[Federal Register Volume 62, Number 128 (Thursday, July 3, 1997)]
[Rules and Regulations]
[Pages 35948-35950]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-17446]


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FEDERAL HOUSING FINANCE BOARD

12 CFR Part 902

[No. 97-42]
RIN 3069-AA51


Procedure For Imposing Assessments on the FHLBanks

AGENCY: Federal Housing Finance Board.

ACTION: Final rule.

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SUMMARY: The Federal Housing Finance Board (Finance Board) is amending 
its procedure for imposing semiannual assessments on the Federal Home 
Loan Banks (FHLBanks) as part of the conversion of Finance Board 
operations from the calendar year to the federal fiscal year.

EFFECTIVE DATE: The final rule will become effective August 4, 1997.

FOR FURTHER INFORMATION CONTACT: John C. Waters, Associate Director, 
Office of Resource Management, 202/408-2860, or Janice A. Kaye, 
Attorney-Advisor, Office of General Counsel, 202/408-2505, Federal 
Housing Finance Board, 1777 F Street, N.W., Washington, D.C. 20006.

SUPPLEMENTARY INFORMATION:

I. Statutory and Regulatory Background

    Under section 18(b)(1) of the Federal Home Loan Bank Act (Bank 
Act), the Finance Board has the authority to impose a semiannual 
assessment on the FHLBanks in an amount sufficient to provide for the 
payment of the Finance Board's estimated expenses for the period 
covered by the assessment. See 12 U.S.C. 1438(b)(1). Section 18(b)(3) 
of the Bank Act requires the Finance Board to offset the amount of the 
current semiannual assessment by any amount it determines is remaining 
from a previous assessment. See id. 1438(b)(2).
    In 1993, The Finance Board by regulation implemented its authority 
to assess the FHLBanks. See 58 FR 19195 (Apr. 13, 1993), codified at 12 
CFR 902.2. The current rule requires the Finance Board to adopt an 
annual budget of expenses for each calendar year and authorizes the 
Finance Board to impose two semiannual assessments on the FHLBanks in 
each calendar year to pay its approved expenses. See 12 CFR 902.2. The 
current rule also establishes the procedure the Finance Board follows 
when imposing an assessment on the FHLBanks. See id.
    Effective October 1, 1997, the Finance Board will transfer 
responsibility for operational support of its accounting and personnel 
systems from the Office of Thrift Supervision (OTS) to the

[[Page 35949]]

Department of Agriculture's National Finance Center (NFC). Unlike the 
OTS, the NFC operates according to the federal fiscal year, which spans 
a 12-month period beginning October 1 and ending September 30. Thus, 
the Finance Board must convert its operations from a calendar to a 
federal fiscal year basis. One of the changes necessary to complete the 
Finance Board's conversion from a calendar to a federal fiscal year is 
an amendment to the Finance Board regulation concerning FHLBank 
assessments to reflect a fiscal year cycle. The Finance Board is also 
amending the regulation to clarify the procedures it will follow when 
making an assessment on the FHLBanks.

II. Analysis of the Final Rule

    In accordance with section 18(b)(1) of the Bank Act, Sec. 902.2(a) 
of the final rule authorizes the Finance Board to impose assessments on 
the FHLBanks to pay its expenses. See 12 U.S.C. 1438(b)(1); 12 CFR 
902.2(a). More specifically, Sec. 902.2(a) of the final rule authorizes 
the Finance Board to impose a semiannual assessment on the FHLBanks in 
an aggregate amount it determines to be sufficient to pay its estimated 
expenses for the period covered by the assessment.
    Section 902.2(b) of the final rule establishes the procedure for 
imposing assessments on the FHLBanks. In order to effect the changeover 
from a calendar to a federal fiscal year, paragraph (b)(1) of the final 
rule requires the Finance Board, at or near the end of each fiscal 
year, to approve an annual budget of Finance Board expenses for the 
following fiscal year and to provide promptly a copy of the approved 
budget to each Bank president. Under the current rule, the Finance 
Board must approve its budget of expenses near the end of, and for the 
next, calendar year. See 12 CFR 902.2(b).
    Paragraph (b)(2) of the final rule combines provisions that appear 
currently in Secs. 902.2(c), (d), and (f). See id. Secs. 902.2(c), (d), 
(f). Like Sec. 902.2(c) of the current rule, paragraph (b)(2) requires 
the Finance Board to assess the FHLBanks semiannually in an aggregate 
amount sufficient to meet the Finance Board's administrative and 
operating expenses. See id. Sec. 902.2(c). As under Sec. 902.2(d) of 
the current rule, the final rule requires the Finance Board to offset a 
current semiannual assessment by any amount the Finance Board 
determines is remaining from a previous assessment. See id. 
Sec. 902.2(d). Since the source of revenue is irrelevant in determining 
whether any amount remains from a previous assessment, the Finance 
Board has eliminated the provision concerning revenues received from 
subleasing portions of its office building. See id. Sec. 902.2(d)(1). 
Similar to Sec. 902.2(f) of the current rule, paragraph (b)(2) of the 
final rule requires the Finance Board to notify promptly each FHLBank 
president in writing of the amount of any assessment. See id. 
Sec. 902.2(f).
    Paragraph (b)(3) of the final rule combines provisions that appear 
currently in Secs. 902.2(e) and (g). See id. Secs. 902.2(e), (g). Like 
Sec. 902.2(e) of the current rule, paragraph (b)(3) of the final rule 
requires each FHLBank to pay a pro rata share of any assessment imposed 
by the Finance Board. See id. Sec. 902.2(e). Both the current and final 
rules require the Finance Board to calculate each FHLBank's pro rata 
share based on the ratio between the total paid-in value of that 
FHLBank's capital stock relative to the aggregate total paid-in value 
of the capital stock of every FHLBank. See id. Similar to Sec. 902.2(g) 
of the current rule, the final rule requires the Finance Board to 
notify promptly each Bank in writing of the amount of its pro rata 
share of any assessment. See id. Sec. 902.2(g).
    Although every FHLBank remits its pro rata share of each assessment 
to the Finance Board in equal monthly installments, under Sec. 902.2(h) 
of the current rule, a monthly payment schedule is not mandatory. See 
id. Sec. 902.2(h). To reflect current practice, paragraph (b)(4) of the 
final rule requires each FHLBank to pay its pro rata share in equal 
monthly installments during the semiannual period covered by the 
assessment unless otherwise instructed in writing by the Finance Board.

III. Notice and Public Participation

    The notice and comment procedure required by the Administrative 
Procedure Act is inapplicable to this final rule because it is a rule 
of agency procedure. See 5 U.S.C. 553(b)(3)(A).

IV. Regulatory Flexibility Act

    The Finance Board is adopting this technical amendment in the form 
of a final rule and not as a proposed rule. Therefore, the provisions 
of the Regulatory Flexibility Act do not apply. See id. 601(2), 603(a).

V. Paperwork Reduction Act

    This final rule does not contain any collections of information 
pursuant to the Paperwork Reduction Act of 1995. See 44 U.S.C. 3501 et 
seq. Consequently, the Finance Board has not submitted any information 
to the Office of Management and Budget for review.

List of Subjects in 12 CFR Part 902

    Administrative practice and procedure, Assessments, Federal home 
loan banks, Government contracts, Minority businesses, Mortgages, 
Reporting and recordkeeping requirements.

    Accordingly, the Federal Housing Finance Board hereby amends title 
12, chapter IX, part 902 of the Code of Federal Regulations as follows:

PART 902--OPERATIONS

    1. Revise the authority citation for part 902 to read as follows:

    Authority: 12 U.S.C. 1422b and 1438(b).

    2. Revise Sec. 902.2 to read as follows:


Sec. 902.2  Assessments on the Banks.

    (a) Assessment authority. The Finance Board may impose a semiannual 
assessment on the Banks in an aggregate amount the Finance Board 
determines is sufficient to provide for the payment of its estimated 
expenses for the period for which it makes such assessment.
    (b) Assessment procedure. (1) At or near the end of each fiscal 
year, the Finance Board shall approve an annual budget of Finance Board 
expenses for the next fiscal year. The Finance Board shall promptly 
provide a copy of the approved budget to each Bank president.
    (2) The Finance Board shall assess the Banks semiannually in an 
aggregate amount it determines is sufficient to pay the expenses 
approved under paragraph (b)(1) of this section. The Finance Board 
shall offset the amount of the semiannual assessments it imposes on the 
Banks by any amount it determines is remaining from previous semiannual 
assessments. The Finance Board shall promptly notify each Bank 
president in writing of the amount of any assessment.
    (3) Each Bank shall pay a pro rata share of the semiannual 
assessments imposed under paragraph (b)(2) of this section. The Finance 
Board shall calculate each Bank's pro rata share based on the ratio 
between the total paid-in value of the Bank's capital stock and the 
aggregate total paid-in value of the capital stock of every Bank. The 
Finance Board shall promptly notify each Bank in writing of the amount 
of its pro rata share of any semiannual assessment.
    (4) Unless otherwise instructed in writing by the Finance Board, 
each Bank shall pay to the Finance Board its pro rata share of an 
assessment in equal monthly installments during the semiannual period 
covered by the assessment.


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    By the Board of Directors of the Federal Housing Finance Board.
Bruce A. Morrison,
Chairperson.
[FR Doc. 97-17446 Filed 7-2-97; 8:45 am]
BILLING CODE 6725-01-U