[Federal Register Volume 80, Number 102 (Thursday, May 28, 2015)]
[Rules and Regulations]
[Pages 30336-30345]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-12807]


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FEDERAL HOUSING FINANCE AGENCY

12 CFR Part 1290

RIN 2590-AA38


Federal Home Loan Bank Community Support Program--Administrative 
Amendments

AGENCY: Federal Housing Finance Agency.

ACTION: Final rule.

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SUMMARY: The Federal Housing Finance Agency (FHFA) is issuing a final 
rule amending its community support regulation to streamline and 
simplify the administrative process requirements under the regulation. 
The amendments will not affect the substantive requirements of the 
regulation, which include FHFA review and assessment of applicable 
members of the Federal Home Loan Banks (Banks) every two years, or 
change the criteria for determining member compliance with the 
community support standards and eligibility for access to long-term 
Bank advances. The amendments will replace the current process of 
selecting one-eighth of all applicable members for eight quarterly 
reviews by FHFA over a two-year review cycle, with a new process of 
FHFA reviewing all applicable members at the same time every two years.

DATES: This final rule will become effective on June 29, 2015.

FOR FURTHER INFORMATION CONTACT: Melissa Allen, Principal Program 
Analyst, (202) 649-3130, Charles McLean, Special Assistant to the 
Deputy Director, (202) 649-3155, #[email protected], 
Division of Housing Mission and Goals, or Kevin Sheehan, Associate 
General Counsel, (202) 649-3086, Office of General Counsel, 400 Seventh 
Street SW., Washington, DC 20024. (These are not toll-free numbers.) 
The telephone number for the Telecommunications Device for the Hearing 
Impaired is (800) 877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

A. Community Support Regulation Established Under the Bank Act

    Section 10(g) of the Federal Home Loan Bank Act (Bank Act) requires 
FHFA to adopt regulations establishing standards of community 
investment or service for members of Banks to maintain access to long-
term Bank advances. 12 U.S.C. 1430(g). Section 10(g) states that such 
regulations ``shall take into account factors such as a member's 
performance under the Community Reinvestment Act of 1977 [(CRA)] and 
the member's record of lending to first-time homebuyers.''
    FHFA's current community support regulation implements section 
10(g). 12 CFR part 1290. The regulation details the CRA and first-time 
homebuyer standards that have been established pursuant to section 
10(g). Each Bank member, except as provided in the regulation, must 
meet these standards in order to maintain access to long-term Bank 
advances. A long-term Bank advance is defined as an advance with a term 
to maturity greater than one year. 12 CFR 1290.1. The regulation sets 
forth the process that FHFA follows in reviewing, evaluating, and 
communicating each member's community support performance.\1\
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    \1\ In addition, the community support regulation requires each 
Bank to establish and maintain a community support program that 
provides technical assistance to its members and promotes and 
expands affordable housing finance.
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B. CRA and First-Time Homebuyer Standards Under the Current Regulation

    A member meets the CRA standard if the rating in the member's most 
recent CRA evaluation was ``Outstanding'' or ``Satisfactory.'' 12 CFR 
1290.3(b). Only members subject to the CRA must meet the CRA standard. 
Id.
    A member meets the first-time homebuyer standard if it has an 
established record of lending to first-time homebuyers or if it 
performs one or more of the first-time homebuyer support activities 
specified in the regulation. 12 CFR 1290.3(c). A member that is subject 
to the CRA is deemed to meet the first-time homebuyer standard if its 
most recent CRA rating was ``Outstanding.'' Id. All members subject to 
community support review, including those not subject to the CRA (e.g., 
insurance companies and credit unions), must meet the first-time 
homebuyer standard. Id.
    Members that have been certified as community development financial 
institutions (CDFIs) are deemed to be in compliance with the community 
support requirements and are not

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subject to community support review, unless the CDFI member is also an 
insured depository institution or a CDFI credit union. 12 CFR 
1290.2(e).

C. Review Process Under the Current Regulation

1. Quarterly Reviews and Notices to Members
    The current regulation requires FHFA to select a member for 
community support review approximately once every two years. 
Approximately one-eighth of all members are required to be reviewed in 
each calendar quarter of a two-year review cycle. FHFA does not review 
a member until it has been a member of a Bank for at least one year. 
Each member selected for review is required to submit a Community 
Support Statement to FHFA evidencing the member's most recent CRA 
rating, if any, and its first-time homebuyers support activities.
    Members selected for review are notified in two ways of the 
requirement to submit Community Support Statements to FHFA. First, FHFA 
publishes a quarterly Notice in the Federal Register of the members 
selected for community support review and the deadline for submission 
of their Community Support Statements to FHFA, and notifies each Bank 
of the members within its district selected for community support 
review during the calendar quarter. Second, within 15 days of the 
publication of the Notice in the Federal Register, each Bank must 
provide written notice to its members selected for community support 
review of the deadline for submission of the Community Support 
Statements to FHFA. The Federal Register Notice requires each Bank to 
provide to members a blank Community Support Statement Form, which also 
is available on FHFA's Web site and, upon a member's request, to assist 
the member in completing the Community Support Statement. Many of the 
Banks maintain regular contacts with their members throughout the 
community support review process.
2. Public Comments on Members' Community Support Performance
    FHFA reviews each member's completed Community Support Statement 
for compliance with the community support standards. 12 CFR 1290.4. As 
part of its review, FHFA is also required to take into consideration 
any public comments received concerning the member. 12 CFR 1290.2(d). 
The Federal Register Notice informs the public that comments may be 
submitted to FHFA on the selected members' community support 
performance. The Notice and regulation also provide that, to encourage 
the submission of public comments, each Bank shall provide written 
notice to its Advisory Council, and to nonprofit housing developers, 
community groups, and other interested parties in its district, of the 
members selected for community support review. 12 CFR 1290.2(b)(2)(ii). 
FHFA has received relatively few public comments on members' community 
support performance, and most have been supportive of their 
performance.
3. Sanctions for Failure To Comply With the Current Regulation
    A member that does not meet the requirements of the community 
support regulation may be placed ``on probation'' or ``on 
restriction.'' Typically, less than one percent of members are on 
probation or restriction at any given time. The regulation provides for 
members to be placed on probation if: (i) Their most recent CRA rating 
is ``Needs to Improve''; or (ii) their first-time homebuyer performance 
is unsatisfactory. If a member is placed on probation, the member may 
continue to obtain long-term Bank advances. A member that is on 
probation as a result of its CRA rating will remain on probation until 
its next CRA review. If the new rating for the member fails to meet the 
CRA standard, the member will be placed on restriction. 12 CFR 
1290.3(b)(2). A member that is on probation due to a failure to meet 
the first-time homebuyer standard will remain on probation for one 
year. If the member fails to demonstrate compliance with the first-time 
homebuyer standard at the end of the probationary period, the member 
will be placed on restriction. 12 CFR 1290.3(c)(2).
    Under the regulation, a member is placed on restriction if: (i) It 
does not submit a Community Support Statement; (ii) it provides no 
evidence of first-time homebuyer performance; (iii) its most recent CRA 
rating is ``Substantial Noncompliance''; or (iv) it fails to comply 
with either the CRA standard or the first-time homebuyer standard at 
the end of a probationary period. If a member is placed on restriction, 
it may not obtain long-term Bank advances until it meets the 
requirements for CRA ratings or first-time homebuyers activities. 12 
CFR 1290.3(b)(3), (c)(3); 1290.5(a).

II. Proposed Rule and Comments

    On November 10, 2011, FHFA published in the Federal Register a 
proposed rule that would have made substantive and administrative 
changes to the community support regulation. 76 FR 70069. The proposed 
rule would have replaced the requirement for members to submit their 
most recent CRA ratings in Community Support Statements to FHFA with a 
requirement that the Banks verify members' CRA ratings using publicly 
available information from the Federal Financial Institutions 
Examination Council or the member's primary Federal banking regulatory 
agency. Members would still have been required to submit a statement 
every two years describing their first-time homebuyer support 
activities, but the Banks rather than FHFA would have been responsible 
for reviewing those statements to evaluate members' compliance with the 
first-time homebuyer support requirements.
    In conjunction with the proposed transfer of responsibility for 
community support review and evaluation, the proposed rule would have 
eliminated the quarterly FHFA reviews of selected members and the 
accompanying Federal Register Notices. The proposed rule would have 
added a requirement that the Banks post notices on their public Web 
sites soliciting public comments on members' community support 
performance. The proposed rule would have required the Banks to notify 
their members of the results of the Banks' community support reviews by 
providing that a Bank could not approve a member's request for long-
term advances unless the Bank had determined that the member complies 
with the first-time homebuyer standard and the CRA standard, as 
applicable.
    FHFA received 114 comments on the proposed rule. The twelve Banks 
submitted a joint comment letter, and a majority of the other comments 
were submitted by Bank members or by associations representing Bank 
members. Comments were also submitted by nonprofits, Bank Advisory 
Council members, and state housing agencies. Most of the comments, 
including those of the twelve Banks, opposed the proposed shift in 
responsibility for reviewing and assessing members' community support 
compliance from FHFA to the Banks. Commenters contended that the 
determination of whether a member complies with the community support 
requirements is a regulatory function best suited to FHFA and that the 
Banks should not be evaluating their own members. Commenters stated 
that each Bank would be required to adopt its own standards and 
procedures, resulting in unnecessary duplication of effort among the 
Banks. Commenters also objected to the Banks soliciting public comments 
on members'

[[Page 30338]]

community support performance because they did not support transferring 
the responsibility to determine compliance to the Banks. Commenters 
were generally silent on the proposed administrative changes, including 
the discontinuation of the quarterly review rounds and accompanying 
Federal Register Notices.

III. Analysis of Final Rule

    The final rule does not make any of the changes to substantive 
requirements that were proposed in the 2011 proposed rule. FHFA will 
continue to be responsible for reviewing and assessing member 
compliance with the community support requirements, with members 
continuing to be reviewed every two years. However, consistent with the 
proposed rule, the final rule makes a number of revisions that 
streamline and simplify the administrative process requirements, which 
will facilitate the use of electronic submissions and evaluations.
    The specific administrative changes are the following: Eliminating 
the eight quarterly review rounds; eliminating the accompanying 
quarterly FHFA Federal Register Notices; requiring the Banks to solicit 
public comments (to be sent to FHFA) on their public Web sites; 
requiring the Banks, rather than FHFA, to communicate FHFA's review 
results to members; and eliminating specific deadlines for FHFA's 
review of members' Community Support Statements and notifications of 
the results to members.
    The final rule also makes organizational and other technical 
language changes in the regulation for greater clarity in administering 
the review process. These technical changes include codifying FHFA's 
long-standing policy for treatment of new Bank members, which has been 
to exclude members from community support reviews until they have been 
Bank members for more than one year. The technical changes also include 
codifying long-standing agency practice with respect to the 
consequences for failure to comply with the first-time homebuyer 
standard, by eliminating provisions that suggested some failures to 
comply would result in probation rather than restriction for the 
member.
    The changes in the final rule will make it easier for FHFA to 
transition from a paper-based administrative process to a fully 
electronic process. An electronic submission process will further 
reduce the administrative process requirements. FHFA will work with the 
Banks to ensure that all members are able to comply with any such 
changes.
    The specific changes made by the final rule are described in the 
section-by-section analysis below.

A. Definitions--Sec.  1290.1

    Section 1290.1 of the final rule continues to set forth definitions 
applicable to the community support requirements in part 1290. The 
final rule removes the definitions for ``appropriate Federal banking 
agency'' and ``appropriate State regulator'' from Sec.  1290.1 because 
those terms are defined in 12 CFR part 1201, which includes general 
definitions applicable to all FHFA regulations.

B. Community Support Requirements--Sec.  1290.2

    Section 1290.2 of the final rule sets forth administrative process 
requirements applicable to the Banks and members under the community 
support regulation.
1. Bank Notices to Members
    Section 1290.2(a) of the final rule provides that by the effective 
date of the final rule, and by March 31, 2017, and every two years 
thereafter, each Bank must provide written notice to all of its members 
subject to community support review that each such member must submit 
to FHFA a completed Community Support Statement in accordance with 
paragraph (b) of this section. As further discussed under paragraph 
(b), FHFA will no longer review selected members' community support 
performance on a quarterly schedule, and instead will review all 
members subject to community support review at approximately the same 
time every two years. Accordingly, FHFA will no longer be required to 
notify the Banks, or publish quarterly Notices in the Federal Register, 
of the members selected for community support review and the submission 
deadlines for the Community Support Statements. Paragraph (a) retains 
the requirement in current paragraph (b)(2) for the Banks to provide 
notices to members, but simplifies the requirement because all members 
will receive the same notice at the same time, with the same deadline 
for submission of their Community Support Statements.
    Section 1290.2(a) also provides that, unless instructed otherwise 
by FHFA, the Bank shall provide to members a blank Community Support 
Statement Form, which also is available on FHFA's Web site. Section 
1290.2(a) further provides that at the request of a member the Bank 
shall assist the member in completing the Community Support Statement. 
These requirements, which currently are in the quarterly Federal 
Register Notices, are included in the final rule because the Notices 
will be discontinued.

2. Members' Submission of Community Support Statements to FHFA

    Currently, Sec.  1290.2(a) provides that FHFA will select a member 
for community support review approximately once every two years. 
Section 1290.2(b)(1) of the final rule does not change the frequency of 
this review. However, instead of requiring FHFA to select members for 
review, the paragraph is revised to specify the deadline for members to 
submit to FHFA their completed Community Support Statements and any 
other information FHFA may require. These Statements will be due to 
FHFA no later than December 31, 2015, and December 31 every two years 
thereafter. The final rule also simplifies the existing regulatory 
language by incorporating current paragraph (c) on signing of the 
Statement in revised paragraph (b)(1).
    This change means that, instead of different members being required 
to submit their Community Support Statements in different quarters 
spread over a two-year period, all members subject to community support 
review will be required to submit their Community Support Statements by 
the same deadline every two years. This change is consistent with the 
2011 proposed rule, which provided for review of members' first-time 
homebuyers performance every two years but did not require that the 
Banks conduct the reviews on a quarterly basis. Reviewing all members 
subject to community support review on the same schedule every two 
years will significantly simplify and streamline the current 
administrative process. It will eliminate the need for FHFA to maintain 
and track eight separate lists of members for each quarterly round, as 
well as the need to publish quarterly Notices in the Federal Register 
identifying the members subject to review in that quarter. It will 
simplify FHFA tracking of members' Community Support Statement 
submissions and compliance, and it will simplify compliance for the 
members by avoiding any possible confusion among the Banks and members 
about whether a member is subject to review in a particular quarter. 
The change to a single submission deadline every two years will also 
eliminate the administrative complications of preparing for a new 
quarterly round while still processing member Community Support 
Statement submissions from the previous round.

[[Page 30339]]

3. Transition Provision
    FHFA is in the middle of the review cycle covering 2014 and 2015 
under the current community support regulation. Starting on the 
effective date of the final rule, FHFA will apply the final rule's new 
review process for the remainder of the 2014-2015 review period. New 
Sec.  1290.2(b)(2) of the final rule provides for a transition period 
for members that were selected for review during the 2014-2015 review 
cycle under the current regulation. Members that were selected for 
review prior to the effective date of the final rule are required to 
submit completed Community Support Statements as provided in the 
applicable Federal Register Notice. Members that have submitted or 
submit completed Community Support Statements to FHFA as required by 
such Federal Register Notice are not required to submit a second 
Community Support Statement to FHFA by the December 31, 2015 deadline. 
Instead, these members will be required to submit their next Community 
Support Statements to FHFA by December 31, 2017. Based on past 
community support review experience, the likelihood of members changing 
status from compliance to noncompliance is very small. Members 
determined to be in noncompliance are permitted under the regulation to 
submit subsequent evidence of compliance to FHFA at any time. After 
this transition period, all members subject to community support review 
will be required to submit their Community Support Statements to FHFA 
on the same schedule, once every two years. The first review to be 
conducted entirely under the new review process will be in 2017.
4. Notices to Public
    Section 1290.2(c)(1) of the final rule continues the requirement in 
current paragraph (b)(2) that the Banks notify their Advisory Councils, 
nonprofit housing developers, community groups, and other interested 
parties in their districts, of the community support review of members. 
However, the process is simplified in that, unlike under the current 
regulation, the notice is only required to be provided every two years 
rather than quarterly, reflecting the elimination of the quarterly 
review schedule.
    Consistent with the proposed rule, Sec.  1290.2(c)(1) of the final 
rule requires the Banks to also post notices on their Web sites 
inviting public comments on any member's community support programs and 
activities. Because FHFA will continue to conduct the community support 
reviews under the final rule, the Bank's notices shall include 
instructions for the public to submit any comments to FHFA.
    Section 1290.2(c)(2) of the final rule provides that FHFA may 
publish a notice in the Federal Register as an additional means of 
notifying the public of the opportunity to submit comments on any 
member's community support programs and activities. FHFA currently 
includes this notice in the quarterly Federal Register Notices under 
the existing regulation. The final rule allows FHFA to publish a 
similar notice as necessary, while allowing FHFA flexibility to forego 
the notice if it is no longer an effective means of informing the 
public of the opportunity to submit comments on individual members.
    Section 1290.2(c)(3) of the final rule provides that FHFA will 
consider any comments it receives in reviewing members for compliance 
with the community support requirement. This provision is substantially 
the same as the provision currently located in paragraph (d).
5. Non-Depository Community Development Financial Institutions
    Section 1290.2(d) of the final rule continues to provide that 
members that have been certified as CDFIs by the CDFI Fund and that are 
not insured depository institutions or CDFI credit unions are deemed to 
be in compliance with the community support requirements. Accordingly, 
such non-depository CDFIs are not required to submit Community Support 
Statements to FHFA and are not subject to review by FHFA under the 
community support regulation. The final rule renumbers existing 
paragraph (e) as paragraph (d) and makes non-substantive changes to the 
paragraph for greater clarity. For additional discussion of this 
provision, see the Federal Register notice describing the final rule 
entitled ``Federal Home Loan Bank Membership for Community Development 
Financial Institutions.'' 75 FR 678, 689-690 (Jan. 5, 2010).
6. New Bank Members
    The final rule adds a new Sec.  1290.2(e) that incorporates into 
the regulation the long-standing agency policy that new members of a 
Bank are not subject to community support review until after the first 
year of Bank membership. The Federal Register notice describing the 
1996 proposed rule on the community support regulation stated that an 
institution would be subject to review ``only after it has been a 
[Bank] member for one year.'' 61 FR 60229. The Federal Register notice 
describing the 1997 final community support rule noted that several 
commenters supported this approach, 62 FR 28983, and the policy has 
been followed consistently since that time.
    Section 1290.2(e) of the final rule provides that a member of a 
Bank is not required to submit a Community Support Statement under 
paragraph (b) unless the institution has been a member of a Bank for at 
least one year as of March 31 of the year in which submissions are due 
under paragraph (b). An institution that becomes a member after the 
applicable cut-off date will be subject to community support review 
during the succeeding review.

C. Community Support Standards--Sec.  1290.3

    Current Sec.  1290.3 sets forth the standards for member compliance 
with the community support regulation, as well as the circumstances 
under which a member will be placed on probation or restriction from 
access to long-term Bank advances. Current Sec.  1290.5 sets forth 
additional provisions and procedures related to restricting access to 
long-term advances based on noncompliance with the community support 
regulation. The final rule maintains the existing standards for 
compliance and circumstances giving rise to probation or restriction, 
but these sections have been reorganized for greater clarity. As 
reorganized, Sec.  1290.3 sets out the standards for member compliance 
with the community support regulation, and Sec.  1290.5 sets out the 
circumstances under which a member will be placed on probation or 
restriction, as well as the procedures applicable in those 
circumstances.
1. CRA Standard
    Section 1290.3(b) of the final rule continues to provide that a 
member meets the CRA standard if it received a rating of 
``Outstanding'' or ``Satisfactory'' in its most recent CRA evaluation. 
As under the current regulation, members such as credit unions and 
insurance companies that are not subject to the CRA will not have a CRA 
rating and, therefore, are subject only to the first-time homebuyer 
standard.
2. First-Time Homebuyer Standard
    Section 1290.3(c) of the final rule continues to set forth the 
specific first-time homebuyer programs and activities that are eligible 
to meet the first-time homebuyer standard and clarifies some of the 
language consistent with current practice. The final rule provides that 
a member meets the first-time homebuyer standard if the member received 
a rating of ``Outstanding'' in its most recent CRA

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evaluation. For other members, FHFA evaluates whether the member has 
engaged in at least one of the listed eligible first-time homebuyer 
programs or activities.
    Section 1290.3(c)(4)(vii) of the final rule clarifies that the 
first-time homebuyer standard can be met by participating or investing 
in service organizations that assist credit unions in providing 
mortgages to first-time homebuyers or to low- or moderate-income 
households. This clarification is consistent with FHFA's current 
interpretation of the regulation, which considers mortgages to low- or 
moderate-income households a proxy for mortgages to first-time 
homebuyers under the community support regulation.
    The final rule also includes a new paragraph (c)(5) for other 
member activities supporting first-time homebuyer financing that may 
not be covered by the list of specified activities in the regulation. 
This ``other activities'' category is currently included in the 
Community Support Statement Form and is added in the final rule so that 
all eligible activities are set forth comprehensively in one place in 
the rule.
    The final rule also moves the language in current Sec.  
1290.3(c)(1) on mitigating factors affecting a member's ability to meet 
the first-time homebuyer standard to new Sec.  1290.3(c)(6). FHFA may 
determine that mitigating factors affect a member's ability to engage 
in activities to assist first-time or potential first-time homebuyers 
as described in paragraphs (c)(1) through (c)(5).
    The final rule also simplifies the current regulatory language in 
Sec.  1290.3 by deleting redundant language describing the various 
elements of the Community Support Statement and information that FHFA 
must consider in its evaluation of a member's community support 
performance. FHFA will continue to evaluate all information submitted 
by a member, as well as any public comments or other information, as 
relevant to the member's performance under the first-time homebuyer 
standard.

D. FHFA Review and Decision on Community Support Statements--Sec.  
1290.4

    Section 1290.4 of the final rule continues to set forth the process 
for FHFA review and evaluation of member compliance with the community 
support requirements. Currently, Sec.  1290.4 includes specific 
timeframes applicable to FHFA's review. Consistent with the current 
regulation, Sec.  1290.4(a) of the final rule provides that FHFA will 
review each member approximately once every two years for compliance 
with the community support requirements. The final rule simplifies the 
existing regulatory language by eliminating unnecessarily detailed 
descriptions of each step in the review process, including the 
deadlines for FHFA review, which will no longer be applicable as 
members will be able to submit their Community Support Statements to 
FHFA for review and decision at any time after being notified by the 
Bank up until the December 31st deadline.
    Section 1290.4(b) of the final rule continues to provide that a 
Community Support Statement is considered complete when a member has 
provided to FHFA all of the information required by this part.
    Section 1290.4(c) of the final rule provides that FHFA will notify 
the Banks of the results of FHFA's community support determinations. 
Section 1290.4(c) of the final rule also requires the Banks to promptly 
notify their members of FHFA's determinations. Under current Sec.  
1290.4(b), FHFA notifies the members and their Banks of the results. 
Requiring the Banks, rather than FHFA, to notify their members of 
FHFA's determinations is consistent with the proposed rule. The Banks 
have the customer relationships with their members, and it is the 
Banks' responsibility to make or restrict advances to their members and 
communicate the status of members' access to advances.
    Section 1290.4(c) of the final rule clarifies that FHFA's written 
notice of determination on a Community Support Statement will identify 
the reasons for FHFA's determination only if a member is being placed 
on probation or restriction. The notice will not provide specific 
reasons if a member is in compliance with the community support 
standards. The community support regulation clearly states the criteria 
for compliance with the community support requirements, so it is 
unnecessary for FHFA to further describe its rationale if FHFA 
determines that a member is in compliance with the community support 
requirements.

E. Probation or Restriction on Member Access to Long-Term Bank 
Advances--Sec.  1290.5

    Currently, Sec.  1290.5 sets out requirements and procedures 
applicable to restrictions on access to long-term Bank advances. As 
discussed above, the final rule revises Sec.  1290.5 to consolidate the 
various provisions in current Sec. Sec.  1290.3 and 1290.5 applicable 
to both probation and restriction. The final rule does not make any 
substantive changes to the criteria or procedures applicable to either 
probation or restriction.
1. Probation
    The final rule adds a new Sec.  1290.5(a) listing the circumstances 
under which FHFA will place a member on probation. Currently, Sec.  
1290.3(b)(2) provides that a member with a most recent CRA rating of 
``Needs to Improve'' continues to have access to long-term advances but 
is placed on probation, which extends until the member receives its 
next CRA rating. The final rule includes this provision in Sec.  
1290.5(a).
    Separately, current Sec.  1290.5(d)(2) provides that a member on 
restriction due to a CRA rating of ``Substantial Noncompliance'' will 
be moved to probationary status if the member's subsequent CRA rating 
is ``Needs to Improve,'' and the member either had not previously 
received a CRA rating or had received an ``Outstanding'' or 
``Satisfactory'' rating immediately prior to the CRA rating leading to 
restriction. The final rule includes this provision in Sec.  
1290.5(d)(3), restated for clarity and to remove a cross-reference that 
is no longer necessary.
    Section 1290.3(c)(2) currently provides that a member is subject to 
probation if FHFA deems the evidence of first-time homebuyer 
performance to be unsatisfactory, while Sec.  1290.3(c)(3) currently 
provides that a member is subject to restriction if the member provides 
no evidence of first-time homebuyer performance. These provisions are 
replaced by Sec.  1290.5(b)(5) in the final rule, as further discussed 
under the restriction criteria below.
2. Restriction on Access to Long-Term Bank Advances
    The final rule reorders existing paragraph (a) of Sec.  1290.5 as 
paragraph (b), listing the circumstances under which FHFA will restrict 
a member's access to long-term Bank advances.
    Section 1290.5(b)(1) of the final rule provides that members that 
fail to submit completed Community Support Statements will be placed on 
restriction from access to long-term advances. This provision is 
relocated from Sec.  1290.5(a) in the current regulation. The final 
rule clarifies that a member will be placed on restriction if it: (i) 
Submits a Community Support Statement to FHFA that has not been signed; 
(ii) submits a Community Support Statement to FHFA that fails to 
include a CRA rating if the member is subject to the CRA; or (iii)

[[Page 30341]]

fails to submit a Community Support Statement at all to FHFA.
    Sections 1290.5(b)(2), (b)(3), and (b)(4) of the final rule provide 
that a member is required to be placed on restriction from access to 
long-term advances if it has: (i) A CRA rating of ``Substantial 
Noncompliance'' on its most recent CRA evaluation; (ii) CRA ratings of 
``Needs to Improve'' on its two most recent consecutive CRA 
evaluations; or (iii) CRA ratings of ``Substantial Noncompliance'' and 
a subsequent ``Needs to Improve'' on its two most recent consecutive 
CRA evaluations, if the CRA rating preceding the ``Substantial 
Noncompliance'' rating was ``Needs to Improve'' or ``Substantial 
Noncompliance.'' These provisions are relocated from Sec. Sec.  
1290.3(b)(3) and 1290.5(a)(3), respectively, in the current regulation.
    Section 1290.5(b)(5) of the final rule provides that a member that 
fails to demonstrate compliance with the first-time homebuyer standard 
is required to be placed on restriction from access to long-term 
advances. This provision replaces Sec. Sec.  1290.3(c)(2), 
1290.3(c)(3), and 1290.5(a)(4) in the current regulation. Section 
1290.3(c)(2) currently provides that a member is subject to probation 
if FHFA deems the evidence of first-time homebuyer performance to be 
unsatisfactory, while Sec.  1290.3(c)(3) currently provides that a 
member is subject to restriction if the member provides no evidence of 
first-time homebuyer performance. Section 1290.5(a)(4) currently 
addresses the status of members at the end of a probationary period 
under Sec.  1290.3(c)(2).
    In practice, FHFA has found there to be no meaningful distinction 
between ``unsatisfactory evidence'' and ``no evidence'' of first-time 
homebuyer performance because under either criterion the member has not 
demonstrated compliance with the first-time homebuyer standard, 
resulting in restriction under the regulation (and would have resulted 
in restriction under the 2011 proposed rule). Either term could be 
interpreted to cover many of the same situations, potentially creating 
confusion about the proper application of the regulation. To minimize 
confusion and codify FHFA's long-standing practice, the final rule 
eliminates the distinction between ``unsatisfactory evidence'' and ``no 
evidence.'' Section 1290.5(b)(5) of the final rule simplifies and 
clarifies the existing regulatory language and provides that a member 
that fails to demonstrate compliance with the first-time homebuyer 
standard will be placed on restriction.
    Section 1290.5(c) of the final rule revises current paragraph (c), 
which sets forth the effective date for members placed on restriction, 
to include the effective dates applicable for both probation and 
restriction. Paragraph (c)(1) provides that the probationary period 
under Sec.  1290.5(a) will extend until the member's appropriate 
Federal banking agency completes its next CRA evaluation and issues a 
rating. The member will be eligible to receive long-term advances 
during the probationary period. At the end of the probationary period, 
the member would either meet the CRA standard under Sec.  1290.3(b) or 
would be placed on restriction pursuant to Sec.  1290.5(b)(3). 
Probation will take effect on the date the notice required under Sec.  
1290.4(c) is sent by FHFA to the Bank.
    Paragraph (c)(2) provides that a restriction on access to long-term 
advances will take effect 30 days after notice is sent by FHFA to the 
Bank, unless the member demonstrates compliance before the end of the 
30-day period.
3. Removal of Restriction on Access to Long-Term Bank Advances
    Currently, Sec.  1290.5(d) sets out the criteria and procedures for 
removing restrictions on members' access to long-term Bank advances. 
The final rule consolidates the substance of paragraph (d)(2) with the 
rest of the provisions regarding probation and restriction in 
paragraphs (a) and (b) of that section.
    Section 1290.5(d)(1) of the final rule retains the current 
provision that a restriction may be removed if FHFA determines, upon 
written request from a member, that application of the restriction may 
adversely affect the safety and soundness of the member.
    Section 1290.5(d)(2) of the final rule retains the current 
provision that a restriction may be removed if FHFA determines, upon 
written request from a member, that the member subsequently has 
complied with the requirements of this part, e.g., the member has 
received a CRA rating of ``Outstanding'' or ``Satisfactory'' on its 
next CRA evaluation, or the member has demonstrated compliance with the 
first-time homebuyer standard.
    Section 1290.5(d)(3) of the final rule provides that FHFA will 
remove a restriction on a member's access to long-term advances and 
place the member on probation if the member is subject to the CRA and 
the member received a rating of ``Needs to Improve'' in its most recent 
CRA evaluation, its immediately preceding CRA rating was ``Substantial 
Noncompliance,'' and either the member has not received any other CRA 
rating or the CRA rating before the rating of ``Substantial 
Noncompliance'' was ``Outstanding'' or ``Satisfactory.'' This provision 
retains the requirements in current Sec.  1290.5(d)(2).
    Section 1290.5(d)(4) of the final rule retains the provision in 
current Sec.  1290.5(d)(3) requiring FHFA to provide written notice to 
the member's Bank of a determination by FHFA to remove a restriction on 
the member's access to long-term advances. The final rule revises the 
current provision by requiring the Bank, rather than FHFA, to provide 
notice promptly to the member of FHFA's determination to remove a 
restriction. The determination to remove a restriction takes effect on 
the date the notice is sent by FHFA to the Bank.
4. Bank Affordable Housing Programs and Other Bank Community Investment 
Cash Advance Programs
    Section 1290.5(e) of the current regulation provides that a member 
that is subject to restriction on access to long-term Bank advances due 
to a failure to meet the community support requirements is not eligible 
to submit new applications under the Bank's Community Investment Cash 
Advance (CICA) programs under 12 CFR part 1291 or 12 CFR part 952. 
Section 1290.5(e) of the final rule retains the current provision, with 
two technical clarifications. The final rule states explicitly that 
part 1291 is the regulation for the Bank Affordable Housing Programs 
(AHP). The AHP is included under the definition of CICA program, as 
described in 12 CFR 1292.1. The final rule also updates the cross-
reference to the CICA regulation from part 952 to part 1292.

F. Bank Community Support Programs--Sec.  1290.6

    Section 1290.6 of the final rule sets out the requirements for the 
Banks' community support programs, including requirements that each 
Bank's program: provide technical assistance to members; promote and 
expand affordable housing finance; and include an annual Targeted 
Community Lending Plan. The final rule does not make any changes to 
current Sec.  1290.6.

G. Bank Advisory Council Annual Reports--Sec.  1290.7

    Section 1290.7 of the final rule sets out a requirement that each 
Annual Report submitted by a Bank's Advisory Council to FHFA pursuant 
to section 10(j)(11) of the Bank Act (12 U.S.C. 1430(j)(11)) must 
include an analysis of the Bank's targeted community lending and 
affordable housing activities. The final rule makes non-substantive

[[Page 30342]]

changes to current Sec.  1290.7 for greater clarity.

IV. Notice and Public Participation

    Most of the specific administrative changes in the final rule have 
already been subject to prior public notice and comment as part of the 
2011 proposed rule. 76 FR 70069. As discussed in more detail above, in 
adopting this final rule, FHFA has considered all of the comments that 
were received on the 2011 proposed rule. However, even if the changes 
in the final rule had not been included in the 2011 proposed rule, they 
would be exempt from the prior public notice and comment requirements 
of the Administrative Procedure Act (APA).
    Section 553(b)(A) of the APA provides that when a regulation 
involves matters of agency organization, procedure, or practice, the 
agency may publish the regulation in final form without prior public 
notice and comment. 5 U.S.C. 553(b)(A). This final rule involves 
matters of agency procedure and practice. The final rule does not make 
any change to the substantive standards for compliance with the 
community support regulation. The changes in the final rule are limited 
to administrative changes in the process that FHFA itself uses to 
evaluate members. As a result, FHFA finds that the final rule is exempt 
from the public notice and comment provisions of section 553.
    In addition, section 553(b)(B) of the APA provides that when an 
agency for good cause finds that notice and comment are impracticable, 
unnecessary or contrary to the public interest, the agency may publish 
the regulation in final form without prior public notice and comment. 5 
U.S.C. 553(b)(B). Many of the changes in this final rule are limited to 
reorganizing and restating existing provisions for clarity and, 
therefore, are insignificant in nature and impact. As a result, FHFA 
finds that public notice and comment on those changes are unnecessary.

V. Regulatory Impacts

A. Paperwork Reduction Act

    FHFA currently collects information from Bank members regarding 
their compliance with the community support requirements under existing 
part 1290. Existing part 1290 also permits Bank members whose access to 
long-term advances has been restricted for failure to meet the 
community support requirements to apply directly to FHFA to remove the 
restriction under certain circumstances. The current collection of 
information has been approved by the Office of Management and Budget 
(OMB), and the control number, OMB No. 2590-0005, will expire on 
February 29, 2016. The final rule amends the community support 
provisions in part 1290 but does not substantively or materially modify 
the approved information collection with respect to the members' 
information collection burden. Therefore, FHFA has not submitted any 
request to revise the information collection to OMB for review and 
approval.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires that 
a regulation that has a significant economic impact on a substantial 
number of small entities, small businesses, or small organizations must 
include an initial regulatory flexibility analysis describing the 
regulation's impact on small entities. Such an analysis need not be 
undertaken if the agency has certified that the regulation will not 
have a significant economic impact on a substantial number of small 
entities. 5 U.S.C. 605(b). FHFA has considered the impact of this final 
rule under the Regulatory Flexibility Act. FHFA certifies that the 
final rule will not have a significant economic impact on a substantial 
number of small business entities because the regulation is applicable 
only to the Banks, which are not small entities for purposes of the 
Regulatory Flexibility Act.

List of Subjects in 12 CFR Part 1290

    Credit, Federal home loan banks, Housing, Mortgages, Reporting and 
recordkeeping requirements.

    Accordingly, for the reasons stated in the Supplementary 
Information, and under the authority of 12 U.S.C. 4526, FHFA revises 
part 1290 of title 12, chapter XII of the Code of Federal Regulations 
to read as follows:

PART 1290--COMMUNITY SUPPORT REQUIREMENTS

Sec.
1290.1 Definitions.
1290.2 Community support requirements.
1290.3 Community support standards.
1290.4 FHFA review and decision on Community Support Statements.
1290.5 Probation or restriction on member access to long-term Bank 
advances.
1290.6 Bank community support programs.
1290.7 Bank Advisory Council Annual Reports.

    Authority:  12 U.S.C. 1430(g), 4511, 4513.


Sec.  1290.1  Definitions.

    For purposes of this part:
    Advisory Council means the Advisory Council each Bank is required 
to establish pursuant to section 10(j)(11) of the Federal Home Loan 
Bank Act (12 U.S.C. 1430(j)(11)), and part 1291 of this chapter.
    CDFI Fund means the Community Development Financial Institutions 
Fund established under section 104(a) of the Community Development 
Banking and Financial Institutions Act of 1994 (12 U.S.C. 4703(a)).
    Community development financial institution or CDFI means an 
institution that is certified as a community development financial 
institution by the CDFI Fund under the Community Development Banking 
and Financial Institutions Act of 1994 (12 U.S.C. 4701 et seq.).
    CRA means the Community Reinvestment Act of 1977, as amended (12 
U.S.C. 2901, et seq.).
    CRA evaluation means the public disclosure portion of the CRA 
performance evaluation provided by a member's appropriate Federal 
banking agency.
    Displaced homemaker means an adult who has not worked full-time, 
full-year in the labor force for a number of years, and during that 
period, worked primarily without remuneration to care for a home and 
family, and currently is unemployed or underemployed and is 
experiencing difficulty in obtaining or upgrading employment.
    First-time homebuyer means:
    (1) An individual and his or her spouse, if any, who has had no 
present ownership interest in a principal residence during the three-
year period prior to purchase of a principal residence.
    (2) A displaced homemaker who, except for owning a residence with 
his or her spouse or residing in a residence owned by his or her 
spouse, meets the requirements of paragraph (1) of this definition.
    (3) A single parent who, except for owning a residence with his or 
her spouse or residing in a residence owned by his or her spouse, meets 
the requirements of paragraph (1) of this definition.
    Long-term advance means an advance with a term to maturity greater 
than one year.
    Restriction on access to long-term advances means a member may not 
borrow long-term advances or renew any maturing advance for a term to 
maturity greater than one year.
    Single parent means an individual who is unmarried or legally 
separated from a spouse and has custody or joint custody of one or more 
minor children or is pregnant.
    Targeted community lending means providing financing for economic

[[Page 30343]]

development projects for targeted beneficiaries.


Sec.  1290.2  Community support requirements.

    (a) Bank notice to members. By June 29, 2015, and by March 31, 
2017, and every two years thereafter, each Bank must provide written 
notice to all of its members subject to community support review that 
each such member must submit to FHFA a completed Community Support 
Statement in accordance with the requirements of paragraph (b) of this 
section. Unless instructed otherwise by FHFA, the Bank must provide to 
each member a blank Community Support Statement Form, which will also 
be available on FHFA's Web site. Upon a member's request, the Bank must 
provide assistance to the member in completing the Community Support 
Statement.
    (b) Community Support Statement.--(1) Submission requirements. 
Except as provided in paragraph (b)(2) of this section, each member 
that is subject to community support review must submit to FHFA a 
completed Community Support Statement and any other related information 
FHFA may require by December 31, 2015, and by December 31 every two 
years thereafter. The member's completed Community Support Statement 
must be executed by an appropriate senior officer of the member and 
must be submitted to FHFA pursuant to FHFA's submission instructions.
    (2) Transition provision. Members that were selected for community 
support review during the 2014-2015 review cycle prior to June 29, 2015 
are required to submit completed Community Support Statements as 
provided in the applicable Federal Register Notice. Members that have 
submitted or submit completed Community Support Statements to FHFA as 
required in the applicable Federal Register Notice for the 2014-2015 
review cycle are not required to submit a second Community Support 
Statement to FHFA by the December 31, 2015 deadline.
    (c) Notice to public.--(1) By the Banks. By June 29, 2015, and by 
March 31, 2017, and every two years thereafter, each Bank must provide 
written notice to its Advisory Council, and to interested nonprofit 
housing developers, community groups, and other interested parties in 
its district, and include a notice on its public Web site, of the 
opportunity to submit comments on the community support programs and 
activities of Bank members, with the name and address of each member 
subject to community support review and the deadline and FHFA contact 
information for submission of any comments to FHFA.
    (2) By FHFA. FHFA may publish a notice in the Federal Register 
notifying the public of the opportunity to submit comments on the 
community support programs and activities of Bank members, with the 
deadline and FHFA contact information for submission of any comments to 
FHFA.
    (3) Consideration of comments. In reviewing a member for compliance 
with the community support requirements, FHFA will take into 
consideration any public comments it has received concerning the 
member.
    (d) Non-Depository Community Development Financial Institutions. A 
member that has been certified as a community development financial 
institution by the CDFI Fund, other than a member that also is an 
insured depository institution or a CDFI credit union (as defined in 12 
CFR 1263.1), is deemed to be in compliance with the community support 
requirements of section 10(g) of the Federal Home Loan Bank Act (12 
U.S.C. 1430(g)) and this part, by virtue of that certification. Such 
non-depository CDFIs, therefore, are not required to submit Community 
Support Statements to FHFA under paragraph (b) of this section and are 
not subject to community support review under this part.
    (e) New Bank members. A member of a Bank is not required to submit 
a Community Support Statement under paragraph (b) of this section 
unless the institution has been a member of a Bank for at least one 
year as of March 31 of the year in which submissions are due under 
paragraph (b) of this section.


Sec.  1290.3  Community support standards.

    (a) In general. A member subject to community support review meets 
the community support requirements of this part if it submits a 
completed Community Support Statement that demonstrates to FHFA's 
satisfaction that the member complies with both the CRA standard, if 
the member is subject to the requirements of the CRA, and the first-
time homebuyer standard.
    (b) CRA standard. A member meets the CRA standard if it is subject 
to the requirements of the CRA and the rating in the member's most 
recent CRA evaluation is ``Outstanding'' or ``Satisfactory.''
    (c) First-time homebuyer standard. A member meets the first-time 
homebuyer standard if at least one of the following is satisfied:
    (1) The member is subject to the requirements of the CRA and the 
rating in the member's most recent CRA evaluation is ``Outstanding'';
    (2) The member has an established record of lending to first-time 
homebuyers;
    (3) The member has a program whereby it actively seeks to lend or 
support lending to first-time homebuyers, including, but not limited 
to, the following--
    (i) Providing special credit products with flexible underwriting 
standards for first-time homebuyers;
    (ii) Participating in Federal, State, or local government, or 
nationwide homeownership lending programs that benefit, serve, or are 
targeted to, first-time homebuyers; or
    (iii) Participating in loan consortia for first-time homebuyer 
loans or loans that serve predominantly low- or moderate-income 
borrowers;
    (4) The member has a program whereby it actively seeks to assist or 
support organizations that assist potential first-time homebuyers to 
qualify for mortgage loans, including, but not limited to, the 
following--
    (i) Providing, participating in, or supporting special counseling 
programs or other homeownership education activities that benefit, 
serve, or are targeted to, first-time homebuyers;
    (ii) Providing or participating in marketing plans and related 
outreach programs targeted to first-time homebuyers;
    (iii) Providing technical assistance or financial support to 
organizations that assist first-time homebuyers;
    (iv) Participating with or financially supporting community or 
nonprofit groups that assist first-time homebuyers;
    (v) Holding investments or making loans that support first-time 
homebuyer programs;
    (vi) Holding mortgage-backed securities that may include a pool of 
loans to low- and moderate-income homebuyers;
    (vii) Participating or investing in service organizations that 
assist credit unions in providing mortgages to first-time homebuyers or 
low- or moderate-income households; or
    (viii) Participating in a Bank Affordable Housing Program or other 
Bank targeted community investment or development program;
    (5) The member engages in other activities, not covered by 
paragraphs (c)(1) through (c)(4) of this section, that demonstrate to 
FHFA's satisfaction the member's support for first-time homebuyers 
financing; or
    (6) FHFA determines that mitigating factors affect the member's 
ability to engage in activities to assist first-time or potential 
first-time homebuyers as

[[Page 30344]]

described in paragraphs (c)(1) through (c)(5) of this section.


Sec.  1290.4  FHFA review and decision on Community Support Statements.

    (a) Review by FHFA. FHFA will review each member approximately once 
every two years for compliance with the community support requirements 
of this part.
    (b) Complete Community Support Statements. A Community Support 
Statement is complete when a member has provided to FHFA all of the 
information required by this part.
    (c) Decision on Community Support Statements. FHFA will provide 
written notice to the member's Bank of FHFA's determination regarding 
the Community Support Statement submitted by the member. A notice 
placing a member on probation or restricting the member's access to 
long-term Bank advances will identify the reasons for FHFA's 
determination. The Bank must promptly notify the member of FHFA's 
determination regarding the member's Community Support Statement.


Sec.  1290.5  Probation or restriction on member access to long-term 
Bank advances.

    (a) Probation. FHFA will place a member on probation if the member 
is subject to the CRA, its most recent CRA rating was ``Needs to 
Improve,'' and either the member has not received any other CRA rating 
or its second-most recent CRA rating was ``Outstanding'' or 
``Satisfactory.''
    (b) Restriction. FHFA will restrict a member's access to long-term 
advances if:
    (1) The member failed to sign its Community Support Statement 
submitted to FHFA pursuant to Sec.  1290.2(b)(1), failed to include its 
CRA rating in its Community Support Statement submitted to FHFA if 
subject to the CRA, or failed to submit a Community Support Statement 
at all to FHFA;
    (2) The member is subject to the CRA and its most recent CRA rating 
was ``Substantial Noncompliance'';
    (3) The member is subject to the CRA, its most recent CRA rating 
was ``Needs to Improve,'' and its second-most recent CRA rating was 
``Needs to Improve'';
    (4) The member is subject to the CRA, its most recent CRA rating 
was ``Needs to Improve,'' its second-most recent CRA rating was 
``Substantial Noncompliance,'' and its third-most recent CRA rating was 
``Needs to Improve'' or ``Substantial Noncompliance''; or
    (5) The member has not demonstrated compliance with the first-time 
homebuyer standard.
    (c) Effective dates.--(1) Probation. A probationary period under 
Sec.  1290.5(a) will extend until the member's appropriate Federal 
banking agency completes its next CRA evaluation and issues a rating 
for the member. Probation will take effect on the date the notice 
required under Sec.  1290.4(c) is sent by FHFA to the Bank. The member 
will be eligible to receive long-term advances during the probationary 
period.
    (2) Restriction. A restriction on access to long-term advances will 
take effect 30 days after the date the notice required under Sec.  
1290.4(c) is sent by FHFA to the Bank, unless the member demonstrates 
compliance with the requirements of this part before the end of the 30-
day period.
    (d) Removing a restriction.--(1) FHFA may remove a restriction on a 
member's access to long-term advances imposed under this section if 
FHFA determines that application of the restriction may adversely 
affect the safety and soundness of the member. A member may submit a 
written request to FHFA to remove a restriction on access to long-term 
advances under this paragraph (d)(1). The written request must include 
a clear and concise statement of the basis for the request and a 
statement that application of the restriction may adversely affect the 
safety and soundness of the member from the member's appropriate 
Federal banking agency or the member's appropriate State regulator for 
a member that is not subject to regulation or supervision by a Federal 
regulator. FHFA will consider each written request within 30 calendar 
days of receipt.
    (2) FHFA may remove a restriction on a member's access to long-term 
advances imposed under this section if FHFA determines that the member 
subsequently has complied with the requirements of this part. A member 
may submit a written request to FHFA to remove a restriction on access 
to long-term advances under this paragraph (d)(2). The written request 
must state with specificity how the member has complied with the 
requirements of this part. FHFA will consider each written request 
within 30 calendar days of receipt.
    (3) FHFA may remove a restriction on a member's access to long-term 
advances imposed under this section and place the member on probation 
if the member is subject to the CRA, its most recent CRA rating was 
``Needs to Improve,'' its second-most recent CRA rating was 
``Substantial Noncompliance,'' and either the member has not received 
any other CRA rating or its third-most recent CRA rating was 
``Outstanding'' or ``Satisfactory.''
    (4) FHFA will provide written notice to the member's Bank of any 
determination to remove a restriction under this paragraph (d). The 
Bank shall promptly notify the member of FHFA's determination to remove 
a restriction. FHFA's determination shall take effect on the date the 
notice is sent by FHFA to the Bank.
    (e) Bank Affordable Housing Programs and other Bank Community 
Investment Cash Advance Programs. A member that is subject to a 
restriction on access to long-term advances under this part is not 
eligible to participate in the Bank's Affordable Housing Program (AHP) 
under part 1291 of this chapter or in other Bank Community Investment 
Cash Advance (CICA) programs offered under part 1292 of this chapter. 
The restriction in this paragraph (e) does not apply to AHP or other 
CICA applications or funding approved before the date the restriction 
is imposed.


Sec.  1290.6  Bank community support programs.

    (a) Requirement. Consistent with the safe and sound operation of 
the Bank, each Bank shall establish and maintain a community support 
program. A Bank's community support program shall:
    (1) Provide technical assistance to members;
    (2) Promote and expand affordable housing finance;
    (3) Identify opportunities for members to expand financial and 
credit services in underserved neighborhoods and communities;
    (4) Encourage members to increase their targeted community lending 
and affordable housing finance activities by providing incentives such 
as awards or technical assistance to nonprofit housing developers or 
community groups with outstanding records of participation in targeted 
community lending or affordable housing finance partnerships with 
members; and
    (5) Include an annual Targeted Community Lending Plan, approved by 
the Bank's board of directors and subject to modification, which shall 
require the Bank to--
    (i) Conduct market research in the Bank's district;
    (ii) Describe how the Bank will address identified credit needs and 
market opportunities in the Bank's district for targeted community 
lending;
    (iii) Consult with its Advisory Council and with members, housing 
associates, and public and private economic development organizations 
in the Bank's district in developing and

[[Page 30345]]

implementing its Targeted Community Lending Plan; and
    (iv) Establish quantitative targeted community lending performance 
goals.
    (b) Notice. A Bank shall provide annually to each of its members a 
written notice:
    (1) Identifying CICA programs and other Bank activities that may 
provide opportunities for a member to meet the community support 
requirements and to engage in targeted community lending; and
    (2) Summarizing targeted community lending and affordable housing 
activities undertaken by members, housing associates, nonprofit housing 
developers, community groups, or other entities in the Bank's district 
that may provide opportunities for a member to meet the community 
support requirements and to engage in targeted community lending.


Sec.  1290.7  Bank Advisory Council Annual Reports.

    Each Annual Report submitted by a Bank's Advisory Council to FHFA 
pursuant to section 10(j)(11) of the Bank Act (12 U.S.C. 1430(j)(11)) 
must include an analysis of the Bank's targeted community lending and 
affordable housing activities.

    Dated: May 19, 2015.
Melvin L. Watt,
Director, Federal Housing Finance Agency.
[FR Doc. 2015-12807 Filed 5-27-15; 8:45 am]
 BILLING CODE 8070-01-P