[Federal Register Volume 87, Number 249 (Thursday, December 29, 2022)]
[Notices]
[Pages 80184-80185]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-28331]


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FEDERAL HOUSING FINANCE AGENCY

[No. 2022-N-17]


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 is used in determining whether a Federal 
Home Loan Bank (Bank) member qualifies as a ``community financial 
institution'' (CFI) to $1,417,000,000, 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 will take 
effect on January 1, 2023.

FOR FURTHER INFORMATION CONTACT: Janna Bruce, Division of Federal Home 
Loan Bank Regulation, (202) 649-3202, [email protected]; or Vickie 
Olafson, Assistant General Counsel, (202) 649-3025, 
[email protected], (not tollfree numbers), Federal Housing 
Finance Agency, Constitution Center, 400 Seventh Street SW, Washington, 
DC 20219.

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 CFI 
certain advantages over non-CFI insured depository institutions in 
qualifying for 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 the statutory cap.\2\ The Bank Act was 
amended in 2008 to set the statutory cap at $1 billion and to require 
FHFA to adjust the cap annually to reflect the percentage increase in 
the CPI-U, as published by the DOL.\3\ For 2022, FHFA set the CFI asset 
cap at $1,323,000,000, which reflected a 6.8 percent increase over 
2021, based upon the increase in the CPI-U between 2020 and 2021.\4\
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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)(B); 12 CFR 1263.1 (defining the term 
``CFI asset cap'').
    \4\ See 87 FR 1147 (Jan. 10, 2022).
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II. The CFI Asset Cap for 2023

    As of January 1, 2023, FHFA will increase the CFI asset cap to 
$1,417,000,000, which reflects a 7.1 percent increase in the unadjusted 
CPI-U from November 2021 to November 2022. 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. The new 
CFI asset cap was obtained by applying the percentage increase in the 
CPI-U to the unrounded amount for the preceding year and rounding to 
the nearest million, as has been FHFA's practice for all previous 
adjustments.
    In calculating the CFI asset cap, FHFA uses CPI-U data that have 
not been

[[Page 80185]]

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.

Joshua R. Stallings,
Deputy Director, Division of Federal Home Loan Bank Regulation, Federal 
Housing Finance Agency.
[FR Doc. 2022-28331 Filed 12-28-22; 8:45 am]
BILLING CODE 8070-01-P