[Federal Register Volume 76, Number 12 (Wednesday, January 19, 2011)]
[Notices]
[Page 3142]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-991]


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FEDERAL HOUSING FINANCE AGENCY

[No. 2011-N-01]


Notice of Annual Adjustment of the Cap on Average Total Assets 
That Defines Community Financial Institutions

AGENCY: Federal Housing Finance Agency.

ACTION: Notice.

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SUMMARY: The Federal Housing Finance Agency (FHFA) has adjusted the cap 
on average total assets that defines a ``Community Financial 
Institution'' 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). These changes took effect on January 1, 
2011.

FOR FURTHER INFORMATION CONTACT: Patricia L. Sweeney, Division of 
Federal Home Loan Bank Regulation, 202-408-2872, [email protected], 
Federal Housing Finance Agency, 1625 Eye Street NW., Washington, DC 
20006-4001; Eric M. Raudenbush, Assistant General Counsel, 202-414-
6421, [email protected], Federal Housing Finance Agency, Fourth 
Floor, 1700 G Street, NW., Washington, DC 20552.

SUPPLEMENTARY INFORMATION:

I. Statutory and Regulatory Background

    The Federal Home Loan Bank Act (Bank Act) confers upon insured 
depository institutions that meet the statutory definition of a 
``Community Financial Institution'' (CFI) certain advantages over non-
CFI insured depository institutions in qualifying for Federal Home Loan 
Bank (Bank) membership, and in the purposes for which they may receive 
long-term advances and the collateral they may pledge to secure 
advances. See 12 U.S.C. 1424(a), 1430(a). Section 2(10)(A) of the Bank 
Act and Sec.  1263.1 of FHFA's regulations define a CFI as any Bank 
member the deposits of which are insured by the Federal Deposit 
Insurance Corporation and that has average total assets below a 
statutory cap. See 12 U.S.C. 1422(10)(A); 12 CFR 1263.1. The Bank Act 
was amended in 2008 to set the statutory cap at $1 billion and to 
require the Director of FHFA to adjust the cap annually to reflect the 
percentage increase in the CPI-U, as published by the DOL, for the 
prior year. See 12 U.S.C. 1422(10); 12 CFR 1263.1 (defining the term 
CFI asset cap). For 2010, FHFA set the CFI asset cap at $1,029,000,000, 
which reflected a 1.8 percent increase over 2009, based upon the 
increase in the CPI-U between 2008 and 2009. See 75 FR 9601 (Mar. 3, 
2010).

II. The CFI Asset Cap for 2011

    As of January 1, 2011, FHFA has increased the CFI asset cap from 
$1,029,000,000 to $1,040,000,000, which reflects a 1.1 percent increase 
in the unadjusted CPI-U from November 2009 to November 2010. The new 
amount was obtained by rounding to the nearest million, as has been the 
practice for all prior adjustments. Consistent with the practice of 
other Federal agencies, FHFA bases the annual adjustment to the CFI 
asset cap on the percentage increase in the CPI-U from November of the 
year prior to the preceding calendar year to November of the preceding 
calendar year, because the November figures represent the most recent 
available data as of January 1st of the current calendar year.
    In calculating the CFI asset cap, FHFA uses CPI-U data that have 
not been seasonally adjusted (i.e., the data have not been adjusted to 
remove the estimated effect of price changes that normally occur at the 
same time and in about the same magnitude every year). The DOL 
encourages use of unadjusted CPI-U data in applying ``escalation'' 
provisions such as that governing the CFI asset cap, because the 
factors that are used to seasonally adjust the data are amended 
annually, and seasonally adjusted data that are published earlier are 
subject to revision for up to five years following their original 
release. Unadjusted data are not routinely subject to revision, and 
previously published unadjusted data are only corrected when 
significant calculation errors are discovered.

    Dated: January 11, 2011.
Edward J. DeMarco,
Acting Director, Federal Housing Finance Agency.
[FR Doc. 2011-991 Filed 1-18-11; 8:45 am]
BILLING CODE 8070-01-P