[Federal Register Volume 79, Number 85 (Friday, May 2, 2014)]
[Rules and Regulations]
[Pages 25006-25007]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-10127]


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FEDERAL HOUSING FINANCE AGENCY

12 CFR Part 1238

[No. 2014-N-7]


Orders: Supplemental Orders on Reporting by Regulated Entities of 
Stress Testing Results as of September 30, 2013

AGENCY: Federal Housing Finance Agency.

ACTION: Orders.

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SUMMARY: In this document, the Federal Housing Finance Agency (FHFA) 
provides notice that it issued Orders to supplement its Orders dated 
November 26, 2013 and December 13, 2013, with respect to the Federal 
National Mortgage Association and Federal Home Loan Mortgage 
Corporation reporting results under section 165(i)(2) of the Dodd-Frank 
Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).

DATES: Effective May 2, 2014. Each Order is applicable April 28, 2014.

FOR FURTHER INFORMATION CONTACT: Naa Awaa Tagoe, Senior Associate 
Director, Office of Financial Analysis, Modeling and Simulations, (202) 
649-3140, [email protected]; Stefan Szilagyi, Examination Manager, 
FHLBank Modeling, FHLBank Risk Modeling Branch, (202) 649-3515, 
[email protected]; or Mark D. Laponsky, Deputy General Counsel, 
Office of General Counsel, (202) 649-3054 (these are not toll-free 
numbers), [email protected]. The telephone number for the 
Telecommunications Device for the Hearing Impaired is (800) 877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    FHFA is responsible for ensuring that the regulated entities 
operate in a safe and sound manner, including the maintenance of 
adequate capital and internal controls, that their operations and 
activities foster liquid, efficient, competitive, and resilient 
national housing finance markets, and that they carry out their public 
policy missions through authorized activities. See 12 U.S.C. 4513. 
These Supplemental Orders are being issued under 12 U.S.C. 4514(a), 
which authorizes the Director of FHFA to require by Order that the 
regulated entities submit regular or special reports to FHFA and 
establishes remedies and procedures for failing to make reports 
required by Order. The Supplemental Orders provide to the Federal 
National Mortgage Association and the Federal Home Loan Mortgage 
Corporation a revised template to use in reporting to the public the 
severely adverse results of their respective stress tests.

II. Orders

    For the convenience of the affected parties, the text of the 
Orders, without appendices, follows below in its entirety. You may 
access these Orders with Appendices 11 and 12 from FHFA's Web site at 
http://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Issues-Scenarios-and-Guidance-to-FannieMae,-Freddie-Mac-and-the-Federal-Home-Loan-Banks-Regarding-Annual-Dodd-Frank-St.aspx. The Orders will be available for 
public inspection and copying at the Federal Housing Finance Agency, 
Eighth Floor, 400 Seventh St. SW., Washington, DC 20024. To make an 
appointment, call (202) 649-3804.
    The text of the Supplemental Orders is as follows:

Federal Housing Finance Agency

Order Nos. 2014-OR-FNMA-1, and 2014-OR-FHLMC-1

SUPPLEMENTAL ORDER ON REPORTING BY REGULATED ENTITIES OF STRESS TESTING 
RESULTS AS OF SEPTEMBER 30, 2013

    Whereas, section 165(i)(2) of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act (``Dodd-Frank Act'') requires certain financial 
companies with total consolidated assets of more than $10 billion, and 
which are regulated by a primary Federal financial regulatory agency, 
to conduct annual stress tests to determine whether the companies have 
the capital

[[Page 25007]]

necessary to absorb losses as a result of adverse economic conditions;
    Whereas, FHFA's rule implementing section 165(i)(2) of the Dodd-
Frank Act is codified as 12 CFR part 1238 and requires that ``[e]ach 
regulated entity must file a report in the manner and form established 
by FHFA.'' 12 CFR Sec.  1238.5(b);
    Whereas, on November 26, 2013, FHFA issued an Order to each 
regulated entity accompanied by appendices numbered 1 through 10 and 
amended Summary Instructions and Guidance relating to the performance 
of stress tests as of September 30, 2013, and the reporting of the 
results of such tests;
    Whereas, on December 13, 2013, FHFA issued a Supplemental Order to 
each regulated entity providing two additional appendices for use in 
reporting stress testing results as of September 30, 2013;
    Whereas, the Federal National Mortgage Association and the Federal 
Home Loan Mortgage Corporation timely submitted its stress test results 
pursuant to 12 CFR part 1238 and the implementing Orders, instructions, 
and guidance;
    Whereas, after analyzing the results of the Federal National 
Mortgage Association and the Federal Home Loan Mortgage Corporation 
stress testing and the methodologies and practices used in testing, 
pursuant to 12 CFR Sec.  1238.4(c), FHFA required the Federal National 
Mortgage Association and the Federal Home Loan Mortgage Corporation to 
implement alternative stress testing techniques and exercises before 
publication of any results;
    Whereas, FHFA has determined that the Federal National Mortgage 
Association's and the Federal Home Loan Mortgage Corporation's public 
reporting of the severely adverse results should reflect the 
alternative techniques and exercises required; and
    Whereas, section 1314 of the Safety and Soundness Act, 12 U.S.C. 
Sec.  4514(a) authorizes the Director of FHFA to require regulated 
entities, by general or specific order, to submit such reports on their 
management, activities, and operations as the Director considers 
appropriate.
    Now Therefore, it is hereby ordered as follows:
    The Federal National Mortgage Association and the Federal Home Loan 
Mortgage Corporation shall publicly report as required by 12 CFR part 
1238 the severely adverse results of the required stress testing using 
the template provided herewith as Attachment 1.
    This Order is effective immediately.

    Signed at Washington, DC, this 28th day of April 2014.
Melvin L. Watt,
Director, Federal Housing Finance Agency.
    Dated: April 28, 2014.
Melvin L. Watt,
Director, Federal Housing Finance Agency.
[FR Doc. 2014-10127 Filed 5-1-14; 8:45 am]
BILLING CODE 8070-01-P