[Federal Register Volume 67, Number 54 (Wednesday, March 20, 2002)]
[Rules and Regulations]
[Pages 12841-12856]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-5462]



[[Page 12841]]

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FEDERAL HOUSING FINANCE BOARD

12 CFR Chapter IX

[No. 2002-05]
RIN 3069-AB12


Technical Amendments to Federal Housing Finance Board Regulations

AGENCY: Federal Housing Finance Board.

ACTION: Final rule.

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SUMMARY: The Federal Housing Finance Board (Finance Board) is making 
various technical amendments to its regulations in order to complete 
the reorganization and modernization of the regulations that was begun 
with the regulatory reorganization rule published in February 2000. 
This rule will consolidate into one part the definitions of common 
terms used throughout the regulations; correct mistaken cross-
references and other oversights remaining from the reorganization rule; 
delete obsolete provisions; and make certain changes to better conform 
to the stylistic conventions of the Code of Federal Regulations. None 
of the amendments are intended to effect any substantive change to any 
regulation.

EFFECTIVE DATE: This final rule is effective on March 20, 2002.

FOR FURTHER INFORMATION CONTACT: Arnold Intrater, Acting General 
Counsel, (202) 408-2536; or Eric Raudenbush, Senior Attorney-Advisor, 
(202) 408-2932, Office of General Counsel, Federal Housing Finance 
Board, 1777 F Street, NW., Washington, DC 20006.

SUPPLEMENTARY INFORMATION: On February 18, 2000, the Finance Board 
published a final rule that reorganized and renumbered the agency's 
existing regulations, deleted obsolete regulations and made various 
technical amendments to the reorganized regulations. See 65 FR 8253 
(Feb. 18, 2000) (Reorganization Rule). The amendments set forth in the 
Reorganization Rule were intended to implement a more logical, 
efficient and modern presentation of the regulations governing the 
Federal Housing Finance Board and Federal Home Loan Bank System, as 
well as to achieve greater consistency in terminology and greater 
conformity with current stylistic conventions of the Code of Federal 
Regulations (CFR).
    Because the changes implemented by the Reorganization Rule were so 
comprehensive, there were a number of mistakes and oversights (e.g., 
mistaken cross-references and obsolete terminology that was not 
amended) that remained to be corrected even after the rule became 
effective. In addition, since the publication of the Reorganization 
Rule, the Finance Board has completed a number of major rulemakings 
that have either added substantial amounts of text to its regulations, 
or significantly altered the text that existed prior to February of 
2000. Although these major rulemakings were anticipated and taken into 
consideration in the drafting of the Reorganization Rule, their 
subsequent adoption has resulted in the need for some minor technical 
amendments in order to integrate fully the new material into the 
streamlined regulatory format. This final rule corrects the mistakes 
resulting from, and oversights remaining from, the Reorganization Rule 
and makes changes to integrate recently-adopted major regulations fully 
and cleanly into the overall structure of the regulations. None of the 
amendments contained in the rule are intended to effect any substantive 
change to any regulation.
    A significant portion of the amendments set forth in the final rule 
involve the consolidation of definitions of terms that are used 
frequently throughout the regulations into part 900, which is the first 
part that appears in the regulations as codified in the CFR. Prior to 
the enactment of the Reorganization Rule, there were numerous examples 
throughout the regulations of terms that were defined many times over 
in separate parts of the regulations, and of synonymous terms that were 
variously used to describe the same concept in different parts of the 
regulations (e.g., ``Finance Board,'' ``Board'' and ``Federal Housing 
Finance Board'' were used in different parts of the regulations to 
refer to the same agency). To remedy these problems, the Reorganization 
Rule established a new part 900 wherein terms that were used often 
throughout the regulations could be defined once without further 
repetition.
    Because several major rulemakings were anticipated at the time that 
the Reorganization Rule was drafted, only a few definitions were moved 
into part 900 as part of that rule. Several more definitions were added 
to part 900 in subsequent rulemakings. The Finance Board has now 
completed a thorough review of the regulations and has selected all of 
the terms that it believes should logically appear in part 900. 
Generally, the rule would consolidate into part 900 the definitions of 
all terms: (1) That are used in more than two parts of the regulations; 
and (2) whose definition does not set forth a substantive standard. 
Definitions that set forth substantive standards continue to appear in 
the definitional sections of the parts in which the term is used, 
regardless of the number of times that the definition must be repeated 
throughout the regulations. For example, the term ``investment grade'' 
is used in parts 932 (capital requirements), 956 (investments) and 960 
(standby letters of credit) of the regulations, but its definition has 
been left in each of the appropriate definitional sections because it 
sets forth a substantive standard that is integral to those 
regulations.
    The remaining amendments, which are scattered throughout the 
regulations, either: correct mistaken cross-references or other 
typographical errors; change citations or paragraph headings and 
numbering to conform to current standards of the CFR; or make 
conforming changes related to the consolidation of definitions into 
part 900, discussed above.
    Finally, because all of the amendments that would be implemented by 
this rule are technical and nonsubstantive, the Finance Board has 
adopted the rule in final form without the usual notice-and-comment 
process.

Regulatory Flexibility Act

    This is a technical rule that reorganizes the Finance Board's 
regulations without substantive change. The rule will not impose any 
regulatory requirements on small entities. Thus, in accordance with the 
provisions of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., the 
Finance Board hereby certifies that this final rule will not have a 
significant economic impact on a substantial number of small entities. 
5 U.S.C. 605(b).

Paperwork Reduction Act

    The 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 Parts 900 Through 997

    Credit, Federal home loan banks, Reporting and recordkeeping 
requirements.


    Accordingly, under the authority of section 2B(a) of the Federal 
Home Loan Bank Act, 12 U.S.C. 1422b(a), chapter IX of title 12 of the 
Code of Federal Regulations is amended as follows:
    1. Revise part 900 to read as follows:

[[Page 12842]]

PART 900--GENERAL DEFINITIONS APPLYING TO ALL FINANCE BOARD 
REGULATIONS

Sec.
900.1   Basic terms relating to the Finance Board, the Bank System 
and related entities.
900.2   Terms relating to Bank operations, mission and supervision.
900.3   Terms relating to other entities and concepts used 
throughout 12 CFR chapter IX.

    Authority: 12 U.S.C. 1422b(a).


Sec. 900.1  Basic terms relating to the Finance Board, the Bank System 
and related entities.

    As used throughout this chapter, the following basic terms relating 
to the Finance Board, the Bank System and related entities have the 
meanings set forth below, unless otherwise indicated in a particular 
subchapter, part, section, or paragraph:
    Act means the Federal Home Loan Bank Act, as amended (12 U.S.C. 
1421 through 1449).
    Bank, written in title case, means a Federal Home Loan Bank 
established under section 12 of the Act (12 U.S.C. 1432).
    Bank System means the Federal Home Loan Bank System, consisting of 
the 12 Banks and the Office of Finance.
    Board of Directors, written in title case, means the Board of 
Directors of the Federal Housing Finance Board; the term board of 
directors, written in lower case, has the meaning indicated in context.
    Chairperson means the Chairperson of the Board of Directors of the 
Finance Board.
    Finance Board means the Federal Housing Finance Board established 
by section 2A of the Act (12 U.S.C. 1422a).
    Financing Corporation or FICO means the Financing Corporation 
established and supervised by the Finance Board under section 21 of the 
Act (12 U.S.C. 1441) and part 995 of this chapter.
    Housing associate means an entity that has been approved as a 
housing associate pursuant to part 926 of this chapter.
    Member means an institution that has been approved for membership 
in a Bank and has purchased capital stock in the Bank in accordance 
with Secs. 925.20 or 925.24(b) of this chapter.
    Office of Finance or OF means the Office of Finance, a joint office 
of the Banks referred to in section 2B of the Act (12 U.S.C. 1422b) and 
established under part 985 of this chapter.
    Resolution Funding Corporation or REFCORP means the Resolution 
Funding Corporation established by section 21B of the Act (12 U.S.C. 
1441b) and addressed in parts 996 and 997 of this chapter.
    Secretary to the Board means the Executive Secretary to the Board 
of Directors, an officer within the Office of the Managing Director of 
the Finance Board.


Sec. 900.2  Terms relating to Bank operations, mission and supervision.

    As used throughout this chapter, the following terms relating to 
Bank operations, mission and supervision have the meanings set forth 
below, unless otherwise indicated in a particular subchapter, part, 
section or paragraph:
    Acquired member assets or AMA means those assets that may be 
acquired by a Bank under part 955 of this chapter.
    Advance means a loan from a Bank that is:
    (1) Provided pursuant to a written agreement;
    (2) Supported by a note or other written evidence of the borrower's 
obligation; and
    (3) Fully secured by collateral in accordance with the Act and part 
950 of this chapter.
    Affordable Housing Program or AHP means the Affordable Housing 
Program, the CICA program that each Bank is required to establish 
pursuant to section 10(j) of the Act (12 U.S.C. 1430(j)) and part 951 
of this chapter.
    Capital plan means the capital structure plan required for each 
Bank by section 6(b) of the Act, as amended (12 U.S.C. 1426(b)), and 
part 933 of this chapter, as approved by the Finance Board, unless the 
context of the regulation refers to the capital plan prior to its 
approval by the Finance Board.
    CIP means the Community Investment Program, an advance program 
under CICA required to be offered pursuant to section 10(i) of the Act 
(12 U.S.C. 1430(i)).
    Community Investment Cash Advance or CICA means any advance made 
through a program offered by a Bank under section 10 of the Act (12 
U.S.C. 1430) and parts 951 and 952 of this chapter to provide funding 
for targeted community lending and affordable housing, including 
advances made under a Bank's Rural Development Funding (RDF) program, 
offered under section 10(j)(10) of the Act (12 U.S.C. 1430(j)(10)); a 
Bank's Urban Development Funding (UDF) program, offered under section 
10(j)(10) of the Act (12 U.S.C. 1430(j)(10)); a Bank's Affordable 
Housing Program (AHP), offered under section 10(j) of the Act (12 
U.S.C. 1430(j)); a Bank's Community Investment Program (CIP), offered 
under section 10(i) of the Act (12 U.S.C. 1430(i)); or any other 
program offered by a Bank that meets the requirements of part 952 of 
this chapter.
    Community lending means providing financing for economic 
development projects for targeted beneficiaries, and, for community 
financial institutions (as defined in Sec. 925.1 of this chapter), 
purchasing or funding small business loans, small farm loans or small 
agri-business loans (as defined in Sec. 950.1 of this chapter).
    Consolidated obligation or CO means any bond, debenture, or note 
authorized under part 966 of this chapter to be issued jointly by the 
Banks pursuant to section 11(a) of the Act, as amended (12 U.S.C. 
1431(a)), or any bond or note issued by the Finance Board on behalf of 
all Banks pursuant to section 11(c) of the Act (12 U.S.C. 1431(c)), on 
which the Banks are jointly and severally liable.
    Financial Management Policy or FMP means the Financial Management 
Policy For The Federal Home Loan Bank System approved by the Finance 
Board pursuant to Finance Board Resolution No. 96-45 (July 3, 1996), as 
amended by Finance Board Resolution No. 96-90 (Dec. 6, 1996), Finance 
Board Resolution No. 97-05 (Jan. 14, 1997), and Finance Board 
Resolution No. 97-86 (Dec. 17, 1997).


Sec. 900.3  Terms relating to other entities and concepts used 
throughout 12 CFR chapter IX.

    As used throughout this chapter, the following terms relating to 
other entities and concepts used throughout 12 CFR chapter IX have the 
meanings set forth below, unless otherwise indicated in a particular 
subchapter, part, section or paragraph:
    Appropriate Federal banking agency has the meaning set forth in 
section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)) 
and, for federally-insured credit unions, means the NCUA.
    Appropriate state regulator means any state officer, agency, 
supervisor or other entity that has regulatory authority over, or is 
empowered to institute enforcement action against, a particular 
institution.
    Fannie Mae means the Federal National Mortgage Association 
established under authority of the Federal National Mortgage 
Association Charter Act (12 U.S.C. 1716, et seq.).
    FDIC means the Federal Deposit Insurance Corporation.
    FRB means the Board of Governors of the Federal Reserve System.
    Freddie Mac means the Federal Home Loan Mortgage Corporation 
established under authority of the Federal Home

[[Page 12843]]

Loan Mortgage Corporation Act (12 U.S.C. 1451, et seq.).
    Generally Accepted Accounting Principles or GAAP means accounting 
principles generally accepted in the United States.
    Ginnie Mae means the Government National Mortgage Association 
established under authority of the Federal National Mortgage 
Association Charter Act (12 U.S.C. 1716, et seq.).
    HUD means the United States Department of Housing and Urban 
Development.
    NCUA means the National Credit Union Administration.
    NRSRO means a credit rating organization regarded as a Nationally 
Recognized Statistical Rating Organization by the Securities and 
Exchange Commission.
    OCC means the Office of the Comptroller of the Currency.
    OTS means the Office of Thrift Supervision.
    SBIC means a small business investment company formed pursuant to 
section 301 of the Small Business Investment Act (15 U.S.C. 681).
    State means a state of the United States, American Samoa, the 
Commonwealth of the Northern Mariana Islands, the District of Columbia, 
Guam, Puerto Rico, or the United States Virgin Islands.

PART 905--DESCRIPTION OF ORGANIZATION AND FUNCTIONS

    2. Revise the authority citation for part 905 to read as follows:

    Authority: 5 U.S.C. 552; 12 U.S.C. 1422b(a), 1423.


Sec. 905.1  [Removed and Reserved]

    3. Remove and reserve Sec. 905.1.

    4. Amend Sec. 905.2 by revising paragraphs (b) and (c) to read as 
follows:


Sec. 905.2  General statement and statutory authority.

* * * * *
    (b) The members of the Board of Directors are individually referred 
to as Directors. The heads of the various administrative units, called 
offices, are also called Directors.
    (c) The Finance Board administers the Act and is authorized to 
issue rules, regulations and orders affecting the Bank System. The 
Finance Board performs all such duties and responsibilities as may be 
required by statute. As required by section 302(b)(2) of the Federal 
National Mortgage Association Charter Act (12 U.S.C. 1717(b)), it also 
conducts a monthly survey of all major lenders to calculate a national 
average for interest rates on mortgages for one-family homes, on behalf 
of the Fannie Mae. As required by section 305(b) of the Federal Home 
Loan Mortgage Corporation Act (12 U.S.C. 1454(b)), it conducts a 
similar survey for the Freddie Mac.

    5. Revise Sec. 905.4 to read as follows:


Sec. 905.4  Duties of the Finance Board.

    (a) Bank System. The Finance Board supervises and regulates the 
Banks and the Office of Finance. Specifically, its duties are:
    (1) To ensure that the Banks operate in a safe and sound manner;
    (2) To supervise all business operations of the Banks, which may 
include:
    (i) Prescribing conditions upon which Banks may advance funds to 
their members and housing associates;
    (ii) Prescribing rules and conditions under which a Bank may borrow 
funds, pay interest on those funds, or issue obligations;
    (iii) Requiring examinations of the Banks; and
    (iv) Appointing the public interest members of the boards of 
directors of the Banks;
    (3) To ensure that the Banks fulfill their housing finance and 
community lending mission;
    (4) To ensure that the Banks remain adequately capitalized; and
    (5) To ensure that the Banks are able to raise funds in the capital 
markets.
    (b) Financing Corporation. The Finance Board also oversees the 
operations of the Financing Corporation, including its issuance of 
obligations.


Sec. 905.5  [Removed]

    6. Remove Sec. 905.5.

Appendix A to Subpart A of Part 905--[Amended]

    7. Amend Appendix A to subpart A of part 905 by:
    a. Removing the words ``One World Trade Center, 103rd Floor, New 
York, NY 10048'' and adding, in their place, the words ``200 Park 
Avenue, New York, NY 10166-4193'';
    b. Removing the words ``One Riverfront Center, 20 Stanwix Street, 
Pittsburgh, PA 15222-4893'' and adding, in their place, the words ``601 
Grant Street, Pittsburgh, PA 15219-4455''; and
    c. Removing the words ``2400 Atrium Two, 221 East Fourth Street, 
Cincinnati, OH 45202'' and adding, in their place, the words ``221 East 
Fourth Street, Suite 1000, Cincinnati, OH 45201-0598''.

Subpart C--[Removed]

    8. Remove subpart C from part 905.

Subpart D--[Redesignated]

    9. Redesignate subpart D as subpart C.

    10. In the heading for newly designated subpart C, remove the word 
``Procedures'' and, in its place, add the word ``Miscellaneous''.


Secs. 905.50, 905.52, 905.53  [Removed]

    11. Remove Secs. 905.50, 905.52, 905.53.


Secs. 905.51, 905.54  [Redesignated]

    12. Redesignate Sec. 905.51 as Sec. 905.25 and Sec. 905.54 as 
Sec. 905.26.


Sec. 905.25  [Amended]

    13. Amend newly designated Sec. 905.25 by removing the words ``(see 
Sec. 905.3)'' from the introductory text.

    14. Revise newly designated Sec. 905.26 to read as follows:


Sec. 905.26  Official logo and seal.

    This section describes and displays the logo adopted by the Board 
of Directors as the official symbol representing the Finance Board. It 
is displayed on correspondence and selected documents. This logo also 
serves as the official seal used to certify and authenticate official 
documents of the Board of Directors.
    (a) Description. The logo is a disc with its center consisting of 
three polygons arranged in an irregular line partially overlapping--
each polygon drawn in a manner resembling a silhouette of a pitched 
roof house and with distinctive eaves under its roof--encircled by a 
designation scroll having an outer and inner border of plain heavy 
lines and containing the words ``FEDERAL HOUSING FINANCE BOARD'' in 
capital letters with serifs, with two mullets on the extreme left and 
right of the scroll.
    (b) Display. The Finance Board's official seal and logo appears 
below:
[GRAPHIC] [TIFF OMITTED] TR20MR02.004

PART 906--OPERATIONS

    15. Revise the authority citation for part 906 to read as follows:

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

[[Page 12844]]

Sec. 906.1  [Amended]

    16. Amend Sec. 906.1 by removing the definitions of the terms 
``Bank System'' and ``Chairperson''.


Sec. 906.2  [Amended]

    17. Amend paragraph (b)(3) of Sec. 906.2, in the last sentence, by 
removing the words ``pro rate'' and, in their place, adding the words 
``pro rata''.


Sec. 906.4  [Amended]

    18. Amend Sec. 906.4:
    a. In the first sentence of paragraph (a) by:
    i. Removing the words ``United States Code,'' and adding, in their 
place the words ``United States Code (31 U.S.C. 9701)''; and
    ii. Removing the words ``(31 U.S.C. 9701)''.
    b. In paragraph (b)(2) by:
    i. Removing the word ``will'' and adding, in its place, the word 
``must''; and
    ii. Removing the words ``Housing Finance Directorate'' and, in 
their place, adding the words ``Finance Board''.
    c. In paragraph (b)(3) by removing the word ``analyist'' and, in 
its place, adding the word ``analyst''.


Sec. 906.5  [Amended]

    19. Amend Sec. 906.5:
    a. In paragraph (b)(1) by removing the word ``Administration'' and, 
in its place, adding the words ``the Office of Resource Management''.
    b. In paragraph (c)(2)(iv) by adding, after the semi-colon, the 
word ``or''.

PART 907--PROCEDURES

    20. The authority citation for part 907 continues to read as 
follows:

    Authority: 12 U.S.C. 1422b(a)(1).


    21. Amend part 907 by removing the word ``intervener'' and 
``interveners'' wherever they appear and adding, in their place, 
respectively, the words ``intervenor'' and ``intervenors''.


Sec. 907.1  [Amended]

    22. Amend Sec. 907.1:
    a. In the introductory text by removing the words ``For purposes 
of'' and, in their place, adding the words ``As used in''; and
    b. By removing the definitions of the terms ``Board of Directors'', 
``Chairperson'' and ``Secretary to the Board''.


Sec. 907.6  [Amended]

    23. Amend paragraph (b)(2) of Sec. 907.6 by removing the words 
``Board of Directors'' (in title case) and, in their place, adding the 
words ``board of directors'' (in lower case).

PART 910--FREEDOM OF INFORMATION ACT REGULATION

    24. Revise the authority citation for part 910 to read as follows:

    Authority: 5 U.S.C. 552.


    25. In Sec. 910.1, revise the introductory text and the definitions 
of the terms ``Agency'' and ``Financial Regulatory Agency'' to read as 
follows:


Sec. 910.1  Definitions.

    As used in this part:
    Agency has the meaning set forth in 5 U.S.C. 552(f)(1).
* * * * *
    Financial regulatory agency means the FRB, OCC, FDIC, OTS, NCUA, 
Farm Credit Administration, or a state officer, agency, supervisor, or 
other entity that has regulatory authority over, or is empowered to 
institute enforcement action against, a financial institution, 
including an insurance company.
* * * * *


Sec. 910.4  [Amended]

    26. Amend paragraph (d)(2) of Sec. 910.4 by removing the words 
``paragraph (c)(1)'' and, in their place, adding the words ``paragraph 
(d)(1)''.


Sec. 910.9  [Amended]

    27. Amend paragraph (d)(3)(i) of Sec. 910.9, in the introductory 
paragraph, by removing the words ``paragraph (b)(3)'' and, in their 
place, adding the words ``paragraph (d)(3)''.

PART 911--AVAILABILITY OF UNPUBLISHED INFORMATION

    28. The authority citation for part 911 continues to read as 
follows:

    Authority: 5 U.S.C. 301; 12 U.S.C. 1422b(a)(1).


Sec. 911.1  [Amended]

    29. Amend the introductory paragraph to Sec. 911.1 by removing the 
words ``For purposes of'' and, in their place, adding the words ``As 
used in''.


Sec. 911.3  [Amended]

    30. Amend paragraph (d) of Sec. 911.3 by removing the words 
``Federal Home Loan Bank'' wherever they appear and, in their place, 
adding the word ``Bank''.

PART 912--INFORMATION REGARDING MEETINGS OF THE BOARD OF DIRECTORS 
OF THE FEDERAL HOUSING FINANCE BOARD

    31. The authority citation for part 912 continues to read as 
follows:

    Authority: 5 U.S.C. 552b.


Secs. 912.1, 912.2  [Redesignated]

    32. Redesignate Secs. 912.1 and 912.2 as Secs. 912.2 and 
Sec. 912.1, respectively.

    33. Amend newly designated Sec. 912.1 by removing the definition of 
the term ``Executive secretary'', by adding, in proper alphabetical 
sequence, a definition for the term ``Secretary to the Board'', and by 
revising the introductory text and the definitions of the terms 
``Chairperson'' and ``Sunshine Act'', to read as follows:


Sec. 912.1  Definitions.

    As used in this part:
* * * * *
    Chairperson includes the Acting Chairperson.
* * * * *
    Secretary to the Board includes the Acting Secretary if the 
position of Secretary is vacant.
    Sunshine Act means the Government in the Sunshine Act (5 U.S.C. 
552b).


Sec. 912.2  [Amended]

    34. Amend paragraph (a) of newly designated Sec. 912.2, in the 
first sentence, by removing the words ``Government in the Sunshine Act 
(5 U.S.C. 552b), that'' and, in their place, adding the words 
``Sunshine Act, which''.


Sec. 912.4  [Amended]

    35. Amend Sec. 912.4:
    a. In paragraph (a)(3), introductory text, by removing the word 
``Provided'' and adding, in its place, the italicized word 
``provided''; and
    b. In paragraph (a)(8) by removing the concluding period and 
adding, in its place, a semi-colon.


Sec. 912.5  [Amended]

    36. Amend Sec. 912.5:
    a. By removing the words ``Executive Secretary'' wherever they 
appear and adding, in their place, the words ``Secretary to the 
Board'';
    b. In the first sentence of paragraph (a)(5), by removing the words 
``paragraphs (a) (5), (6), or (7) of Sec. 912.4'' and adding, in their 
place, the words ``Sec. 912.4(a)(5), (6), or (7)'';
    c. In paragraph (a)(6)(ii) by:
    i. Removing the words ``paragraph (a) of Sec. 912.4'' and adding, 
in their place, the words ``Sec. 912.4(a)''; and
    ii. Adding, after the words ``determined by the Board'', the words 
``of Directors'';
    d. Removing, in paragraph (b)(1), the words ``paragraphs (a) (4), 
(8), (9)(i) or (10) of Sec. 912.4'' and adding, in their place, the 
words ``Sec. 912.4(a)(4), (8), (9)(i) or (10)''; and
    e. Removing, in paragraph (c)(2), the words ``paragraphs (a) (8), 
(9)(i) or (10)

[[Page 12845]]

of Sec. 912.4'' and adding, in their place, the words 
``Sec. 912.4(a)(8), (9)(i) or (10)''.


Sec. 912.6  [Amended]

    37. Amend Sec. 912.6:
    a. In paragraph (a)(1) by removing the words ``paragraph (a) of 
Sec. 912.4'' and adding, in their place, the words ``Sec. 912.4(a)'';
    b. In paragraph (a)(1) by removing the words ``paragraph (a) of 
Sec. 912.5'' and adding, in their place, the words ``Sec. 912.5(a)'';
    c. In paragraph (a)(2) by removing the words ``paragraph (b) of 
Sec. 912.5'' and adding, in their place, the words ``Sec. 912.5(b)'';
    d. In the first sentence of paragraph (b) by:
    i. Removing the words ``paragraph (a) of Sec. 912.5'' and adding, 
in their place, the words ``Sec. 912.5(a)''; and
    ii. Removing the words ``Executive Secretary'' and adding, in their 
place, the words ``Secretary to the Board''; and
    e. In paragraph (c) by removing the words ``paragraph (a) of 
Sec. 912.5'' and adding, in their place, the words ``Sec. 912.5(a)''.

PART 913--PRIVACY ACT PROCEDURES

    38. The authority citation for part 913 continues to read as 
follows:

    Authority: 5 U.S.C. 552a.

PART 913--[AMENDED]

    39. In part 913, remove the words ``Executive Secretary'' wherever 
they appear and add, in their place, the words ``Secretary to the 
Board''.


Secs. 913.1, 913.2  [Redesignated]

    40. Redesignate Secs. 913.1 and 913.2 as Secs. 913.2 and 
Sec. 913.1, respectively.


Sec. 913.3  [Amended]

    41. Amend paragraph (b) of Sec. 913.3 by adding the word ``in'' 
between the words ``system of records shall be'' and the words 
``writing, shall contain''.


Sec. 913.5  [Amended]

    42. Amend Sec. 913.5:
    a. In paragraph (b)(2)(vi), by removing the concluding period and 
adding, in its place, a semi-colon; and
    b. In paragraph (c), by adding the heading ``Accounting.''.


Sec. 913.9  [Amended]

    43. Amend Sec. 913.9:
    a. In paragraph (c)(1)(iii), by removing the words ``as amended, 5 
U.S.C. App. 3'' and adding, in their place, the words ``as amended (5 
U.S.C. App. 3)'';
    b. In paragraph (c)(2)(v), by removing the words ``as amended, 5 
U.S.C. App. 3'' and adding, in their place, the words ``as amended (5 
U.S.C. App. 3)''; and
    c. In paragraph (d), in the introductory text, by removing the 
words ``comprised of'' and, in their place, adding the word 
``comprising''.

PART 915--BANK DIRECTOR ELIGIBILITY, APPOINTMENT AND ELECTIONS

    44. Revise the authority citation for part 915 by revising it to 
read as follows:

    Authority: 12 U.S.C. 1422a(a)(3), 1422b(a), 1426, 1427, 1432.

PART 915--[AMENDED]

    45. Amend part 915 by removing the words ``docket number'' wherever 
they appear and adding, in their place, the words ``FHFB ID number''.


Sec. 915.1  [Amended]

    46. Amend Sec. 915.1:
    a. In the definition of ``Discretionary directorship'', by removing 
the words ``section 7(a) of the Act'' and adding, in their place, the 
words ``section 7(a) of the Act (12 U.S.C. 1427(a))'';
    b. In the definition of ``Guaranteed directorship'', by removing 
the words ``section 7(b) of the Act'' and adding, in their place, the 
words ``section 7(b) of the Act (12 U.S.C. 1427(b))''; and
    c. In the definition of ``Voting state'', by removing the words 
``part 933'' and adding, in its place, the words ``part 925''.


Sec. 915.3  [Amended]

    47. Amend Sec. 915.3:
    a. In paragraph (a), fourth sentence, by:
    i. Removing the words ``Section 7(d) of the Act'' and adding, in 
their place, the words ``section 7(d) of the Act (12 U.S.C. 1427(d))''; 
and
    ii. Removing the word ``chapter'' and, in its place, adding the 
word ``part'';
    b. In paragraph (b)(4) by adding, after the words ``section 7(e) of 
the Act'', the words ``(12 U.S.C. 1427(e))'';
    c. In paragraph (b)(5), in the first sentence, by adding, after the 
words ``section 7(a) of the Act'', the words ``(12 U.S.C. 1427(a))''; 
and
    d. In paragraph (d) by:
    i. Adding, preceding the text, the heading ``Location of member.''; 
and
    ii. Adding after the words ``section 7(c) of the Act'', the words 
``(12 U.S.C. 1427(c))''.


Sec. 915.5  [Amended]

    48. Amend paragraph (c) of Sec. 915.5, in the second sentence, by 
removing the words ``Section 7(b) of the Act'' and adding, in their 
place, the words ``section 7(b) of the Act (12 U.S.C. 1427(b))''.


Sec. 915.7  [Amended]

    49. Amend Sec. 915.7:
    a. In paragraph (b)(2):
    i. In the first sentence, by removing the words ``A bona fide 
resident of the Bank district or an'' and adding, in their place, the 
word ``An''; and
    ii. In the first sentence, by removing the words ``appropriate 
federal regulator'' and, in their place, adding the words ``appropriate 
Federal banking agency'';
    b. By removing the second sentence;
    c. In paragraph (c)(1), by redesignating paragraphs (c)(1)(i) and 
(c)(1)(ii) as paragraphs (c)(1)(i)(A) and (c)(1)(i)(B), respectively;
    d. By redesignating paragraphs (c)(1), (c)(2) and (c)(3) as 
paragraphs (c)(1)(i), (c)(1)(ii) and (c)(1)(iii), respectively;
    e. By designating the introductory text of paragraph (c) as 
paragraph (c)(1) introductory text;
    f. By redesignating paragraph (c)(4) as paragraph (c)(2);
    g. In newly designated paragraph (c)(1)(i)(B), by removing the word 
``Act.'' and adding, in its place, the words ``Act (12 U.S.C. 
1427(d));'';
    h. In newly designated paragraph (c)(1)(ii), by removing the period 
and, in its place, adding the word ``; or'';
    i. In newly designated paragraph (c)(2), by removing the words 
``Section 7(d) of the Act'' and adding, in their place, the words 
``section 7(d) of the Bank Act (12 U.S.C. 1427(d))''; and
    j. In paragraph (d)(2), by removing the words ``Section 7(f) of the 
Bank Act'' and adding, in their place, the words ``section 7(f) of the 
Act (12 U.S.C. 1427(f))''.


Sec. 915.8  [Amended]

    50. Amend paragraph (b) of Sec. 915.8 by adding, before the period 
at the end of the second sentence, the words ``of this section''.


Sec. 915.10  [Amended]

    51. Amend paragraph (b) of Sec. 915.10:
    a. In both the first and second sentences, by removing the words 
``Section 7(d) of the Act'' and adding, in their place, the words 
``section 7(d) of the Act (12 U.S.C. 1427(d))''; and
    b. In the second sentence, by removing the word ``Part'' both 
places that it appears and, in its place, adding the word ``part''.


Sec. 915.12  [Amended]

    52. Amend paragraph (a) of Sec. 915.12, in the parenthetical 
following the first sentence, by removing the words ``12 CFR 905.51'' 
and adding, in their place, the words ``Sec. 905.25 of this chapter''.

[[Page 12846]]

Sec. 915.15  [Amended]

    53. Amend Sec. 915.15, in the first sentence, by removing the word 
``Act'' and adding, in its place, the words ``Act (12 U.S.C. 
1427(c))''.


Sec. 915.16  [Amended]

    54. Amend paragraph (e) of Sec. 915.16, in the second sentence, by 
removing the words ``Section 7(d) of the Bank Act'' and adding, in 
their place, the words ``section 7(d) of the Act (12 U.S.C. 1427(d))''.


Sec. 915.17  [Amended]

    55. Amend paragraph (a)(1) of Sec. 915.17, in the second sentence, 
by removing the words ``Section 7(a) of the Bank Act'' and adding, in 
their place, the words ``section 7(a) of the Act (12 U.S.C. 1427(a))''.

PART 917--POWERS AND RESPONSIBILITIES OF BANK BOARDS OF DIRECTORS 
AND SENIOR MANAGEMENT

    56. The authority citation for part 917 continues to read as 
follows:

    Authority: 12 U.S.C. 1422a(a)(3), 1422b(a)(1), 1426, 1427, 
1432(a), 1436(a), 1440.


Sec. 917.1  [Amended]

    57. Amend Sec. 917.1:
    a. By removing the definition of ``Capital structure plan''; and
    b. In paragraph (4) of the definition of ``Contingency liquidity'', 
by removing the words ``a credit rating organization regarded as a 
Nationally Recognized Statistical Rating Organization by the Securities 
and Exchange Commission'' and adding, in their place, the words ``an 
NRSRO''.


Sec. 917.3  [Amended]

    58. Amend paragraph (b)(3)(i) of Sec. 917.3 by removing the word 
``and'' that appears after the semi-colon.


Sec. 917.4  [Amended]

    59. Amend paragraph (a)(1) of Sec. 917.4 by adding, between the 
words ``advances,'' and ``letters of credit'', the word ``standby''.


Sec. 917.5  [Amended]

    60. Amend Sec. 917.5:
    a. In paragraph (a) introductory text, by removing the words ``90 
days after the effective date of this section'' and, in their place, 
adding the words ``on July 30, 2000'';

    b. In paragraph (a)(4), by adding a hard (paragraph) return after 
the word ``and'' and
    c. In paragraph (c) by designating as a heading (italicizing) the 
words ``Report to Finance Board''.


Sec. 917.6  [Amended]

    61. Amend paragraph (c) of Sec. 917.6, in the introductory text, by 
adding a comma after the words ``paragraph (a)(1) of this section''.


Sec. 917.7  [Amended]

    62. Amend paragraph (e)(8) of Sec. 917.7 by removing the words 
``implementation of with the Bank's'' and, in their place, adding the 
words ``implementation of the Bank's''.

PART 918--BANK DIRECTOR COMPENSATION AND EXPENSES

    63. The authority citation for part 918 continues to read as 
follows:

    Authority: 12 U.S.C. 1422b(a), 1427.


Sec. 918.3  [Amended]

    64. Amend paragraph (a)(1) of Sec. 918.3 by removing the words 
``Act, as amended, 12 U.S.C. 1427(i)'' and adding, in their place, the 
words ``Act (12 U.S.C. 1427(i))''.


Sec. 918.5  [Amended]

    65. Amend Sec. 918.5 by removing the words ``Act, as amended'' and 
adding, in their place, the words ``Act (12 U.S.C. 1427(i))''.


Sec. 918.7  [Amended]

    66. Amend Sec. 918.7 by removing the words ``Act, as amended'' and 
adding, in their place, the words ``Act (12 U.S.C. 1427(i))''.


Sec. 918.9  [Amended]

    67. Amend Sec. 918.9 by adding the word ``former'' between the 
words ``officers and employees in'' and the words ``12 CFR 932.19''.

PART 925--MEMBERS OF THE BANKS

    68. The authority citation part 925 continues to read as follows:

    Authority: 12 U.S.C. 1422, 1422a, 1422b, 1423, 1424, 1426, 1430, 
1442.


    69. Revise Sec. 925.1 to read as follows:


Sec. 925.1  Definitions.

    For purposes of this part:
    Adjusted net income means net income, excluding extraordinary items 
such as income received from, or expense incurred in, sales of 
securities or fixed assets, reported on a regulatory financial report.
    Aggregate unpaid loan principal means the aggregate unpaid 
principal of a subscriber's or member's home mortgage loans, home-
purchase contracts and similar obligations.
    Allowance for loan and lease losses means a specified balance-sheet 
account held to fund potential losses on loans or leases, that is 
reported on a regulatory financial report.
    Appropriate regulator means a regulatory entity listed in 
Sec. 925.8, as applicable.
    Combination business or farm property means real property for which 
the total appraised value is attributable to residential, and business 
or farm uses.
    Community financial institution or CFI means an institution:
    (1) The deposits of which are insured under the Federal Deposit 
Insurance Act (12 U.S.C. 1811, et seq.); and
    (2) That has, as of the date of the transaction at issue, less than 
the community financial institution asset cap in total assets, based on 
an average of total assets over three years, which shall be calculated 
by the Bank based on the average of total assets drawn from the 
institution's regulatory financial reports filed with its appropriate 
regulator for the most recent calendar quarter and the immediately 
preceding 11 calendar quarters.
    Community financial institution asset cap means, for 2000, $500 
million. Beginning in 2001 and for subsequent years, the cap shall be 
adjusted annually by the Finance Board to reflect any percentage 
increase in the preceding year's Consumer Price Index (CPI) for all 
urban consumers, as published by the U.S. Department of Labor. Each 
year, as soon as practicable after the publication of the previous 
year's CPI, the Finance Board shall publish notice by the Federal 
Register of the CPI-adjusted cap.
    Composite regulatory examination rating means a composite rating 
assigned to an institution following the guidelines of the Uniform 
Financial Institutions Rating System (Issued by the Federal Financial 
Institutions Examination Council; for availability contact the Federal 
Housing Finance Board, FOIA Office, 1777 F Street, NW., Washington, DC 
20006), including a CAMEL rating, a MACRO rating, or other similar 
rating, contained in a written regulatory examination report.
    Consolidation includes a consolidation, a merger, or a purchase of 
all of the assets and assumption of all of the liabilities of an entity 
by another entity.
    Dwelling unit means a single room or a unified combination of rooms 
designed for residential use.
    Enforcement action means any written notice, directive, order or

[[Page 12847]]

agreement initiated by an applicant for Bank membership or by its 
appropriate regulator to address any operational, financial, managerial 
or other deficiencies of the applicant identified by such regulator, 
but does not include a board of directors resolution adopted by the 
applicant in response to examination weaknesses identified by such 
regulator.
    Funded residential construction loan means the portion of a loan 
secured by real property made to finance the on-site construction of 
dwelling units on one-to-four family property or multifamily property 
disbursed to the borrower.
    Home mortgage loan means:
    (1) A loan, whether or not fully amortizing, or an interest in such 
a loan, which is secured by a mortgage, deed of trust, or other 
security agreement that creates a first lien on one of the following 
interests in property:
    (i) One-to-four family property or multifamily property, in fee 
simple;
    (ii) A leasehold on one-to-four family property or multifamily 
property under a lease of not less than 99 years that is renewable, or 
under a lease having a period of not less than 50 years to run from the 
date the mortgage was executed; or
    (iii) Combination business or farm property where at least 50 
percent of the total appraised value of the combined property is 
attributable to the residential portion of the property or, in the case 
of any community financial institution, combination business or farm 
property, on which is located a permanent structure actually used as a 
residence (other than for temporary or seasonal housing), where the 
residence constitutes an integral part of the property; or
    (2) A mortgage pass-through security that represents an undivided 
ownership interest in:
    (i) Long-term loans, provided that, at the time of issuance of the 
security, all of the loans meet the requirements of paragraph (1) of 
this definition; or
    (ii) A security that represents an undivided ownership interest in 
long-term loans, provided that, at the time of issuance of the 
security, all of the loans meet the requirements of paragraph (1) of 
this definition.
    Insured depository institution means an insured depository 
institution as defined in section 2(12) of the Act (12 U.S.C. 
1422(12)).
    Long-term means a term to maturity of five years or greater.
    Manufactured housing means a manufactured home as defined in 
section 603(6) of the Manufactured Home Construction and Safety 
Standards Act of 1974, as amended (42 U.S.C. 5402(6)).
    Multifamily property means:
    (1) Real property that is solely residential and includes five or 
more dwelling units;
    (2) Real property that includes five or more dwelling units 
combined with commercial units, provided that the property is primarily 
residential; or
    (3) Nursing homes, dormitories, or homes for the elderly.
    Nonperforming loans and leases means the sum of the following, 
reported on a regulatory financial report:
    (1) Loans and leases that have been past due for 90 days (60 days 
in the case of credit union applicants) or longer but are still 
accruing;
    (2) Loans and leases on a nonaccrual basis; and
    (3) Restructured loans and leases (not already reported as 
nonperforming).
    Nonresidential real property means real property that is not used 
for residential purposes, including business or industrial property, 
hotels, motels, churches, hospitals, educational and charitable 
institution buildings or facilities, clubs, lodges, association 
buildings, golf courses, recreational facilities, farm property not 
containing a dwelling unit, or similar types of property.
    One-to-four family property means:
    (1) Real property that is solely residential, including one-to-four 
family dwelling units or more than four family dwelling units if each 
dwelling unit is separated from the other dwelling units by dividing 
walls that extend from ground to roof, such as row houses, townhouses 
or similar types of property;
    (2) Manufactured housing if applicable state law defines the 
purchase or holding of manufactured housing as the purchase or holding 
of real property;
    (3) Individual condominium dwelling units or interests in 
individual cooperative housing dwelling units that are part of a 
condominium or cooperative building without regard to the number of 
total dwelling units therein; or
    (4) Real property which includes one-to-four family dwelling units 
combined with commercial units, provided the property is primarily 
residential.
    Other real estate owned means all other real estate owned (i.e., 
foreclosed and repossessed real estate), reported on a regulatory 
financial report, and does not include direct and indirect investments 
in real estate ventures.
    Regulatory examination report means a written report of examination 
prepared by the applicant's appropriate regulator, containing, in the 
case of insured depository institution applicants, a composite rating 
assigned to the institution following the guidelines of the Uniform 
Financial Institutions Rating System, including a CAMEL rating, a MACRO 
rating, or other similar rating.
    Regulatory financial report means a financial report that an 
applicant is required to file with its appropriate regulator on a 
specific periodic basis, including the quarterly call report for 
commercial banks, thrift financial report for savings associations, 
quarterly or semi-annual call report for credit unions, the National 
Association of Insurance Commissioners' annual or quarterly report for 
insurance companies, or other similar report, including such report 
maintained by the appropriate regulator on a computer on-line database.
    Residential mortgage loan means any one of the following types of 
loans, whether or not fully amortizing:
    (1) Home mortgage loans;
    (2) Funded residential construction loans;
    (3) Loans secured by manufactured housing whether or not defined by 
state law as secured by an interest in real property;
    (4) Loans secured by junior liens on one-to-four family property or 
multifamily property;
    (5) Mortgage pass-through securities representing an undivided 
ownership interest in:
    (i) Loans that meet the requirements of paragraphs (1) through (4) 
of this definition at the time of issuance of the security;
    (ii) Securities representing an undivided ownership interest in 
loans, provided that, at the time of issuance of the security, all of 
the loans meet the requirements of paragraphs (1) through (4) of this 
definition; or
    (iii) Mortgage debt securities as defined in paragraph (6) of this 
definition;
    (6) Mortgage debt securities secured by:
    (i) Loans, provided that, at the time of issuance of the security, 
substantially all of the loans meet the requirements of paragraphs (1) 
through (4) of this definition;
    (ii) Securities that meet the requirements of paragraph (5) of this 
definition; or
    (iii) Securities secured by assets, provided that, at the time of 
issuance of the security, all of the assets meet the requirements of 
paragraphs (1) through (5) of this definition;
    (7) Home mortgage loans secured by a leasehold interest, as defined 
in

[[Page 12848]]

paragraph (1)(ii) of the definition of ``home mortgage loan,'' except 
that the period of the lease term may be for any duration; or
    (8) Loans that finance properties or activities that, if made by a 
member, would satisfy the statutory requirements for the CIP 
established under section 10(i) of the Act (12 U.S.C. 1430(i)), or the 
regulatory requirements established for any CICA program.
    Total assets means the total assets reported on a regulatory 
financial report.


Sec. 925.3  [Amended]

    70. Amend paragraph (c) of Sec. 925.3, in the last sentence, by 
removing the words ``Executive Secretary'' and adding, in their place, 
the words ``Secretary to the Board''.


Sec. 925.4  [Amended]

    71. Amend paragraph (c)(2) of Sec. 925.4 by:
    a. Removing the reference to ``Sec. 925.25(d)(1)(i)'' and adding, 
in its place, a reference to ``Sec. 925.24(b)(4)(i)''; and
    b. Removing the reference to ``Secs. 925.25(d)(2)(i), (e) and (f)'' 
and adding, in its place, a reference to ``Sec. 925.24(c) and (d)''.


Sec. 925.5  [Amended]

    72. Amend paragraph (a)(2) of Sec. 925.5 by removing the words 
``Executive Secretary'' and adding, in their place, the words 
``Secretary to the Board''.


Sec. 925.7  [Amended]

    73. Amend Sec. 925.7 by adding the words ``(12 U.S.C. 
1424(a)(1)(A))'' between the words ``of the Act'' and the words ``and 
Sec. 925.6(a)(1)''.


Sec. 925.8  [Amended]

    74. Amend Sec. 925.8 by:
    a. Adding the words ``(12 U.S.C. 1424(a)(1)(B))'' between the words 
``of the Act'' and the words ``and Sec. 925.6(a)(2)''; and
    b. Removing the words ``Federal Deposit Insurance Corporation, the 
Federal Reserve Board, the National Credit Union Administration, the 
Office of the Comptroller of the Currency, the Office of Thrift 
Supervision'' and, in their place, adding the words ``FDIC, FRB, NCUA, 
OCC, OTS''.


Sec. 925.9  [Amended]

    75. Amend Sec. 925.9 by adding the words ``(12 U.S.C. 
1424(a)(1)(C))'' between the words ``of the Act'' and the words ``and 
Sec. 925.6(a)(3)''.


Sec. 925.10  [Amended]

    76. Amend Sec. 925.10 by:
    a. Adding the words ``(12 U.S.C. 1424(a)(2)(A))'' between the words 
``of the Act'' and the words ``and Sec. 925.6(b)''; and
    b. Removing the words ``Sec. 925.1(bb)(6)'' and, in their place, 
adding the words ``paragraph (6) of the definition of `residential 
mortgage loan' set forth in Sec. 925.1''.


Sec. 925.11  [Amended]

    77. Amend Sec. 925.11:
    a. In paragraph (a), by adding the words ``(12 U.S.C. 
1424(a)(2)(B))'' between the words ``of the Act'' and the words ``and 
Sec. 925.6(a)(4)'';
    b. In paragraph (b), introductory text, by adding the words ``(12 
U.S.C. 1424(a)(2)(B))'' between the words ``of the Act'' and the words 
``and Sec. 925.6(a)(4)'';
    c. In paragraph (b)(3), by removing the words ``was `1;' or, was 
`2' or'' and adding, in their place, the words ``was `1;' or was `2' 
or''; and
    d. In paragraph (c), by adding the words ``(12 U.S.C. 
1424(a)(2)(B))'' between the words ``of the Act'' and the words ``and 
Sec. 925.6(a)(4)''.


Sec. 925.12  [Amended]

    78. Amend the introductory text of Sec. 925.12 by adding the words 
``(12 U.S.C. 1424(a)(2)(C))'' between the words ``of the Act'' and the 
words ``and Sec. 925.6(a)(5)''.


Sec. 925.13  [Amended]

    79. Amend paragraph (a) of Sec. 925.13 by adding the words ``(12 
U.S.C. 1424(a)(2)(C))'' between the words ``of the Act'' and the words 
``and Sec. 925.6(a)(6)''.

    80. Revise Sec. 925.14 to read as follows:


Sec. 925.14  De novo insured depository institution applicants.

    (a) Duly organized, subject to inspection and regulation, financial 
condition and character of management requirements. An insured 
depository institution applicant whose date of charter approval is 
within three years prior to the date the Bank receives the applicant's 
application for membership in the Bank (de novo applicant) is deemed to 
meet the requirements of Secs. 925.7, 925.8, 925.11 and 925.12.
    (b) Makes long-term home mortgage loans requirement. A de novo 
applicant shall be deemed to make long-term home mortgage loans as 
required by Sec. 925.9 if it has filed as part of its application for 
membership a written justification acceptable to the Bank of how its 
home financing credit policy and lending practices will include 
originating or purchasing long-term home mortgage loans.
    (c) 10 percent requirement. (1) One-year requirement. A de novo 
applicant that is subject to the 10 percent requirement of section 
4(a)(2)(A) of the Act (12 U.S.C. 1424(a)(2)(A)) and Sec. 925.6(b) shall 
have until one year after commencing its initial business operations to 
meet the 10 percent requirement of Sec. 925.10.
    (2) Conditional approval. A de novo applicant shall be 
conditionally deemed to be in compliance with the 10 percent 
requirement of section 4(a)(2)(A) of the Act (12 U.S.C. 1424(a)(2)(A)) 
and Sec. 925.6(b). A de novo applicant that receives such conditional 
membership approval is subject to the stock purchase requirements of 
Sec. 925.20 and the advances provisions of part 950 of this chapter.
    (3) Approval. A de novo applicant shall be deemed to be in 
compliance with the 10 percent requirement of section 4(a)(2)(A) of the 
Bank Act (12 U.S.C. 1424(a)(2)(A)) and Sec. 925.6(b) upon receipt by 
the Bank from the applicant, within one year after commencement of the 
applicant's initial business operations, of evidence acceptable to the 
Bank that the applicant satisfies the 10 percent requirement.
    (4) Conditional approval deemed null and void. If the requirements 
of paragraph (c)(3) of this section are not satisfied, a de novo 
applicant shall be deemed to be in noncompliance with the 10 percent 
requirement of section 4(a)(2)(A) of the Act (12 U.S.C. 1424(a)(2)(A)) 
and Sec. 925.6(b), and its conditional membership approval is deemed 
null and void.
    (5) Treatment of outstanding advances and Bank stock. If a de novo 
applicant's conditional membership approval is deemed null and void 
pursuant to paragraph (c)(4) of this section, the liquidation of any 
outstanding indebtedness owed by the applicant to the Bank and 
redemption of stock of such Bank shall be carried out in accordance 
with Sec. 925.29.
    (d) Home financing policy requirement. (1) Conditional approval. A 
de novo applicant that has not received its first formal, or, if 
unavailable, informal or preliminary, Community Reinvestment Act (CRA) 
performance evaluation, shall be conditionally deemed to be in 
compliance with the home financing policy requirement of section 
4(a)(2)(C) of the Act (12 U.S.C. 1424(a)(2)(C)) and Sec. 925.6(a)(6), 
if the applicant has filed as part of its application for membership a 
written justification acceptable to the Bank of how and why its home 
financing credit policy and lending practices will meet the credit 
needs of

[[Page 12849]]

its community. An applicant that receives such conditional membership 
approval is subject to the stock purchase requirements of Sec. 925.20 
and the advances provisions of part 950 of this chapter.
    (2) Approval. A de novo applicant that has been granted conditional 
approval under paragraph (d)(1) of this section shall be deemed to be 
in compliance with the home financing policy requirement of section 
4(a)(2)(C) of the Act (12 U.S.C. 1424(a)(2)(C)) and Sec. 925.6(a)(6) 
upon receipt by the Bank of evidence from the applicant that it 
received a CRA rating of ``Satisfactory'' or better on its first 
formal, or if unavailable, informal or preliminary, CRA performance 
evaluation.
    (3) Conditional approval deemed null and void. If the de novo 
applicant's first such CRA rating is ``Needs to Improve'' or 
``Substantial Non-Compliance,'' the applicant shall be deemed to be in 
noncompliance with the home financing policy requirement of section 
4(a)(2)(C) of the Act (12 U.S.C. 1424(a)(2)(C)) and Sec. 925.6(a)(6), 
subject to rebuttal by the applicant under Sec. 925.17(f), and its 
conditional membership approval is deemed null and void.
    (4) Treatment of outstanding advances and Bank stock. If the 
applicant's conditional membership approval is deemed null and void 
pursuant to paragraph (d)(3) of this section, the liquidation of any 
outstanding indebtedness owed by the applicant to the Bank and 
redemption of stock of such Bank shall be carried out in accordance 
with Sec. 925.29.


Sec. 925.16  [Amended]

    81. Amend Sec. 925.16 by adding the words ``(12 U.S.C. 
1424(a)(2)(B))'' between the words ``of the Act'' and the words ``and 
Sec. 925.6(a)(4)''.


Sec. 925.17  [Amended]

    82. Amend Sec. 925.17:
    a. In paragraph (a) by removing the words ``of the Act and 
Sec. 925.6 (a)'' and adding, in their place, the words ``of the Act (12 
U.S.C. 1424(a)) and Sec. 925.6(a)'';
    b. In paragraph (b) by removing the words ``of the Act and 
Sec. 925.6(a) (2)'' and adding, in their place, the words ``of the Act 
(12 U.S.C. 1424(a)) and Sec. 925.6(a)(2)''; and
    c. In the heading to paragraph (f), by removing the words ``925.13, 
925.14(a)(4), and 925.14(b)(3)'' and, in their place, adding the words 
``925.13 and 925.14(d)''.


Sec. 925.18  [Amended]

    83. Amend paragraph (e) of Sec. 925.18 by removing the words ``of 
the Act or Secs. 925.26, 925.27, and 925.28'' and, in their place, 
adding the words ``of the Act (12 U.S.C. 1426) or Secs. 925.26 and 
925.27''.


Sec. 925.22  [Amended]

    84. Amend Sec. 925.22:
    a. In paragraph (b)(2), by removing the word ``Board'' wherever it 
appears and adding, in its place, the words ``Finance Board''; and
    b. In paragraph (c) by removing the words ``of the Act, 12 U.S.C. 
1426(b), 1430(c), 1430(e)'' and adding, in their place, the words ``of 
the Act (12 U.S.C. 1426(b), 1430(c), 1430(e))''.


Sec. 925.24  [Amended]

    85. Amend Sec. 925.24:
    a. In paragraph (b)(5), in the first sentence, by adding the words 
``(12 U.S.C. 1426)'' immediately preceding the period;
    b. In paragraph (c) by removing the word ``Chapter'' and adding, in 
its place, the word ``chapter''; and
    c. In paragraph (d), by removing the words ``of the Act, 12 U.S.C. 
1426(f)'' and adding, in their place, the words ``of the Act (12 U.S.C. 
1426(f))''.


Sec. 925.26  [Amended]

    86. Amend paragraph (d) of Sec. 925.26 by removing the words 
``requirements under 12 U.S.C. 1441b(f)(2)(C)'' and, in their place, 
adding the words ``requirements under section 21B(f)(2)(C) of the Act 
(12 U.S.C. 1441b(f)(2)(C))''.


Sec. 925.31  [Amended]

    87. Amend Sec. 925.31:
    a. In paragraph (a), by removing the word ``Board'' and adding, in 
its place, the words ``Finance Board''; and
    b. In paragraph (b), by removing the word ``Board'' and adding, in 
its place, the words ``Finance Board''.

PART 926--FEDERAL HOME LOAN BANK HOUSING ASSOCIATES

    88. The authority citation for Sec. 926.1 continues to read as 
follows:

    Authority: 12 U.S.C. 1422b(a), 1430b.


Sec. 926.1  [Amended]

    89. Amend Sec. 926.1 by removing the definitions of the terms 
``Advance'' and ``HUD''.


Sec. 926.4  [Amended]

    90. Amend Sec. 926.4:
    a. In paragraph (a) by adding the words ``(12 U.S.C. 1430b(a))'' 
between the words ``of the Act'' and the words ``and 
Sec. 926.3(a)(1)'';
    b. In paragraph (c)(1), by adding the words ``(12 U.S.C. 
1430b(a))'' between the words ``of the Act'' and the words ``and 
Sec. 926.3(a)(3)''; and
    c. In paragraph (d), in the first sentence, by adding the words 
``(12 U.S.C. 1430b(a))'' between the words ``of the Act'' and the words 
``and Sec. 926.3(a)(4)''.

PART 930--DEFINITIONS APPLYING TO RISK MANAGEMENT AND CAPITAL 
REGULATIONS

    91. The authority citation for part 930 continues to read as 
follows:

    Authority: 12 U.S.C. 1422a(a)(3), 1422b(a), 1426, 1440, 1443, 
1446.


    92. Amend Sec. 930.1 by:
    a. Removing the definitions of the terms ``Capital plan'' and 
``GAAP''; and
    b. Revising the definitions of the terms ``Contingency liquidity'', 
``Credit risk'', ``Market risk'' and ``Operations risk'' to read as 
follows:


Sec. 930.1  Definitions.

    As used in this subchapter:
* * * * *
    Contingency liquidity means the sources of cash a Bank may use to 
meet its operational requirements when its access to the capital 
markets is impeded, and includes:
    (1) Marketable assets with a maturity of one year or less;
    (2) Self-liquidating assets with a maturity of seven days or less;
    (3) Assets that are generally accepted as collateral in the 
repurchase agreement market; and
    (4) Irrevocable lines of credit from financial institutions rated 
not lower than the second highest credit rating category by an NRSRO.
* * * * *
    Credit risk means the risk that the market value, or estimated fair 
value if market value is not available, of an obligation will decline 
as a result of deterioration in creditworthiness.
* * * * *
    Market risk means the risk that the market value, or estimated fair 
value if market value is not available, of a Bank's portfolio will 
decline as a result of changes in interest rates, foreign exchange 
rates, equity and commodity prices.
* * * * *
    Operations risk means the risk of an unexpected loss to a Bank 
resulting from human error, fraud, unenforceability of legal contracts, 
or deficiencies in internal controls or information systems.
* * * * *

PART 932--FEDERAL HOME LOAN BANK CAPITAL REQUIREMENTS

    93. The authority citation for part 932 continues to read as 
follows:


[[Page 12850]]


    Authority: 12 U.S.C. 1422a(a)(3), 1422b(a), 1426, 1440, 1443, 
1446.


Sec. 932.4  [Amended]

    94. Amend paragraph (g)(1)(i) of Sec. 932.4 by adding a hard 
(paragraph) return after the word ``or''.

PART 940--CORE MISSION ACTIVITIES

    95-96. The authority citation for part 940 continues to read as 
follows:

    Authority: 12 U.S.C. 1422a(a)(3), 1422b(a), 1430, 1430b, 1431.


    97. Revise Sec. 940.1 to read as follows:


Sec. 940.1  Definitions.

    As used in this part:
    Targeted income level has the meaning set forth in paragraphs (1) 
and (2) of the definition of ``targeted income level'' in Sec. 952.1 of 
this chapter.


Sec. 940.2  [Amended]

    98. Amend Sec. 940.2:
    a. In the introductory text, by:
    i. Removing the word ``associates'' and adding, in its place, the 
words ``housing associates''; and
    ii. Removing the words ``members'' and associates' financing of'' 
and adding, in their place, the words ``members'' and housing 
associates''; and
    b. In paragraph (a) of Sec. 940.2 by removing the word ``Housing'' 
and adding, in its place, the words ``Financing of housing''.

PART 944--COMMUNITY SUPPORT REQUIREMENTS

    99. Revise the authority citation for part 944 to read as follows:

    Authority: 12 U.S.C. 1422a(a)(3)(B), 1422b(a)(1), 1430(g).


    100. Revise Sec. 944.1 to read as follows:


Sec. 944.1  Definitions.

    For purposes of this part:
    Advisory Council means the Advisory Council each Bank is required 
to establish pursuant to section 10(j)(11) of the Act (12 U.S.C. 
1430(j)(11)) and part 951 of this chapter.
    CRA means the Community Reinvestment Act of 1977, as amended (12 
U.S.C. 2901, et seq.).
    CRA evaluation means the public disclosure portion of the CRA 
performance evaluation provided by a member's appropriate Federal 
banking agency.
    Displaced homemaker means an adult who has not worked full-time, 
full-year in the labor force for a number of years and, during that 
period, worked primarily without remuneration to care for a home and 
family, and currently is unemployed or underemployed and is 
experiencing difficulty in obtaining or upgrading employment.
    First-time homebuyer means:
    (1) An individual and his or her spouse, if any, who has had no 
present ownership interest in a principal residence during the three-
year period prior to purchase of a principal residence.
    (2) A displaced homemaker who, except for owning a residence with 
his or her spouse or residing in a residence owned by his or her 
spouse, meets the requirements of paragraph (1) of this definition.
    (3) A single parent who, except for owning a residence with his or 
her spouse or residing in a residence owned by his or her spouse, meets 
the requirements of paragraph (1) of this definition.
    Long-term advance means an advance with a term to maturity greater 
than one year.
    Restriction on access to long-term advances means a member may not 
borrow long-term advances or renew any maturing advance for a term to 
maturity greater than one year.
    Single parent means an individual who is unmarried or legally 
separated from a spouse and has custody or joint custody of one or more 
minor children or is pregnant.
    Targeted community lending has the meaning set forth in Sec. 952.1 
of this chapter.


Sec. 944.2  [Amended]

    101. Amend Sec. 944.2:

    a. In paragraph (b)(2) introductory text, by adding the word ``to'' 
immediately preceding the colon; and
    b. In paragraph (b)(2)(i), by removing the words ``To each'' and 
adding, in their place, the word ``Each''.


Sec. 944.3  [Amended]

    102. Amend Sec. 944.3:
    a. In paragraph (b)(2), second sentence, by removing the words 
``federal financial supervisory agency'' and adding, in their place, 
the words ``Federal banking agency'';
    b. In paragraph (c)(1)(i), by removing the word ``or'';
    c. In paragraph (c)(1) (ii)(B), by adding the word ``or'' 
immediately following the semi-colon;
    d. In paragraph (c)(1)(ii)(C), by removing the word ``or'' that 
immediately follows the semi-colon; and
    e. In paragraph (c)(2) of Sec. 944.3, in the third sentence, by 
removing the word ``Sec. 936.5'' and adding, in their place, the word 
``Sec. 944.5''.


Sec. 944.5  [Amended]

    103. Amend Sec. 944.5:
    a. In paragraph (b), by removing the comma following the word 
``advances'' and adding, in its place, a colon;
    b. In paragraph (d)(1)(i) of Sec. 944.5:
    i. In the third sentence, by removing the words ``federal financial 
supervisory agency, or the National Credit Union Administration for a 
federally insured credit union member, or the member's appropriate 
state regulator'' and, in their place, adding the words ``Federal 
banking agency, or the member's appropriate state regulator''; and
    ii. By removing the last sentence; and
    c. In paragraph (d)(3), by removing the comma following the words 
``paragraph (d)'' and adding, in its place, a colon.


Sec. 944.6  [Amended]

    104. Amend Sec. 944.6:
    a. In paragraph (a)(3) by removing the word ``and'' that 
immediately follows the semi-colon;
    b. In paragraph (a)(4), by adding the word ``and'' immediately 
following the semi-colon; and
    c. In paragraph (a)(5)(iii), by removing the words ``nonmember 
borrowers'' and adding, in their place, the words ``housing 
associates''.


Sec. 944.7  [Amended]

    105. Amend Sec. 944.7 by adding the words ``(12 U.S.C. 
1430(j)(11))'' between the words ``of the Act'' and the words ``shall 
include''.

PART 950--ADVANCES

    106. Revise the authority citation for part 950 to read as follows:

    Authority: 12 U.S.C. 1422a(a)(3), 1422b(a)(1), 1426, 1429, 1430, 
1430b, 1431.

    107. Amend Sec. 950.1 by:
    a. Removing the definitions of the terms ``Advance'', ``Affordable 
Housing Program or AHP'', ``Appropriate Federal banking agency'', 
``Community Investment Cash Advance or CICA'', ``FDIC'', ``GAAP'', 
``HUD'', ``OCC'', ``OTS'', and ``State''; and
    b. Adding, in correct alphabetical sequence, definitions for the 
terms ``CFI member'' and ``Credit Union'' and revising the definitions 
for the terms ``Depository institution'', ``Dwelling unit'', 
``Insurer'', ``Long-term advance'', ``Multi-family property'', 
``Nonresidential real property'', ``Small business loans'', ``State 
housing finance agency or SHFA'' and ``Tangible capital'' to read as 
follows:


Sec. 950.1  Definitions.

    As used in this part:
* * * * *

[[Page 12851]]

    CFI member means a member that is a Community Financial 
Institution, as defined in Sec. 925.1 of this chapter, except that, for 
purposes of this part, the member's average of total assets over three 
years shall be calculated by the Bank:
    (1) Based on the average of total assets drawn from the 
institution's regulatory financial reports (as defined in Sec. 925.1 of 
this chapter) filed with its appropriate regulator (as defined in 
Sec. 925.1 of this chapter) for the three most recent calendar year-
ends; and
    (2) Annually, and shall be effective April 1 of each year.
    Credit union means a credit union as defined in section 101 of the 
Federal Credit Union Act (12 U.S.C. 1752).
    Depository institution means a bank, savings association, or credit 
union.
    Dwelling unit means a single room or a unified combination of rooms 
designed for residential use by one household.
* * * * *
    Insurer means the FDIC for insured depository institutions, as 
defined section 3(c)(2) of the Federal Deposit Insurance Act (12 U.S.C. 
1813(c)(2)), and the NCUA for federally-insured credit unions.
    Long-term advance means an advance with an original term to 
maturity greater than five years.
* * * * *
    Multifamily property means:
    (1)(i) Real property that is solely residential and which includes 
five or more dwelling units; or
    (ii) Real property which includes five or more dwelling units with 
commercial units combined, provided the property is primarily 
residential.
    (2) Multifamily property as defined in this section includes 
nursing homes, dormitories and homes for the elderly.
    Nonresidential real property means real property not used for 
residential purposes, including business or industrial property, 
hotels, motels, churches, hospitals, educational and charitable 
institutions, clubs, lodges, association buildings, golf courses, 
recreational facilities, farm property not containing a dwelling unit, 
or similar types of property, except as otherwise determined by the 
Finance Board in its discretion.
* * * * *
    Small business loans means commercial and industrial loans that are 
within the legal lending limit of the reporting CFI member and that are 
reported on either: Schedule RC-C, Part I, item 1.e or Schedule RC-C, 
Part I, item 4 of the Report of Condition and Income filed by insured 
commercial banks and FDIC-supervised savings banks; or Schedule SC300, 
SC303 or SC306 of the Thrift Financial Report filed by savings 
associations (or equivalent successor schedules).
* * * * *
    State housing finance agency or SHFA has the meaning set forth in 
Sec. 926.1 of this chapter.
* * * * *
    Tangible capital means:
    (1) Capital, calculated according to GAAP, less ``intangible 
assets'' except for purchased mortgage servicing rights to the extent 
such assets are included in a member's core or Tier 1 capital, as 
reported in the member's Thrift Financial Report for members whose 
primary federal regulator is the OTS, or as reported in the Report of 
Condition and Income for members whose primary federal regulator is the 
FDIC, the OCC, or the FRB.
    (2) Capital calculated according to GAAP, less intangible assets, 
as defined by a Bank for members that are not regulated by the OTS, the 
FDIC, the OCC, or the FRB; provided that a Bank shall include a 
member's purchased mortgage servicing rights to the extent such assets 
are included for the purpose of meeting regulatory capital 
requirements.


Sec. 950.2  [Amended]

    108. Amend the heading to paragraph (d) of Sec. 950.2 by removing 
the words ``Approval--By the Bank's board of directors'' and, in their 
place, adding the words ``Form of applications and agreements''.


Sec. 950.4  [Amended]

    109. Amend Sec. 950.4:
    a. In paragraph (e)(1), by removing the word ``monthly'' and, in 
its place, adding the word ``quarterly'';
    b. In paragraph (e)(2), by removing the word ``monthly'' and, in 
its place, adding the word ``quarterly'';
    c. In paragraph (g)(2)(i), by removing the word ``950.4(b)(2)'' 
and, in its place, adding the word ``950.2(b)(2)''; and
    d. In paragraph (g)(2)(ii), by removing the word ``950.4(a)'' and, 
in its place, adding the word ``950.2(a)''.

    110. Amend Sec. 950.7 by revising paragraphs (a)(1)(ii)(D), 
(a)(2)(i) and (e)(3) to read as follows:


Sec. 950.7  Collateral.

    (a) * * *
    (1) * * *
    (ii) * * *
    (D) Such other high-risk securities as the Finance Board in its 
discretion may determine.
    (2) * * *
    (i) Mortgage-backed securities issued or guaranteed by Freddie Mac, 
Fannie Mae, Ginnie Mae, or any other agency of the United States 
Government;
* * * * *
    (e) * * *
    (3) The security interest of the Bank in such member's Bank stock 
shall be entitled to the priority provided for in section 10(e) of the 
Act (12 U.S.C. 1430(e)).
* * * * *


Sec. 950.8  [Amended]

    111. Amend paragraph (a) of Sec. 950.8 by removing the words ``such 
member'' and adding, in their place, the words ``a member''.


Sec. 950.9  [Amended]

    112. Amend paragraph (a)(1) of Sec. 950.9 by removing the words 
``950.4(c)'' and adding, in their place, the words ''950.2(c)''.


Sec. 950.11  [Amended]

    113. Amend Sec. 950.11, in the first sentence of paragraph (b)(1), 
by adding the words ``(12 U.S.C. 1426(b)(1))'' between the words 
``6(b)(1) of the Act'' and the words ``is maintained''.


Sec. 950.14  [Amended]

    114. Amend Sec. 950.14 by revising paragraphs (b)(2)(i)(A), 
(b)(2)(i)(C), (c)(2)(i), (c)(2)(ii), (e)(2) and (e)(3) to read as 
follows:


Sec. 950.17  Advances to housing associates.

* * * * *
    (b) * * *
    (2) * * *
    (i) * * *
    (A) The collateral described in Sec. 950.7(a)(1) or (2).
    (B) * * *
    (C) The other real estate-related collateral described in 
Sec. 950.7(a)(4), provided that such collateral comprises mortgage 
loans on one-to-four family or multifamily residential property.
* * * * *
    (c) * * *
    (2) Advance pricing. (i) A Bank shall price advances to housing 
associates in accordance with the requirements for pricing advances to 
members set forth in Sec. 950.3(b). Wherever the term ``member'' 
appears in Sec. 950.3(b), the term shall be construed also to mean 
``housing associate.''
    (ii) A Bank shall apply the pricing criteria identified in 
Sec. 950.5(b)(2) equally to all of its member and housing associate 
borrowers.
* * * * *
    (e) * * *
    (2) Verification of eligibility. A Bank may, from time to time, 
require a housing associate to provide evidence that it continues to 
satisfy all of the

[[Page 12852]]

eligibility requirements of the Act, this subpart and part 926 of this 
chapter.
    (3) Loss of eligibility. A Bank shall not extend a new advance or 
renew an existing advance to a housing associate that no longer meets 
the eligibility requirements of the Act, this subpart and part 926 of 
this chapter until the entity has provided evidence satisfactory to the 
Bank that it is in compliance with such requirements.


Sec. 950.25  [Amended]

    115. Amend paragraph (b) of Sec. 950.25 by removing the words 
``debtor/creditor'' and adding, in their place, the words ``creditor/
debtor''.

PART 951--AFFORDABLE HOUSING PROGRAM

    116. The authority citation for part 951 continues to read as 
follows:

    Authority: 12 U.S.C. 1430(j).

    117. Amend Sec. 951.1:
    a. By removing the definitions of the terms ``Advance'', ``AHP or 
Program'', ``CIP'', ``HUD'' and ``State''; and
    b. By revising the definition of the word ``Habitable'' and adding, 
in correct alphabetical sequence, a definition for the word ``Program'' 
to read as follows:


Sec. 951.1  Definitions.

    As used in this part:
* * * * *
    Habitable means suitable for occupancy, taking into account local 
health, safety and building codes.
* * * * *
    Program means the Affordable Housing Program.
* * * * *


Sec. 951.4  [Amended]

    118. Amend paragraph (g) of Sec. 951.4 by removing the words 
``Council members'' and adding, in their place, the words ``Council 
members''.


Sec. 951.5  [Amended]

    119. Amend Sec. 951.5:
    a. In paragraph (b)(2)(i)(A) of by adding a comma immediately 
following the words ``other sources'';
    b. In paragraph (b)(7)(i), by removing the words ``951.13 (c)(4)'' 
and adding, in their place, the words ``951.3(c)(4)''; and
    c. In paragraph (b)(7)(ii), by removing the words ``951.13 (c)(5)'' 
and adding, in their place, the words ``951.3(c)(5)''.


Sec. 951.9  [Amended]

    120-121. Amend Sec. 951.9, in the introductory text, by removing 
the words ``Modification procedure.''.


Sec. 951.10  [Amended]

    122. Amend paragraph (c)(1) of Sec. 951.10, in the introductory 
text, by italicizing (designating as a heading) the words ``Owner-
occupied projects''.


Sec. 951.12  [Amended]

    123. Amend paragraph (h) of Sec. 951.12 by removing the words 
``Procedures for Review of Disputed Supervisory Determinations'' and 
adding, in their place, the words ``procedures for review of disputed 
supervisory determinations set forth in Sec. 907.9 of this chapter''.


Sec. 951.16  [Amended]

    124. Amend Sec. 950.16, in the first sentence, by adding the words 
``(12 U.S.C. 1430(j))'' between the words ``of the Act'' and the words 
``and the provisions''.

PART 952--COMMUNITY INVESTMENT CASH ADVANCE PROGRAMS

    125. Amend the authority citation for part 952 by revising it to 
read as follows:

    Authority: 12 U.S.C. 1422b(a)(1), 1430.


Secs. 952.1, 952.2, 952.3  [Redesignated]

    126. Redesignate Secs. 952.1, 952.2 and 952.3 as Secs. 952.2, 952.3 
and 952.1, respectively.


Sec. 952.1  [Amended]

    127. Amend newly designated Sec. 952.1:
    a. By removing the definitions of the terms ``Advance'', ``AHP'', 
``CICA'', ``CIP'' and ``HUD'';
    b. By moving the definition of ``Targeted community lending'' into 
the correct alphabetical sequence; and
    c. In the definition of ``CICA program or Community Investment Cash 
Advance program'', by removing both references to ``Sec. 952.3'' and 
adding, in its place, references to ``Sec. 952.1''.


Sec. 952.2  [Amended]

    128. Amend newly designated Sec. 952.2:
    a. In the first sentence, by adding the words ``(12 U.S.C. 
1430(j)(10))'' between the words ``of the Act'' and the words 
``authorizes the Banks''; and
    b. By removing the words ``(See 12 U.S.C. 1430(j)(10))'' that 
immediately follow the first sentence.

    129. Revise newly designated Sec. 952.3 to read as follows:


Sec. 952.3  Purpose.

    The purpose of this part is to identify targeted community lending 
projects that the Banks may support through the establishment of CICA 
programs under section 10(j)(10) of the Act (12 U.S.C. 1430(j)(10)). 
Pursuant to this part, a Bank may offer Rural Development Funding (RDF) 
or Urban Development Funding (UDF) programs, or both, for targeted 
community lending using the targeted beneficiaries or targeted income 
levels specified in Sec. 952.1, without prior Finance Board approval. A 
Bank also may offer other CICA programs for targeted community lending 
using targeted beneficiaries and targeted income levels other than 
those specified in Sec. 952.1, established by the Bank with the prior 
approval of the Finance Board. In addition, a Bank shall offer CICA 
programs under section 10(i) of the Act (12 U.S.C. 1430(i)) (Community 
Investment Program (CIP)) and section 10(j) of the Act (12 U.S.C. 
1430(j)) (Affordable Housing Program (AHP)). A Bank may provide 
advances or grants under its CICA programs except for CIP programs, 
under which a Bank may only provide advances.


Sec. 952.5  [Amended]

    130. Amend Sec. 952.5:
    a. In paragraph (a)(3), by removing the reference to ``Sec. 952.3'' 
and adding, in its place, a reference to ``Sec. 952.1'';
    b. In paragraph (a)(4), by removing the reference to ``Sec. 952.3'' 
and adding, in its place, a reference to ``Sec. 952.1'';
    c. In paragraph (d)(1), by removing the reference to ``Sec. 950.6'' 
and adding, in its place, a reference to ``Sec. 950.5'';
    d. In paragraph (d)(4)(ii), by removing the reference to 
``Sec. 950.24'' and adding, in its place, a reference to 
``Sec. 950.17''; and
    e. In paragraph (d)(6)(i), by removing the word ``fund'' and 
adding, in its place, the words ``Discount Fund''.

PART 955--ACQUIRED MEMBER ASSETS

    131. The authority citation for part 955 continues to read as 
follows:

    Authority: 12 U.S.C. 1422a(a)(3), 1422b(a), 1430, 1430b, 1431.


    132. Revise Sec. 955.1 to read as follows:


Sec. 955.1  Definitions.

    As used in this part:
    Affiliate means any business entity that controls, is controlled 
by, or is under common control with, a member.
    Expected losses means the base loss scenario in the methodology of 
an NRSRO applicable to that type of AMA asset.
    Residential real property has the meaning set forth in Sec. 950.1 
of this chapter.


Sec. 955.3  [Amended]

    133-134. Amend Sec. 955.3 by:
    a. In paragraph (b)(2)(ii), by removing the word ``and'' that 
follows the semi-colon; and
    b. In paragraph (b)(3), by adding the word ``and'' immediately 
following the semi-colon.

[[Page 12853]]

PART 956--INVESTMENTS

    135. The authority citation for part 956 continues to read as 
follows:

    Authority: 12 U.S.C. 1422a(a)(3), 1422b(a), 1429.


    136. Revise Sec. 956.1 to read as follows:


Sec. 956.1  Definitions.

    As used in this part:
    Deposits in banks or trust companies has the meaning set forth in 
Sec. 965.1 of this chapter.
    Derivative contract means generally a financial contract the value 
of which is derived from the values of one or more underlying assets, 
reference rates, or indices of asset values, or credit-related events. 
Derivative contracts include interest rate, foreign exchange rate, 
equity, precious metals, commodity, and credit contracts, and any other 
instruments that pose similar risks.
    Investment grade means:
    (1) A credit quality rating in one of the four highest credit 
rating categories by an NRSRO and not below the fourth highest credit 
rating category by any NRSRO; or
    (2) If there is no credit quality rating by an NRSRO, a 
determination by a Bank that the issuer, asset or instrument is the 
credit equivalent of investment grade using credit rating standards 
available from an NRSRO or other similar standards.
    Repurchase agreement means an agreement between a seller and a 
buyer whereby the seller agrees to repurchase a security or similar 
securities at an agreed upon price, with or without a stated time for 
repurchase.


Sec. 956.2  [Amended]

    137. Amend Sec. 956.2:
    a. In paragraph (c), by removing the words ``the Federal National 
Mortgage Association or the Government National Mortgage Association'' 
and adding, in their place, the words ``Fannie Mae or Ginnie Mae''; and
    b. In paragraph (d), by removing the words ``the Federal Home Loan 
Mortgage Corporation pursuant to 12 U.S.C. 1454 or 1455'' and adding, 
in their place, the words ``Freddie Mac pursuant to section 305 or 306 
of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454 or 
1455)''.


Sec. 956.3  [Amended]

    138. Amend paragraph (a)(4)(iii) of Sec. 956.3 by removing the 
words ``a NRSRO'' and adding, in their place, the words ``an NRSRO''.


Sec. 956.4  [Amended]

    139. Amend the introductory text of Sec. 956.4 by removing the 
words ``a NRSRO'' and adding, in their place, the words ``an NRSRO''.


Sec. 956.5  [Amended]

    140. Amend Sec. 956.5:
    a. In paragraph (b), by removing the words ``12 CFR part 961'' and 
adding, in their place, the words ``part 960 of this chapter''; and
    b. In paragraph (e), by removing the word ``Commitment'' and 
adding, in its place, the words ``Commitments''.

PART 960--[REMOVED]

    141. Under the authority of 12 U.S.C. 1422b(a), part 960 is 
removed.

PART 961--[REDESIGNATED]

    142. Part 961 is redesignated as part 960.

PART 960--STANDBY LETTERS OF CREDIT

    143. The authority citation for newly designated part 960 continues 
to read as follows:

    Authority: 12 U.S.C. 1422b, 1429, 1430, 1430b, 1431.


    144. Amend newly designated Sec. 960.1 by adding, in correct 
alphabetical sequence, a definition for the term ``Investment grade'' 
to read as follows:


Sec. 960.1  Definitions.

* * * * *
    Investment grade means:
    (1) A credit quality rating in one of the four highest credit 
rating categories by an NRSRO and not below the fourth highest credit 
rating category by any NRSRO; or
    (2) If there is no credit quality rating by an NRSRO, a 
determination by a Bank that the issuer, asset or instrument is the 
credit equivalent of investment grade using credit rating standards 
available from an NRSRO or other similar standards.
* * * * *


Sec. 960.2  [Amended]

    145. Amend paragraph (b) of newly designated Sec. 960.2 by removing 
the reference to ``Sec. 961.4(a)(2)'' and adding, in its place, a 
reference to ``Sec. 960.4(a)(2)''.


Sec. 960.4  [Amended]

    146. Amend paragraph (c) of newly designated Sec. 960.4 by adding 
the words ``(12 U.S.C. 1430, 1430b)'' between the words ``of the Act'' 
and the words ``and part 950''.


Sec. 960.5  [Amended]

    147. Amend paragraph (b)(1) of newly-designated Sec. 960.5 by 
removing the words ``961.2 or 961.3'' and adding, in their place, the 
words ``960.2 or 960.3''.

PART 965--SOURCES OF FUNDS

    148. Revise the authority citation for part 965 to read as follows:

    Authority: 12 U.S.C. 1422a, 1422b, 1431.


Sec. 965.1  [Amended]

    149. Amend the definition of ``Deposits in banks or trust 
companies'' in Sec. 965.1:
    a. In paragraph (3)(ii) by removing the words ``Federal Deposit 
Insurance Corporation'' and adding, in their place, the word ``FDIC''; 
and
    b. In paragraph (3)(iii) by removing the words ``Board of Governors 
of the Federal Reserve System'' and adding, in their place, the word 
``FRB''.


Sec. 965.2  [Amended]

    150. Amend the paragraph (b) of Sec. 965.2 by removing the words 
``950.24(b)(2)(i)(B), 950.24(d) or 961.4(a)(1)'' and adding, in their 
place, the words ``950.17(b)(2)(i)(B), 950.17(d) or 960.4(a)(1)''.

PART 966--CONSOLIDATED OBLIGATIONS

    151. Revise the authority citation for part 966 to read as follows:

    Authority: 12 U.S.C. 1422a, 1422b, 1431.

    152. Revise Sec. 966.1 to read as follows:


Sec. 966.1  Definitions.

    As used in this part:
    Non-complying Bank means a Bank that has failed to provide the 
liquidity certification as required under Sec. 966.9(b)(1).


Sec. 966.2  [Amended]

    153. Amend Sec. 966.2:
    a. In paragraph (a), in the last sentence, by removing the words 
``of the Finance Board'' that follow the words ``Board of Directors''; 
and
    b. In paragraph (b)(2) by removing the words ``part 985'' and, 
adding, in thier place, the words ``part 985 of this chapter''.


Sec. 966.3  [Amended]

    154-155. Amend paragraph (a)(1) of Sec. 966.3, in the last 
sentence, by removing the words ``12 U.S.C. 1431(g)'' and adding, in 
their place, the words ``section 11(g) of the Act (12 U.S.C. 
1431(g))''.


Sec. 966.8  [Amended]

    156. Amend paragraph (a) of Sec. 966.8 by removing the word ``OF'' 
and adding, in its place, the words ``Office of Finance''.

[[Page 12854]]

Sec. 966.10  [Amended]

    157. Amend Sec. 966.10 by adding the words ``(12 U.S.C. 1431)'' 
between the words ``of the Act'' and the words ``and pursuant to this 
part''.

PART 975--COLLECTION, SETTLEMENT, AND PROCESSING OF PAYMENT 
INSTRUMENTS

    158. The authority citation for part 975 continues to read as 
follows:

    Authority: 12 U.S.C. 1430, 1431.


    159. Redesignate Secs. 975.1 and 975.2 as Secs. 975.2 and 975.1, 
respectively.

    160. Revise newly designated Sec. 975.1 to read as follows:


Sec. 975.1  Definitions.

    (a) Unless otherwise defined in this part, the terms used in this 
part shall conform, in the following order, to: Regulations of the 
Finance Board, the Uniform Commercial Code, regulations of the Federal 
Reserve System, and general banking usage.
    (b) As used in this part:
    Account processing includes charging, crediting, and settling of 
member or eligible institution accounts, excluding individual customer 
accounts.
    Assets includes furniture and equipment, leasehold improvements, 
and capitalized start-up costs.
    Data communication means transmitting and receiving of data to or 
from Banks, Federal Reserve offices, clearinghouse associations, 
depository institutions or their service bureaus, and other direct 
sending entities, arrangement for delivery of information; and 
telephone inquiry service.
    Data processing includes capture, storage, and assembling of, and 
computation of, data from payment instruments received from Federal 
Reserve offices, Banks, clearinghouse associations, depository 
institutions, and other direct lending entities.
    Eligible institution means any institution that is eligible to make 
application to become a member of a Bank under section 4 of the Act (12 
U.S.C. 1424), including any building and loan association, savings and 
loan association, cooperative bank, homestead association, insurance 
company, savings bank, or any insured depository institution (as 
defined in section 2(12) of the Act (12 U.S.C. 1422(12))), regardless 
of whether the institution applies for or would be approved for 
membership.
    Issuance of forms means the designation and distribution of 
standardized forms for use in collection, processing, and settlement 
services.
    Presentment means a demand for acceptance or payment made upon the 
maker, acceptor, drawee or other payor by or on behalf of the holder, 
and may involve the use of electronic transmission of an instrument or 
item or transmission of data from the instrument or item by electronic 
or mechanical means.
    Statement packaging includes receiving statement information from 
members or eligible institutions or their service bureaus on respective 
customer cycle dates; printing statements; matching customer account 
statements; packaging the statements with appropriate items and 
informational materials, as authorized by individual members and 
eligible institutions, for distribution to their customers; sending the 
packages to the members or eligible institutions or mailing the 
packages directly to their customers.
    Storage services includes filing, storage, and truncation of items.
    Transportation of items includes transporting items from Federal 
Reserve offices, other Banks' clearinghouse associations, depository 
institutions, and other direct sending entities to a Bank; forwarding 
items to financial institutions after sorting and forwarding cash items 
or return items to Federal Reserve offices and other sending entities.


Sec. 975.2  [Amended]

    161. Amend newly designated Sec. 975.2:
    a. In paragraph (a) by removing the words ``(12 U.S.C. 1431(e)(2)) 
(Bank Act)'' and adding, in their place, the words ``(12 U.S.C. 
1431(e)(2))''; and
    b. In paragraph (b) by:
    i. Removing the words ``Bank Act'' and adding, in their place, the 
word ``Act''; and
    ii. Adding the words ``(12 U.S.C. 1431(e)(2))'' between the words 
``of the Act'' and the words ``shall be governed''.

    162-163. Revise Sec. 975.3 to read as follows:


Sec. 975.3  General provisions.

    The Banks are authorized to:
    (a) Engage in, be agents or intermediaries for, or otherwise 
participate or assist in, the processing, collection, and settlement of 
checks, drafts, or any other negotiable or nonnegotiable items and 
instruments of payment drawn on eligible institutions or Bank members; 
and
    (b) Be drawees of checks, drafts, and other negotiable and 
nonnegotiable items and instruments issued by eligible institutions or 
Bank members.


Sec. 975.4  [Amended]

    164. Amend Sec. 975.4, in the introductory text, by removing the 
words ``, as defined in Sec. 975.2''.

PART 978--BANK REQUESTS FOR INFORMATION

    165. The authority citation for part 978 continues to read as 
follows:

    Authority: 12 U.S.C. 1422b(a), 1442.


    166. Amend Sec. 978.1 by revising the definition of ``Financial 
regulatory agency'' to read as follows:


Sec. 978.1  Definitions.

* * * * *
    Financial regulatory agency means any of the following:
    (1) The Department of the Treasury, including either the OCC or the 
OTS;
    (2) The FRB;
    (3) The NCUA; or
    (4) The FDIC.
* * * * *


Sec. 978.2  [Amended]

    167. Amend Sec. 978.2 by removing the words ``of the Act, 12 U.S.C. 
1442'' and adding, in their place, the words ``of the Act (12 U.S.C. 
1442)''.


Sec. 978.4  [Amended]

    168. Amend Sec. 978.4, in the second sentence, by removing the 
words ``of the Act, 12 U.S.C. 1442, as amended,'' and adding, in their 
place, the words ``of the Act (12 U.S.C. 1442)''.


Sec. 978.7  [Amended]

    169. Amend Sec. 978.7 by removing the words ``of the Act, 12 U.S.C. 
1440'' from paragraph (d)(1) and adding, in their place, the words ``of 
the Act (12 U.S.C. 1440)''.

PART 980--NEW BUSINESS ACTIVITIES

    170. The authority citation for part 980 continues to read as 
follows:

    Authority: 12 U.S.C. 1422a(a)(3), 1422b(a), 1431(a), 1432(a).


Sec. 980.3  [Amended]

    171. Amend Sec. 980.3:
    a. In paragraph (a)(3)(iii), by adding the word ``and'' immediately 
after the semi-colon; and
    b. In paragraph (a)(3)(iv), by removing the word ``and'' that 
immediately follows the semi-colon.

PART 985--THE OFFICE OF FINANCE

    172. An authority citation for part 985 is added to read as 
follows:

    Authority: 12 U.S.C. 1422b(b)(2), 1431(a), 1431(c), 1432(a).


    173. Revise Sec. 985.1 to read as follows:

[[Page 12855]]

Sec. 985.1  Definitions.

    As used in this part:
    Chair means the chairperson of the board of directors of the Office 
of Finance.
    Managing Director means the managing director of the Office of 
Finance.


Sec. 985.3  [Amended]

    174. Amend paragraph (d) of Sec. 985.3 by removing the word 
``(REFCorp)'' and adding, in its place, the word ``(REFCORP)''.


Sec. 985.6  [Amended]

    175. Amend paragraph (d) of Sec. 985.6 by removing the words 
``Nationally Recognized Statistical Rating Organizations'' and adding, 
in their place, the words ``NRSROs''.


Sec. 985.8  [Amended]

    176. Amend paragraph (d)(4)(i) of Sec. 985.8 by removing the 
reference to ``Sec. 917.6'' and adding, in its place, a reference to 
``Sec. 917.7''.

PART 987--BOOK-ENTRY PROCEDURE FOR CONSOLIDATED OBLIGATIONS

    177. The authority citation for part 987 continues to read as 
follows:

    Authority: 12 U.S.C. 1422a, 1422b, 1431, 1435.


    178. Amend Sec. 987.1 by:
    a. Removing the definition of the word ``State''; and
    b. Revising the introductory text and the definition of the term 
``Office of Finance'' to read as follows:


Sec. 987.1  Definitions.

    As used in this part, unless the context otherwise requires or 
indicates:
* * * * *
    Office of Finance means the Office of Finance acting as agent of 
the Banks in all matters relating to the issuance of Book-entry 
consolidated obligations and in the performance of all other necessary 
and proper functions relating to Book-entry consolidated obligations, 
including the payment of principal and interest due thereon.
* * * * *


Sec. 987.5  [Amended]

    179. Amend paragraph (a) of Sec. 987.5, in the second sentence, by 
removing the word ``a'' that appears between the words ``Security 
Entitlement or to'' and the words ``Book-entry consolidated 
obligations''.

PART 989--FINANCIAL STATEMENTS OF THE BANKS

    180. Revise the authority citation for part 989 to read as follows:

    Authority: 12 U.S.C. 1422a, 1422b, 1426, 1431, 1440.


    181. Amend Sec. 989.1 by revising the introductory text and the 
definition of ``Audit'' to read as follows:


Sec. 989.1  Definitions.

    As used in this part:
    Audit means an examination of the financial statements by an 
independent accountant in accordance with Generally Accepted Auditing 
Standards for the purpose of expressing an opinion thereon.
* * * * *

PART 995--FINANCING CORPORATION OPERATIONS

    182. Revise the authority citation for part 995 to read as follows:

    Authority: 12 U.S.C. 1441(b)(8), (c), (j).


    183. Revise Sec. 995.1 to read as follows:


Sec. 995.1  Definitions.

    As used in this part:
    Administrative expenses:
    (1) Include general office and operating expenses such as telephone 
and photocopy charges, printing, legal, and professional fees, postage, 
courier services, and office supplies; and
    (2) Do not include any form of employee compensation, custodian 
fees, issuance costs, or any interest on (and any redemption premium 
with respect to) any Financing Corporation obligations.
    BIF-assessable deposit means a deposit that is subject to 
assessment for purposes of the Bank Insurance Fund under the Federal 
Deposit Insurance Act (12 U.S.C. 1811 et seq.), including a deposit 
that is treated as a deposit insured by the Bank Insurance Fund under 
section 5(d)(3) of the Federal Deposit Insurance Act (12 U.S.C. 
1815(d)(3)).
    Custodian fees means any fee incurred by the Financing Corporation 
in connection with the transfer of any security to, or maintenance of 
any security in, the segregated account established under section 
21(g)(2) of the Act (12 U.S.C. 1441(g)(2)), and any other expense 
incurred by the Financing Corporation in connection with the 
establishment or maintenance of such account.
    Directorate means the board established under section 21(b) of the 
Act (12 U.S.C. 1441(b)) to manage the Financing Corporation.
    Exit fees means the amounts paid under sections 5(d)(2)(E) and (F) 
of the Federal Deposit Insurance Act (12 U.S.C. 1815(d)(2)(E) and (F)), 
and regulations promulgated thereunder (12 CFR part 312).
    Insured depository institution has the same meaning as in section 3 
of the Federal Deposit Insurance Act (12 U.S.C. 1813).
    Issuance costs means issuance fees and commissions incurred by the 
Financing Corporation in connection with the issuance or servicing of 
Financing Corporation obligations, including legal and accounting 
expenses, trustee, fiscal, and paying agent charges, securities 
processing charges, joint collection agent charges, advertising 
expenses, and costs incurred in connection with preparing and printing 
offering materials to the extent the Financing Corporation incurs such 
costs in connection with issuing any obligations.
    Non-administrative expenses means custodian fees, issuance costs, 
and interest on Financing Corporation obligations.
    Obligations means debentures, bonds, and similar debt securities 
issued by the Financing Corporation under sections 21(c)(3) and (e) of 
the Act (12 U.S.C. 1421(c)(3) and (e)).
    Receivership proceeds means the liquidating dividends and payments 
made on claims received by the Federal Savings and Loan Insurance 
Corporation Resolution Fund established under section 11A of the 
Federal Deposit Insurance Act (12 U.S.C. 1821a) from receiverships, 
that are not required by the Resolution Funding Corporation to provide 
funds for the Funding Corporation Principal Fund established under 
section 21B of the Act (12 U.S.C. 1441b).
    SAIF-assessable deposit means a deposit that is subject to 
assessment for purposes of the Savings Association Insurance Fund under 
the Federal Deposit Insurance Act, including a deposit that is treated 
as a deposit insured by the Savings Association Insurance Fund under 
section 5(d)(3) of the Federal Deposit Insurance Act (12 U.S.C. 
1815(d)(3)).


Sec. 995.3  [Amended]

    184. Amend Sec. 995.3, in the first sentence, by adding the words 
``(12 U.S.C. 1441(g))'' between the words ``of the Act'' and the 
period.


Sec. 995.4  [Amended]

    185. Amend paragraph (b) of Sec. 995.4:
    a. In the first sentence, by removing the word ``securities'' and, 
in its place, adding the words ``consolidated obligations''; and
    b. In the second sentence, by removing the reference to ``part 
912'' and, in its place, adding a reference to ``part 987''.

[[Page 12856]]

Sec. 995.7  [Amended]

    186. Amend paragraph (b) of Sec. 995.7, in the first sentence, by 
adding the words ``(12 U.S.C. 1441(b)(7)(B))'' between the words ``of 
the Act'' and the period.


Sec. 995.8  [Amended]

    187. Amend Sec. 995.8:
    a. In paragraph (b)(2)(i), by adding the words ``(12 U.S.C. 
1441(f)(2))'' between the words ``of the Act'' and the words ``and 
paragraph (b)(1)'';
    b. In paragraph (b)(3)(i), by adding the words ``(12 U.S.C. 
1441(f)(2))'' between the words ``of the Act'' and the words ``and 
paragraph (b)(1)'';
    c. In paragraph (b)(3)(ii), by adding the words ``(12 U.S.C. 
1441(f)(2))'' between the words ``of the Act'' and the words ``and 
paragraph (b)(1)'';
    d. In paragraph (c)(1), by adding the words ``(12 U.S.C. 
1441(f)(3))'' between the words ``of the Act'' and the period; and
    e. In paragraph (d)(1), by adding the words ``(12 U.S.C. 
1815(d)(2)(E))'' between the words ``Federal Deposit Insurance Act'' 
and the words ``or as otherwise''.


Sec. 995.10  [Amended]

    188-190. Amend Sec. 995.10 by adding the words ``(12 U.S.C. 1441)'' 
between the words ``of the Act'' and the words ``and this part''.

PART 996--AUTHORITY FOR BANK ASSISTANCE OF THE RESOLUTION FUNDING 
CORPORATION

    191. The authority citation for part 996 continues to read as 
follows:

    Authority: 12 U.S.C. 1422a, 1422b.


    192a. Redesignate Secs. 996.1 and 996.2 as Secs. 996.2 and 996.3, 
respectively; and

    192b. Add and reserve a new Sec. 996.1.


Sec. 996.2  [Amended]

    193. Amend newly designated Sec. 996.2 by:
    a. Adding the words ``(12 U.S.C. 1441b(b))'' between the words ``of 
the Act'' and the words ``, officers, employees, or agents''; and
    b. Adding the words ``(12 U.S.C. 1441b(c)(6)(B))'' between the 
words ``of the Act'' and the period.


Sec. 996.3  [Amended]

    194. Amend newly designated Sec. 996.3 by:
    a. Removing the words ``(``SAIF member'')''; and
    b. Adding the words ``(12 U.S.C. 1441b(e)(7))'' between the words 
``of the Act'' and the period.

PART 997--RESOLUTION FUNDING CORPORATION OBLIGATIONS OF THE BANKS

    195. Revise the authority citation for part 997 to read as follows:

    Authority: 12 U.S.C. 1422b(a) and 1441b(f).


Sec. 997.1  [Amended]

    196. Amend Sec. 997.1:
    a. In the definition of ``Quarterly present-value determination'', 
by removing the words ``requirements of 12 U.S.C. 1441b(f)(2)(C)(ii)'' 
and adding, in their place, the words ``requirements of section 
21B(f)(2)(C)(ii) of the Act (12 U.S.C. 1441b(f)(2)(C)(ii))''; and
    b. By removing the definition of ``REFCORP''.

    Dated: February 13, 2002.

    By the Board of Directors of the Federal Housing Finance Board.
John T. Korsmo,
Chairman.
[FR Doc. 02-5462 Filed 3-19-02; 8:45 am]
BILLING CODE 6725-01-P