[Federal Register Volume 62, Number 172 (Friday, September 5, 1997)]
[Rules and Regulations]
[Pages 46872-46873]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-23510]


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FEDERAL HOUSING FINANCE BOARD

12 CFR Part 936

[No. 97-56]
RIN 3069-AA35


Technical Amendment to the Community Support Requirement

AGENCY: Federal Housing Finance Board.

ACTION: Final rule.

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SUMMARY: The Federal Housing Finance Board (Finance Board) is amending 
its regulation on the community support requirement to allow every 
Federal Home Loan Bank (FHLBank) member to provide all of the 
information necessary to apply to the Finance Board to remove 
restrictions on access to long-term advances that may adversely affect 
the member's safety and soundness.

EFFECTIVE DATE: The final rule will become effective October 6, 1997.

FOR FURTHER INFORMATION CONTACT: Penny S. Bates, Program Analyst, 
Community Support Program, Office of Policy, 202/408-2574, or Janice A. 
Kaye, Attorney-Advisor, Office of General Counsel, 202/408-2505, 
Federal Housing Finance Board, 1777 F Street, N.W., Washington, D.C. 
20006.

SUPPLEMENTARY INFORMATION:

I. Statutory and Regulatory Background

    Section 10(g)(1) of the Federal Home Loan Bank Act (Bank Act) 
requires the Finance Board to promulgate regulations establishing 
standards of community investment or service that FHLBank members must 
meet in order to maintain access to long-term advances. See 12 U.S.C. 
1430(g)(1). The regulations promulgated by the Finance Board must take 
into account factors such as the FHLBank member's performance under the 
Community Reinvestment Act of 1977 (CRA), 12 U.S.C. 2901, et seq., and 
record of lending to first-time homebuyers. See 12 U.S.C. 1430(g)(2). 
In May 1997, the Finance Board published a final community support 
requirement rule establishing uniform standards and review criteria for 
determining compliance with section 10(g) of the Bank Act. See 62 FR 
28983 (May 29, 1997). The streamlined community support requirement 
rule became effective on June 30, 1997. See id.

II. Analysis of the Technical Amendment

    Section 936.5(d)(1)(i) of the community support requirement 
regulation authorizes the Finance Board, in its sole discretion, to 
remove a restriction on access to long-term advances imposed under this 
part if it determines that application of the restriction may adversely 
affect the safety and soundness of the member. See 12 CFR 
936.5(d)(1)(i). The rule permits a member to submit a detailed written 
request to the Finance Board to remove a restriction. See id. The 
member's request must include a statement from its appropriate federal 
financial supervisory agency that application of the restriction may 
adversely affect the safety and soundness of the member. For purposes 
of the community support requirement rule, the term ``appropriate 
federal financial supervisory agency'' means the Office of the 
Comptroller of the Currency for national banks; the Board of Governors 
of the Federal Reserve System for state chartered banks that are 
members of the Federal Reserve System and bank holding companies; the 
Federal Deposit Insurance Corporation for state chartered banks and 
savings banks that are not members of the Federal Reserve System and 
the deposits of which are insured by the Federal Deposit Insurance 
Corporation; and the Office of Thrift Supervision for savings 
associations the deposits of which are insured by the Federal Deposit 
Insurance Corporation and savings and loan holding companies. Id. 
Sec. 936.1(e).
    Since the regulatory definition is the same as the one provided for 
purposes of the CRA, see 12 U.S.C. 2902(1), it does not include the 
primary regulators of a federally insured credit union member that is 
not subject to the CRA or a FHLBank member that is subject to 
supervision only by a state regulator. Thus, such members would be 
unable to provide all of the information required to make a request to 
the Finance Board for removal of a restriction on access to long-term 
advances based on safety and soundness concerns. In order to correct 
this oversight, the Finance Board is amending Sec. 936.5(d)(1)(i) to 
permit a FHLBank member that is not subject to supervision by an 
appropriate federal financial supervisory agency to submit a statement 
concerning the adverse affects on safety and soundness of a restriction 
on long-term advances from the National Credit Union Administration or 
its primary state regulator, as appropriate.

III. Notice and Public Participation

    The notice and comment procedure required by the Administrative 
Procedure Act is unnecessary in this instance because the final rule 
makes only a minor technical change to a recently promulgated rule. See 
5 U.S.C. 553(b)(3)(B).

IV. Regulatory Flexibility Act

    The Finance Board is adopting this technical amendment in the form 
of a final rule and not as a proposed rule. Therefore, the provisions 
of the Regulatory Flexibility Act do not apply. See id. 601(2), 603(a).

V. Paperwork Reduction Act

    This final rule does not contain any collections of information 
pursuant to the Paperwork Reduction Act of 1995. See 44 U.S.C. 3501 et 
seq. Consequently, the Finance Board has not submitted any information 
to the Office of Management and Budget for review.

List of Subjects in 12 CFR Part 936

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

    Accordingly, the Federal Housing Finance Board hereby amends title 
12, chapter IX, part 936 of the Code of Federal Regulations to read as 
follows:

PART 936--COMMUNITY SUPPORT REQUIREMENTS

    1. The authority citation for part 936 continues to read as 
follows:

    Authority: 12 U.S.C. 1422a(a)(3)(B), 1422b(a)(1), 1429, and 
1430.

    2. Revise Sec. 936.5(d)(1)(i) to read as follows:


Sec. 936.5  Restrictions on access to long-term advances.

* * * * *
    (d) * * *
    (1) * * *
    (i) If the Finance Board determines that application of the 
restriction may adversely affect the safety and soundness of the 
member. A member may submit a written request to the Finance Board to 
remove a restriction on access to long-term advances under this 
paragraph (d)(1)(i). Such written

[[Page 46873]]

request shall contain 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 financial supervisory agency, or the 
National Credit Union Administration for a federally insured credit 
union member, or the member's appropriate state regulator for a member 
that is not subject to regulation or supervision by a federal 
regulator. The Finance Board shall consider each written request within 
30 calendar days of receipt. For purposes of this paragraph (d)(1)(i), 
the term appropriate state regulator means any state officer, agency, 
supervisor, or other entity that has regulatory authority over, or is 
empowered to institute enforcement action against, a member.
* * * * *
    Dated: August 28, 1997.

    By the Board of Directors of the Federal Housing Finance Board.
Bruce A. Morrison,
Chairperson.
[FR Doc. 97-23510 Filed 9-4-97; 8:45 am]
BILLING CODE 6725-01-U