[Federal Register Volume 77, Number 47 (Friday, March 9, 2012)]
[Notices]
[Page 14366]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-5805]


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FEDERAL HOUSING FINANCE AGENCY

[No. 2012-N-02]


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, 
2012.

FOR FURTHER INFORMATION CONTACT: Patricia L. Sweeney, Division of 
Federal Home Loan Bank Regulation, 202-649-3311, [email protected], 
or Eric M. Raudenbush, Assistant General Counsel, 202-649-6421, 
[email protected], Federal Housing Finance Agency, 400 Seventh 
Street SW., Washington, DC 20024.

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.\1\ 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.\2\ 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.\3\ For 2011, FHFA set the CFI asset cap at $1,041,000,000, 
which reflected a 1.1 percent increase over 2010, based upon the 
increase in the CPI-U between 2009 and 2010. Due to a transcription 
error, the agency's Federal Register notice announcing the CFI asset 
cap adjustment for 2011 mistakenly stated that the cap had been set at 
$1,040,000,000. See 76 FR 3142 (Jan. 19, 2011).
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    \1\ See 12 U.S.C. 1424(a), 1430(a).
    \2\ See 12 U.S.C. 1422(10)(A); 12 CFR 1263.1.
    \3\ See 12 U.S.C. 1422(10); 12 CFR 1263.1 (defining the term CFI 
asset cap).
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II. The CFI Asset Cap for 2012

    As of January 1, 2012, FHFA has increased the CFI asset cap from 
$1,041,000,000 (the correct number for 2011) to $1,076,000,000 which 
reflects a 3.4 percent increase in the unadjusted CPI-U from November 
2010 to November 2011. 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: March 5, 2012.
Edward J. DeMarco,
Acting Director, Federal Housing Finance Agency.
[FR Doc. 2012-5805 Filed 3-8-12; 8:45 am]
BILLING CODE 8070-01-P