[Federal Register Volume 76, Number 231 (Thursday, December 1, 2011)]
[Rules and Regulations]
[Pages 74648-74649]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-30480]


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FEDERAL HOUSING FINANCE AGENCY

FEDERAL HOUSING FINANCE BOARD

12 CFR Parts 912 and 997

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of Federal Housing Enterprise Oversight

12 CFR Parts 1780 to 1799

RIN 2590-AA52


Repeal of Regulations

AGENCIES: Federal Housing Finance Agency; Federal Housing Finance 
Board; and Office of Federal Housing Enterprise Oversight.

ACTION: Final rule.

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SUMMARY: The Federal Housing Finance Agency (FHFA) is repealing two 
obsolete and outdated Federal Housing Finance Board (Finance Board) 
regulations, which relate to meetings of the Board of Directors of the 
Finance Board and the manner of calculating the Resolution Funding 
Corporation (RefCorp) obligations of the Federal Home Loan Banks 
(Banks), respectively. FHFA is also repealing certain parts of the 
Office of Federal Housing Enterprise Oversight (OFHEO) regulations 
currently designated as reserved and an associated subchapter, which 
will be empty after the repeal of those parts. This final rule repeals 
the regulations and subchapter in their entirety.

DATES: This rule is effective on January 3, 2012.

FOR FURTHER INFORMATION CONTACT: Michou H.M. Nguyen, Assistant General 
Counsel, (202) 414-3810, Office of General Counsel, 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.

SUPPLEMENTARY INFORMATION:

I. Background and Analysis

A. Creation of the Federal Housing Finance Agency and Recent 
Legislation

    Effective July 30, 2008, the Housing and Economic Recovery Act of 
2008 (HERA), Public Law 110-289, 122 Stat. 2654, created FHFA as a new 
independent agency of the Federal Government, and transferred to FHFA 
the supervisory and oversight responsibilities of OFHEO over the 
Federal National Mortgage Association, and the Federal Home Loan 
Mortgage Corporation (collectively, the Enterprises), the oversight 
responsibilities of the Finance Board over the Banks and the Office of 
Finance (OF) (which acts as the Banks' fiscal agent) and certain 
functions of the Department of Housing and Urban Development. See id. 
at section 1101, 122 Stat. 2661-62. FHFA is responsible for ensuring 
that the Enterprises and the Banks operate in a safe and sound manner, 
including that they maintain adequate capital and internal controls, 
that their activities foster liquid, efficient, competitive and 
resilient national housing finance markets, and that they carry out 
their public policy missions through authorized activities. See id. at 
section 1102, 122 Stat. 2663-64. The Enterprises, the Banks, and the OF 
continue to operate under regulations promulgated by OFHEO and the 
Finance Board, respectively, until such regulations are superseded by 
regulations issued by FHFA. See id. at sections 1301, 1302, 1311, 1312, 
122 Stat. 2794-95, 2797-98.

B. Considerations of Differences Between the Banks and the Enterprises

    Section 1201 of HERA requires the Director, when promulgating 
regulations ``of general applicability and future effect'' relating to 
the Banks, to consider the differences between the Banks and the 
Enterprises as they may relate 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. See section 1201, Public Law 110-289, 122 Stat. 
2782-83 (amending 12 U.S.C. 4513). This final rule does not impose any 
new obligations on the Banks, but instead simply removes two existing 
Finance Board regulations that, as a result of other events, no longer 
have any practical or legal effect. Furthermore, as explained below, 
the repeal of parts 912 and 997 of title 12 of the Code of Federal 
Regulations (CFR) would not have a ``future effect'' on the rights and 
responsibilities of the Banks. For these reasons, FHFA believes that a 
section 1201 analysis is not required for this final rule.

C. Part 912 (Meetings of the Board of Directors of the Finance Board)

    Part 912 of title 12 of the CFR was issued by the Finance Board 
pursuant to the Government in the Sunshine Act (Sunshine Act), which 
generally requires that meetings of Federal agencies that are headed by 
collegial bodies be open to the public, and that such agencies 
promulgate regulations to implement the provisions of the Sunshine Act. 
Section 2 of the Sunshine Act states that the purpose of the Act is to 
provide the public the ``fullest practicable information regarding the 
decisionmaking processes of the Federal Government'' while protecting 
legitimate individual privacy and ``the ability of the Government to 
carry out its responsibilities.'' Public Law 94-409, section 2, 90 
Stat. 1241 (Sept. 13, 1976) reprinted in 5 U.S.C. 552b notes. In order 
to implement the purposes of the Sunshine Act as articulated in Article 
2, part 912 was designed to provide the public with access to 
information regarding the decision-making processes of the Board of 
Directors of the Finance Board, while protecting the privacy rights of 
individuals and the ability of the Board of Directors of the Finance 
Board to carry out its responsibilities. Part 912 accomplished these 
goals through the use of various procedures applicable to open and 
closed meetings of the Board of Directors of the Finance Board.
    The Sunshine Act does not apply to FHFA, which is not administered 
by a collegial body. For purposes of 5 U.S.C. 552b, the term ``agency'' 
means ``any agency * * * headed by a collegial body composed of two or 
more individual members * * *.'' FHFA is headed by a single Director 
and therefore does not fall within the scope of this definition. 
Consequently, the procedures that the Finance Board had adopted in part 
912 for its board meetings are no longer necessary, and should not be 
adopted by FHFA, because FHFA does not have a board of directors and is 
not subject to the Sunshine Act. Therefore, FHFA is hereby repealing 
part 912 in its entirety.

D. Part 997 (RefCorp Obligations of the Banks)

    In 1989, Congress established RefCorp as a vehicle to provide 
funding for the Resolution Trust Corporation to finance resolution of 
the savings and loan crisis.

[[Page 74649]]

12 U.S.C. 1441b(a), (b). RefCorp issued approximately $30 billion of 
long-term bonds, the last of which will mature in April 2030. The 
interest due on the RefCorp bonds is paid from several sources, 
including mandatory contributions from the Banks. As initially enacted, 
the law required the Banks to contribute $300 million annually toward 
the RefCorp interest payments. Public Law 101-73, Title V, section 
511(a), 103 Stat. 394, (August 9, 1989). In 1999, the Gramm-Leach-
Bliley Act changed the manner in which the Banks' RefCorp annual 
contributions were to be calculated by requiring each Bank to pay 20 
percent of its annual net earnings, rather than $300 million. Public 
Law 106-102, Title VI, section 607(a), 113 Stat. 1455, (November 12, 
1999), codified at 12 U.S.C. 1441b(f)(2)(C)(i). Those amendments 
further provided that the Banks' RefCorp obligation was to terminate 
when the value of the contributions made under the revised formula 
equaled the value of a benchmark annuity of $300 million per year that 
commenced when the RefCorp bonds were issued and ended on their 
maturity date. The Finance Board promulgated part 997 to implement 
those Gramm-Leach-Bliley Act amendments, and the regulations specified 
the method to be used for making the present value calculations 
required to determine the value of the Banks' payments, relative to the 
benchmark annuity, and for adjusting the termination date for the 
payments.
    This year, after consulting with the Department of the Treasury and 
conducting the calculations in accordance with part 997, FHFA 
determined that the RefCorp payment made by the Banks on July 15, 2011, 
caused the value of all RefCorp payments made by the Banks to that date 
to equal the value of the benchmark annuity, which terminated the 
obligation of the Banks to make any further contributions toward the 
debt service for the RefCorp bonds. See 76 FR 49477 (August 10, 2011). 
The termination of the Banks' required RefCorp payments made part 997, 
which relates solely to the calculation of the aggregate value of, and 
end date, for those payments, unnecessary and of no effect. Therefore, 
FHFA is hereby repealing part 997 in its entirety.

E. Parts 1781 to 1799 and Subchapter D

    Currently, parts 1781 to 1799 of title 12 of the CFR, which are 
OFHEO regulations, are designated as ``reserved.'' These reserved parts 
are also currently the only items under subchapter D (Rules of Practice 
and Procedure) of chapter 17 of title 12. Because these parts contain 
no substantive provisions, there is nothing to revise and relocate to 
the FHFA regulations, as is the case with other OFHEO and Finance Board 
regulations. Nonetheless, unless FHFA affirmatively removes the 
reference to those parts as being reserved and removes subchapter D, 
those references and an empty subchapter D will remain in the CFR after 
FHFA has removed or relocated all of the other substantive OFHEO 
regulations. Therefore, in the interest of ensuring that all OFHEO 
regulations that will not be carried forward into the FHFA regulations 
are removed, FHFA is hereby repealing parts 1781 to 1799 and subchapter 
D in their entirety.

II. Notice and Public Participation

    FHFA finds that good cause exists for adopting these rule changes 
as a final rule without public notice and comment under 5 U.S.C. 
553(b)(B) because the subject regulations currently have no legal or 
practical effect and thus their removal would not alter the rights or 
responsibilities of any party. The provisions of part 912 relate solely 
to the operations of the Board of Directors of the Finance Board, which 
no longer exists. The provisions of part 997 relate solely to the 
manner in which the Finance Board and FHFA calculate the Banks' RefCorp 
obligation, which has been terminated. The references to the 
``reserved'' parts of the OFHEO regulations in subchapter D have no 
substantive effect on any party. None of these regulations includes 
provisions that are appropriate for FHFA to carry over and incorporate 
into its own regulations, and thus they should be removed from the CFR. 
For these reasons, FHFA believes that public comments are unnecessary 
and would serve no purpose.

III. Paperwork Reduction Act

    The final rule does not contain any collections of information 
pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et 
seq.). Therefore, FHFA has not submitted any information to the Office 
of Management and Budget for review.

IV. Regulatory Flexibility Act

    The final rule applies only to the Banks and Enterprises, which do 
not come within the meaning of small entities as defined in the 
Regulatory Flexibility Act (RFA). See 5 U.S.C. 601(6). Therefore in 
accordance with section 605(b) of the RFA, FHFA certifies that this 
final rule will not have a significant economic impact on a substantial 
number of small entities.

List of Subjects

12 CFR Part 912

    Sunshine Act.

12 CFR Part 997

    Federal home loan banks.

    Accordingly, for reasons stated in the preamble and under the 
authority of 12 U.S.C. 4511, 4512, 4513, and 4526, FHFA is amending 
subchapters B and L of chapter IX and subchapter D of chapter XVII of 
title 12 of the Code of Federal Regulations as follows:

CHAPTER IX--FEDERAL HOUSING FINANCE BOARD

SUBCHAPTER B--FEDERAL HOUSING FINANCE BOARD ORGANIZATION AND OPERATIONS

PART 912--[REMOVED]

0
1. Remove part 912.

SUBCHAPTER L--NON-BANK SYSTEM ENTITIES

PART 997--[REMOVED]

0
2. Remove part 997.

CHAPTER XVII--OFFICE OF FEDERAL HOUSING ENTERPRISE OVERSIGHT, 
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

SUBCHAPTER D--RULES OF PRACTICE AND PROCEDURE--[REMOVED]

0
3. Remove subchapter D, consisting of reserved parts 1780 to 1799.

    Dated: November 17, 2011.
Edward J. DeMarco,
Acting Director, Federal Housing Finance Agency.
[FR Doc. 2011-30480 Filed 11-30-11; 8:45 am]
BILLING CODE 8070-01-P