[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.
[[Page 35950]]
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