[Federal Register Volume 75, Number 41 (Wednesday, March 3, 2010)]
[Notices]
[Pages 9601-9602]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-4337]
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FEDERAL HOUSING FINANCE AGENCY
[No. 2010-N-01]
Notice of Annual Adjustment of the Cap on Average Total Assets
That Defines Community Financial Institutions
AGENCY: Federal Housing Finance Agency.
ACTION: Notice.
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SUMMARY: The Federal Housing Finance Agency (FHFA) has adjusted the cap
on average total assets that defines a ``Community Financial
Institution'' based on the annual percentage increase in the Consumer
Price Index for all urban consumers (CPI-U) as published by the
Department of Labor (DOL). These changes took effect on January 1,
2010.
FOR FURTHER INFORMATION CONTACT: Patricia L. Sweeney, Division of
Federal Home Loan Bank Regulation, 202-408-2872, [email protected],
Federal Housing Finance Agency, 1625 Eye Street, NW., Washington, DC
20006-4001.
SUPPLEMENTARY INFORMATION:
I. Statutory and Regulatory Background
Section 2(10)(A) of the Federal Home Loan Bank Act (Bank Act)
defines a ``Community Financial Institution'' (CFI) as any Federal Home
Loan Bank member the deposits of which are insured by the Federal
Deposit Insurance Corporation and that has average total assets below a
statutory cap. See 12 U.S.C. 1422(10)(A); 12 CFR 1263.1 (defining the
term Community financial institution or CFI). In 2008, section 1211(a)
of the Housing and Economic Recovery Act of 2008 (HERA), Public Law
110-289, 122 Stat. 2654 (2008), amended the definition of CFI to
increase the average total assets cap for CFIs to $1 billion. Section
2(10)(B) requires the FHFA Director annually to adjust the statutory
cap to reflect inflation over the prior year. See 12 U.S.C.
1422(10)(B); 12 CFR 1263.1 (definition the term CFI asset cap). In
2009, FHFA adjusted the statutory cap for inflation by applying the
CPI-U adjustment resulting in a 1.1 percent increase to the CFI asset
cap. Accordingly, as of January 1, 2009, the adjusted CFI asset cap was
$1,011,000,000. See 74 FR 7438 (Feb. 17, 2009). This Notice announces
the annual CPI-U adjustment for the CFI asset cap, effective January 1,
2010.
II. Calculating the Annual Adjustment
Consistent with the practice of other federal agencies and past
agency practice, FHFA bases the annual adjustment to the CFI asset cap
on the percentage increase in the CPI-U from November 2008 to November
2009. Specifically, the annual adjustment to the CFI asset cap reflects
the percentage by which the CPI-U published for November of the
preceding calendar year exceeds the CPI-U published for November of the
year before the preceding calendar year.
The DOL encourages use of CPI-U data that have not been seasonally
adjusted in ``escalation agreements'' because seasonal factors are
updated
[[Page 9602]]
annually and seasonally adjusted data are subject to revision for up to
five years following the original release. Unadjusted data are not
routinely subject to revision, and previously published unadjusted data
are only corrected when significant calculation errors are discovered.
Accordingly, FHFA uses data that have not been seasonally adjusted.
For 2010, applying the unadjusted CPI-U, the current CFI asset cap
has been increased by 1.8 percent to reflect inflation over the prior
year. Thus, as of January 1, 2010, the CFI asset cap is $1,029,000,000,
which amount was obtained by rounding to the nearest million, which has
been the practice for all prior adjustments.
Dated: February 18, 2010.
Edward J. DeMarco,
Acting Director, Federal Housing Finance Agency.
[FR Doc. 2010-4337 Filed 3-2-10; 8:45 am]
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