17108 Federal Register / Vol. 62, No. 68 / Wednesday, April 9, 1997 / Proposed Rules

The statute calls for the Secretary of

Agriculture to designate for each fiscal

year up to 10 community development

venture organizations to demonstrate

the utility of guarantees to attract

increased private investment in rural

private business enterprises.

To be eligible to participate in the

demonstration program, an organization

shall establish a rural business private

investment pool (referred to as a ‘pool’)

for the purpose of making equity

investment in rural private business

enterprises.

From amounts in the national reserve

account of the Trust Fund authorized

under Subtitle E—Rural Community

Advancement Program, section 381E,

the Secretary shall guarantee the funds

in a pool against loss, except that the

guarantee shall not exceed an amount

equal to 30 percent of the total funds in

the pool. The Secretary shall issue

guarantees covering not more than

$15,000,000 of contingent liabilities for

each of fiscal years 1996 through 2002.

The term of a guarantee shall not exceed

10 years.

To be eligible to participate in the

demonstration program, an organization

shall submit a plan that describes

potential sources and uses of the pool to

be established by the organization; the

utility of the guarantee authority in

attracting capital for the pool; and, on

selection, mechanisms for notifying

State, local, and private nonprofit

business development organizations and

business of the existing pool.

The Secretary shall conduct a

competition for the designation and

establishment of pools. In conducting

the competition, the Secretary shall give

priority to organizations that have a

demonstrated record of performance or

have a board and executive director

with experience in venture capital,

small business equity investment, or

community development finance;

propose to serve low-income

communities; propose to maintain an

average investment of not more than

$500,000 from the pool of the

organization; invest funds statewide or

in a multicounty region; and propose to

target job opportunities resulting from

the investments primarily to

economically disadvantaged

individuals, as determined by the

Secretary. To the extent practicable, the

Secretary shall designate organizations

in diverse geographic areas.

Programs Affected

No program in the Catalog of Federal

Domestic Assistance is impacted by this

action.

Intergovernmental Review

As set forth in the final rule and

related Notice to 7 CFR part 3015,

subpart V, 48 FR 29112, June 24, 1983,

Rural Venture Capital Demonstration

Program investments are subject to the

provisions of Executive Order 12372

which requires intergovernmental

consultation with state and local

officials. RBS conducts

intergovernmental consultation in the

manner delineated in RD Instruction

1940–J, ‘‘Intergovernmental Review of

Farmers Home Administration Programs

and Activities.’’

Comments Invited

Interested parties are invited to

participate in the making of the

proposed rule by submitting such

written data, views, arguments, or

proposal as they may desire. Comments

and proposals may include illustrations

or references to forms and procedures

utilized in other program areas in the

industry.

Comments are specifically solicited

concerning the choice and relative

importance of selection criteria,

structuring of the guarantee, when and

under what circumstances the Agency

will make payment under the guarantee,

requirements of the community

development venture organization’s

proposed workplan, rights and

restrictions of investors in the rural

business private investment pools,

requirements for the organizational

structure of the community

development venture organizations,

Agency oversight responsibilities,

investment pool management, and any

other comments concerning this issue.

Dated: April 1, 1997.

Inga Smulkstys,

Acting Under Secretary for Rural

Development.

[FR Doc. 97–8993 Filed 4–8–97; 8:45 am]

BILLING CODE 3410–XY–U

FEDERAL HOUSING FINANCE BOARD

12 CFR Chapter IX

[No. 97–35]

Mission Achievement by the Federal

Home Loan Banks

AGENCY: Federal Housing Finance

Board.

ACTION: Advance notice of proposed

rulemaking (ANPRM).

SUMMARY: The Federal Housing Finance

Board (Finance Board) is requesting

public comment on ways in which the

Federal Home Loan Banks (Banks) can

further achieve their statutory mission

to support housing finance and

community investment and ways in

which the Finance Board, as regulator of

the Federal Home Loan Bank System

(Bank System), could measure and

ensure that the Banks achieve their

mission.

DATES: Comments must be received in

writing on or before May 9, 1997.

ADDRESSES: Comments should be

mailed to: Elaine L. Baker, Secretary to

the Board, Federal Housing Finance

Board, 1777 F Street, N.W., Washington,

D.C. 20006. Comments will be available

for public inspection at this address.

FOR FURTHER INFORMATION CONTACT:

Jonathan Curtis, Senior Financial

Analyst, Office of Policy, (202) 408–

2866, or Brandon B. Straus, AttorneyAdvisor, (202) 408–2589, Office of

General Counsel, Federal Housing

Finance Board, 1777 F Street, N.W.,

Washington, D.C. 20006.

SUPPLEMENTARY INFORMATION:

I. Background and General Issues

A. Introduction

The Finance Board has a statutory

mandate to supervise the Banks in order

to ensure that they carry out their

housing finance mission. See 12 U.S.C.

1422a(a)(3). The Federal Home Loan

Bank Act (Bank Act) authorizes, and in

some instances requires, the Banks to

make advances and other credit

products available to member and

nonmember borrowers to support both

housing finance and community

investment. See id. sections 1430,

1430b. For instance, section 10(a) of the

Bank Act authorizes the Banks to make

advances to provide members with a

source of funding to support housing

finance. See id. section 1430(a).

Sections 10(i) and 10(j) of the Bank Act

require the Banks to establish two

specific advances programs, an

Affordable Housing Program (AHP) and

a Community Investment Program (CIP),

to promote affordable housing and

community investment finance. See id.

section 1430(j), (i). Section 10(j)(10) of

the Bank Act authorizes the Banks to

establish community investment cash

advance programs in addition to the

AHP and CIP. See id. section

1430(j)(10). In sum, the Finance Board

believes it is clear from the Bank Act

that the mission of the Banks is to

support and promote housing finance

and community investment.

The Finance Board is in the process

of devolving to the Banks functions

currently performed by the Finance

Board in a number of areas that are more

appropriately viewed as Bank
Federal Register / Vol. 62, No. 68 / Wednesday, April 9, 1997 / Proposed Rules 17109

management and governance functions.

As part of that process, the Finance

Board has established clear regulatory

standards within which the Banks must

operate in making management

decisions. The Finance Board believes

this approach may be appropriate for

regulation of the Banks’ achievement of

their mission. Comments are requested

on whether the Finance Board should

define and measure mission fulfillment

for the Banks through a regulation.

Could the goals of the Finance Board in

promoting more focused mission

activities by the Banks be fully achieved

through some means other than a

regulation, such as a policy statement

including a non-exclusive list of

activities that the Banks may undertake

in order to achieve their statutory

mission?

Should the Banks establish annual

plans setting out their goals for

identifying and implementing missionfocused activities, including the

identification of unmet credit needs in

the Bank’s district? Should such plans

serve as the benchmark for determining

whether or not a Bank is fulfilling its

mission? Are there other possible

options for the identification and

achievement of mission by a particular

Bank and the Bank System, as a whole?

The Banks currently fulfill their

mission, in part, through many of the

advances the Banks make and through

their activities under the AHP and the

CIP. As further discussed below, the

Finance Board believes that the Banks

have an obligation to use their statutory

powers to assist member and

nonmember borrowers in meeting

housing finance and community

investment needs through means other

than advances, the AHP, and the CIP.

Several of the Banks have made efforts

to fulfill this obligation through the

establishment of pilot programs under

the Banks’ investment and incidental

authorities, with the approval of the

Finance Board, designed to assist

members in meeting unmet credit needs

in specific segments of the housing

finance and community investment

market. These initiatives are important

first steps towards fulfillment of the

Banks’ broader mission, and the Finance

Board continues to encourage the Banks

to bring innovative programs to the

agency. In addition, the Finance Board

wishes to facilitate all of the Banks’

establishing additional programs to

support affordable housing and

community investment finance by

member and nonmember borrowers

through community investment cash

advance programs, through the Bank’s

investment and credit activities, and by

providing technical assistance. The

Bank’s efforts should focus on assisting

member and nonmember borrowers in

meeting the housing and community

investment needs in their communities,

including the credit needs of low- or

moderate-income families and small

businesses.

The Finance Board recognizes that

housing and community investment

credit needs may be different in each

Bank’s district, and the Banks are in the

best position to identify those needs.

Furthermore, each Bank may have

proven and innovative strategies to help

member and nonmember borrowers

meet those needs. Consequently, the

Finance Board does not intend to

substitute its judgment for the Banks on

these matters. Among the purposes of

this notice is to solicit comments,

generally, on: (1) How the Banks could

identify and meet unmet credit needs,

and (2) how the Finance Board shall

ensure that the Banks identify and meet

those unmet credit needs.

B. Defining Mission-Focused Activities

There are five broad categories of

activities through which the Banks carry

out their mission. The Finance Board

requests comments on the following

questions related to these five categories

of activities.

1. Regular Advances

Many of the Banks’ regular advances

support our nation’s housing finance

system in ways not otherwise provided

by the mortgage markets. These regular

advances further the Banks’ mission.

While the Finance Board wishes to find

ways beyond regular advances for the

Banks to focus their housing and

community investment mission, there

are special programs or products that

may be offered through the traditional

advances mechanism, such as discounts

or rebates for members meeting certain

affordable housing or community

investment goals or advance-related

donations to affordable housing

providers. What kinds of special

programs structured using regular

advances, including letters of credit,

should qualify as mission-focused

activities?

2. AHP

Because the income limits (80 percent

of area median income, or AMI) and the

annual subsidy amount of the AHP are

fixed by statute and full participation is

required by all of the Banks, the Banks’

AHP activities are by definition

mission-focused activities. See 12 U.S.C.

1430(j). It is the Finance Board’s belief

that the Banks’ statutory mission

responsibilities cannot be satisfied

solely by participating in the AHP.

3. CIP

The general parameters of the CIP,

including income-targeting (115 percent

of AMI) and pricing benefits, are also set

by statute and are by definition a

minimum standard of mission

achievement, which the Finance Board

seeks to expand beyond. See id. section

1430(i). The Bank Act does not

prescribe the volume of CIP credit that

the Banks must extend on an annual

basis. The Finance Board specifically

requests comment on whether and how

the CIP could be used more aggressively

in mission fulfillment.

4. Investments

The Banks may have the greatest

flexibility for increased and more

focused financial support of housing

and community investment activities

through their investment authority. The

Finance Board has revised the Financial

Management Policy for the Bank System

to permit double-A investments, such as

state housing finance agency bonds, that

further the Banks’ mission. In addition,

the Finance Board recently approved

three pilot programs that allow several

Banks to purchase participations in

targeted mixed-use and multifamily

project loans and to purchase whole

single-family loans from member

institutions. The Finance Board

specifically requests comment on what

other types of investments the Banks

could make that would be missionfocused and what types of housing and

community credit needs are not being

met that could be assisted through

investment, rather than advance,

products.

5. Other Activities

The Finance Board wishes to promote

opportunities for the Banks to achieve

their mission in non-financial or nonbalance-sheet activities, for example, by

offering technical assistance,

educational programs and business

development for affordable housing, or

by offering grants or awards out of

earnings to housing organizations. The

Finance Board specifically requests

comments on whether—and if so, what

kinds of—non-financial, charitable or

other non-balance sheet funding could

be considered as mission-focused and

included in determining a Bank’s

mission fulfillment.

II. Issues For Consideration

A. Specific Characteristics of MissionFocused Activities

There are a variety of activities that

the Banks might engage in as a means

of carrying out their mission. The

following is only a partial list of
17110 Federal Register / Vol. 62, No. 68 / Wednesday, April 9, 1997 / Proposed Rules

alternatives from which the Banks might

choose. Should the following activities

be considered ways in which the Banks

achieve their mission: (1) Providing

products that are targeted to meet

multiple policy objectives, such as lowincome housing and mixed-income

community revitalization; (2) pricing

Bank products to encourage member

institutions to be active in affordable

housing and community revitalization;

(3) developing strategies to encourage

partnerships among and between

members, nonmembers, housing and

community development organizations,

and government agencies; (4) providing

technical and educational assistance to

members and affordable housing and

community development organizations?

The Finance Board also requests

comment on how the Banks could use

their cooperative structure to assist

members in acquiring, developing, and

implementing emerging technologies.

B. Measurement of Mission

Achievement

The Finance Board requests comment

on ways in which the Banks’ mission

achievement can or should be

measured. One option would be for the

Finance Board to establish, or require

the Banks to establish, quantitative

targets for specific mission-related

activities undertaken by the Banks.

However, the Finance Board

understands that the efficacy of some

mission-related activities, such as

promoting public-private partnerships,

may be difficult to measure

quantitatively. Therefore, comments are

requested on what other methods of

measurement, such as qualitative

measurements, may be appropriate for

these kinds of activities. Comments also

are requested on whether and through

what medium the results of a Bank’s

performance in achieving its mission

should be communicated to the public.

C. Role of Advisory Councils

Comments are requested on what role

the Banks’ Advisory Councils should

play in achievement of the Banks’

mission. Under statute, it is the role of

the Advisory Council to provide

guidance to a Bank on the low- and

moderate-income housing programs and

needs in the Bank’s district and on the

utilization of advances to meet these

needs. See id. section 1430(j)(11). If the

Banks were required to establish

mission achievement plans, as

discussed above, one option would be to

require each Bank to provide its

Advisory Council a reasonable period of

time to review the mission achievement

plan and provide its recommendations

to the Bank’s board of directors.

Comments received in response to

this ANPRM will be reviewed and

considered by the Finance Board in

preparation of further action in

connection with the issues discussed in

this ANPRM. In addition, the Finance

Board expects to hold a public hearing

on these issues in the near future.

Dated: April 2, 1997.

By the Board of Directors of the Federal

Housing Finance Board.

Bruce A. Morrison,

Chairman.

[FR Doc. 97–9049 Filed 4–8–97; 8:45 am]

BILLING CODE 6725–01–U

DEPARTMENT OF THE TREASURY

Office of Thrift Supervision

12 CFR Parts 516, 543, 545, 552, 556,

563

[No. 97–30]

RIN 1550–AA83

Application Processing

AGENCY: Office of Thrift Supervision,

Treasury.

ACTION: Notice of proposed rulemaking.

SUMMARY: As a part of its ongoing effort

to review and streamline its regulations,

the Office of Thrift Supervision (OTS) is

proposing to revise its regulations

governing the comment procedures for

certain specified applications and

notices (collectively ‘‘applications’’). In

addition to reorganizing the regulations,

the OTS proposes to amend the existing

procedures to expand the comment

period on these applications, prescribe

the information that comments must

contain in order to be considered by the

OTS in its evaluation of applications,

and remove existing provisions that

require the OTS to conduct an oral

argument on applications under certain

circumstances and replace these

provisions with discretionary

conference procedures.

DATES: Comments must be received on

or before June 9, 1997.

ADDRESSES: Send comments to Manager,

Dissemination Branch, Records

Management and Information Policy,

Office of Thrift Supervision, 1700 G

Street, NW., Washington, D.C. 20552,

Attention Docket No. 97–30. These

submissions may be hand-delivered to

1700 G Street, NW., from 9:00 a.m. to

5:00 p.m. on business days; they may be

sent by facsimile transmission to FAX

Number (202) 906–7755; or they may be

sent by e-mail:

public.info@ots.treas.gov. Those

commenting by e-mail should include

their name and telephone number.

Comments will be available for

inspection at 1700 G Street, NW., from

9:00 a.m. until 4:00 p.m. on business

days.

FOR FURTHER INFORMATION CONTACT:

Catherine Shepard, Senior Attorney,

Regulations and Legislation Division,

(202) 906–7275, Kevin Corcoran,

Assistant Chief Counsel, Business

Transactions Division, (202) 906–6962,

Office of Chief Counsel; or Diana L.

Garmus, Director, Corporate Activities

Division, (202) 906–5683, Office of

Thrift Supervision, 1700 G Street NW.,

Washington, D.C. 20552.

SUPPLEMENTARY INFORMATION:

I. Background

OTS regulations governing

applications for permission to organize

a federal stock or mutual savings

association, to establish or relocate a

branch office of a federal savings

association, and to engage in a

transaction that is subject to the Bank

Merger Act require applicants to follow

the public comment and review

procedures at 12 CFR 543.2 (e) and (f).

Currently, § 543.2 provides an

opportunity for the public to submit

communications in favor or in protest of

applications, and permits the applicant

to respond to any protest. Where a

protest is timely submitted, meets

specified criteria, and includes a request

for oral argument, or if an applicant

requests an oral argument, the

regulation requires the OTS to conduct

an oral argument on the merits of the

application. The OTS may also hold an

oral argument in the absence of any

specific request, if it determines that

additional proceedings are desirable.

Today, the OTS is proposing to revise

these procedures. The proposed

revisions, discussed more fully below,

would consolidate the public comment

procedures for the cited applications.

The proposal would also expand

existing public comment periods,

prescribe the information that a

comment must contain to be considered

in the evaluation of applications, and

delete existing provisions requiring the

OTS to conduct an oral argument on

applications under certain

circumstances and replace these

provisions with discretionary

conference procedures. The OTS

believes that these changes will make

the application processing procedures

easier to understand and apply.

Additionally, the proposed

discretionary conference procedures

will conform OTS regulations more

closely to those of the other federal

banking agencies, in accordance with