5828 Federal Register / Vol. 62, No. 26 / Friday, February 7, 1997 / Notices

Estimated time per response: 2.5

hours (0.5 to 2.5 applicant; 0.5 to 2.5

hours contract time).

Total annual burden: 1,085 hours.

Needs and Uses: FCC 307 is used by

licensees/permittees of broadcast

stations to request an extension of time

to construct a broadcast facility, or

when applying for a construction permit

to replace an expired permit. The

application shall be filed at least 30

days prior to the expiration date of the

construction permit if the facts

supporting such application for

extension are known to the applicant in

time to permit such filing. In other

cases, an application will be accepted

upon a showing satisfactory to the FCC

of sufficient reasons for filing within

less than 30 days prior to the expiration

date. The form and instructions to the

form will be revised to clarify the

information needed to obtain an

extension or replacement of a

construction permit. The data is used by

FCC staff to ensure that permittees are

making a conscientious effort to

construct an authorized station in order

to bring service to the public.

OMB Approval No.: 3060-XXXX.

Title: Price Cap Performance Review

for Local Exchange Carriers, CC Docket

No. 94–1.

Type of Review: New Collection.

Respondents: Businesses or other for

profit, including small businesses.

Number of Respondents: 13.

Estimate Hour Per Response: 10

hours.

Total Annual Burden: 130 hours.

Needs and Uses: In the Third Report

and Order issued in CC Docket 94–1, the

Commission modified its filing

requirement for incumbent price cap

Local Exchange Carriers (LECs) who

propose to offer new switched access

services. We no longer require an

incumbent LEC to introduce a new

service by filing a waiver under Part 69

of the Commission’s rules. Instead,

incumbent LECs will be able to file a

petition for the new service based on a

public interest standard. The

Commission also eliminated the lower

service band indices in the proceeding.

By doing so, an incumbent price cap

LEC no longer has to file a waiver to set

its rates below the lower service band

indices, but may instead simply adjust

its rates downward.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

[FR Doc. 97–3068 Filed 2–6–97; 8:45 am]

BILLING CODE 6712–01–P

FEDERAL DEPOSIT INSURANCE

CORPORATION

Sunshine Act Agency Meeting

Pursuant to the provisions of the

‘‘Government in the Sunshine Act’’ (5

U.S.C. 552b), notice is hereby given that

at 11:00 a.m. on Tuesday, February 4,

1997, the Board of Directors of the

Federal Deposit Insurance Corporation

met in closed session to consider

matters relating to the Corporation’s

supervisory activities.

In calling the meeting, the Board

determined, on motion of Vice

Chairman Andrew C. Hove, Jr.,

seconded by Director Joseph H. Neely

(Appointive), concurred in by Director

Eugene A. Ludwig (Comptroller of the

Currency), Director Nicolas P. Retsinas

(Director, Office of Thrift Supervision),

and Chairman Ricki Helfer, that

Corporation business required its

consideration of the matters on less than

seven days’ notice to the public; that no

earlier notice of the meeting was

practicable; that the public interest did

not require consideration of the matters

in a meeting open to public observation;

and that the matters could be

considered in a closed meeting by

authority of subsections (c)(4), (c)(6),

(c)(8), and (c)(9)(A)(ii) of the

‘‘Government in the Sunshine Act’’ (5

U.S.C. 552b(c)(4), (c)(6), (c)(8), and

(c)(9)(A)(ii)).

The meeting was held in the Board

Room of the FDIC Building located at

550–17th Street, NW., Washington, DC.

Dated: February 5, 1997.

Federal Deposit Insurance Corporation.

Valerie J. Best,

Assistant Executive Secretary.

[FR Doc. 97–3244 Filed 2–5–97; 2:30 pm]

BILLING CODE 6714–01–M

FEDERAL HOUSING FINANCE BOARD

Hearings on Pilot Programs Recently

Authorized To Be Established at the

Federal Home Loan Banks (FHL

Banks) of New York, Atlanta, and

Chicago, and the Provisions in the

Financial Management Policy (FMP)

Governing Investments Supporting

Housing and Community Development

AGENCY: Federal Housing Finance

Board.

ACTION: Notice of public hearings.

SUMMARY: The Federal Housing Finance

Board (Finance Board) is hereby

announcing a public hearing on pilot

programs recently authorized to be

established at the Federal Home Loan

Banks of New York, Atlanta, and

Chicago and the provisions of the FMP

governing such activities.

DATES: The public hearing will be held

on Monday, March 10, 1997, beginning

at 9:00 a.m. Written requests to

participate in the hearing must be

received no later than Wednesday,

February 19, 1997.

ADDRESSES: The hearing will be held at

the Office of Thrift Supervision

Amphitheater, 1700 G Street, N.W.,

Washington, D.C. 20552. Send requests

to participate in the hearing, written

statements of hearing participants, or

other written comments to Elaine L.

Baker, Executive Secretariat, Federal

Housing Finance Board, 1777 F Street,

N.W., Washington, D.C. 20006. The

submission may be mailed, hand

delivered, or sent by facsimile

transmission to (202) 408–2895.

Submissions must be received by 5:00

p.m. on the day they are due in order

to be considered by the Finance Board.

Late filed, misaddressed, or

misidentified submissions may affect

eligibility to participate in the hearing.

FOR FURTHER INFORMATION CONTACT:

Kerrie Ann Sullivan, External Affairs

Specialist at (202) 408–2515 or John K.

Hardage, Deputy Director of

Congressional Affairs at (202) 408–2980,

Federal Housing Finance Board, 1777 F

Street, N.W., Washington, D.C. 20006.

SUPPLEMENTARY INFORMATION: The

Finance Board is interested in the views

of System members, community groups,

trade associations, federal or state

agencies and departments, elected

officials and others on the pilot

programs recently authorized to be

established at the Federal Home Loan

Banks of New York, Atlanta, and

Chicago, and the provisions of the FMP

governing such activities. A summary

follows:.

In General

As provided by the Financial

Management Policy (FMP) of the

Finance Board, the FHLBanks may

invest in housing and community

development assets, provided that prior

to entering into such investments, the

FHLBank:

(a) Ensures the appropriate levels of

expertise, establishes policies,

procedures, and controls, and provides

for any reserves required to effectively

limit and manage risk exposure and

preserve the FHLBank’s and the

System’s triple-A rating;

(b) Ensures that its involvement in

such investment activity assists in

providing housing and community

development financing that is not

generally available, or that is available
Federal Register / Vol. 62, No. 26 / Friday, February 7, 1997 / Notices 5829

at lower levels or under less attractive

terms;

(c) Ensures that such investment

activity promotes (or at the very least,

does not detract from) the cooperative

nature of the System;

(d) Provides a complete description of

the contemplated investment activity

(including a comprehensive analysis of

how the above three requirements are

fulfilled) to the Finance Board; and

(e) Receives written confirmation

from the Finance Board, prior to

entering into such investments, that the

above investment eligibility standards

and requirements have been satisfied.

New York

The Federal Home Loan Bank

(FHLBank) of New York has been

authorized to establish a $250 million

Community Mortgage Asset Activities

pilot program. Under the program, the

FHLBank will purchase from members

participation interests in one-to-four

family residential, multifamily,

construction, and community

development mortgage loans that would

benefit families and neighborhoods

meeting the income targets established

for the Community Investment Program

(CIP)—that is, housing for families

whose incomes do not exceed 115

percent of median income for the area,

and loans to finance community and

economic development projects in

neighborhoods where 50 percent of the

residents earn at or below 80 percent of

the area median income.

The FHLBank’s objective is to

enhance the capacity of its members to

meet underserved community financing

needs, and to strengthen the

commitment of the FHLBank to its

housing finance mission. The FHLBank

has indicated that the loans-to-oneborrower regulatory limit often caps the

ability of highly capitalized members,

who are skilled in such lending, to bid

0n affordable housing and community

and economic development projects. By

committing to participate in the funding

of such projects with members, the

FHLBank would reduce a member’s

loans-to-one-borrower level by the

amount of its participation, thereby

facilitating the flow of funds to housing

and community development projects

that might not otherwise be funded. The

FHLBank also contemplates offering

shares of its participation interests in

such loans to other FHLBank of New

York members who would not

otherwise be able, due to their size and

the size of the project, to engage in such

lending.

The Finance Board’s Office of General

Counsel (OGC) has reviewed the

FHLBank of New York proposal and has

determined that the FHLBank may

purchase such loans and participation

interests pursuant to its authority, under

subsections 11(h) and 16(a) of the

Federal Home Loan Bank Act (FHL

Bank Act), to invest ‘‘in such securities

as fiduciary and trust funds may be

invested in under the laws of the state

in which the (FHLBank) is located.’’ The

FHLBank of New York has provided a

legal opinion from outside counsel

stating that fiduciary and trust funds

may invest prudently in such loans and

participation interests under the laws of

the State of New York.

The Finance Board has determined

that the pilot program satisfies the three

criteria established by the Finance

Board for considering and approving

new mission-related investment

activities: (1) the program’s targeting,

and the positive impact the program

would have on the loans-to-oneborrower limits of members specializing

in such targeted lending, would

facilitate the provision of credit in areas

of the community where funding might

not, without FHLBank involvement,

otherwise be available; (2) in facilitating

such targeted originations by certain

members, and in facilitating the

participation of other members who

might not otherwise be able to engage in

such lending, the program acts to

promote the cooperative nature of the

Federal Home Loan Bank System

(FHLBank System); and (3) the

FHLBank’s in-house expertise, the

involvement of its board and senior

management in the development of the

program’s business plan, policies,

underwriting guidelines, and

monitoring and reporting requirements,

the intended establishment of reserves

appropriate to risk, and the level of

program oversight contemplated, should

ensure preservation of the triple-A

rating of the FHLBank and the System.

Program implementation will be

contingent upon conformation by the

Finance Board’s Office of Supervision

that appropriate program policies,

procedures, controls and reserves have

been established.

The following conditions apply to the

New York pilot program:

(a) The subject loans shall meet the

income targets established for CIP

advances.

(b) The purchase of such loans shall

not count toward satisfaction of the

FHLBank’s CIP requirements.

(c) The FHLBank shall ensure that the

originator of the loan maintains at least

a 20 percent interest in the loan

participated, with higher minimum

retention levels required where

appropriate.

(d) The FHLBank shall limit

participations in construction loans to

an amount no greater than 10 percent of

the pilot program authorization.

(e) The FHLBank shall make an effort

to share its participation interests in

such loans with FHLBank members,

ensuring that such members understand

their responsibility to undertake due

diligence separate and apart from that

performed by the FHLBank.

(f) The board of the FHLBank shall

ensure, and certify to, the existence of

appropriate expertise, policies,

procedures, and controls prior to

program implementation.

(g) The board of the FHLBank shall

establish adequate reserves prior to

program implementation and on an ongoing basis.

(h) The board of the FHLBank shall

take appropriate precautions, in

structuring program oversight, to avoid

the appearance of a conflict of interest

for board directors with direct

responsibility for approving transactions

under the program.

(i) The board of the FHLBank shall

require monthly program progress

reports from management during the

first year of the program (and at least

quarterly reports thereafter), shall file

written evaluations of such reports, and

shall provide copies of its evaluations

and the management reports to the

Finance Board.

Atlanta

The FHLBank of Atlanta (FHLBank)

has been authorized to establish a $50

million Affordable Multi-family

Participation Program (AMPP) on a pilot

basis. The pilot would involve the

acquisition by the FHLBank of financial

interests in low- and moderate-income

multi-family loans originated by the

Community Investment Corporation of

North Carolina (CICNC). The FHLBank

proposes to purchase existing

participation interests from FHLBank

members, as well as participation

interests in newly-originated multifamily loans. The idea for the program

emanated from CICNC’s membership

who indicated that their ability to

continue participating in new CICNC

projects can only occur if they are able

to participate out some of their current

holdings.

The CICNC, created by the

Community Bankers Association of

North Carolina in 1990, is an affordable

housing loan consortium whose sole

purpose is to facilitate the availability of

long-term permanent financing for the

development of low- and moderateincome housing across the state. CICNC

membership consists of 90 financial

institutions (thrifts and commercial
5830 Federal Register / Vol. 62, No. 26 / Friday, February 7, 1997 / Notices

banks) with $310 billion in assets, 78 of

which are currently members of the

FHLBank of Atlanta. Membership

consists primarily of smaller financial

institutions; a majority (77 percent) of

consortium members have assets of

under $250 million. Most of the banks

and thrifts located in North Carolina are

members of CICNC.

The consortium provides

construction/rehabilitation bridge

financing and long-term funding for

low- and moderate-income multi-family

projects. Over the past six years CICNC

has funded or committed to fund

approximately $45 million for 53

housing developments, producing 2,645

units of affordable housing. To be

considered for a CICNC loan, at least 51

percent of the units in a project must

provide housing for individuals earning

no more than 60 percent of the median

income in urban areas and 80 percent of

median income in rural areas. (In

practice, all of CICNC’s developments

have a majority of occupants earning no

more than 60 percent of area median

income, regardless of whether the

project is located in an urban or rural

area.) CICNC has reported no delinquent

loans and only two late payments in its

six-year history.

The FHLBank has opined that it has

the legal authority to invest in financial

interests through the AMPP pilot. The

Finance Board’s Office of General

Counsel has reviewed the AMPP pilot

proposal and has concluded that the

Finance Board has authority under the

Federal Home Loan Bank Act to approve

the FHLBank’s proposal.

The Finance Board has determined

that Atlanta’s proposed AMPP pilot

program satisfies the three criteria

established by the Finance Board for

considering and approving of new

mission-related activities: (1) the

FHLBank will ensure the appropriate

levels of expertise, establish policies,

procedures, and controls, and provide

for any reserves required to effectively

limit and manage risk exposure and

preserve the FHLBank’s and the

FHLBank System’s triple-A rating; (2)

the FHLBank’s participation will

provide long-term affordable multifamily housing finance that might not

otherwise be available, particularly in

rural areas, due to limitations on

members’ financial capacity to

participate in CICNC projects; and (3)

the program will promote the

cooperative nature of the System by

enhancing the liquidity and

marketabilty of member CICNC

participation interests, which will

enable these institutions to participate

in additional multi-family lending

projects. Program implementation is

contingent upon confirmation by the

Finance Board’s Office of Supervision

that appropriate program policies,

procedures, controls and reserves have

been established by the FHLBank.

The following conditions apply to the

Atlanta pilot program:

(a) The FHLBank shall ensure that

CICNC members retain at least a 20

percent interest in the loan participated,

with higher minimum retention levels

required where appropriate.

(b) The majority of interest purchased

shall be from FHLBank members.

(c) To the extent FHLBank members

are interested in purchasing interests in

CICNC participations, the FHLBank

shall make an effort to share its

participation interest with such

members, ensuring that such members

understand their responsibility to

undertake due diligence separate and

apart from that performed by the

FHLBank.

(d) The FHLBank shall attempt to

ensure that members selling

participation interests to the FHLBank

use the proceeds to finance new

instruments in CICNC projects.

(e) The board of the FHLBank shall

ensure, and certify to, the existence of

appropriate expertise, policies,

procedures, and controls prior to

program implementation.

(f) The board of the FHLBank shall

establish, prior to program

implementation and on an on-going

basis, adequate reserves.

(g) The board of the FHLBank shall

take appropriate precautions, in

structuring its program oversight, to

avoid the appearance of a conflict of

interest for board directors with direct

responsibility for approving transactions

under the program.

(h) The board of the FHLBank shall

require monthly program progress

reports from management during the

first year of the program (and at least

quarterly reports thereafter), shall file

written evaluations of such reports, and

shall provide copies of its evaluations

and the management reports to the

Board.

Chicago

The FHLBank of Chicago (FHLBank)

has been authorized to establish a $750

million Mortgage Partnership Finance

(MPF) pilot program. The objective of

the pilot program is to unbundle the

risks associated with home mortgage

lending and allocate the individual risk

components between the FHLBank of

Chicago and its members in a manner

that uses the cooperative structure of the

FHLBank System to maximize their

respective core competencies.

When financial depositories currently

engaged in home mortgage lending pool

loans they originate for sale into the

secondary market, pay a guarantee fee,

and portfolio the MBS created, the risk

components associated with home

mortgage lending are misaligned. The

depository institution retains

responsibility for marketing and

servicing, but relinquishes control over

what it does best—underwriting and

managing credit risk—to the securitizer

while it retains risks it is less wellequipped to manage—liquidity, interest

rate, and options risk associated with

funding the MBS. To the extent that the

loans are sold outright, the member

divests itself of the interest rate and

options risk, but also of any

compensation for managing the credit

risk.

MPF envisions providing members

with a strategic alternative to holding

loans in portfolio or selling/securitizing

them in the secondary market. The

member would continue to be

responsible for functions involving the

customer relationship, including all

aspects of mortgage marketing and

origination. The novel feature of the

MPF is that the FHLBank would fund

and retain in portfolio home mortgage

loans originated, serviced and creditenhanced by its members. The member

would receive compensation for

managing the customer relationship and

the credit risk while the FHLBank

would retain the risks it has the most

expertise in managing—liquidity,

interest rate and portions risk. The

FHLBank would hold mission-related

mortgage assets on its books.

The FHLBank is proposing to fund the

home mortgages originated through its

members rather than purchase the loans

from member institutions so that

participating institutions may receive a

more favorable risk-based capital

treatment than if the member funded

and sold the loans to the FHLBank with

recourse.

The FHLBank of Chicago will not

fund home mortgages with principal

balances above the conforming loan

limits applicable to the secondary

market housing GSEs. Loan originations

would result from member credit

decisions within the context of MPF

underwriting guidelines and credit

enhancement requirements. It is

anticipated that a substantial proportion

of MPF originations will meet the CIP

single-family eligibility standards (115

percent of area median income or

below).

The Finance Board’s Office of General

Counsel (OGC) has reviewed the

Chicago proposal. OGC has determined

that MPF is a method of channeling
Federal Register / Vol. 62, No. 26 / Friday, February 7, 1997 / Notices 5831

funds into residential housing finance—

the statutory mission of the FHLBank

System—in a manner that is similar to,

but functionally more sophisticated

than, that which occurs when a

FHLBank makes an advance to a

member. OGC has concluded, therefore,

that it is reasonable for the Finance

Board to authorize the undertaking of

the MPF program by the FHLBank of

Chicago as an activity incidental to a

FHLBank’s express statutory authority. The MPF is designed to insulate the

FHLBank from virtually all the credit

risk associated with investing in home

mortgages. First loss credit protection

for the MPF loan program would be

provided by a reserve fund established

by the FHLBank, to be funded by a share

of the mortgage loan cash flows. The

excess spread account would be

established in an amount at least equal

to the historical loss experience on the

types of MPF loans originated by the

members (based on historical data over

the past five years, this first loss

coverage is likely to range from two to

five basis points of mortgage loan

principal). In return for a fee, MPF participating

members would provide second loss

credit enhancement at least equal to the

level of subordination afforded doubleA rated mortgage-backed securities. The

FHLBank will determine the amount of

the required credit enhancement based

on the characteristics of the mortgages

and rating agency modeling

methodology. A recent analysis has

shown that over an eight-year period,

investments in mortgage pools rated

double-A had zero losses.

Participating members will benefit

from their ability to provide home

mortgage loans to more customers on

more flexible terms while realizing fees

for mortgage origination, credit

enhancement, and servicing. The

FHLBank and its shareholders will be

compensated for managing the interest

rate and options risk associated with

funding MPF loans. This cooperative

venture could result in increased

competition in the home mortgage loan

market.

The Finance Board has determined

that the proposed pilot program satisfies

the three criteria established by the

Finance Board for considering and

approving new mission-related

activities: (1) the FHLBank’s in-house

expertise, the involvement of its board

and senior management in the

development of the program’s business

plan, policies, underwriting guidelines,

and monitoring and reporting

requirements, the intended

establishment of reserves and member

secondary credit enhancements

appropriate to risk, the FHLBank’s

experience in managing the interest rate

and options risk associated with home

mortgages, and the level of program

oversight contemplated, should ensure

preservation of the triple-A rating of the

FHLBanks and the FHLBank System; (2)

the financial advantages of the program

relative to other funding alternatives

available to members, the capital

treatment which will allow the members

to more effectively leverage their equity,

and the program’s underwriting

standards, which are expected to be

more flexible than those used to

originate home mortgage loans on more

flexible and attractive terms; and (3) in

providing members with a strategic

alternative that will allow them to

compete more effectively in the housing

finance market, the program acts to

promote the cooperative nature of the

FHLBank System. Program

implementation is contingent upon

confirmation by the Finance Board’s

Office of Supervision that appropriate

program policies, procedures, controls

and reserves have been established by

the FHLBank.

The following conditions apply to the

Chicago Pilot Program:

(a) The original principal balances of

the subject loans shall fall within the

conforming loan limits applicable to the

secondary market housing GSEs.

(b) The FHLBank shall employ pricing

methodology in an attempt to direct a

portion of the program’s funding to lowand moderate-income households.

(c) The board of the FHLBank shall

ensure, and certify to, the existence of

appropriate expertise, policies,

procedures, and controls prior to

program implementation.

(d) The board of the FHLBank shall

evaluate the need for and establish,

prior to program implementation, and

on an on-going basis, any appropriate

reserves.

(e) The board of the FHLBank shall

take appropriate precautions, in

structuring its program, to avoid

conflicts of interest, or any appearance

thereof, for board directors.

(f) The board of the FHLBank shall

require at each regular board meeting

program progress reports from

management during the first year of the

program (and at least quarterly reports

thereafter), and shall provide quarterly

evaluations of the progress of the pilot

program to the Finance Board.

Persons wishing to participate in the

hearings should send a written request

to the address listed in the ADDRESSES

portion of this notice, to be received no

later than Wednesday, February 19,

1997. A request to participate in the

hearing must include the following

information:

(A) The name, title, address, business

telephone and fax number of the

participant; and

(B) The entity or entities that the

participant will be representing.

Depending on the number of requests

received, participants may be limited in

the length of their oral presentations.

All submissions will be included as part

of the record, including written

testimony not presented orally, although

extraneous material may be deleted

from the printed record to reduce

printing costs. The Finance Board will

notify those selected to make oral

presentations and provide an

approximate time. The Finance Board

reserves the right to limit the number of

participants and to select, at its

discretion, those persons who may make

oral presentations if more requests are

received for participation than may be

accommodated in the time available.

Participants will be required to

submit written statements in advance of

the hearing date. These written

statements should incorporate the major

points to be presented at the hearings

and should be accompanied by an

executive summary of no more than two

pages. Written statements must be

received no later than March 3, 1997,

and should be sent to the address listed

in the ADDRESSES portion of this notice.

Anyone selected for an oral presentation

whose testimony has not been received

by March 3, 1997, may not testify except

by special permission of the Finance

Board.

By the Federal Housing Finance Board.

Bruce A. Morrison,

Chairman.

[FR Doc. 97–3191 Filed 2–6–97; 8:45 am]

BILLING CODE 6725–01–M

FEDERAL RESERVE SYSTEM

Change in Bank Control Notices;

Acquisitions of Shares of Banks or

Bank Holding Companies

The notificants listed below have

applied under the Change in Bank

Control Act (12 U.S.C. 1817(j)) and §

225.41 of the Board’s Regulation Y (12

CFR 225.41) to acquire a bank or bank

holding company. The factors that are

considered in acting on the notices are

set forth in paragraph 7 of the Act (12

U.S.C. 1817(j)(7)).

The notices are available for

immediate inspection at the Federal

Reserve Bank indicated. Once the

notices have been accepted for

processing, they will also be available

for inspection at the offices of the Board

of Governors. Interested persons may