[Federal Register Volume 89, Number 9 (Friday, January 12, 2024)]
[Notices]
[Pages 2225-2226]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-00491]


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FEDERAL HOUSING FINANCE AGENCY

[No. 2024-N-1]


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 $1,461,000,000, 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 are 
effective as of January 1, 2024.

FOR FURTHER INFORMATION CONTACT: Janna Bruce, Division of Federal Home 
Loan Bank Regulation, (202) 649-3202, [email protected]; or Carly 
Malamud, Counsel, Office of General Counsel, (202) 649-3098, 
[email protected], (these are not toll-free numbers), Federal 
Housing Finance Agency, Constitution Center, 400 Seventh Street SW, 
Washington, DC 20219. For TTY/TRS users with hearing and speech 
disabilities, dial 711 and ask to be connected to any of the contact 
numbers above.

SUPPLEMENTARY INFORMATION:

I. Statutory and Regulatory Background

    The Federal Home Loan Bank Act (Bank Act) confers upon insured 
depository institutions that meet the

[[Page 2226]]

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 2023, FHFA set the CFI asset cap at $1,417,000,000, which 
reflected a 7.1 percent increase over 2022, based upon the increase in 
the CPI-U between 2021 and 2022.\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 80184 (Dec. 29, 2022).
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II. The CFI Asset Cap for 2024

    As of January 1, 2024, FHFA will increase the CFI asset cap to 
$1,461,000,000, which reflects a 3.1 percent increase in the unadjusted 
CPI-U from November 2022 to November 2023. Consistent with the practice 
of other Federal agencies required to calculate and make annual 
adjustments based on CPI-U changes, 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 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. 2024-00491 Filed 1-11-24; 8:45 am]
BILLING CODE 8070-01-P