[Federal Register Volume 68, Number 4 (Tuesday, January 7, 2003)]
[Notices]
[Pages 780-782]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-196]


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FEDERAL HOUSING FINANCE BOARD

[No. 2002-N-15]


Notice of Annual Adjustment of the Cap on Average Total Assets 
That Defines Community Financial Institutions, and Notice of Annual 
Adjustment of the Limits on Annual Compensation for Federal Home Loan 
Bank Directors, and Notice of Annual Adjustment of the Maximum Dollar 
Limits on Certain Allocations by a Bank of its Annual Required 
Affordable Housing Program Contributions

AGENCY: Federal Housing Finance Board.

[[Page 781]]


ACTION: Notice.

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SUMMARY: Notice is hereby given that the Federal Housing Finance Board 
(Finance Board) has adjusted the cap on average total assets that 
defines a ``Community Financial Institution'' (CFI) based on the annual 
percentage increase in the Consumer Price Index for all urban consumers 
(CPI-U), as published by the Department of Labor (DOL), pursuant to the 
requirements of section 2(13)(B) of the Federal Home Loan Bank Act 
(Bank Act) requirements of the Finance Board's regulations. Notice is 
hereby given that the Finance Board has made similar adjustments to the 
limits on annual compensation for the Federal Home Loan Bank (Bank) 
directors, based on the CPI-U, as published by the DOL, pursuant to the 
requirements of section 7(i)(2)(B) of the Bank Act and requirements of 
the Finance Board's regulations. In addition, notice is hereby given 
that the Finance Board has made similar adjustments to the maximum 
dollar limits on certain allocations by a Bank of its annual required 
Affordable Housing Program (AHP) contributions, pursuant to the 
requirements of the Finance Board's regulations.

FOR FURTHER INFORMATION CONTACT: Scott L. Smith, Associate Director, 
Economic and Financial Analysis, Office of Supervision, (202) 408-2991, 
or Kirsten L. Landeryou, Economic and Financial Analysis, Office of 
Supervision, (202) 408-2552. Staff also can be reached by regular mail 
at the Federal Housing Finance Board, 1777 F Street, NW., Washington, 
DC 20006.

SUPPLEMENTARY INFORMATION: Section 2(13)(B) of the Bank Act (12 U.S.C. 
1422(13)(B)), and Sec.  900.1 of the Finance Board's regulations (12 
CFR 900.1) require the Finance Board, beginning in 2001, to adjust 
annually the cap on average total assets (CFI Asset Cap) set forth in 
section 2(13)(A)(ii) of the Bank Act (12 U.S.C. 1422(13)(A)(ii)) and 
Sec.  900.1 of the Finance Board's regulations that defines a CFI, 
based on the annual percentage increase, if any, in the CP-U, as 
published by the DOL.
    Section 7(i)(2)(B) of the Bank Act (12 U.S.C. 1427(i)(2)(B)) and 
Sec.  918.3(a)(1) of the Finance Board's regulations (12 CFR 
918.3(a)(1)), require the Finance Board, beginning January 1, 2001, to 
make similar annual adjustments to the annual compensation limits set 
forth in section 7(i)(2)(A) of the Bank Act (12 U.S.C. 1427(i)(2)(A)) 
and Sec.  918.3(a)(1), for members of the boards of directors of the 
Banks. Section 951.3(a)(1)(iii) of the Finance Board's regulations (12 
CFR 951.3(a)(1)(iii)) requires the Finance Board, beginning in 2003, to 
make similar annual adjustments to the maximum dollar limits set forth 
in Sec.  951.3(a)(1)(i), on the amounts that a Bank may set aside 
annually from its annual required AHP contributions for the current 
year and the subsequent year, towards homeownership set-aside programs. 
In addition, Sec.  951.3(a)(1)(iii) of the Finance Board's regulations 
(12 CFR 951.3(a)(1)(iii)) requires the Finance Board, beginning in 
2003, to make similar annual adjustments to the maximum dollar limits 
set forth in Sec.  951.3(a)(1)(ii), on the amounts that a Bank may set 
aside annually from its annual required AHP contributions for the 
current year and the subsequent year, towards an additional first-time 
homebuyer set-aside program. Section 951.3(a)(2) of the Finance Board's 
regulations (12 CFR 951.3(a)(2)), requires the Finance Board, beginning 
in 2002, to make a similar annual adjustment to the maximum dollar 
limit set forth in Sec.  951.3(a)(2), on the amount that a Bank may 
allocate from its annual required AHP contribution for the subsequent 
year to the current year's competitive application program.
    For purposes of the CFI Asset Cap, the Finance Board is required to 
publish notice by Federal Register of the CP-U-adjusted Cap. See 12 CFR 
900.1. For purposes of the Banks' board of directors annual 
compensation limits, the Finance Board is required to publish notice, 
by Federal Register, distribution of a memorandum or otherwise, of the 
CP-U-adjusted limits on such compensation. See 12 CFR 918.3(a)(1). For 
purposes of the maximum dollar limits on Banks' allocations from annual 
required AHP contributions, the Finance Board is required to publish 
notice, by Federal Register, distribution of a memorandum or otherwise, 
of the CP-U-adjusted maximum dollar limits.
    The annual adjustments of the existing CFI Asset Cap, annual Bank 
director compensation limits and maximum dollar limits on Bank 
allocations from annual required AHP contributions, effective January 1 
of a particular calendar year, reflect the percentage by which the CP-U 
published for November of the preceding calendar year exceeds the CP-U 
published for November of the year before the preceding calendar year 
(if at all). For example, the adjustments of the limits effective 
January 1, 2003 are based on the percentage increase in the CP-U from 
November 2001 to November 2002. The CFI Asset Cap is rounded to the 
nearest million dollars, the annual compensation limits are rounded to 
the nearest dollar and the limits on allocations from AHP contributions 
are rounded to the nearest $100,000.\1\
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    \1\ All adjusted limits referred to in this notice have been 
rounded to some dollar level. However, the calculations of new 
limits are based on cumulative CP-U changes applied to the limits as 
they first appeared in Finance Board regulations, and hence are not 
distorted over time by rounding.
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    The Finance Board has determined that it is appropriate to use data 
from November rather than waiting for the December data to become 
available so that the Banks can be notified of the adjusted CFI Asset 
Cap, annual Bank director compensation limits and AHP maximum dollar 
allocation limits as close to the January 1 effective date as possible. 
Other Federal agencies do not rely on December data, which is published 
in mid-January, when calculating annual inflation adjustments and, as a 
result, are able to announce their adjustments prior to the effective 
date of January 1.
    The DOL encourages the use of CPI-U data that has not been 
seasonally adjusted in ``escalation agreements'' because seasonal 
factors are updated annually and seasonally adjusted data are subject 
to revision for up to five years following the original release. 
Unadjusted data are not routinely subject to revision, and previously 
published unadjusted data are only corrected when significant 
calculation errors are discovered. Accordingly, the Finance Board is 
using data that has not been seasonally adjusted to calculate the new 
CFI Asset Cap, annual Bank director compensation limits and AHP maximum 
dollar allocation limits.
    The unadjusted CPI-U increased 2.2 percent between November of 2001 
and November of 2002. Based on this data, pursuant to the requirements 
of Sec.  900.1, the Finance Board has adjusted the CFI Asset Cap from 
the 2002 limit of $527 million to $538 million, effective January 1, 
2003. The Finance Board arrived at the adjusted limit of $538 million 
by rounding to the nearest million.
    Pursuant to Sec.  918.3(a)(1), based on the 2.2 percent increase in 
the unadjusted CPI-U, the Finance Board has adjusted the annual 
compensation limits for the members of the boards of directors of the 
Banks as follows, effective January 1, 2003: for a Chairperson--
$26,921; for a Vice-Chairperson--$21,537; for any other member of a 
Bank's board of directors--$16,152. The Finance Board arrived at the 
adjusted annual compensation limits by rounding to the nearest dollar.
    Pursuant to Sec.  951.3(a)(1)(iii), based on the 2.2 percent 
increase in the unadjusted CPI-U, the Finance Board has adjusted the 
maximum dollar limits

[[Page 782]]

on the amounts that a Bank may set aside from its annual required AHP 
contributions for the current year and the subsequent year, toward 
homeownership set-aside programs, from the 2002 limit of $3.0 million 
to $3.1 million, effective January 1, 2003. The Finance Board arrived 
at the adjusted limit of $3.1 million by rounding to the nearest 
$100,000.
    Pursuant to Sec.  951.3(a)(1)(iii), the Finance Board also applied 
the 2.2 percent increase in the unadjusted CPI-U to the 2002 maximum 
dollar limit on the amount that a Bank may set aside from its annual 
required AHP contributions, for the current year and the subsequent 
year, towards an additional first-time homebuyer set-aside program. 
Rounding the resulting number to the nearest $100,000, the maximum 
dollar limit remains at the 2002 level of $1.5 million, effective 
January 1, 2003. In addition, pursuant to Sec.  951.3(a)(2), based on 
the 2.2 percent increase in the unadjusted CPI-U, the Finance Board has 
adjusted the maximum dollar limit on the amount that a Bank may 
allocate from its annual required AHP contribution for the subsequent 
year to the current year's competitive application program, from the 
2002 limit of $3.0 million to $3.1 million, effective January 1, 2003. 
The Finance Board arrived at the adjusted limit of $3.1 million by 
rounding to the nearest $100,000.

    Dated: December 31, 2002.

Federal Housing Finance Board.
John T. Korsmo,
Chairman.
[FR Doc. 03-196 Filed 1-6-03; 8:45 am]
BILLING CODE 6725-01-P