[Federal Register Volume 75, Number 189 (Thursday, September 30, 2010)]
[Proposed Rules]
[Pages 60347-60352]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-24578]
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FEDERAL HOUSING FINANCE BOARD
12 CFR Part 914
FEDERAL HOUSING FINANCE AGENCY
12 CFR Part 1260
RIN 2590-AA35
Information Sharing Among Federal Home Loan Banks
AGENCY: Federal Housing Finance Agency.
ACTION: Notice of proposed rulemaking; request for comments.
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SUMMARY: Section 1207 of the Housing and Economic Recovery Act of 2008
(HERA) amended the Federal Home Loan Bank Act (Bank Act) to require the
Federal Housing Finance Agency (FHFA) to make available to each Federal
Home Loan Bank (Bank) information relating to the financial condition
of all other Banks. Section 1207 also requires FHFA to promulgate
regulations to facilitate the sharing of such information among the
Banks. This proposed rule would implement those HERA provisions, and
also would transfer to new part 1260, without substantive change,
existing regulations of the former Federal Housing Finance Board
(Finance Board) relating to the filing of regulatory reports by the
Banks.
DATES: Written comments must be received on or before November 29,
2010.
ADDRESSES: You may submit your comments, identified by regulatory
information number (RIN) 2590-AA35, by any of the following methods:
E-mail: Comments to Alfred M. Pollard, General Counsel may
be sent by e-mail to [email protected]v. Please include ``RIN 2590-
AA35'' 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]v to ensure timely receipt by FHFA.
Please include ``RIN 2590-AA35'' 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-AA35, 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-AA35,
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: Eric M. Raudenbush, Assistant General
Counsel, Office of General Counsel, [email protected], (202)
414-6421 (this is not a toll-free number); Federal Housing Finance
Agency, Fourth Floor, 1700 G Street, NW., Washington, DC 20552; Daniel
E. Coates, Associate Director, Division of FHLBank Regulation,
[email protected], (202) 408-2959 (this is not a toll-free
number), Federal Housing Finance Agency, 1625 Eye Street, NW.,
Washington, DC 20006. The telephone number for the Telecommunications
Device for the Hearing Impaired is (800) 877-8339.
SUPPLEMENTARY INFORMATION:
I. Comments
FHFA invites comments on all aspects of the proposed rule and will
take all comments into consideration before issuing the final rule.
Copies of all comments will be posted without change, including any
personal information you provide, such as your name and address, on
FHFA's Internet Web site at http://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 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
A. The Federal Home Loan Bank System (Bank System)
The Bank System consists of 12 Banks and the Office of Finance
(OF). The Banks are instrumentalities of the United States organized
under the Federal Home Loan Bank Act (Bank Act). See 12 U.S.C. 1423,
1432(a). The Banks are cooperatives; only members of a Bank may
purchase its capital stock, and only members or certain eligible
housing associates (such as state housing finance agencies) may obtain
access to secured loans, known as advances, or other products provided
by a Bank. See 12 U.S.C. 1426(a)(4), 1430(a), 1430b. Each Bank is
managed by its own board of directors and serves the public interest by
enhancing the availability of residential mortgage and community
lending credit through its member institutions. See 12 U.S.C. 1427. Any
eligible institution (generally a federally insured depository
institution or state-regulated insurance company) may become a member
of a Bank if it satisfies certain criteria and purchases a specified
amount of the Bank's capital stock. See 12 U.S.C. 1424; 12 CFR part
1263.
B. New Statutory Provision Requiring the Sharing of Bank Information
Section 1207 of HERA added a new section 20A to the Bank Act, 12
U.S.C. 1440a, that requires FHFA to make available to each Bank such
reports,
[[Page 60348]]
records, or other information as may be available, relating to the
condition of any other Bank in order to enable each Bank to evaluate
the financial condition of the other Banks and the Bank System as a
whole. The underlying objective for that requirement is that such
information will better enable each Bank to assess the likelihood that
it may be required to make payments on behalf of another Bank under the
joint and several liability on the Banks' Consolidated Obligations
(COs), as well as to comply with its disclosure obligations under the
Securities Exchange Act of 1934 (1934 Act) (both of which are discussed
in detail below). See 12 U.S.C. 1440a(a). Section 20A further requires
FHFA to promulgate regulations to facilitate the sharing of such
financial information among the Banks. See 12 U.S.C. 1440a(b)(1).
Section 20A permits a Bank to request that FHFA determine that
particular information that may otherwise be made available is
proprietary and that the public interest requires that such information
not be shared. See 12 U.S.C. 1440a(b)(2). Finally, section 20A provides
that it does not affect the obligations of the Banks under the 1934 Act
and related regulations of the Securities and Exchange Commission
(SEC), and that the sharing of Bank information thereunder shall not
cause FHFA to waive any privilege applicable to the shared information.
See 12 U.S.C. 1440a(c), (d).
C. Banks' Joint and Several Liability and Disclosure Requirements on
COs
The Banks fund their operations principally through the issuance of
the COs, which are debt instruments issued on behalf of the Banks by
the OF, a joint office of the Banks, pursuant to section 11 of the Bank
Act, 12 U.S.C. 1431, and part 966 of the regulations of the Finance
Board, 12 CFR part 966.\1\ Under these regulations, the COs may be
issued only through OF as agent for the Banks and the Banks are jointly
and severally liable for the timely payment of principal and interest
on all COs when due. See 12 CFR 966.2(b), 966.9(a). Accordingly, even
when COs are issued with one Bank being the primary obligor, the
ultimate liability for the timely payment of principal and interest
thereon remains with all of the Banks collectively. By virtue of their
status as government-sponsored enterprises (GSEs) and the soundness of
the Banks' secured lending (advances) business over many years, the
Banks typically can borrow funds in the capital markets at favorable
rates. The Banks pass along a portion of their GSE funding advantage to
their member institutions--and ultimately to consumers--by providing
advances and other financial services at rates that may not otherwise
be available to their members.
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\1\ HERA amended certain aspects of section 11 of the Bank Act,
relating to the issuance of consolidated obligations and the role of
the OF in that process. FHFA intends to make conforming revisions to
the regulations now located at part 966, and to relocate those
provisions to an appropriate place in FHFA's regulations.
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Although the COs themselves are not registered securities under the
federal securities laws, the Finance Board adopted regulations in 2004
requiring each Bank to register a class of its common stock (which is
issued only to its member institutions) with the SEC under section
12(g) of the 1934 Act, 15 U.S.C. 78l(g). See 69 FR 38811 (June 29,
2004), codified at 12 CFR part 998. Each Bank subsequently registered a
class of its common stock with the SEC in compliance with that
regulation. Separately, HERA included a provision requiring the Banks
to register their common stock under section 12(g) of the 1934 Act, and
to maintain that registration. See 15 U.S.C. 78oo(b). Accordingly, each
Bank remains subject to the periodic disclosure requirements
established under the 1934 Act, as interpreted and administered by the
SEC.
D. Considerations of Differences Between the Banks and the Enterprises
Section 1201 of HERA amended the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 to add a new section
1313(f), which requires the Director of FHFA, when promulgating
regulations relating to the Banks, to consider the differences between
the Banks and the Enterprises (Fannie Mae and Freddie Mac) as they
relate to: the Banks' cooperative ownership structure; the mission of
providing liquidity to members; the affordable housing and community
development mission; their capital structure; and their joint and
several liability on consolidated obligations. See HERA, section 1201,
Public Law 110-289, 122 Stat. 2782-83 (amending 12 U.S.C. 4513). The
Director also may consider any other differences that are deemed
appropriate. In preparing this proposed rule, FHFA considered the
differences between the Banks and the Enterprises as they relate to the
above factors. FHFA requests comments from the public about whether
differences related to these factors should result in any revisions to
the proposal.
III. The Proposed Rule
The proposed rule would add a new part 1260 to the regulations of
FHFA to govern the handling of Bank records, reports, and other
information. It would transfer material relating to Bank regulatory
reports from part 914 of the regulations of the Finance Board to new
part 1260 and would remove part 914. It would also create new
provisions within part 1260 to govern the sharing of information among
Banks, as required by section 20A of the Bank Act. The substance of
each provision of the proposed rule is described in the following
paragraphs.
Section 1260.1--Definitions
Proposed Sec. 1260.1 would include a series of definitions, most
of which would relate to the provisions to be relocated from part 914
of the regulations of the Finance Board. The definitions of the
acronyms ``AHP,'' ``AMA,'' ``CICA,'' and ``CIP'' (which are used in
Sec. 1260.2, discussed below) would be substantively identical to the
definitions of those terms set forth in 12 CFR part 900, which applies
to 12 CFR chapter IX, including current part 914. In addition, the
proposed rule would transfer to Sec. 1260.1, without substantive
change, the definition of the term ``Regulatory Report'' that is
currently set forth in 12 CFR 914.1. Finally, Sec. 1260.1 would also
contain definitions for the short forms ``Bank,'' ``Bank Act,'' and
``FHFA.''
Section 1260.2--Filing Regulatory Reports
The proposed rule would transfer to Sec. 1260.2 from Sec. 914.2
of the Finance Board's regulations a provision requiring each Bank to
file regulatory reports with FHFA, as requested by the agency. As
defined in Sec. 1260.1, these regulatory reports would include any
report of data needed to evaluate the safety and soundness of the
Bank's operations or its compliance with statutory requirements, or
with regulations, orders or other requirements imposed by FHFA.
Proposed Sec. 1260.2 is identical to current Sec. 914.2, except that
Sec. 1260.2 would expressly refer to FHFA as regulator of the Banks
instead of the former Finance Board.
Section 1260.3--Sharing of Information Among the Banks
Paragraph (a) of proposed Sec. 1260.3 sets forth the operative
provisions of the regulation that implement section 20A of the Bank
Act, which identify the information to be shared and describe the
manner in which FHFA will share that information. The information to be
[[Page 60349]]
shared will include the final report of examination for each Bank,
along with any other supervisory reports that FHFA presents to the
board of directors of any Bank. Documents that are related to the
reports of examination but are not part of the report, such as work
programs, conclusions memoranda, and findings memoranda, would not be
included among the materials to be distributed to the Banks. FHFA is
proposing to distribute the reports of examination to each of the other
Banks and OF as a matter of routine, rather than in response to
individual requests, and to do so soon after the report has been
finalized and presented to the board of directors of the subject Bank.
Because OF is a joint office of the Banks and because it is charged
with preparing the combined financial reports for the Bank System, FHFA
is proposing to distribute to OF copies of the reports for all of the
Banks. Although OF is examined by FHFA in the same manner as the Banks,
FHFA is not proposing to distribute to the Banks the report of
examination for OF because all twelve Bank presidents sit on OF's board
of directors and, therefore, would already have access to the
report.\2\ Paragraph (a) also notes that the distribution of
information under this provision is subject to the requirements set
forth in paragraphs (b) through (d) of the proposal, which reflect the
statutory provisions relating to the withholding of certain proprietary
information.
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\2\ FHFA also reviews the annual combined Bank System financial
statements prepared by OF on behalf of the Banks. The agency then
issues a letter to the OF board of directors that provides
recommendations for enhanced disclosures. This also would not be
distributed to the Banks under the proposed rule, for the same
reason.
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Section 20A of the Bank Act reflects a determination by Congress
that providing greater access to financial information relating to all
of the other Banks will help each Bank assess its potential exposure to
joint and several liability on the COs, as well as the accuracy of its
disclosure documents under the 1934 Act. At present, each Bank already
has access to a significant amount of information about the financial
condition of the other Banks. That information includes the quarterly
and annual reports that each Bank files with the SEC under the 1934
Act, which reports must disclose all material business and financial
information about the particular Bank. It also includes the call
reports that each Bank files with FHFA, as well as the quarterly
certifications that each Bank must file with FHFA attesting to its
ability to make full and timely payments on its current obligations
during the next quarter. See 12 CFR 966.9(b)(1), (2). The Banks also
have access to FHFA's Annual Report to Congress (required under 12
U.S.C. 4521(a)), which summarizes the conclusions set forth in each
Bank's report of examination.
FHFA believes that by providing each Bank with access to the actual
reports of examination and other supervisory reports presented to the
boards of directors of the other Banks, the proposed rule would enable
each Bank to better evaluate the other financial information already
available and thus make a more informed assessment about the financial
condition of each of the other Banks. The reports of examination and
other supervisory reports would include more detailed information than
is currently available to the Banks. Among other things, the report of
examination typically sets forth the examiners' assessment of the
strength of the Bank's corporate governance, its management of market
risk, credit risk and operational risk, and its overall financial
condition and performance. Based on these assessments, the report also
may enumerate matters that require corrective action by, or under the
supervision of, the Bank's board of directors and the dates by which
such corrective action is to be completed. The Banks are well-suited to
evaluate the information contained in a report of examination as a
result of their own experience with the examination process.
Although FHFA believes that its distribution of the reports of
examination and other supervisory reports will provide the Banks with
the type of information contemplated by the statute, FHFA requests
comments on whether other types of documents also should be made
available under this regulation. FHFA also requests comments on whether
the rule should allow FHFA to expand the categories of information to
be distributed to the Banks without undertaking a subsequent
rulemaking, i.e., whether the Director or his designee may expand the
categories of information to be disseminated through a less formal
means, such as by order or staff action.
FHFA believes that the approach embodied in the proposed rule,
i.e., where FHFA provides supervisory information directly to each of
the Banks rather than requiring the Banks to share supervisory
information among themselves, is consistent with the requirements of
section 20A and will achieve its objectives. Section 20A(a) generally
directs FHFA to make available to all of the Banks information relating
to the financial condition of all of the other Banks. Section 20A(b)
separately directs FHFA to adopt regulations to facilitate the sharing
of the information made available under section 20A(a) directly among
the Banks. That latter provision appears to reflect a presumption that
FHFA would implement the HERA amendments by requiring each Bank to
provide copies of its report of examination and other supervisory
reports directly to all of the other Banks. Because FHFA is proposing
to distribute the reports of examination and other supervisory reports
directly to all of the Banks, FHFA believes that the rule need not
include a provision dealing with Bank-to-Bank sharing of the reports of
examination and other supervisory reports that FHFA presents to the
board of directors. Moreover, as noted previously, the Banks currently
share various types of other information among themselves on a
voluntary basis, which suggests that there is no compelling need to
mandate Bank-to-Bank sharing of particular categories of other
information. FHFA requests comments on whether the rule should retain
this approach.
By statute, FHFA is required to conduct an on-site examination of
each Bank at least annually to determine the condition of the entity
for the purpose of ensuring its safety and soundness. See 12 U.S.C.
1440, 4517(a)-(b). Upon completion of each annual or special
examination, FHFA examiners prepare a written report of examination for
the Director of FHFA (as required by section 20 of the Bank Act, 12
U.S.C. 1440), which is subsequently presented to the board of directors
of the particular Bank. The report of examination is prepared for the
Director of FHFA and, by regulation, remains the property of FHFA even
when in the possession of a Bank, OF, a Bank member, or another
government agency. See 12 U.S.C. 1440; 12 CFR 911.3(c)(3). Accordingly,
these reports, as well as any other supervisory correspondence, are
subject to the restrictions on the disclosure of unpublished
information set out in part 911 of the regulations of the former
Finance Board (which remain in effect until superseded by action of
FHFA).
Currently, the Banks are prohibited by regulation from sharing
their reports of examination among themselves, or with any other
outside party, except pursuant to the written consent of FHFA. See 12
CFR 911.3(c)(1). In 2006, the Finance Board issued an Advisory Bulletin
that permitted the Banks to disclose the factual content of a report of
examination in the preparation of its SEC disclosure documents, but
continued to prohibit the Banks from releasing the report of
examination
[[Page 60350]]
itself, or any portion of the report. See Federal Housing Finance Board
Advisory Bulletin 2006-AB-03 (July 18, 2006) (available online at
http://www.fhfa.gov/webfiles/13094/2006-AB-03.pdf). The Advisory
Bulletin specifically prohibited the sharing of reports of examination
among the Banks even for the purpose of assessing the likelihood of
having to make a payment on COs for which another Bank is the primary
obligor. If FHFA adopts a final rule that requires it to provide
examination reports to all of the Banks, FHFA also will consider
whether any revisions to the Advisory Bulletin are necessary, such as
to ensure that the Bulletin remains consistent with purposes of HERA
while also ensuring that the Banks do not share the reports of
examination that they receive from FHFA with any other parties.
In the rule, FHFA is proposing to distribute only the final reports
of examination, along with any other supervisory reports that FHFA has
presented to a Bank's board of directors, and to do so as a matter of
course after each report has been finalized and presented to the Bank's
board, rather than making the reports available only upon the request
of individual Banks. FHFA views the proposed distribution of the
reports to all of the Banks as a matter of course as preferable to
providing the reports only in response to a specific request from one
or more of the Banks. First, the proposed approach would ensure that
all Banks receive and use the same information in assessing their
potential joint and several liability and in preparing their disclosure
documents. Further, this approach would result in a more efficient and
regular process for FHFA to administer and would establish a clear and
standard timeframe for each Bank to review its own report of
examination for any proprietary information that it believes should be
withheld under the statutory standards of section 20A of the Bank Act.
FHFA requests comments on whether the proposed distribution as a matter
of course is the most appropriate means of providing information to the
Banks.
Paragraph (b) of proposed Sec. 1260.3 would implement the
statutory requirement that each Bank be afforded the opportunity to
request that the Director of FHFA not disclose particular information
because the information is proprietary and the public interest requires
that the information not be shared. Paragraph (b)(1) generally restates
the statutory standard, which is a two-part test and requires that both
parts must be satisfied in order for the Director or his designee to
determine that the information should not be disclosed. Paragraph
(b)(1) also would give each Bank a brief period of time within which to
ask that FHFA not disclose certain information within the report of
examination to the other Banks. In order to make such a request, a Bank
must file a written request with FHFA that particular information
contained in its report of examination or other supervisory report be
redacted from the copy of the report to be distributed to the other
Banks. Each entity would be required to file its request no later than
the close of business on the tenth business day following the date on
which FHFA presented the final report of examination or the supervisory
report to the entity's board of directors.
FHFA believes that ten (10) business days is sufficient time for a
Bank to review its report of examination or any other supervisory
reports for proprietary information that it believes meets the
standards for being withheld. First, through the receipt of draft
reports and other supervisory correspondence, the Bank most likely will
already be familiar with most of the contents of the reports well
before they are presented to the Bank's board of directors. Second, a
final report of examination typically is not a lengthy document, and
therefore should not require a lengthy period of time to review for
proprietary information. The same should be true for other types of
supervisory reports. Finally, in order for this process to achieve the
statutory objectives, these reports of examination must be reasonably
current, so that the recipients can evaluate them together with other
current information relating to the financial condition of the Bank.
FHFA requests comments on whether the final rule should allow each
entity a different length of time within which to review its report of
examination for proprietary information that it believes should not be
disclosed.
Paragraph (b)(2) of proposed Sec. 1260.3 would require the
Director of FHFA, or such other FHFA officer as the Director may
designate, to determine promptly whether to grant all or part of a
request to withhold proprietary information that a Bank has made in
accordance with the requirements of paragraph (b)(1). Any determination
made by the Director or his designee under this paragraph would be
final.
Proposed Sec. 1260.3(c) describes the process by which FHFA would
distribute reports to the other Banks. The rule would require FHFA to
distribute a report of examination or other supervisory report after
the ten (10) business-day period noted above has expired without a
request to withhold proprietary information, or after the Director or
his designee has made a determination in response to such a request. If
the Director or his designee determines that the report includes
proprietary information that should not be disclosed, FHFA will
distribute an appropriately redacted version of the report. The
proposed rule would allow reports of examination and other supervisory
reports to be distributed in either tangible or electronic form, as
deemed appropriate on either an ongoing, or case-by-case, basis by
FHFA.
Section 20A(d) of the Bank Act states that the Director of FHFA
shall not be deemed to have waived any privilege applicable to any
information concerning a Bank by sharing information as required under
section 20A(a) of the statute. As mentioned above, reports of
examination and other supervisory correspondence are considered to be
privileged unpublished information that are subject to the restrictions
on disclosure set forth in part 911 of the regulations of the Finance
Board, which remains in effect. See 12 CFR 911.1, 911.3(c)(3). Proposed
Sec. 1260.3(d) would make clear that reports of examination or any
other privileged information that may be made available under Sec.
1260.3 would remain subject to the restrictions set forth in part 911
of this title, or any future regulatory provisions dealing with the
same subject matter that may be promulgated by FHFA. Proposed Sec.
1260.3(d) would operate in parallel with 12 CFR 911.3(a), which
provides that possession or control of unpublished information by any
entity, including the Banks and OF, does not constitute a waiver by
FHFA of any privilege, or of its right to control, supervise, or impose
limitations on the subsequent use and disclosure of the information.
Because FHFA conducts examinations at various times over the course
of a year, examination reports for different Banks are generated at
different times during the year. Thus, if the rule were to apply only
to reports of examination and supervisory reports that were prepared
after the rule takes effect, it could take nearly one year for FHFA to
distribute the reports for all twelve of the Banks. FHFA believes that
a better approach would be to include in the rule a transition
provision that allows FHFA to distribute the then-current reports of
examination to all of the Banks and OF soon after the rule takes
effect. Accordingly, proposed Sec. 1260.3(e) includes a transition
provision that would require FHFA to
[[Page 60351]]
distribute to each Bank and OF a copy of the most recent report of
examination for each Bank as of the effective date of the final rule.
Each Bank would be given ten (10) business days from the effective date
of the final rule to submit to FHFA a written request to withhold
proprietary information contained in the report of examination, in the
manner described in paragraph (b)(1). Following the expiration of this
review period, the reports of examination would be distributed as
provided in paragraphs (b)(2) and (c) of proposed Sec. 1260.3.
FHFA requests comments regarding whether the transition provision
should require the distribution of any reports of examination other
than the most current report as of the effective date of the final
rule, and, if so, to what extent, and whether any other types of
documents should be provided as part of the initial distribution.
IV. Paperwork Reduction Act
The proposed rule does not contain any collections of information
pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et
seq.). Therefore, FHFA has not submitted any information to the Office
of Management and Budget for review.
V. Regulatory Flexibility Act
The proposed rule applies only to the Banks, which do not come
within the meaning of small entities as defined in the Regulatory
Flexibility Act (RFA). See 5 U.S.C. 601(6). Therefore, in accordance
with section 605(b) of the RFA, FHFA certifies that this proposed rule,
if promulgated as a final rule, will not have significant economic
impact on a substantial number of small entities.
List of Subjects
12 CFR Part 914
Federal home loan banks, Reporting and recordkeeping requirements.
12 CFR Part 1260
Confidential business information, Federal home loan banks,
Reporting and recordkeeping requirements.
Accordingly, for the reasons stated in the preamble and under the
authority of 12 U.S.C. 4526, the Federal Housing Finance Agency
proposes to amend subchapter C of chapter IX and subchapter D of
chapter XII of title 12 of the Code of Federal Regulations as follows:
CHAPTER IX--FEDERAL HOUSING FINANCE BOARD
SUBCHAPTER C--GOVERNANCE AND MANAGEMENT OF THE FEDERAL HOME LOAN BANKS
PART 914--[REMOVED]
1. Remove part 914.
CHAPTER XII--FEDERAL HOUSING FINANCE AGENCY
SUBCHAPTER D--FEDERAL HOME LOAN BANKS
2. Add part 1260 to subchapter D to read as follows:
PART 1260--FILING OF REGULATORY REPORTS AND SHARING OF INFORMATION
Sec.
1260.1 Definitions.
1260.2 Filing Regulatory Reports.
1260.3 Sharing of information among Banks.
Authority: 12 U.S.C. 1440, 1440a, 4511, 4514, and 4517.
Sec. 1260.1 Definitions.
As used in this part:
AHP means the Affordable Housing Program, the CICA program that
each Bank is required to establish pursuant to section 10(j) of the
Bank Act (12 U.S.C. 1430(j)) and part 1291 of this chapter.
AMA means those assets that may be acquired by a Bank under part
955 of this title.
Bank, written in title case, means a Federal Home Loan Bank
established under section 12 of the Bank Act (12 U.S.C. 1432).
Bank Act means the Federal Home Loan Bank Act, as amended (12
U.S.C. 1421 through 1449).
CICA means any advance made through a program offered by a Bank
under section 10 of the Bank Act (12 U.S.C. 1430), part 952 of this
title, and part 1291 of this chapter to provide funding for targeted
community lending and affordable housing.
CIP means the Community Investment Program, an advance program
under CICA required to be offered pursuant to section 10(i) of the Bank
Act (12 U.S.C. 1430(i)).
FHFA means the Federal Housing Finance Agency.
Regulatory Report means--(1) Any report to FHFA of raw or summary
data needed to evaluate the safe and sound condition and operations of
a Bank or to determine compliance with any:
(i) Provision in the Bank Act or other law, order, rule, or
regulation;
(ii) Condition imposed in writing by FHFA in connection with the
granting of any application or other request by a Bank; or
(iii) Written agreement entered into between FHFA and a Bank; and
(2) Includes, without limitation:
(i) Call reports and reports of instrument-level risk modeling
data;
(ii) Reports related to a Bank's housing mission achievement, such
as reports related to AMA, AHP, CIP, and other CICA programs; and
(iii) Reports submitted in response to requests to one or more
Banks for information on a nonrecurring basis.
Sec. 1260.2 Filing Regulatory Reports.
Each Bank shall file Regulatory Reports with FHFA in accordance
with the forms, instructions, and schedules issued by FHFA from time to
time. If no regularly scheduled reporting dates are established,
Regulatory Reports shall be filed as requested by FHFA.
Sec. 1260.3 Sharing of information among Banks.
(a) In general. In order to enable each Bank to evaluate the
financial condition of any one or more of the other Banks and the Bank
System, FHFA periodically shall distribute to each Bank and to the
Office of Finance the final reports of examination (or such portions
thereof that FHFA deems appropriate) of all other Banks, as well as any
other supervisory reports that FHFA presents to the board of directors
of a Bank, subject to the requirements set forth in paragraphs (b)
through (d) of this section.
(b) Requests to withhold proprietary information.--(1) After FHFA
has presented a Bank's report of examination or other supervisory
report to its board of directors, the Bank shall have ten (10) business
days within which to request in writing that particular information
contained therein be withheld from disclosure because it is proprietary
and the public interest requires that it not be shared.
(2) After receiving a timely written request made under paragraph
(b)(1) of this section, the Director or his designee shall promptly
determine whether to redact any information from the report of
examination or other supervisory report prior to distributing it to the
other Banks and the Office of Finance. Such a determination shall be
final.
(c) Distribution of Information. After the expiration of the review
period established under paragraph (b)(1) of this section without a
request from the affected Bank, or after the Director or his designee
has made a determination under paragraph (b)(2) of this section, FHFA
shall distribute a copy of the report of examination or other
supervisory report to each Bank and the Office of Finance in either
tangible or
[[Page 60352]]
electronic form, as FHFA shall deem appropriate.
(d) No waiver of privilege. The release of information under this
section does not constitute a waiver by FHFA of any privilege, or its
right to control, supervise, or impose limitations on, the subsequent
use and disclosure of any information concerning a Bank. To the extent
that any reports of examination or other materials provided to a Bank
or the Office of Finance pursuant to this section otherwise qualify as
Unpublished Information under Sec. 911.1 of this title or any
successor provision, those materials shall continue to qualify as such
and shall continue to be subject to the restrictions on disclosure set
forth in part 911 of this title, or any successor provisions.
(e) Transition provision. Following the effective date of this
section, FHFA will distribute promptly to each Bank and the Office of
Finance a copy of the most recent report of examination of all other
Banks. Each Bank shall have ten (10) business days following the
effective date of this section within which to submit a written request
to withhold information as described in paragraph (b)(1) of this
section. Upon the expiration of the time period described in the
preceding sentence, the distribution of the initial reports of
examination shall proceed in accordance with paragraphs (b)(2) and (c)
of this section.
Dated: September 24, 2010.
Edward J. DeMarco,
Acting Director, Federal Housing Finance Agency.
[FR Doc. 2010-24578 Filed 9-29-10; 8:45 am]
BILLING CODE 8070-01-P