[Federal Register Volume 63, Number 235 (Tuesday, December 8, 1998)]
[Proposed Rules]
[Pages 67625-67629]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32527]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 63, No. 235 / Tuesday, December 8, 1998 /
Proposed Rules
[[Page 67625]]
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FEDERAL HOUSING FINANCE BOARD
12 CFR Part 935
[No. 98-62]
RIN 3069-AA77
Collateral Eligible to Secure Federal Home Loan Bank Advances
AGENCY: Federal Housing Finance Board.
ACTION: Proposed rule.
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SUMMARY: The Federal Housing Finance Board (Finance Board) is proposing
to amend its regulation governing eligible collateral for Federal Home
Loan Bank (FHLBank) advances to clarify that certain assets, including
the insured or guaranteed portions of federally-insured or guaranteed
loans, securities representing an equity interest in eligible
collateral, and mortgage assets or government securities held by
members' wholly-owned investment subsidiaries, qualify as eligible
collateral to secure FHLBank advances. The proposed rule would also
amend the Finance Board's regulation on collateral verification to
eliminate certain ambiguities therein.
DATES: Comments are due on or before February 8, 1999.
ADDRESSES: Mail comments to Elaine L. Baker, Executive Secretary,
Federal Housing Finance Board, 1777 F Street, N.W., Washington D.C.
20006. Comments will be available for inspection at this address.
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. Statutory and Regulatory Background
Section 10(a) of the Federal Home Loan Bank Act (Bank Act)
enumerates four categories of collateral that are eligible to secure
FHLBank advances: (1) Current whole first mortgage loans on improved
residential property and securities representing a whole interest in
such mortgages; (2) securities that are issued, guaranteed, or insured
by the United States Government, or any agency thereof; (3) deposits of
a FHLBank; and (4) other real-estate related collateral in a total
amount not to exceed 30 percent of the borrowing member's capital. See
12 U.S.C. 1430(a).
The Finance Board promulgated part 935 of its regulations, 12 CFR
part 935, governing FHLBank advances, in 1993. See 58 FR 29469 (May 20,
1993). Among other things, the Advances Regulation implements and
clarifies the statutory requirements of 12 U.S.C. 1430 relating to the
security interests that a FHLBank must obtain and maintain when making
advances to member institutions. See 12 CFR 935.9-935.12. Among the
issues that the Regulation addresses are: the types and amounts of
collateral that a FHLBank may or must accept when making advances; the
priority of FHLBank claims to such collateral in relation to other
creditors; and requirements regarding the valuation and verification of
the existence of pledged collateral.
In the five and one-half years since the promulgation of the
Advances Regulation, the Finance Board has received numerous requests
from both FHLBanks and their members to clarify or interpret these
collateral provisions in the context of specific transactions, which
the agency has done on a case-by-case basis. In other instances,
FHLBanks have requested permission to enter into various collateral
arrangements that, while permissible under the terms of the advances
provisions of the Bank Act, are not clearly authorized under the
Advances Regulation. The Finance Board is now proposing to amend
certain of the collateral provisions of its Advances Regulation, and to
add other provisions, in order to codify in the Regulation various
collateral arrangements that have been the subject of regulatory
interpretations and requests for such interpretations from the FHLBanks
and their members.
The Finance Board requests comments on all aspects of the proposed
rule.
II. Analysis of the Proposed Rule
A. Definitions
The proposed rule would amend Sec. 935.1 of the Advances
Regulation, 12 CFR 935.1, which sets forth definitions of terms used in
part 935, by adding thereto a definition of the term ``qualifying
investment subsidiary.'' This term is used in proposed Sec. 935.9(b) to
refer to certain member-owned subsidiaries. Because the definition of
``qualifying investment subsidiary'' is intended primarily to make
clear the parameters of the authority granted to the FHLBanks under
proposed Sec. 935.9(b), the term is addressed in detail in the
discussion of that section, set forth below.
The proposed rule also would make technical amendments to the
definition of the term ``mortgage-backed security'' set forth in
Sec. 935.1, in order to eliminate redundant language contained in the
existing definition and otherwise make it more readable.
B. Mortgage Collateral
Substantively, the proposed rule would make several revisions to
Sec. 935.9(a) of the Advances Regulation, which implements and
clarifies the statutory requirements set forth in section 10(a) of the
Bank Act, governing collateral eligible to secure FHLBank advances to
members. See 12 U.S.C. 1430(a). Section 935.9(a)(1) of the existing
Advances Regulation implements section 10(a)(1) of the Bank Act by
authorizing the FHLBanks to accept as collateral for advances current
whole first mortgage loans on improved residential property and high-
quality privately-issued mortgage-backed securities (MBS). The proposed
rule would add a new paragraph (iii) to permit the FHLBanks to accept
any security the ownership of which would represent an undivided equity
interest in such whole mortgage loans or MBS. Although such equity
securities arguably also fall within the definition of MBS set forth in
Sec. 935.1, Sec. 935.9(a)(1)(iii) has been included in the proposed
rule to make clear that shares of mutual funds and similar investments
that are not ordinarily considered to be MBS may constitute eligible
collateral when the underlying assets consist only of current whole
first mortgage loans on residential property or eligible privately-
issued MBS.
[[Page 67626]]
C. Government Securities
Section 935.9(a)(2) of the Advances Regulation implements section
10(a)(2) of the Bank Act by authorizing the FHLBanks to accept as
collateral for advances to members securities issued, insured, or
guaranteed by the United States Government, or any agency thereof.
Under the proposed rule, the text of existing Sec. 935.9(a)(2) would be
modified slightly to make clear that MBS that are issued or guaranteed
by any agency of the United States Government--and not merely those
issued or guaranteed by Fannie Mae, Freddie Mac, or Ginnie Mae--may be
accepted as collateral. This text also would be redesignated as the
introductory paragraph and paragraph (A) of proposed
Sec. 935.9(a)(2)(i).
Paragraph (B) of proposed Sec. 935.9(a)(2)(i) would contain a new
provision clarifying that the FHLBanks may accept as collateral
mortgages or other loans, regardless of the delinquency status of the
mortgages or other loans, to the extent that repayment of the principal
and/or interest on such mortgages or loans is backed by the full faith
and credit of the United States. For example, under this provision,
FHLBanks would be permitted to accept the insured portions of Federal
Housing Administration (FHA) and Veteran's Administration (VA)-insured
mortgage loans, or the guaranteed portions of small business loans
guaranteed by the Small Business Administration (SBA).
While section 10(a)(2) of the Bank Act mentions MBS as an example
of securities that FHLBanks are authorized to accept thereunder, the
Act does not limit the FHLBanks to acceptance of any particular types
of securities, aside from requiring that they be issued, guaranteed, or
insured by the United States Government or any of its agencies. Section
10(a)(1) of the Bank Act (and Sec. 935.9(a)(1) of the Advances
Regulation), in authorizing FHLBanks to accept whole mortgage loans as
collateral, requires that such mortgages be ``not more than 90 days
delinquent.'' However, this requirement addresses a safety and
soundness concern that is effectively mooted to the extent that the
principal and/or interest payments on a particular loan are backed by
the full faith and credit of the United States. As such, the Finance
Board has determined that the authorization contained in proposed
Sec. 935.9(a)(2)(i)(B) is consistent with the requirements of section
10(a) of the Bank Act.
Paragraph (C) of proposed Sec. 935.9(a)(2)(i) would provide that
FHLBanks may also accept as collateral securities that are backed by,
or represent equity interests in, pools of loans or mortgages that are
insured or guaranteed by the United States Government or its agencies,
even if the investment instrument itself is not so insured or
guaranteed. In this case, the benefit of the government insurance or
guarantee would pass through to the security holders and serve as the
functional equivalent of a guaranty of, or insurance on, the security
itself.
Proposed Sec. 935.9(a)(2)(ii) parallels paragraph (iii) of proposed
Sec. 935.9(a)(1) in that it would permit FHLBanks to accept as
collateral shares of mutual funds and other similar investments that
represent an undivided equity interest in pools of government
securities.
D. Eligible Collateral Held by a Qualifying Investment Subsidiary
The proposed rule would redesignate paragraphs (b) through (e) of
existing Sec. 935.9 as paragraphs (c) through (f) and would add a new
paragraph (b) to Sec. 935.9. Proposed Sec. 935.9(b) would permit
FHLBanks, under certain circumstances, to accept as collateral for
advances assets that would otherwise constitute eligible collateral
under Sec. Sec. 935.9(a)(1) or (2), but that are held by the member's
qualifying investment subsidiary, as opposed to the member itself. The
proposed rule would add a definition of the term ``qualifying
investment subsidiary'' (QIS) to Sec. 935.1 of the Advances Regulation.
A QIS would include any business entity: 100 percent of the voting
stock of which is owned and controlled, directly or indirectly, by a
FHLBank member; that is operated for the sole purpose of holding
investment or real estate assets on behalf of that member; and that
holds only cash equivalents and assets that are eligible to secure
advances under Secs. 935.9(a)(1) and (2) of the Advances Regulation
(i.e., whole residential mortgages, high-quality privately-issued MBS,
and government securities). The term is intended to include any entity
established by a member, to reduce its tax burden or for other
financial management purposes, as a passive repository for assets that
the member would otherwise hold on its own balance sheet. Examples of
entities that might qualify as a QIS include a Real Estate Investment
Trust (REIT) established by a member in conformity with the
requirements of the Internal Revenue Code (IRC), see 26 U.S.C. 856-68,
or a security corporation established under Massachusetts law, see
Mass. Gen. Laws Ann. ch. 63 section 38B, or other state law.
Under the proposed definition, a QIS may include entities that are
wholly-owned indirectly by a member. For example, an entity that is
wholly-owned by a holding company that itself is wholly-owned by the
member institution may qualify as a QIS. By requiring 100 percent of
only the voting stock of a QIS to be controlled by a member, the
proposed rule would permit entities having non-voting preferred shares
that are owned by individuals or entities other than the member to
qualify as a QIS. For example, to qualify as a REIT under the IRC, an
entity must be beneficially owned by at least 100 stockholders. See 26
U.S.C. 856(a)(5). If this IRC requirement is implemented through
distribution by the REIT of a limited number non-voting preferred
shares to persons or entities other than the member, that distribution
would not invalidate the entity's status as a QIS under the proposed
rule, so long as the member owns and controls all of the voting stock
of the entity.
While the Bank Act requires that a member assume a primary and
unconditional obligation to repay all advances, see 12 U.S.C. 1430(d),
and that advances be fully secured by eligible collateral, see id.
1430(a), the Act does not expressly require that such collateral be
pledged by the member itself. Section 10(f) of the Bank Act, which
addresses priorities of FHLBank security interests, specifically
mentions, and presumes the possible existence of, security interests
granted by an ``affiliate'' of a member. See id. 1430(f). A wholly-
owned subsidiary that would qualify as a QIS under the proposed rule
clearly would be an ``affiliate'' of its member/parent, even under the
most conservative definition of that term.
Without passing upon the question of whether eligible collateral
held by a third party may be used in all cases to secure a FHLBank
advance to a member, the Finance Board has concluded that such
collateral held by a QIS of a member may be used to secure an advance
to that member where the FHLBank's legal rights and privileges with
respect to such collateral are functionally equivalent in all material
aspects to those that the FHLBank would possess if the member were to
pledge the same collateral on its own behalf. This conclusion is
reflected in Sec. 935.9(b)(1) of the proposed rule, which would permit
FHLBanks to accept pledges of collateral from a member's QIS to secure
advances to that member if these criteria are met. The Finance Board
anticipates that this will be a determination that will need to be made
on a case-by-case basis after careful legal review and analysis by each
FHLBank that decides to accept such collateral, taking into
consideration the structure
[[Page 67627]]
of the transaction and the law of the state that governs the
transaction.
In order to provide guidance as to the factors that a FHLBank must
consider in determining whether this general requirement has been met,
the Finance Board has set forth in proposed Sec. 935.9(b)(2) four
``safe harbor'' requirements which, if each is met by the FHLBank,
would ensure that the FHLBank is in compliance with proposed
Sec. 935.9(b)(1). A FHLBank would not need to meet these safe harbor
requirements to be in compliance with proposed Sec. 935.9(b) if it
otherwise demonstrated that its legal rights and privileges with
respect to the QIS-held collateral are functionally equivalent in all
material aspects to those that the FHLBank would possess if the member
were to pledge the same collateral on its own behalf.
To meet the proposed safe harbor requirements, the FHLBank first
must obtain from the QIS and maintain, as collateral for repayment of
the advance, a legally enforceable security interest in assets held by
the QIS that are eligible collateral under Secs. 935.9(a)(1) or (2). To
determine whether such a pledge is legally enforceable, a FHLBank,
among other things, will need to satisfy itself that the QIS has the
legal authority to make the pledge and that sufficient consideration
has passed between the parties to make the pledge enforceable as a
matter of contract law.
Because the Bank Act requires that each advance be fully secured,
see id. 1430(a), a guaranty by the QIS of the member's obligation,
backed by the eligible assets held by the QIS, would not meet the
requirements of the Bank Act or the proposed rule, as the collateral
would then be securing the QIS's secondary obligation and not the
advance itself. However, as provided by proposed Sec. 935.9(b)(2)(i),
where the QIS enters into a surety arrangement under which it assumes a
primary joint and several co-obligation to repay the advance made to
the member, and fully secures this primary surety obligation with
eligible collateral, such collateral would be considered as securing
the advance itself as required by the statute.
Second, the FHLBank must obtain from the QIS a legally enforceable
waiver of defenses, that the QIS might have as a third party pledgor
that would not apply to a party pledging collateral in support of its
own obligation. For example, under section 3-605 of the Uniform
Commercial Code, a surety may be discharged from its obligation in
certain cases where the obligor and obligee have modified their
agreement without the knowledge or consent of the surety. See U.C.C. 3-
605 (1995). However, the surety may waive this right of discharge in
advance ``by general language indicating that parties waive defenses
based on suretyship.'' See id. 3-605(i).
The types of defenses that third parties may be permitted to raise
would vary depending upon the structure of the transaction in question
and the law of the state that governs the transaction. The possibility
that the QIS may be able to raise such a defense, even if remote in a
practical sense, would render its pledge of collateral materially
inferior to a pledge made directly by the member. Again, FHLBank staff
would need to review thoroughly each transaction, as well as the
applicable provisions of state law, to determine the types of defenses
that could be raised by the QIS and whether these defenses could be
effectively waived. If such defenses could not be waived, the
transaction would fail to meet the safe harbor requirements. However,
the FHLBank still might be able to comply with the general requirements
of Sec. 935.9(b)(1) by structuring the transaction to ensure that a
scenario that might give rise to any such defenses could not occur.
Third, the FHLBank would need to take such precautions as are
necessary to ensure that the pledge of collateral by the QIS would be
neither voidable under the fraudulent conveyance provisions of
applicable state and federal bankruptcy laws, see 11 U.S.C. 548, nor
subject to the claims of other creditors. The Finance Board anticipates
that both components of this requirement can be effectively addressed
through contractual provisions. For example, provisions prohibiting the
QIS from pledging collateral to any other party, or from incurring any
type of debt, might be sufficient to ensure that the collateral could
not be subject to the claims of any other creditors. Likewise,
provisions that (1) limit the amount of any pledge of collateral to a
fixed percentage (less than 100 percent) of the fair market value of
the collateral and require substitution of collateral should this fair
market value drop below a certain threshold, or (2) permit the FHLBank
to force the liquidation of the QIS when certain criteria are met,
might be sufficient to ensure that the collateral transaction could not
be voidable under any fraudulent conveyance provisions. Again, the
FHLBank would need to ensure that sufficient consideration has passed
between the parties to support the pledge of collateral by the QIS.
Fourth and last, in order to qualify under the safe harbor
provisions of proposed Sec. 935.9(b)(2), a FHLBank would need to obtain
from its member and maintain a perfectible security interest in stock
or other securities representing the member's controlling equity
interest in its QIS. In cases where the QIS is itself owned by a
holding company that is wholly-owned by the member, the voting stock of
both the QIS and the holding company would need to be pledged in order
to meet this safe harbor requirement.
Security interests obtained and maintained by a FHLBank pursuant to
proposed Sec. 935.9(b) would be entitled to the benefit of the priority
lien granted to FHLBanks under section 10(f) of the Bank Act, which
applies to ``any security interest granted to a [FHL]Bank by any member
of a [FHL]Bank or any affiliate of any such member.'' See 12 U.S.C.
1430(f).
E. Collateral Verification
Finally, the proposed rule would amend Sec. 935.11(b) of the
Finance Board's Advances Regulation, which requires that each FHLBank
regularly verify the existence of collateral securing its advances.
Existing Sec. 935.11(b) requires that each FHLBank establish written
collateral verification procedures containing standards that are
``similar to those established by the Auditing Standards Board of the
American Institute of Public Accountants'' (AICPA). The Finance Board
has found that the ambiguity of this reference renders it effectively
unenforceable. The proposed rule, therefore, eliminates the reference
to AICPA standards and requires merely that the FHLBanks establish
``written procedures and standards'' for collateral verification. Under
this provision, the Finance Board will be able to evaluate each
FHLBank's procedures and standards taking into account only the
relevant safety and soundness considerations that apply to that FHLBank
without reference to the AICPA, or any other external, standards.
III. Regulatory Flexibility Act
The proposed rule applies only to the FHLBanks, which do not come
within the meaning of ``small business,'' 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, 5 U.S.C. 605(b), the Finance Board
hereby certifies that this proposed rule, if promulgated as a final
rule, will not have a significant economic impact on a substantial
number of small entities.
List of Subjects in 12 CFR Part 935
Credit, Federal home loan banks, Reporting and recordkeeping
requirements.
[[Page 67628]]
Accordingly, the Finance Board proposes to amend 12 CFR part 935 as
follows:
PART 935--ADVANCES
1. The authority citation for part 935 is revised to read as
follows:
Authority: 12 U.S.C. 1422a(a)(3), 1422b(a)(1), 1426, 1429, 1430,
1430b and 1431.
Subpart A--Advances to Members
2. Amend Sec. 935.1 by revising the definition of ``Mortgage-backed
security'' and adding the definition of ``Qualifying investment
subsidiary'' to read as follows:
Sec. 935.1 Definitions.
* * * * *
Mortgage-backed security means:
(1) An equity security representing an ownership interest in:
(i) Fully disbursed, whole first mortgage loans on improved
residential real property; or
(ii) Mortgage pass-through or participation securities which are
themselves backed entirely by fully disbursed, whole first mortgage
loans on improved residential real property; or
(2) An obligation, bond, or other debt security backed entirely by
the assets described in paragraph (1) (i) or (ii) of this definition.
* * * * *
Qualifying Investment Subsidiary means a business entity,
including, without limitation, a Real Estate Investment Trust (REIT) or
a state security corporation:
(1) 100 percent of the voting stock of which is owned and
controlled, directly or indirectly, by a member;
(2) That is operated for the sole purpose of holding investment or
real estate assets on behalf of that member; and
(3) That holds only cash equivalents and assets that are eligible
to secure advances to members under Sec. 935.9(a)(1) or (a)(2) of this
part.
* * * * *
3. Amend Sec. 935.9 as follows:
a. Add to the headings of paragraphs (b), (c) and (e) the word
``advances'' preceding the word ``collateral'';
b. Redesignate paragraphs (b) through (e) as paragraphs (c) through
(f); and
c. Revise paragraph (a) and add paragraph (b) as follows:
Sec. 935.9 Collateral.
(a) Eligible security for advances. At the time of origination or
renewal of an advance, each Bank shall obtain, and thereafter maintain,
a security interest in collateral that meets the requirements of one or
more of the following categories:
(1) Mortgage loans and privately issued securities. (i) Fully
disbursed, whole first mortgage loans on improved residential real
property not more than 90 days delinquent;
(ii) Privately issued mortgage-backed securities, excluding the
following:
(A) Securities which represent a share of only the interest
payments or only the principal payments from the underlying mortgage
loans;
(B) Securities which represent a subordinate interest in the cash
flows from the underlying mortgage loans;
(C) Securities which represent an interest in any residual payments
from the underlying pool of mortgage loans; or
(D) Such other high-risk securities as the Board in its discretion
may determine; or
(iii) Any security the ownership of which represents an undivided
equity interest in underlying assets, all of which qualify as eligible
collateral under paragraphs (a)(1)(i) or (ii) of this section.
(2) Agency securities. (i) Securities issued, insured, or
guaranteed by the United States Government, or any agency thereof,
including without limitation:
(A) Mortgage-backed securities, as defined in Sec. 935.1 of this
part, issued or guaranteed by the Federal Home Loan Mortgage
Corporation, the Federal National Mortgage Association, the Government
National Mortgage Association, or any other agency of the United States
Government; and
(B) Mortgages or other loans, regardless of delinquency status, to
the extent that such mortgage or loan is insured or guaranteed by the
United States or any agency thereof, or otherwise is backed by the full
faith and credit of the United States; or
(C) Securities backed by, or representing an equity interest in,
mortgages or other loans referred to in paragraph (a)(2)(i)(B) of this
section; or
(ii) Any security the ownership of which represents an undivided
equity interest in underlying assets, all of which qualify as eligible
collateral under paragraph (a)(2)(i) of this section.
(3) Deposits. Deposits in a Bank.
(4) Other collateral. (i) Except as provided in paragraph
(a)(4)(iii) of this section, other real estate-related collateral
acceptable to the Bank if:
(A) Such collateral has a readily ascertainable value; and
(B) The Bank can perfect a security interest in such collateral.
(ii) Eligible other real estate-related collateral may include, but
is not limited to:
(A) Privately issued mortgage-backed securities not otherwise
eligible under paragraph (a)(i)(ii) of this section;
(B) Second mortgage loans, including home equity loans;
(C) Commercial real estate loans; and
(D) Mortgage loan participations.
(iii) A Bank shall not permit the aggregate amount of outstanding
advances to any one member, secured by such other real estate-related
collateral, to exceed 30 percent of such member's capital, as
calculated according to GAAP, at the time the advance is issued or
renewed.
(b) Eligible advances collateral held by investment subsidiaries.
(1) General rule. Assets held by a member's Qualifying Investment
Subsidiary that are eligible to secure advances under paragraphs (a)(1)
or (a)(2) of this section may be used to secure advances to that member
if the Bank obtains and maintains a security interest pursuant to which
the Bank's legal rights and privileges with respect to such assets are
functionally equivalent in all material aspects to those that the Bank
would possess if the member were to pledge eligible collateral
directly;
(2) Safe harbor provision. A Bank's legal rights and privileges
with respect to eligible assets held by a Qualifying Investment
Subsidiary will be deemed to be functionally equivalent in all material
aspects to those that the Bank would possess if the member were to
pledge eligible collateral directly if:
(i) The Bank obtains from the Qualifying Investment Subsidiary, and
maintains, a perfectible and legally enforceable security interest in
collateral eligible to secure advances under paragraphs (a)(1) or
(a)(2) of this section either:
(A) To secure the member's obligation to repay advances; or
(B) To secure a surety agreement under which the Qualifying
Investment Subsidiary has assumed, along with the member, a primary
obligation to repay advances made to the member;
(ii) The Bank obtains from the Qualifying Investment Subsidiary a
legally enforceable waiver of any defenses that the Subsidiary may have
as a pledgor of collateral on behalf of a third party, or as a surety,
as appropriate;
(iii) The Bank takes such precautions as are necessary to ensure
that the pledge of collateral by the Qualifying Investment Subsidiary
will be neither voidable under the fraudulent conveyance provisions of
applicable federal and state bankruptcy laws, nor subject to the claims
of other creditors; and
[[Page 67629]]
(iv) The Bank obtains from the member, and maintains, a perfectible
security interest in securities representing the member's equity
interest in its Qualifying Investment Subsidiary.
* * * * *
4. Amend Sec. 935.11 by revising paragraph (b) to read as follows:
Sec. 935.11 Pledged collateral; verification.
* * * * *
(b) Collateral verification. Each Bank shall establish written
procedures and standards for verifying the existence of collateral
securing the Bank's advances, and shall regularly verify the existence
of the collateral securing its advances in accordance with such
procedures and standards.
Dated: December 2, 1998.
By the Board of Directors of the Federal Housing Finance Board.
Bruce A. Morrison,
Chairman.
[FR Doc. 98-32527 Filed 12-7-98; 8:45 am]
BILLING CODE 6725-01-P