[Federal Register Volume 75, Number 6 (Monday, January 11, 2010)]
[Proposed Rules]
[Pages 1289-1296]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-111]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 75, No. 6 / Monday, January 11, 2010 / 
Proposed Rules  

[[Page 1289]]



FEDERAL HOUSING FINANCE BOARD

12 CFR PART 906

FEDERAL HOUSING FINANCE AGENCY

12 CFR PART 1207

RIN 2590-AA28


Minority and Women Inclusion

AGENCIES: Federal Housing Finance Board; Federal Housing Finance 
Agency.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Housing Finance Agency (FHFA or agency) is issuing 
notice and opportunity for the public to comment on this proposed 
regulation on minority and women inclusion. Section 1116 of the Housing 
and Economic Recovery Act of 2008 amended section 1319A of the Federal 
Housing Enterprises Financial Safety and Soundness Act of 1992, 
requiring FHFA, the Federal National Mortgage Association, the Federal 
Home Loan Mortgage Corporation, and the Federal Home Loan Banks to 
promote diversity and the inclusion of women and minorities in all 
activities. The proposed rule will implement this provision.

DATES: Written comments on the proposed regulation must be received on 
or before March 12, 2010.

ADDRESSES: Submit comments to FHFA by any of the following methods:
     E-mail: [email protected]. Please include in the 
subject line of your submission: ``Federal Housing Finance Agency--
Proposed Rule: RIN 2590-AA28''.
     Mail/Hand Delivery: Alfred M. Pollard, General Counsel, 
Federal Housing Finance Agency, Fourth Floor, 1700 G Street, NW., 
Washington, DC 20552, Attention: Public Comments/RIN 2590-AA28. The 
package should be logged at the Guard Desk, First Floor, on business 
days between 9 a.m. and 5 p.m.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments. To ensure timely 
receipt by the agency include the following information in the subject 
line of your submission: ``Federal Housing Finance Agency--Proposed 
Rule: RIN 2590-AA28''. If you submit your comment to the Federal 
eRulemaking Portal, please also send it by e-mail to FHFA at 
[email protected] to ensure timely receipt by the agency.

FOR FURTHER INFORMATION CONTACT: Eric Howard, Equal Employment 
Opportunity and Diversity Director, [email protected]v, (202) 408-
2502, 1625 Eye Street, NW., Washington, DC 20006; or Mark Laponsky, 
Deputy General Counsel, [email protected], (202) 414-3832 (not 
toll-free numbers), Federal Housing Finance Agency, Fourth Floor, 1700 
G Street, NW., Washington, DC 20552. The telephone number for the 
Telecommunications Device for the Deaf is (800) 877-8339. For 
additional information, see SUPPLEMENTARY INFORMATION.

SUPPLEMENTARY INFORMATION:

I. Comments

    FHFA invites comments on all aspects of the proposed regulation and 
will take all comments into consideration before issuing the final 
regulation. We will post all public comments we receive without change, 
including any personal information you provide, such as your name and 
address, on the FHFA Web site at http://www.fhfa.gov. In addition, 
copies of all comments received will be available for examination by 
the public on business days between the hours of 10 a.m. and 3 p.m., at 
the Federal Housing Finance Agency, Fourth Floor, 1700 G Street, NW., 
Washington, DC 20552. To make an appointment to inspect comments, 
please call the Office of General Counsel at (202) 414-6924.

II. Background

    Effective July 30, 2008, the Housing and Economic Recovery Act of 
2008 (HERA), Public Law 110-289, 122 Stat. 2654, amended the Federal 
Housing Enterprises Financial Safety and Soundness Act of 1992 (12 
U.S.C. 4501 et seq.) (Safety and Soundness Act) to establish FHFA as an 
independent agency of the Federal Government.\1\ HERA transferred the 
supervisory and oversight responsibilities of the Office of Federal 
Housing Enterprise Oversight (OFHEO) over the Federal National Mortgage 
Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation 
(Freddie Mac) (collectively, Enterprises), and of the Federal Housing 
Finance Board (FHFB) over the Federal Home Loan Banks (FHLBanks or 
Banks) (collectively, regulated entities) and the FHLBank System's 
Office of Finance to FHFA. In addition, this law combined the staffs of 
OFHEO, FHFB, and the Government-Sponsored Enterprise mission office of 
the Department of Housing and Urban Development (HUD).
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    \1\ See Division A, titled the ``Federal Housing Finance 
Regulatory Reform Act of 2008,'' Title I, section 1101 of HERA.
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    The Safety and Soundness Act provides that FHFA is headed by a 
Director with general supervisory and regulatory authority over the 
regulated entities. FHFA is charged, among other things, with 
overseeing the prudential operations of the regulated entities and to 
ensure that they: Operate in a safe and sound manner including 
maintenance of adequate capital and internal controls; foster liquid, 
efficient, competitive, and resilient national housing finance markets; 
comply with the Safety and Soundness Act and rules, regulations, 
guidelines and orders issued under the Safety and Soundness Act, and 
the respective authorizing statutes of the regulated entities; and 
carry out their missions through activities authorized and consistent 
with the Safety and Soundness Act and their authorizing statutes; and, 
that the activities and operations of the regulated entities are 
consistent with the public interest. The Enterprises and the FHLBanks 
continue to operate under regulations promulgated by OFHEO, FHFB, and 
as relevant, HUD, until FHFA issues its own regulations.\2\
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    \2\ Sections 1302, 1303, 1312, and 1313 of HERA, 122 Stat. 2795, 
2796, and 2798.
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A. The FHLBank System

    The FHLBank System (System) was created by the Federal Home Loan 
Bank Act of 1932 (FHLBank Act) as a government-sponsored enterprise 
(GSE) to support mortgage lending and related community investment. It 
is composed of 12 FHLBanks, more than 8,000

[[Page 1290]]

member financial institutions, and the System's fiscal agent, the 
Office of Finance. The FHLBanks fulfill their statutory mission 
primarily through providing to its members long- and short-term loans 
(called advances). The FHLBank Act provides the FHLBanks explicit 
authority to make secured advances.\3\ Advances provide members with a 
source of funding for mortgages and asset-liability management; 
liquidity for a member's short-term needs; and additional funds for 
housing finance and community development. Advances are collateralized 
primarily by residential mortgage loans, and government and agency 
securities. Community financial institutions (i.e., members with assets 
less than $1 billion) may pledge small business, small farm, and small 
agri-business loans as collateral for advances. Additionally, some of 
the FHLBanks have Acquired Member Asset (AMA) programs whereby they 
acquire fixed-rate, single-family mortgage loans from participating 
member institutions. Given their status as GSEs, the FHLBanks are able 
to borrow funds in the capital markets on terms more favorable than 
could be obtained by most other entities. Consolidated obligations, 
consisting of bonds and discount notes, are the principal source for 
the FHLBanks to fund advances, AMA programs, and investments. The 
Office of Finance, as the System's fiscal agent, issues all 
consolidated obligations on behalf of the 12 FHLBanks. Although each 
FHLBank is primarily liable for the portion of consolidated obligations 
corresponding to the proceeds received by that FHLBank, each FHLBank is 
also jointly and severally liable with the other 11 FHLBanks for the 
payment of principal of, and interest on, all consolidated 
obligations.\4\
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    \3\ 12 U.S.C. 1430(10).
    \4\ See 12 CFR 966.9.
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B. The Enterprises

    Fannie Mae and Freddie Mac are GSEs chartered by Congress for the 
purpose of establishing secondary market facilities for residential 
mortgages.\5\ Specifically, Congress established the Enterprises to 
provide stability in the secondary market for residential mortgages, 
respond appropriately to the private capital market, provide ongoing 
assistance to the secondary market for residential mortgages, and 
promote access to mortgage credit throughout the nation.\6\
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    \5\ See Fannie Mae Charter Act, 12 U.S.C. 1716 et seq.; Freddie 
Mac Corporation Act, 12 U.S.C. 1451 et seq.
    \6\ Id.
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    The Enterprises fulfill their statutory mission by purchasing 
residential mortgages from lenders and either holding these mortgages 
in their portfolios or packaging the loans into mortgage-backed 
securities (MBS) that are sold to the public. By packaging mortgages 
into MBS and guaranteeing the timely payment of principal and interest 
on the underlying mortgages, Fannie Mae and Freddie Mac attract to the 
secondary mortgage market investors who might not otherwise invest in 
mortgages, thereby expanding the pool of funds available for housing. 
The Enterprises finance purchases of their mortgage-related securities 
and mortgage loans, and manage their market risks, primarily by issuing 
debt instruments and entering into derivative contracts in the capital 
markets. Fannie Mae and Freddie Mac are shareholder-owned companies and 
their common stock is listed on the New York Stock Exchange. Each 
Enterprise is a separate corporate entity with its own management and 
board of directors elected annually by the common stockholders.

III. Summary of the Proposed Regulation

    Section 1116 of HERA amended section 1319A of the Safety and 
Soundness Act (12 U.S.C. 4520) to require FHFA to engage in certain 
activities to promote a diverse workforce. It also requires each 
Regulated Entity to establish an Office of Minority and Women 
Inclusion, or designate an office, responsible for carrying out the 
requirements of the section and such requirements and standards 
established by the Director. Section 1319A of the Safety and Soundness 
Act requires the regulated entities to promote diversity in all 
activities and at every level of the organization, including 
management, employment and contracting. Furthermore, 12 U.S.C. 1833e, 
as amended, and Executive Order 11478 require FHFA and the regulated 
entities to promote equal opportunity in employment and contracting. 
FHFA will prescribe regulations establishing a minority outreach 
program to promote diversity in FHFA contracting. The proposed rule 
supersedes 12 CFR part 906, subpart C, the FHFB regulation on minority 
and women outreach; therefore, 12 CFR part 906, subpart C will be 
withdrawn, removed, and deleted upon the effective date of a final 
rule.
    The proposed rule would implement the requirements of 12 U.S.C. 
1833e, 4520, and Executive Order 11478 in a single regulation. Section 
1313(f) of the Safety and Soundness Act, as amended by section 1201 of 
HERA, requires the Director, when promulgating regulations relating to 
the Banks, to consider the differences between the Banks and the 
Enterprises with respect to the Banks' cooperative ownership structure; 
mission of providing liquidity to members; affordable housing and 
community development mission; capital structure; and joint and several 
liability. The Director may also consider any other differences that 
are deemed appropriate. In preparing the proposed rule, the Director 
considered the differences between the Banks and the Enterprises as 
they relate to the above factors. The Director requests comments from 
the public about whether differences related to these factors should 
result in a revision of the proposed rule as it relates to the Banks.
    Additionally, although the Office of Finance is not directly 
covered by section 1116 of HERA, it is subject to the Director's 
``general regulatory authority'' under section 1311(b)(2) of the Safety 
and Soundness Act (12 U.S.C. 4511(b)(2)), as amended by HERA. The 
Director has determined that the national policy and purposes of 
section 1116 of HERA are sufficiently important to treat the Office of 
Finance in the same manner as the regulated entities for the purposes 
of this proposed rule.
    Subpart A of the proposed rule contains items of general 
applicability to FHFA, the regulated entities, and the Office of 
Finance. It defines terms used in this part, addresses FHFA's general 
policy and purpose of issuance, and explains how this part applies to 
FHFA's, the regulated entities', and the Office of Finance's equal 
opportunity programs. The requirements of section 1116 of HERA are 
limited to minorities and women. The proposed rule expands those 
requirements to cover disabled populations. HERA authorizes FHFA's 
Director to establish ``standards and requirements'' relating to 
diversity in the ``management, employment and business activities'' of 
the regulated entities.\7\ The Director considers ensuring that 
disabled populations are included in the management, employment, and 
business activities of the regulated entities and the Office of Finance 
an important aspect of diversity to which the requirements of this 
proposed rule should apply.
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    \7\ See 12 U.S.C. 4520(a).
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    Subpart B of the proposed rule confirms FHFA's commitment to equal

[[Page 1291]]

opportunity and describes activities to promote workforce diversity and 
equal employment opportunity within FHFA. Proposed subpart B also 
identifies and describes FHFA's contractor outreach activities and 
programs to ensure equal opportunity in contracting by FHFA, as 
required by 12 U.S.C. 1833e.
    Subpart C of the proposed rule contains requirements for the 
regulated entities and the Office of Finance. It instructs each 
regulated entity and the Office of Finance to establish an Office of 
Minority and Women Inclusion, or designate an office, responsible for 
carrying out the requirements of the section and such requirements and 
standards established by the Director. The subpart requires each 
regulated entity and the Office of Finance to establish an equal 
opportunity program applying to all areas of the business, including 
management, employment and contracting, at every level of the 
organization. It requires each regulated entity and the Office of 
Finance to establish an outreach program to ensure the inclusion of 
minorities, women, and individuals with disabilities, and businesses 
owned by them in contracts entered into by the Regulated Entities or 
the Office of Finance. Further, proposed subpart C sets forth reporting 
requirements, including minimum contents of reports to FHFA by the 
regulated entities and the Office of Finance. The proposed rule 
observes that FHFA's activity under this subpart C and related 
guidance, standards, directives or orders is regulatory and supervisory 
in nature and may lead to regulatory or supervisory actions, including 
enforcement actions.
    FHFA has considered that any data or information reporting 
requirements present operational and administrative burdens. FHFA does 
not consider the burden of reporting under the proposed rule to be 
unreasonable. Congress recognized the importance of promoting diversity 
in the management, employment and business activities of the Regulated 
Entities. Consequently, FHFA believes that ensuring compliance with the 
proposed diversity requirements is a one of its supervisory and 
regulatory duties. For several decades companies in most industries, 
including much of the financial services industry, have been subject to 
reporting requirements and enforcement with respect to diversity. 
Agencies requiring such reports and enforcing standards include the 
U.S. Equal Employment Opportunity Commission and the Office of Federal 
Contract Compliance Programs in the U.S. Department of Labor. The 
proposed subpart C does not seek to duplicate reporting burdens imposed 
by either agency. Instead, FHFA has selected specific types of 
information that are particularly useful in analyzing the demographic 
composition of workforces at every level. It also identifies for 
reporting similar types of data that allow FHFA to analyze diversity 
among the contractors used by regulated entities and the Office of 
Finance.

IV. Section-by-Section Analysis

Section 1207.1 Definitions

    Proposed Sec.  1207.1 defines terms used in this part.

Section 1207.2 Policy, Purpose, and Scope

    Proposed Sec.  1207.2 expresses FHFA's policy that it, the 
Regulated Entities, and the Office of Finance shall promote non-
discrimination, diversity and the inclusion of women, minorities, and 
the disabled in all their activities. It explains the purpose to 
establish minimum standards for FHFA, the regulated entities, and the 
Office of Finance in carrying out the policy of non-discrimination, 
diversity and inclusion. Proposed Sec.  1207.2 also makes clear that 
the regulation applies to FHFA as well as to the regulated entities and 
the Office of Finance.

Section 1207.3 Limitations

    Proposed Sec.  1207.3 provides that except as necessary for 
enforcement by FHFA, the rule does not create any enforceable right or 
benefit.

Sections 1207.4 Through 1207.9 [Reserved]

Section 1207.10 FHFA Workforce Diversity; Equal Employment Opportunity 
Program

    Proposed Sec.  1207.10 describes FHFA's program for promoting 
diversity and equal employment opportunity in its workforce and how 
FHFA will comply with the specific requirements of section 1116 of HERA 
and Executive Order 11478.

Section 1207.11 Equal Opportunity and Outreach in FHFA Contracting

    Proposed Sec.  1207.11 implements 12 U.S.C. 1833e by establishing 
FHFA's program for ensuring equal opportunity, diversity and inclusion 
in the use of contractors, and describing the agency's contractor 
outreach program, record-keeping and complaint resolution process.

Sections 1207.12-1207.19 [Reserved]

Section 1207.20 Office of Minority and Women Inclusion

    Proposed Sec.  1207.20 implements the requirement that each 
regulated entity and the Office of Finance create an Office of Minority 
and Women Inclusion or designate an office to fulfill the requirements 
of this part, section 1116 of HERA, and 12 U.S.C. 1833e(b), and provide 
the office with adequate resources to perform its responsibilities.

Section 1207.21 Equal Opportunity in Employment and Contracting

    Proposed Sec.  1207.21 establishes minimum requirements for each 
regulated entity's and the Office of Finance's equal opportunity, 
diversity and inclusion programs for equal opportunity in regulated 
entity and Office of Finance employment, management, contracting, and 
all other business activities.

Section 1207.22 Regulated Entity and Office of Finance Reports

    Proposed Sec.  1207.22 establishes a minimum requirement of an 
annual report submitted by each regulated entity and the Office of 
Finance and provides notice that the Director may require additional 
reports.

Section 1207.23 Annual Reports--Format and Contents

    Proposed Sec.  1207.23 establishes the format and minimum content 
required in each regulated entity's and the Office Finance's annual 
report on Minority and Women Inclusion.

Section 1207.24 Enforcement

    Proposed Sec.  1207.24 explains that FHFA considers non-compliance 
with this regulation or with standards issued under this regulation by 
the regulated entities or the Office of Finance to be the basis for 
enforcement actions under 12 U.S.C. 4513b and 4515, and that the 
Director may initiate examinations of a regulated entity's or the 
Office of Finance's compliance under 12 U.S.C. 4517.

V. Regulatory Impacts

Paperwork Reduction Act

    The proposed regulation does not contain any information collection 
requirement that requires the approval of the Office of Management and 
Budget under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires that 
a regulation that has a significant

[[Page 1292]]

economic impact on a substantial number of small entities, small 
businesses, or small organizations shall include an initial regulatory 
flexibility analysis describing the regulation's impact on small 
entities. Such an analysis need not be undertaken if the agency has 
certified that the regulation will not have a significant economic 
impact on a substantial number of small entities. 5 U.S.C. 605(b). FHFA 
has considered the impact of the proposed regulation under the 
Regulatory Flexibility Act. FHFA certifies that the proposed 
regulation, if adopted, is not likely to have a significant economic 
impact on a substantial number of small business entities because the 
regulation is applicable only to FHFA, the regulated entities, and the 
Office of Finance, which are not small entities for purposes of the 
Regulatory Flexibility Act.

List of Subjects

12 CFR Part 906

    Government contracts, Minority businesses.

12 CFR Part 1207

    Disability, Discrimination, Equal employment opportunity, 
Government contracts, Minority businesses, Office of Finance, Outreach, 
Regulated entities.

Authority and Issuance

    Accordingly, for the reasons stated in the preamble, under the 
authority of 12 U.S.C. 4526, the Federal Housing Finance Agency 
proposes to amend chapters IX and XII of Title 12, Code of Federal 
Regulations, as follows:

CHAPTER IX--FEDERAL HOUSING FINANCE BOARD

PART 906--OPERATIONS

Subpart C--[Removed and Reserved]

    1. Remove and reserve subpart C, consisting of Sec. Sec.  906.10 
through 906.13.

CHAPTER XII--FEDERAL HOUSING FINANCE AGENCY

Subchapter A--Organization and Operations

    2. Add part 1207 to subchapter A to read as follows:

PART 1207--MINORITY AND WOMEN INCLUSION

Subpart A--General
Sec.
1207.1 Definitions.
1207.2 Policy, purpose, and scope.
1207.3 Limitations.
1207.4-1207.9 [Reserved].
Subpart B--Minority and Women Inclusion and Diversity at the Federal 
Housing Finance Agency
1207.10 FHFA workforce diversity; equal employment opportunity 
program.
1207.11 Equal opportunity and outreach in FHFA contracting.
1207.12-1207.19 [Reserved].
Subpart C--Minority and Women Inclusion and Diversity at Regulated 
Entities and the Office of Finance
1207.20 Office of Minority and Women Inclusion.
1207.21 Equal opportunity in employment and contracting.
1207.22 Regulated entity and Office of Finance Reports.
1207.23 Annual reports--format and contents.
1207.24 Enforcement.

    Authority: 12 U.S.C. 4520 and 4526; 12 U.S.C. 1833e; E.O. 11478.

PART 1207--MINORITY AND WOMEN INCLUSION

Subpart A--General


Sec.  1207.1  Definitions.

    The following definitions apply to the terms used in this part:
    Business and activities means operational, commercial, and economic 
endeavors of any kind, whether for profit or not for profit and whether 
regularly or irregularly engaged in by a regulated entity or the Office 
of Finance, and includes, but is not limited to, management of the 
regulated entity or the Office of Finance, employment, procurement, 
insurance, and all types of contracts, including contracts for the 
issuance or guarantee of any debt, equity, or mortgage-related 
securities, the management of mortgage and securities portfolios, the 
making of equity investments, the purchase, sale and servicing of 
single- and multi-family mortgage loans, and the implementation of 
affordable housing or community investment programs and initiatives.
    Director means the Director of FHFA or his or her designee.
    Disability has the same meaning as defined in 29 CFR 1630.2(g) and 
1630.3 and Appendix to Part 1630--Interpretive Guidance on Title I of 
the Americans With Disabilities Act.
    Disabled means a person with a disability.
    Disabled-owned business means a business, and includes financial 
institutions, mortgage banking firms, investment banking firms, 
investment consultants or advisors, financial services entities, asset 
management entities, underwriters, accountants, brokers, brokers-
dealers, and providers of legal services--
    (1) Qualified as a Service-Disabled Veteran-Owned Small Business 
Concern as defined in 13 CFR 125.8 through 125.13; or
    (2) More than fifty percent (50%) of the ownership or control of 
which is held by one or more persons with a disability; and
    (3) More than fifty percent (50%) of the net profit or loss of 
which accrues to one or more persons with a disability.
    FHFA means the Federal Housing Finance Agency.
    Minority means Black or African American, American Indian or Alaska 
Native, Hispanic or Latino American, Asian American, and Native 
Hawaiian or Other Pacific Islander.
    Minority-owned business means a business, and includes financial 
institutions, mortgage banking firms, investment banking firms, 
investment consultants or advisors, financial services entities, asset 
management entities, underwriters, accountants, brokers, brokers-
dealers and providers of legal services:
    (1) More than fifty percent (50%) of the ownership or control of 
which is held by one or more minority individuals; and
    (2) More than fifty percent (50%) of the net profit or loss of 
which accrues to one or more minority individuals.
    Office of Finance means the Office of Finance of the Federal Home 
Loan Bank System.
    Reasonable accommodation has the same meaning as defined in 29 CFR 
1630.2(o) and Appendix to Part 1630--Interpretive Guidance on Title I 
of the Americans With Disabilities Act.
    Regulated entity means the Federal Home Loan Mortgage Corporation, 
the Federal National Mortgage Association, any Federal Home Loan Bank 
and/or any affiliate thereof that is subject to the regulatory 
authority of FHFA. The term ``regulated entities'' means (collectively) 
the Federal Home Loan Mortgage Corporation, the Federal National 
Mortgage Association, and/or any affiliate Federal Home Loan Bank and/
or any affiliate thereof that is subject to the regulatory authority of 
FHFA.
    Women-owned business means a business, and includes financial 
institutions, mortgage banking firms, investment banking firms, 
investment consultants or advisors, financial services entities, asset 
management entities, underwriters, accountants, brokers, brokers-
dealers and providers of legal services:
    (1) More than fifty percent (50%) of the ownership or control of 
which is held by one or more women;

[[Page 1293]]

    (2) More than fifty percent (50%) of the net profit or loss of 
which accrues to one or more women; and
    (3) A significant percentage of senior management positions of 
which are held by women.


Sec.  1207.2  Policy, purpose, and scope.

    (a) General policy. FHFA's policy is to promote non-discrimination, 
diversity and inclusion of women and minorities in its own activities 
and in the business and activities of the regulated entities and the 
Office of Finance.
    (b) Purpose. This part establishes minimum standards and 
requirements for FHFA, the regulated entities and the Office of Finance 
to promote diversity and ensure, to the maximum extent possible, the 
inclusion and utilization of minorities, women, individuals with 
disabilities, and minority-, women-, and disabled-owned businesses at 
all levels, in management and employment, in all business and 
activities, and in all contracts for services of any kind, including 
services that require the services of investment banking, asset 
management entities, broker-dealers, financial services entities, 
underwriters, accountants, investment consultants, and providers of 
legal services.
    (c) Scope. This part applies to FHFA's contract and outreach 
programs, to each regulated entity's and the Office of Finance's 
implementation of and adherence to diversity, inclusion and non-
discrimination policies, practices and principles.


Sec.  1207.3  Limitations.

    Except as expressly provided herein for enforcement by FHFA, the 
regulations in this part do not, are not intended to, and should not be 
construed to create any right or benefit, substantive or procedural, 
enforceable at law, in equity, or through administrative proceeding, by 
any party against the United States, its departments, agencies, or 
entities, its officers, employees, or agents, a regulated entity or the 
Office of Finance, their officers, employees or agents, or any other 
person.


Sec. Sec.  1207.4 through 1207.9  [Reserved].

Subpart B--Minority and Women Inclusion and Diversity at the 
Federal Housing Finance Agency


Sec.  1207.10  FHFA Workforce Diversity; Equal Employment Opportunity 
program.

    (a) General. FHFA will take affirmative steps to seek diversity in 
its workforce at all levels of the agency, consistent with the 
demographic diversity of the United States, and maintain an Equal 
Employment Opportunity (EEO) program consistent with the Equal 
Employment Opportunity Commission requirements for Federal agencies and 
Executive Order 11478.
    (b) Workforce diversity. FHFA is committed to a diverse workforce 
at all levels in the agency and in every area of its activity. FHFA 
will not discriminate in employment or in contracting against any 
person, contractor or potential contractor because of race, color, 
religion, national origin, sex, age, genetic information, disability, 
sexual orientation, or status as a parent.
    (c) Affirmative steps for workforce diversity. FHFA will engage in 
at least the following activities to promote diversity in the agency's 
workforce:
    (1) Heavily recruiting at historically Black colleges and 
universities, Hispanic-serving institutions, women's colleges, and 
colleges that typically serve the individuals with disabilities and 
majority minority populations;
    (2) Sponsoring and recruiting at job fairs in urban communities and 
placing employment advertisements in newspapers and magazines oriented 
toward women and people of color;
    (3) Partnering with organizations that are focused on developing 
opportunities for minorities and women to place talented young 
minorities and women in industry internships, summer employment and 
full-time positions; and
    (4) Where feasible, partnering with inner-city high schools, girl's 
schools, and high schools with majority minority populations to 
establish or enhance financial literacy programs and provide mentoring.
    (d) EEO program elements. In addition to workforce diversity 
activities, FHFA's EEO program will consist of at least the following 
activities and elements:
    (1) An EEO policy and complaint procedure for employees and 
applicants for employment;
    (2) A reasonable accommodation request procedure for employees and 
applicants for employment;
    (3) A program for maintaining contact and liaison with internal and 
external stakeholders, including other government agencies, on matters 
of diversity and equal opportunity;
    (4) Periodic workplace surveys to refresh workforce demographic 
data;
    (5) An alternative dispute resolution process for resolving 
complaints of employment discrimination;
    (6) An annual notice to employees and the public of FHFA's 
commitment to EEO and non-discrimination that is distributed to all 
employees and published in a manner accessible to the public;
    (7) Ensuring the delivery of training for employees and supervisors 
with respect to non-discrimination obligations and rights;
    (8) Reporting as required on FHFA No FEAR Act training, non-
discrimination and diversity training, and No FEAR Act compliance;
    (9) Collecting and reporting data on EEO complaints at FHFA;
    (10) Collecting, analyzing and reporting FHFA workforce demographic 
data with respect to all aspects of employment;
    (11) Recommending to the Director actions and plans for EEO and 
diversity enhancement in FHFA's operations, programs and policies, 
programs, and implementing approved actions and plans;
    (12) Evaluating the effectiveness and impact of FHFA policies, 
programs and practices on diversity in FHFA; and
    (13) Maintaining equal opportunity and diversity in contracting 
policies, training contracting staff in these requirements, analyzing 
the effectiveness and reporting on agency efforts and outreach to 
promote diversity in contracting.


Sec.  1207.11  Equal opportunity and outreach in FHFA contracting.

    (a) Equal opportunity in contracting. FHFA is committed to ensuring 
that minorities, women, individuals with disabilities, and minority-, 
women-, and disabled-owned businesses have the maximum practicable 
opportunity to participate fully in all contracts awarded by FHFA. FHFA 
does not discriminate on the basis of race, color, religion, national 
origin, sex, age, genetic information, disability, sexual orientation 
or status as a parent in the solicitation, award, or administration of 
contracts.
    (b) Outreach. FHFA's outreach is intended to ensure that 
minorities, women and individuals with disabilities, and minority-, 
women-, and disabled-owned businesses are made aware of and given the 
opportunity to compete for contracts with FHFA. FHFA will conduct 
outreach activities that may include, but are not limited to:
    (1) Identifying contractors that are minorities, women, individuals 
with disabilities, and minority-, women-, and disabled-owned businesses 
by obtaining lists and directories maintained by government agencies, 
trade groups, and other organizations;
    (2) Offering technical assistance for minorities, women, 
individuals with disabilities, and minority-, women-, and disabled-
owned businesses to

[[Page 1294]]

participate in FHFA's contracting process;
    (3) Advertising contract opportunities through media targeted to 
reach potential contractors that are minorities, women, individuals 
with disabilities, and minority-, women-, and disabled-owned 
businesses;
    (4) Participating in events such as conventions, trade shows, 
seminars, professional meetings and other gatherings intended to 
promote business opportunities for minorities, women, individuals with 
disabilities, and minority-, women-, and disabled-owned businesses; and
    (5) Ensuring that FHFA contracting staff understands and promotes 
the outreach program.
    (c) Complaints of discrimination in FHFA contracting. Any 
contractor or potential contractor that believes FHFA intentionally 
discriminated on the basis of race, color, religion, national origin, 
sex, age, genetic information, or disability, sexual orientation or 
status as a parent in the solicitation, award or administration of a 
contract may make such a complaint to the responsible FHFA contracting 
officer, consistent with FHFA's contract dispute resolution procedure.
    (d) Record-keeping. FHFA's contracting officer will maintain data 
of complaints of discrimination, resolution of those complaints, FHFA's 
outreach efforts, and the sources from which successful contractor 
bidders who are minorities, women, individuals with disabilities, or 
minority-, women-, and disabled-owned businesses learned of the 
contracting opportunity.


Sec. Sec.  1207.12 through 1207.19  [Reserved].

Subpart C--Minority and Women Inclusion and Diversity at Regulated 
Entities and the Office of Finance


Sec.  1207.20  Office of Minority and Women Inclusion.

    (a) Establishment. Each regulated entity and the Office of Finance 
shall establish and maintain an Office of Minority and Women Inclusion, 
or designate and maintain an office to perform the responsibilities of 
this part, under the direction of an officer of the regulated entity or 
the Office of Finance who reports directly to either the Chief 
Executive Officer or the Chief Operating Officer, or the equivalent. 
Each regulated entity and the Office of Finance shall notify the 
Director within thirty (30) days after any change in the designation of 
the office performing the responsibilities of this part.
    (b) Adequate resources. Each regulated entity and the Office of 
Finance will ensure that its Office of Minority and Women Inclusion, or 
the office designated to perform the responsibilities of this part, is 
provided human, technological, and financial resources sufficient to 
fulfill the requirements of this part.
    (c) Responsibilities. Each Office of Minority and Women Inclusion, 
or the office designated to perform the responsibilities of this part, 
is responsible for fulfilling the requirements of this part, 12 U.S.C. 
1833e(b) and 4520, and such standards and guidance as the Director may 
issue hereunder.


Sec.  1207.21  Equal opportunity in employment and contracting.

    (a) Equal opportunity notice. Each regulated entity and the Office 
of Finance shall publish a statement, endorsed by its Chief Executive 
Officer and approved by its Board of Directors, confirming its 
commitment to the principles of equal opportunity in employment and in 
contracting, regardless of race, color, national origin, sex, religion, 
age, disability status, or genetic information. Publication shall 
include, at a minimum, conspicuous posting in each regulated entity's 
and Office of Finance's physical facility (including through 
alternative media--e.g., Braille, audio--as necessary) and accessible 
posting on the regulated entity's and the Office of Finance's web site. 
The notice shall be updated and re-published, re-endorsed by the Chief 
Executive Officer and re-approved by the Board of Directors annually.
    (b) Policies and procedures. Each regulated entity and the Office 
of Finance shall develop, implement, and maintain standards and 
procedures to ensure, to the maximum extent possible, the inclusion and 
utilization of minorities, women, individuals with disabilities, and 
minority-, women-, and disabled-owned businesses in all business and 
activities and at all levels of the regulated entity and the Office of 
Finance, including in management, employment, procurement, insurance, 
and all types of contracts. The policies and procedures of each 
regulated entity and the Office of Finance at a minimum shall:
    (1) Confirm its adherence to the principles of equal opportunity 
and non-discrimination in employment and in contracting;
    (2) Describe its policy against discrimination in employment and 
contracting;
    (3) Establish internal procedures to receive and attempt to resolve 
complaints of discrimination in employment and in contracting, which 
shall include an opportunity to use alternative dispute resolution 
techniques, when appropriate;
    (4) Establish an effective procedure for accepting, reviewing and 
granting or denying requests for reasonable accommodations of 
disabilities from employees or applicants for employment. Publication 
will include at a minimum making the procedure conspicuously accessible 
to employees and applicants through print, electronic, or alternative 
(e.g., Braille, audio) media and through the regulated entity's or the 
Office of Finance's web site;
    (5) Encourage the consideration of diversity in nominating or 
soliciting nominees for positions on boards of directors;
    (6) Require that each contract it enters contains a material clause 
committing the contractor to practice the principles of equal 
employment opportunity and non-discrimination in all its business 
activities and requiring each such contractor to include the clause in 
each subcontract it enters for services or goods provided to the 
regulated entity or the Office of Finance;
    (7) Be published and accessible to employees, applicants for 
employment, contractors, potential contractors, and members of the 
public through print, electronic, or alternative (e.g., Braille, audio) 
media and through the regulated entity's or the Office of Finance's web 
site; and
    (8) Be reviewed at the direction of the officer immediately 
responsible for directing the Office of Minority and Women Inclusion, 
or other office designated to perform the responsibilities of this 
part, at least annually to assess their effectiveness and to 
incorporate appropriate changes.
    (c) Outreach for contracting. Each regulated entity and the Office 
of Finance shall establish a program for outreach designed to ensure to 
the maximum extent possible the inclusion in contracting opportunities 
of minorities, women, individuals with disabilities, and minority-, 
women-, and disabled-owned businesses. The program at a minimum shall:
    (1) Apply to all contracts entered by the regulated entity or the 
Office of Finance, including contracts with financial institutions, 
investment banking firms, investment consultants or advisors, financial 
services entities, mortgage banking firms, asset management entities, 
underwriters, accountants, brokers, brokers-dealers, and providers of 
legal services;
    (2) Establish standards and procedures requiring publication of 
contracting opportunities designed to encourage contractors that are 
minorities, women, individuals with

[[Page 1295]]

disabilities, and minority-, women-, and disabled-owned businesses to 
submit offers or bid for the award of such contracts; and
    (3) Ensure the consideration of the diversity of a contractor when 
the regulated entity or the Office of Finance reviews and evaluates 
offers from contractors.


Sec.  1207.22  Regulated entity and Office of Finance reports.

    (a) General. Each regulated entity and the Office of Finance, 
through its Office of Minority and Women Inclusion, or other office 
designated to perform the responsibilities of this part, shall report 
in writing, in such format as the Director may require, to the Director 
describing its efforts to promote diversity and ensure the inclusion 
and utilization of minorities, women, individuals with disabilities, 
and minority-, women-, and disabled-owned businesses at all levels, in 
management and employment, in all business and activities, and in all 
contracts for services and the results of such efforts.
    (1) Within (90) days after the effective date of this regulation 
each regulated entity and the Office of Finance shall submit to the 
Director or his or her designee a preliminary status report describing 
actions taken, plans for and progress toward implementing the 
provisions of 12 U.S.C. 4520 and this part; and including to the extent 
available the data and information required by this part to be included 
in an annual report.
    (2) FHFA intends to use the preliminary status report solely as 
material relating to examining the submitting regulated entity or the 
Office of Finance and reporting to the institution on its operations 
and the condition of its program.
    (b) FHFA use of reports. The data and information reported to FHFA 
under this part are intended to be used for any permissible supervisory 
and regulatory purpose, including examinations, enforcement actions, 
identification of matters requiring attention, and production of FHFA 
examination, operating and condition reports related to one or more of 
the regulated entities and the Office of Finance. FHFA may use the 
information and data submitted to issue aggregate reports and data 
summaries that each regulated entity and the Office of Finance may use 
to assess its own progress and accomplishments, or to the public as it 
deems necessary. FHFA is not requiring, and does not desire, that 
reports under this part contain personally identifiable information.
    (c) Frequency of reports. Each regulated entity and the Office of 
Finance shall submit an annual report on or before February 1 of each 
year, beginning in 2011, reporting on the period of January 1 through 
December 31 of the preceding year, and such other reports as the 
Director may require. If the date for submission falls on a Saturday, 
Sunday, or Federal holiday, the report is due no later than the next 
day that is not a Saturday, Sunday, or Federal holiday.
    (d) Annual summary. Each regulated entity and the Office of Finance 
shall include in its annual report to the Director (pursuant to 12 
U.S.C. 1723a(k), 1456(c), or 1440, with respect to the regulated 
entities) a summary of its activities under this part during the 
previous year, including at a minimum, detailed information describing 
the actions taken by the regulated entity or the Office of Finance 
pursuant to 12 U.S.C. 4520 and a statement of the total amounts paid by 
the regulated entity or the Office of Finance to third-party 
contractors during the previous year and the percentage of such amounts 
paid to contractors that are minorities or minority-owned businesses, 
women or women-owned businesses, and individuals with disabilities or 
disabled-owned businesses, respectively.


Sec.  1207.23  Annual reports--format and contents.

    (a) Format. Each annual report shall consist of a detailed summary 
of the regulated entity's or the Office of Finance's activities during 
the reporting year to carry out the requirements of this part, which 
report may also be made a part of the regulated entity's or the Office 
of Finance's annual report to the Director. The report shall contain a 
table of contents and conclude with a certification by the regulated 
entity's or the Office of Finance's officer responsible for the annual 
report that the data and information presented in the report, are 
accurate, and are approved for submission.
    (b) Contents. The annual report shall contain the information 
provided in the regulated entity's or the Office of Finance's annual 
summary pursuant to Sec.  1207.22(d) and, in addition to any other 
information or data the Director may require, shall include:
    (1) The EEO-1 Employer Information Report (Form EEO-1 used by the 
Equal Employment Opportunity Commission and the Office of Federal 
Contract Compliance Programs to collect certain demographic 
information) or similar reports filed by the regulated entity or the 
Office of Finance during the reporting year. If the regulated entity or 
the Office of Finance does not file Form EEO-1 or similar reports, the 
regulated entity or the Office of Finance shall submit to FHFA a 
completed Form EEO-1;
    (2) All other reports or plans the regulated entity or the Office 
of Finance submitted to the Equal Employment Opportunity Commission, 
the Department of Labor, Office of Federal Contract Compliance Programs 
or Congress (``reports or plans'' is not intended to not include 
separate complaints or charges of discrimination or responses thereto 
charges of discrimination) during the reporting year;
    (3) Data showing by minority, gender, and disability classification 
the number of individuals applying for employment with the regulated 
entity or the Office of Finance in each occupational or job category 
identified on the Form EEO-1 during the reporting year;
    (4) Data showing by minority, gender, and disability classification 
the number of individuals hired for employment with the regulated 
entity or the Office of Finance in each occupational or job category 
identified on the Form EEO-1 during the reporting year;
    (5) Data showing by minority, gender and disability classification, 
and categorized as voluntary or involuntary, the number of separations 
from employment with the regulated entity or the Office of Finance in 
each occupational or job category identified on the Form EEO-1 during 
the reporting year;
    (6) Data showing the number of requests for reasonable 
accommodation received from employees and applicants for employment, 
the number of requests granted, and the disabilities accommodated and 
the types of accommodation granted during the reporting year;
    (7) Data showing for the reporting year by minority, gender, and 
disability classification the number of individuals applying for 
promotion at the regulated entity or the Office of Finance--
    (i) Within each occupational or job category identified on the Form 
EEO-1; and
    (ii) From one such occupational or job category to another.
    (8) Data showing by minority, gender, and disability classification 
the number of individuals--
    (i) Promoted at the regulated entity or the Office of Finance 
within each occupational or job category identified on the Form EEO-1, 
after applying for such a promotion;
    (ii) Promoted at the regulated entity or the Office of Finance 
within each

[[Page 1296]]

occupational or job category identified on the Form EEO-1, without 
applying for such a promotion;
    (iii) Promoted at the regulated entity or the Office of Finance 
from one occupational or job category identified on the Form EEO-1 to 
another such category, after applying for such a promotion.
    (9) A comparison of the data reported under paragraphs (b)(1) 
through (b)(8) of this section to such data as reported in the previous 
year together with a narrative analysis;
    (10) Descriptions of all regulated entity or Office of Finance 
outreach activity during the reporting year to low-income, inner city, 
minority, women, and disabled populations, including activities to 
provide financial literacy education, to recruit employees, to solicit 
or advertise for contractors to provide service to the regulated entity 
or Office of Finance, or to inform such contractors of the regulated 
entity's or Office of Finance's contracting process or provide 
technical assistance for participation in the contracting process, 
including the identification of any partners, organizations, or 
government offices with which the regulated entity or the Office of 
Finance participated in such outreach activity;
    (11) Cumulative data separately showing the number of contracts 
entered with minority or minority-owned businesses, women or women-
owned businesses, and disabled or disabled-owned businesses during the 
reporting year;
    (12) Cumulative data separately showing for the reporting year the 
total amount the regulated entity or the Office of Finance paid to 
contractors that are--
    (i) Minority or minority-owned businesses;
    (ii) Women or women-owned businesses; and
    (iii) Disabled or disabled-owned businesses.
    (13) The annual total of amounts paid to contractors and the 
percentage of which was paid separately to minority or minority-owned 
businesses, women or women-owned businesses, and disabled or disabled-
owned businesses during the reporting year;
    (14) Certification of compliance with Sec. Sec.  1207.20 and 
1207.21, together with sufficient documentation to verify compliance;
    (15) Data for the reporting year showing, separately, the number of 
equal opportunity complaints (including administrative agency charges 
or complaints, arbitral or judicial claims) against the regulated 
entity or the Office of Finance that--
    (i) Claim employment discrimination, by basis or kind of the 
alleged discrimination (race, sex, disability, etc.) and by result 
(settlement, favorable, or unfavorable outcome);
    (ii) Claim discrimination in any aspect of the contracting process 
or administration of contracts, by basis of the alleged discrimination 
and by result; and
    (iii) Were resolved through the regulated entity's or the Office of 
Finance's dispute resolution procedure.
    (16) Data showing for the reporting year amounts paid to claimants 
by the regulated entity or the Office of Finance for settlements or 
judgments on discrimination complaints--
    (i) In employment, by basis of the alleged discrimination; and
    (ii) In any aspect of the contracting process or in the 
administration of contracts, by basis of the alleged discrimination.
    (17) A comparison of the data reported under paragraphs (b)(12) and 
(b)(13) of this section with the same information reported for the 
previous year;
    (18) A narrative identification and analysis of the reporting 
year's activities the regulated entity or the Office of Finance 
considers successful and unsuccessful in achieving the purpose and 
policy of regulations in this part and a description of progress made 
from the previous year; and
    (19) A narrative identification and analysis of business 
activities, levels, and areas in which the regulated entity's or the 
Office of Finance's efforts need to improve with respect to achieving 
the purpose and policy of regulations in this part, together with a 
description of anticipated efforts and results the regulated entity or 
the Office of Finance expects in the succeeding year.


Sec.  1207.24  Enforcement.

    The Director may enforce this regulation and standards issued under 
it in any manner and through any means within his or her authority, 
including through identifying matters requiring attention, corrective 
action orders, directives, or enforcement actions under 12 U.S.C. 4513b 
and 4514. The Director may conduct examinations of a regulated entity's 
or the Office of Finance's activities under and in compliance with this 
part pursuant to 12 U.S.C. 4517.

     Dated: January 4, 2010.
Edward J. DeMarco,
Acting Director, Federal Housing Finance Agency.
[FR Doc. 2010-111 Filed 1-8-10; 8:45 am]
BILLING CODE 8070-$$-P