[Federal Register Volume 65, Number 145 (Thursday, July 27, 2000)]
[Proposed Rules]
[Page 46119]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-18833]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of Federal Housing Enterprise Oversight
12 CFR Chapter XVII
Notice of Safety and Soundness Regulation
AGENCY: Office of Federal Housing Enterprise Oversight, HUD.
ACTION: Notice of regulatory project.
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SUMMARY: Office of Federal Housing Enterprise Oversight (OFHEO) is
issuing notice of a regulatory project designed to ensure the adoption
and implementation of various written policies and procedures for the
supervision of Federal National Mortgage Association and the Federal
Home Loan Mortgage Corporation (the ``enterprises''). In accordance
with OFHEO's supervisory mandate, as established in Title XIII of the
Housing and Community Development of Act of 1992, known as the Federal
Housing Enterprises Financial Safety and Soundness Act of 1992, OFHEO
will formalize ongoing supervisory policies and procedures that are
reflected in the agency's various examination guidelines and other
supervisory pronouncements, and update and revise its supervisory
standards in light of market changes. The effect of this project is to
enhance safety and soundness, to clarify interpretations of applicable
laws and regulations, to provide greater transparency to and public
understanding of the regulatory regime affecting the enterprises, and
to provide a clear expression of the regulatory basis for OFHEO action
in matters of supervisory concern.
FOR FURTHER INFORMATION CONTACT: Alfred M. Pollard, General Counsel, or
David W. Roderer, Deputy General Counsel, Office of Federal Housing
Enterprise Oversight, 1700 G. Street, NW., Fourth Floor, Washington, DC
20552, telephone (202) 414-6924 (not a toll free number). The telephone
number for the Telecommunications Device for the Deaf is: (800) 877-
8339.
SUPPLEMENTARY INFORMATION: The Office of Federal Housing Enterprise
Oversight (OFHEO) is charged by Congress with overseeing the business
conduct and financial operations of the Federal National Mortgage
Association and the Federal Home Loan Mortgage Corporation in order to,
among other things, ensure that they are adequately capitalized and
operating safely. In furtherance of its supervisory responsibilities,
the agency is empowered to adopt safety and soundness standards, to
conduct examinations monitoring compliance by the enterprises with such
standards, and to enforce compliance with the standards it may
establish.
OFHEO has since its inception in 1993 operated under a system
largely without a full complement of promulgated regulatory standards
or procedures. The agency relies primarily upon the strength of its
examination staff, examination guidelines and procedures, and
unpublished letters. Little public recognition exists of the prudential
standards under which the enterprises successfully operate. The project
will produce greater transparency of OFHEO's regulatory processes and
the safeguards affecting the secondary market entities. The resulting
increased public awareness of the supervisory standards applicable to
this critical segment of housing finance should promote enhanced market
understanding of the relative strengths and viability of the
enterprises.
In accordance with OFHEO's supervisory mandate under Pub. L. No.
102-550, the agency is undertaking a regulatory project designed to
ensure the adoption and implementation of written policies and
procedures for the enterprises that address, among other matters, (1)
management responsibilities (addressing board and senior management
roles and responsibilities, and minimum internal control standards for
monitoring and reporting policies and procedures affecting specified
subject areas); (2) risk management (formalizing quantitative and
qualitative standards in appropriate areas including asset-related
matters, credit risk, interest rate risk, and operational risks); (3)
investments (addressing limits on types of investments and setting
forth record keeping and disclosure requirements); (4) information
systems security and integrity (formalizing standards and safeguards);
(5) financial information disclosure (specifying applicable disclosure
standards); (6) executive compensation (codifying procedures and
standards for agency review of senior executive compensation and
termination benefits); and, (7) enforcement policies and procedures
(clarifying relevant procedures and formal and informal enforcement
sanctions available to the agency).
Dated: July 20, 2000.
Armando Falcon, Jr.,
Director, Office of Federal Housing Enterprise Oversight.
[FR Doc. 00-18833 Filed 7-26-00; 8:45 am]
BILLING CODE 4220-01-U