[Federal Register Volume 61, Number 236 (Friday, December 6, 1996)]
[Rules and Regulations]
[Pages 64613-64615]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31039]


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FEDERAL HOUSING FINANCE BOARD

12 CFR Part 902

[No. 96-81]


Procedure for Consideration of Regulatory Waivers

AGENCY: Federal Housing Finance Board.

ACTION: Final rule.

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SUMMARY: The Federal Housing Finance Board (Finance Board) is adopting 
a final rule amending its agency operations regulation to include a 
provision setting forth guidelines for requesting waivers of Finance 
Board regulatory provisions not required by statute in appropriate 
circumstances. This final rule is being published in compliance with 
the Freedom of Information Act, which requires publication of agency 
rules of procedure.

EFFECTIVE DATE: January 6, 1997.

FOR FURTHER INFORMATION CONTACT: Eric M. Raudenbush, Attorney-Advisor, 
Office of General Counsel (202) 408-2932, Federal Housing Finance 
Board, 1777 F Street, N.W., Washington, D.C. 20006.

SUPPLEMENTARY INFORMATION:

I. Analysis

    Although, as a general rule, an agency may not grant exceptions to 
its rules in individual cases, even to achieve what the agency believes 
to be justice in an individual case, courts have held that an agency 
may, in particular cases of hardship, exercise its discretion and waive 
regulatory provisions that are not required by statute, where the 
agency has established a rational process for the granting of waivers. 
In order to establish guidelines for such a process and to inform 
interested parties of such guidelines, the Finance Board is amending 
part 902 of its regulations, 12 CFR part 902, to add a provision 
governing Finance Board consideration of requests for waivers of 
provisions of its regulations, 12 CFR ch. IX, that do not implement 
mandatory statutory requirements.
    Any decision to suspend, waive, or grant an exception to a 
consistently applied general rule is subject to close and careful 
scrutiny by a reviewing court, although a waiver of a rule that affects 
the substantive rights or interests of a party is typically subject to 
a higher

[[Page 64614]]

degree of judicial scrutiny than a waiver of a procedural rule. 
Therefore, the burden is on the party seeking the waiver to plead with 
particularity the facts and circumstances that warrant granting the 
request. In particular, the waiver application must demonstrate that 
the arguments in support of the request are substantially different 
from those that were considered during the rulemaking process. Further, 
because an agency's decision to grant an exception in a certain case 
could create a precedent that other similarly situated waiver 
applicants may seek to rely on, the reasons supporting the decision to 
grant a waiver must be stated clearly on the record.
    Although the Finance Board places the highest priority upon the 
consistent application of its regulations, the agency also believes 
that its regulations are intended to further the purposes of the 
Federal Home Loan Bank Act (Bank Act) and that, to the extent that the 
application of any regulatory provision to a particular person or 
entity might be inconsistent with these purposes, waiver of the 
provision with respect to that person or entity should be considered. 
For this reason, paragraph (a) of new Sec. 902.6 provides that the 
Finance Board, in its discretion and in connection with a particular 
transaction, may waive any of its regulatory requirements or any 
required submission of information not otherwise mandated by statute if 
it determines, based on the facts presented, that application of the 
provision to the party requesting the waiver would contravene the goals 
of the Bank Act.
    In addition, Sec. 902.6(a) permits waiver of a regulatory provision 
if such waiver is not inconsistent with the law and does not adversely 
affect any substantial existing rights, where the Finance Board 
determines that the person or entity requesting the waiver has 
otherwise made an adequate showing of good cause. Such ``good cause'' 
should be based upon factors that have not already been thoroughly 
addressed during the regulatory process that preceded adoption or 
amendment of the provision and may include a showing that the 
requirement is unnecessary or that the requirement would impose 
unnecessary burden or hardship on the requestor. In accordance with 
existing case law, the burden upon the party requesting waiver of a 
rule that affects substantive rights or interests will be greater than 
that upon a party seeking waiver of a procedural rule.
    For purposes of recordkeeping, notice and efficient processing, 
Sec. 902.6(b)(1) requires that any waiver request be filed with the 
Finance Board's Executive Secretary and, where a Federal Home Loan Bank 
member institution is making the request, with the Bank of which the 
institution is a member. Finally, in order to ensure that there is an 
adequate record upon which to make a determination, Sec. 902.6(b)(2) 
requires that the waiver request clearly and specifically set forth all 
pertinent facts and analyze all legal issues relevant to the waiver 
determination.

II. Paperwork Reduction Act

    The Finance Board has submitted to the Office of Management and 
Budget (OMB) an analysis of the waiver request collection of 
information contained in Sec. 902.6. The Finance Board will use the 
information collection to determine whether a party that requests a 
waiver of Finance Board regulatory provisions with respect to a 
particular transaction has satisfied the regulatory requirements for 
granting such a waiver. Individuals or entities must meet the 
regulatory standards in order for the Finance Board to consider a 
waiver request. Responses are required to obtain or retain a benefit. 
The Finance Board will maintain the confidentiality of information 
obtained from respondents pursuant to the collection of information as 
required by applicable statute, regulation, and agency policy.
    Likely respondents and/or recordkeepers will be Federal Home Loan 
Banks, institutions that are members of a Bank and the Finance Board. 
Potential respondents are not required to respond to the collection of 
information unless the regulation collecting the information displays a 
currently valid control number assigned by OMB. See 44 U.S.C. 3512(a).
    The estimated annual reporting and recordkeeping hour burden is:


a. Number of respondents.........................................     12
b. Total annual responses........................................     12
Percentage of these responses collected electronically...........     0%
c. Total annual hours requested..................................    928
d. Current OMB inventory.........................................      0
e. Difference....................................................    928
                                                                        

    The estimated annual reporting and recordkeeping cost burden is:


a. Total annualized capital/startup costs..................            0
b. Total annual costs (O&M)................................            0
c. Total annualized cost requested.........................   $35,732.32
d. Current OMB inventory...................................            0
e. Difference..............................................   $35,732.32
                                                                        

    Mail comments concerning the accuracy of the burden estimates and 
suggestions for reducing the burden to Elaine L. Baker, Executive 
Secretary, Federal Housing Finance Board, 1777 F Street, N.W., 
Washington, D.C. 20006. Comments will be available for public 
inspection at this address. The Finance Board has submitted the 
collection of information to OMB for review in accordance with section 
3507(c) of the Paperwork Reduction Act of 1995, codified at 44 U.S.C. 
3507(c), and 5 CFR 1320.10. Comments regarding the collection of 
information may be submitted in writing to the Office of Information 
and Regulatory Affairs of OMB, Attention: Desk Officer for Federal 
Housing Finance Board, Washington, D.C. 20503 by January 6, 1997.

III. Other Procedural Requirements

    This final rule does not meet the criteria for a ``significant 
regulatory action'' under Executive Order 12866.
    The notice and comment procedures requirements of the 
Administrative Procedures Act are inapplicable to this rule of agency 
procedure, pursuant to 5 U.S.C. 553(b)(3)(A).
    Because no notice of proposed rulemaking is required, the 
provisions of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., do 
not apply.

List of Subjects in 12 CFR Part 902

    Assessments, Federal home loan banks, Government contracts, 
Minority businesses, Mortgages, Reporting and recordkeeping 
requirements. Accordingly, title 12, chapter IX, part 902, Code of 
Federal Regulations, is hereby amended as follows:

PART 902--OPERATIONS

    1. The authority citation for part 902 is revised to read as 
follows:

    Authority: 12 U.S.C. 1422b, 1438(b), 1833e.

    2. Section 902.6 is added to read as follows:


Sec. 902.6  Procedure for consideration of waiver of regulatory 
provisions.

    (a) Authority. The Finance Board reserves the right, in its 
discretion and in connection with a particular transaction, to waive 
any provision, restriction, or requirement of this chapter, or any 
required submission of information, not otherwise required by law, if 
such waiver is not inconsistent with the law and does not adversely 
affect any substantial existing rights, upon a determination by the 
Finance Board that application of the provision, restriction, or 
requirement would adversely affect achievement of the purposes of the 
Federal Home Loan Bank Act, or upon a showing of good cause.

[[Page 64615]]

    (b) Waiver requests. Any person or entity may file a written waiver 
request with the Finance Board.
    (1) Procedure. Any request for a waiver shall be filed with the 
Executive Secretary, Federal Housing Finance Board, 1777 F Street, 
N.W., Washington, D.C. 20006, and, if from a Bank member institution, 
with the appropriate Bank.
    (2) Documentation. A waiver request shall include the following:
    (i) A detailed statement of facts, including the provisions of this 
chapter to which the request relates, the participants in the proposed 
transaction, and the reasons for the request; and
    (ii) An analysis of each legal issue raised.

    Dated: November 7, 1996.

    By the Board of Directors of the Federal Housing Finance Board.
Bruce A. Morrison,
Chairman.
[FR Doc. 96-31039 Filed 12-5-96; 8:45 am]
BILLING CODE 6725-01-P