board regulatory priority is to continue to
ensure that the FHLBanks carry out their housing finance mission. There
are two significant regulatory actions through which the Finance Board
intends to further this priority in fiscal year 1995: (1) the amendment
of the Finance Board's existing Affordable Housing Program (AHP)
regulation; and (2) the possible adoption of a new regulation or
guidelines governing the FHLBanks' Community Investment Program (CIP).
These two initiatives are described below.
The Finance Board also intends to implement this priority by amending
its existing Community Support Requirements (Community Support)
regulation to establish specific community support standards applicable
to credit union and insurance company members. The Bank Act requires
the Finance Board to adopt a regulation establishing standards of
``community investment or service'' that member institutions must meet
in order to maintain continued access to long-term advances.
Under the existing Community Support regulation, the primary standard
for evaluating the adequacy of a member's community support activities
is the evaluation of the member's compliance with the Community
Reinvestment Act of 1977 (CRA), as evidenced by the CRA rating assigned
to the member by its Federal banking regulator. However, since the CRA
does not apply to credit unions and insurance companies, these
institutions do not receive CRA ratings. The amendment to the Community
Support regulation is intended to address this issue. The Finance Board
does not expect the amendment of the Community Support regulation to
constitute a significant regulatory action.
FHLBank Corporate Governance Priority
The Finance Board's third major priority for fiscal 1995 is to reduce
the regulatory burden on the FHLBanks by carrying out, to the extent
permitted by current law, the recommendation regarding FHLBank System
governance contained in a number of the congressional reports mandated
by the Housing and Community Development Act of 1992, as well as in the
strategic plan called ``System 2000'' developed jointly by the Finance
Board and the System in 1993. The recommendation is that the Finance
Board's safety and soundness, regulatory, and supervisory functions be
separated from the Finance Board's corporate governance and business
oversight functions.
The Finance Board's corporate governance priority promotes the
President's National Performance Review priorities in two ways. First,
it will ``cut red tape'' by reducing the number and extent of
regulations that control the FHLBanks' business decisions. Second, it
will ``put customers first'' by allowing the FHLBanks more flexibility
in carrying out the purpose for which they were created: to channel
money from Wall Street to individual housing lenders all across
America.
The Finance Board is currently seeking recommendations from the 12
FHLBanks as well as its own senior staff regarding which activities
currently carried out by the Finance Board might better be done by the
FHLBanks or by a to-be-created central governance authority. The
Finance Board will study the recommendations and implement those
changes it believes are appropriate and that can be carried out without
statutory or regulatory change.
Clearly, the Finance Board would have to modify or eliminate some of
its existing regulations in order to effect many of the changes. It is
unlikely that any one of the regulatory changes that ultimately emanate
from this priority will amount to a significant regulatory action.
However, if all of the regulatory changes emanating from this priority
were taken together, it is possible that they could amount to a
significant regulatory action since the annual reduction of burden on
the FHLBanks and the economy could amount to $100 million or more.
_______________________________________________________________________
FHFB
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PRERULE STAGE
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204. COMMUNITY INVESTMENT PROGRAM
Legal Authority:
12 USC 1422a; 12 USC 1422b; 12 USC 1430(i)
CFR Citation:
12 CFR 961
Legal Deadline:
None
Abstract:
Pursuant to section 721 of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989, Public Law 101-73, 103 Stat. 423, the
Federal Home Loan Banks (FHLBanks) must establish a Community
Investment Program (CIP) which will provide funds through FHLBank
advances (loans) to a FHLBank's member institutions at interest rates
equal to interest rates on FHLBank consolidated bonds or notes having
comparable maturity dates with the advances. These advances will be
used by the member institutions to provide funding for community-
oriented development projects or housing. These regulations will
continue the commitment of the FHLBanks to community development
lending.
Statement of Need:
The CIP has operated for 4 years without any clarifying regulations.
During this time, operational issues have arisen. A regulation or
guidelines may be necessary to address these issues in order to
establish a more specific framework for the operation of the CIP.
Summary of the Legal Basis:
Section 2B(a)(1) of the Federal Home Loan Bank Act (Bank Act)
authorizes the Federal Housing Finance Board (Finance Board) to
promulgate regulations necessary to carry out the provisions of the
Bank Act. See 12 U.S.C. 1422b(a)(1). Section 10(i) of the Bank Act
requires the FHLBanks to establish a CIP, pursuant to the general
statutory criteria set forth in section 10(i). The Finance Board
therefore has the authority, under its general authority to issue
regulations implementing the Bank Act, to issue clarifying regulatory
standards governing the CIP.
Alternatives:
Because consideration of additional CIP guidance is in a very
preliminary stage, including the issue of whether such guidance will be
established by regulation or guidelines, the Finance Board has not yet
analyzed the alternative approaches to the issues expected to be
addressed in this initiative.
Anticipated Costs and Benefits:
Because the Finance Board has not yet analyzed the alternative
approaches to the issues expected to be addressed in the CIP regulation
or guidelines, the Finance Board is not yet able to identify the
expected costs and benefits of any such CIP regulation or guidelines.
Risks:
The CIP regulation or guidelines will not address issues of financial
risk to the FHLBanks. The advances made by the FHLBanks through the
CIP, like all FHLBank advances, are governed by the Finance Board's
Advances regulation, which addresses the safety and soundness issues
involved in making advances. Since advances made through the CIP are
overcollateralized, there is a low magnitude of risk of loss to the
FHLBanks in making such advances.
Timetable:
Next Action Undetermined
Small Entities Affected:
None
Government Levels Affected:
None
Agency Contact:
Sylvia Martinez
Director
Housing Finance Directorate
Federal Housing Finance Board
1777 F Street NW.
Washington, DC 20006
202 408-2825
RIN: 3069-AA05
_______________________________________________________________________
FHFB
___________________________________________________________
FINAL RULE STAGE
___________________________________________________________
205. AFFORDABLE HOUSING PROGRAM
Legal Authority:
12 USC 1422b(a)(1); 12 USC 1430(j)
CFR Citation:
12 CFR 960
Legal Deadline:
None
Abstract:
The Federal Housing Finance Board (Finance Board) issued a proposed
rule revising its regulation governing the Affordable Housing Program
(AHP) in order to simplify and clarify the AHP's requirements for the
Federal Home Loan Banks (FHLBanks) and their members.
Statement of Need:
The Finance Board is revising its AHP Regulation in order to address
operational issues that have arisen during the 4 years the program has
been in existence. The proposed AHP amendments will help enhance the
AHP's compatibility with various State and Federal housing programs
that provide funds in conjunction with AHP funds. In addition, the
amendments would make the AHP more responsive to local low-income
housing needs in each of the 12 FHLBank districts and increase
efficiency in administration of the program.
Summary of the Legal Basis:
Section 10(j) of the Federal Home Loan Bank Act requires the Finance
Board to promulgate regulations governing the AHP. See 12 U.S.C.
1430(j).
Alternatives:
During the development of the proposed AHP amendments, the Finance
Board considered various alternative approaches to dealing with the
operational issues that have arisen over the 4 years of the AHP's
existence. In addition, the Finance Board will consider all
alternatives suggested by the public during the notice-and-comment
process. The Finance Board expects to address these alternatives in its
final AHP regulation.
Anticipated Costs and Benefits:
At this time, it is not possible to quantify the expected costs and
benefits of the revised AHP regulation. In general, the Finance Board
expects the revised AHP regulation to reduce the FHLBanks'
administrative costs of operating the AHP.
Risks:
The revised AHP regulation does not address issues of financial risk to
the FHLBanks. The advances made by the FHLBanks through the AHP, like
all FHLBank advances, are governed by the Finance Board's Advances
regulation, which addresses the safety and soundness issues involved in
making advances. Since advances made through the AHP are
overcollateralized, there is a low magnitude of risk of loss to the
FHLBanks in making such advances.
Timetable:
_______________________________________________________________________
Action DFR Cite
_______________________________________________________________________
NPRM 59 FR 1323 01/10/94
NPRM Comment Per59 FR 1323 03/11/94
Final Action 10/00/94
Final Action Effective 11/00/94
Small Entities Affected:
None
Government Levels Affected:
None
Agency Contact:
Diane E. Dorius
Deputy Director, Housing Finance Directorate
Federal Housing Finance Board
1777 F Street NW.
Washington, DC 20006
202 408-2576
RIN: 3069-AA28
BILLING CODE 6725-01-F