[Federal Register Volume 78, Number 19 (Tuesday, January 29, 2013)]
[Proposed Rules]
[Pages 6042-6044]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-01427]


 ========================================================================
 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. 78, No. 19 / Tuesday, January 29, 2013 / 
Proposed Rules  

[[Page 6042]]



FEDERAL HOUSING FINANCE BOARD

12 CFR Part 911

FEDERAL HOUSING FINANCE AGENCY

12 CFR Part 1214

RIN 2590-AA06


Availability of Non-Public Information

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

ACTION: Notice of proposed rulemaking; request for comments.

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SUMMARY: The Federal Housing Finance Agency (FHFA or Agency) proposes 
to adopt a rule governing the disclosure of FHFA non-public 
information. The proposed rule would replace rules issued by FHFA's 
predecessor agencies the Federal Housing Finance Board (Finance Board) 
and the Office of Federal Housing Enterprise Oversight (OFHEO). The 
proposed rule would prohibit the unauthorized disclosure of FHFA non-
public information, replace the Finance Board's rule on the 
Availability of Unpublished Information, and parallel those portions of 
OFHEO's former rule on non-public information that were not replaced by 
FHFA's Freedom of Information Act regulation.

DATES: Written comments must be received on or before April 1, 2013.

ADDRESSES: You may submit your comments, identified by Regulatory 
Information Number (RIN) 2590-AA06, by any of the following methods:
     Email: Comments to Alfred M. Pollard, General Counsel, may 
be sent by email to [email protected]. Please include Comments/RIN 
2590-AA06 in the message's subject line.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments. If you submit your 
comment to the Federal eRulemaking Portal, please also send it by email 
to FHFA at [email protected] to ensure timely receipt by the Agency. 
Please include Comments/RIN 2590-AA06 in the subject line of the 
message.
     Courier/Hand Delivery: The hand delivery address is: 
Alfred M. Pollard, General Counsel, Attention: Comments/RIN 2590-AA06, 
Federal Housing Finance Agency, 400 Seventh Street SW., Eighth Floor, 
Washington, DC 20024. The package should be logged in at the Guard's 
Desk, First Floor, on business days between 9 a.m. and 5 p.m.
     U.S. Mail, United Parcel Service, Federal Express or Other 
Mail Service: The mailing address for comments is: Alfred M. Pollard, 
General Counsel, Attention: Comments/RIN 2590-AA06, Federal Housing 
Finance Agency, 400 Seventh Street SW., Eighth Floor, Washington, DC 
20024.

FOR FURTHER INFORMATION CONTACT: James P. Jordan, Senior Counsel, 202-
649-3075 (not a toll-free number), Federal Housing Finance Agency, 400 
Seventh Street, SW., Eighth Floor, Washington, DC 20024. The telephone 
number for the Telecommunications Device for the Hearing Impaired is 
800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Comments

    FHFA invites comments on all aspects of the proposed rule, and will 
revise the language of the proposed rule as appropriate after taking 
all comments into consideration. FHFA will accept comments on this 
proposed rule in writing on or before April 1, 2013. Copies of all 
comments received will be posted without change on the FHFA web site at 
http://www.fhfa.gov, and will include any personal information you 
provide, such as your name, address, email address, and telephone 
number. Copies of all comments received will be made 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 400 Seventh Street, 
SW., Washington, DC 20024. To make an appointment to inspect comments, 
please call the Office of General Counsel at 202-649-3804.

II. Background

Establishment of FHFA

    Effective July 30, 2008, the Housing and Economic Recovery Act of 
2008 (Pub. L. 110-289, 122 Stat. 2654) (HERA), amended the Federal 
Housing Enterprises Financial Safety and Soundness Act of 1992 (12 
U.S.C. 4501 et seq.) (Safety and Soundness Act), and the Federal Home 
Loan Bank Act (12 U.S.C. 1421-1449) to establish FHFA as an independent 
regulatory agency of the Federal Government. FHFA was established with 
all of the authorities necessary to supervise and regulate the Federal 
National Mortgage Association, the Federal Home Loan Mortgage 
Corporation, the Federal Home Loan Banks (collectively, regulated 
entities), and the Office of Finance of the Federal Home Loan Bank 
System (Office of Finance).
    HERA transferred to FHFA the employees, functions, and regulations 
of OFHEO, the Finance Board, and the Government-Sponsored Enterprise 
mission team within the U.S. Department of Housing and Urban 
Development. FHFA is responsible for ensuring that the regulated 
entities operate in a safe and sound manner, including maintaining 
adequate capital and internal controls; foster liquid, efficient, 
competitive, and resilient national housing finance markets; comply 
with the Safety and Soundness Act and their respective authorizing 
statutes, as well as all rules, regulations, guidelines, and orders 
issued under law; and carry out their missions through activities that 
are authorized by law and are consistent with the public interest. In 
addition, FHFA may prescribe regulations as determined to be 
appropriate regarding the conduct of conservatorships or receiverships.

III. Analysis of Proposed Rule

    The Safety and Soundness Act mandates that FHFA issue regulations 
in connection with FHFA's supervision and regulation of the regulated 
entities and the Office of Finance. The proposed rule updates, 
clarifies, and simplifies existing regulations and eliminates redundant 
provisions. It reduces confusion about the applicability of predecessor 
agencies' rules. The proposed rule is internal and procedural rather 
than substantive.
    FHFA has concluded that this rule would be exempt from the notice 
and comment requirement under the Administrative Procedure Act, 5 
U.S.C. 553, because this rule falls under the agency ``procedure'' 
exemption described in 5 U.S.C. 553(b)(A).

[[Page 6043]]

However, in recognition of the Administrative Conference of the United 
States Recommendation 92-1, paragraph 2, The Procedural and Practice 
Rule Exemption from the APA Notice-and-Comment Rulemaking Requirements, 
57 FR 30,102 (1992), FHFA is voluntarily submitting this rule as a 
proposed rule to the public for notice and comment with a 60-day 
comment period following publication. The proposed rule is of a 
``housekeeping nature.'' That is, the consolidation and migration of 
FHFA's predecessor agencies' rules on non-public information involve 
primarily the agency's management of its own information and minor 
technical amendments.
    The proposed rule would prohibit the unauthorized disclosure of 
FHFA non-public information, replace the Finance Board's rule on the 
Availability of Unpublished Information at 12 CFR part 911, and 
parallel those portions of OFHEO's former rule on non-public 
information that were not replaced by FHFA's Freedom of Information Act 
regulation at 12 CFR part 1202. The proposed rule does not affect 12 
CFR 1703 Subparts E-F. As described below, FHFA is proposing a separate 
rule to replace those subparts.
    Proposed Sec. Sec.  1214.3, 1214.4, and 1214.5 are substantively 
analogous to the former 12 CFR 703.6 to 1703.8 and to the existing 12 
CFR 911.3, which the proposed rule would replace. The proposed FHFA 
rule (12 CFR part 1214), the former OFHEO rule (12 CFR part 1703), and 
the existing Finance Board rule (12 CFR part 911), all generally 
prohibit disclosure of non-public agency information to parties that 
are not agency employees, and set forth the limited circumstances when 
disclosure is permitted. The Finance Board rule, 12 CFR part 911, also 
outlines how the Finance Board handled demands and requests for 
information in the context of legal proceedings. FHFA is separately 
proposing the ``Production of FHFA Records, Information, and Employee 
Testimony in Legal Proceedings (``Touhy'') rule which would set forth 
FHFA's process for handling those demands and requests.

Use of the Term ``Confidential''

    The proposed rule would define ``confidential supervisory 
information,'' to be included as a subset of ``non-public 
information.'' The inclusion of the term ``confidential'' within the 
definition of ``confidential supervisory information'' is not intended 
to invoke the meaning of ``confidential,'' as that term is used in 
Executive Order No. 13526, 75 FR 707 (2009) (President's order on the 
classification of National Security Information). Confidential 
supervisory information is used in part 1214 to refer to the distinct 
category of information defined in proposed Sec.  1214.1. FHFA used the 
word ``confidential'' within the label for this category of information 
simply to be consistent with the manner in which federal banking 
agencies refer to similar or identical types of information.

Regulatory Impacts

Paperwork Reduction Act

    The proposed rule 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 and Executive Order 13272--Consideration of 
Small Entities

    FHFA has considered the proposed rule's impact under the Regulatory 
Flexibility Act (5 U.S.C. 602 et seq.) and Executive Order 13272 of 
August 13, 2002. The proposed rule, if adopted as a final rule, is not 
likely to have a significant economic impact on a substantial number of 
small entities under the Regulatory Flexibility Act and Executive Order 
13272, because it will not: (1) Impose record-keeping requirements on 
them; (2) affect their competitive position in relation to large 
entities; and (3) affect their cash flow, liquidity or ability to 
remain in the market. (5 U.S.C. 605(b)).

List of Subjects in 12 CFR Part 1214

    Administrative practice and procedure, Confidential commercial 
information, Disclosure, Exemptions, Government employees, Records.

    For the reasons set forth in the SUPPLEMENTARY INFORMATION, FHFA 
proposes to: Amend chapters IX and XII of title 12 of the Code of 
Federal Regulations as follows:

CHAPTER IX--FEDERAL HOUSING FINANCE BOARD

PART 911--[REMOVED]

0
1. Remove part 911.

CHAPTER XII--FEDERAL HOUSING FINANCE AGENCY

0
2. Add part 1214 to read as follows:

PART 1214--AVAILABILITY OF NON-PUBLIC INFORMATION

Sec.
1214.1 Definitions.
1214.2 Purpose and scope.
1214.3 General rule.
1214.4 Exceptions.
1214.5 Confidential supervisory information.

    Authority: 5 U.S.C. 301, 552; 12 U.S.C. 4501, 4513, 4522, 4526, 
4639.


Sec.  1214.1  Definitions.

    Confidential supervisory information means information prepared or 
received by FHFA that meets all of the following criteria:
    (1) The information is not a document prepared by a regulated 
entity or the Office of Finance for its own business purposes that is 
in its possession;
    (2) The information is exempt from the Freedom of Information Act, 
5 U.S.C. 552 (1966); and
    (3) The information--
    (i) Consists of reports of examination, inspection and visitation, 
confidential operating and condition reports, and any information 
derived from, related to, or contained in such reports, or
    (ii) Is gathered by FHFA in the course of any investigation, 
suspicious activity report, cease-and-desist order, civil money penalty 
enforcement order, suspension, removal or prohibition order, or other 
supervisory or enforcement orders or actions taken under the Federal 
Housing Enterprises Financial Safety and Soundness Act of 1992, Public 
Law 102-550 (1992).
    Conservatorship or Receivership information means information in 
FHFA's possession strictly for the purpose of administering the 
conservatorship or receivership of a regulated entity.
    Disclosure means release or divulgence of information by any person 
to a person outside of FHFA.
    FHFA employee means strictly for the purpose of this regulation, 
any person employed by FHFA, including any current or former officer, 
intern, agent, contractor or contractor personnel, or detailee of FHFA, 
and any person employed by the FHFA Office of the Inspector General 
(FHFA-OIG), including any current or former officer, intern, agent, 
contractor or contractor personnel, or detailee of FHFA-OIG.
    Non-public information means information that FHFA has not made 
public that is created by, obtained by, or communicated to an FHFA 
employee in connection with the performance of official duties, 
regardless of who is in possession of the information. This includes, 
but is not limited to conservatorship or receivership information and 
confidential supervisory information as defined above. It does not 
include information or documents that FHFA has disclosed under the 
Freedom of Information Act (5 U.S.C. 552; 12 CFR part 1202), or Privacy 
Act of 1974 (5 U.S.C. 552a; 12

[[Page 6044]]

CFR part 1204). It also does not include specific information or 
documents that were previously disclosed to the public at large or 
information or documents that are customarily furnished to the public 
at large in the course of the performance of official FHFA duties, 
including but not limited to: disclosures made by the Director pursuant 
to the Enterprise Public Use Database Rule (currently located at 24 CFR 
subpart F, and any FHFA successor rule); the annual report that FHFA 
submits to Congress pursuant to the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.), 
press releases, FHFA blank forms, and materials published in the 
Federal Register.
    Person means individual or business entity.


Sec.  1214.2  Purpose and Scope.

    (a) Purpose. The purpose of this part is to control the 
dissemination of non-public information and maintain its controlled, 
sensitive, privileged, or proprietary nature, as appropriate.
    (b) Scope. This part imposes a broad-based prohibition against 
unauthorized disclosure of any non-public information. This part does 
not supersede the regulations at 12 CFR part 1202 (governing disclosure 
under the Freedom of Information Act); 12 CFR part 1204 (governing 
disclosure under the Privacy Act); and the sections describing 
permitted disclosures in any FHFA rules on Federal home Loan Bank 
Information Sharing or on the FHFA Public Use Database.
    (c) These provisions also do not supersede or otherwise alter the 
rights or liabilities created by 5 U.S.C. 7211 (governing disclosures 
to Congress); 5 U.S.C. 2302(b)(8) (governing disclosures of illegality, 
waste, fraud, abuse, or public health or safety threats); or 12 U.S.C. 
3401 (governing disclosure of financial institution customer 
information).


Sec.  1214.3  General Rule.

    (a) In general. Except as authorized in writing by the Director, no 
person in possession or control of non-public information may disclose 
or permit the use or disclosure of such information in any manner or 
for any purpose.
    (b) Persons possessing non-public information. All non-public 
information, for which the Director authorizes disclosure, remains the 
property of FHFA and may not be used or disclosed for any purpose other 
than that authorized under this part without the prior written 
permission of the Director.
    (c) No Waiver. FHFA's disclosure of non-public information to any 
person does not constitute a waiver by FHFA of any privilege or FHFA's 
right to control, supervise, or impose limitations on, the subsequent 
use and disclosure of the non-public information.
    (d) Penalties. Any person that discloses or uses non-public 
information except as authorized under this part may be subject to the 
penalties provided in 18 U.S.C. 641 and other applicable laws. In 
addition to those penalties, FHFA, regulated entity, Office of Finance, 
affiliate (as defined in 12 U.S.C. 4502(20)), or entity-affiliated 
party (as defined in 12 U.S.C. 4502(11)) employees may be subject to 
appropriate administrative, enforcement, or disciplinary proceedings.


Sec.  1214.4  Exceptions.

    (a) FHFA Employees. Subject to the scope restrictions of Sec.  
1214.2, except as authorized by this part, no FHFA employee may 
disclose or permit the disclosure in any manner of any non-public 
information to anyone except another FHFA employee or regulated entity 
or the Office of Finance, when appropriate, for use in the performance 
of their official duties.
    (b) Regulated Entity Agents and Consultants.--(1) When necessary 
and appropriate for regulated entity or Office of Finance business 
purposes, a regulated entity, the Office of Finance, or any director, 
officer, or employee thereof may disclose non-public information to any 
person officially connected with a regulated entity or the Office of 
Finance, as officer, director, employee, attorney, auditor, or 
independent auditor (``regulated entity agents'').
    (2) A regulated entity, the Office of Finance, or a director, 
officer, employee, or agent thereof, also may disclose non-public 
information to a consultant under this paragraph if the consultant is 
under a written contract to provide services to the regulated entity or 
the Office of Finance and the consultant has agreed in writing:
    (i) To abide by the prohibition on the disclosure of non-public 
information contained in this section; and
    (ii) That it will not use the non-public information for any 
purposes other than those stated in its contract to provide services to 
the regulated entity or the Office of Finance.
    (c) Law Enforcement Proceedings. Notwithstanding the general 
prohibition of disclosure of non-public information, to the minimum 
extent required by the Inspector General Act, Public Law 95-452 (1978), 
FHFA's Office of Inspector General is permitted under this section to 
disclose non-public FHFA information without Director approval.
    (d) Privilege. FHFA retains all privilege claims for non-public 
information shared under Sec.  1214.4, including, but not limited to 
attorney-client, attorney-work product, deliberative process, and 
examination privileges.


Sec.  1214.5  Confidential Supervisory Information.

    (a) General. Confidential supervisory information may be disclosed 
only in accordance with this part. Confidential supervisory information 
is the property of FHFA and any unauthorized use or disclosure of such 
information may be subject to the penalties identified in Sec.  
1214.3(d).
    (b) Regulated Entities and Office of Finance. The Director makes 
available to each regulated entity a copy of FHFA's report of 
examination of that regulated entity. The report of examination and all 
other confidential supervisory information is the property of FHFA and 
is provided to the regulated entity for its confidential internal use 
only. Under no circumstance shall a regulated entity or any director, 
officer, employee, regulated entity agent, or consultant, make public 
or disclose, in any manner, the report of examination, other 
confidential supervisory information, or any portion of the contents 
thereof to any individual or organization which is not a director, 
officer, employee, attorney, auditor, or independent auditor of the 
regulated entity; or, in the case of the Federal Home Loan Banks, the 
Office of Finance. Any other disclosure or use of confidential 
supervisory information, except as expressly permitted by the Director, 
may be subject to the penalties of 18 U.S.C. 641 and such 
administrative enforcement actions as may be appropriate.
    (c) Privilege. FHFA retains all privilege claims for non-public 
information disclosed by FHFA under this section, including, but not 
limited to attorney-client, attorney-work product, deliberative 
process, and examination privileges.

    Dated: January 17, 2013.
Edward J. DeMarco,
Acting Director, Federal Housing Finance Agency.
[FR Doc. 2013-01427 Filed 1-28-13; 8:45 am]
BILLING CODE 8070-01-P