This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

24263

Vol. 66, No. 93

Monday, May 14, 2001

1Of course, a Bank’s board may, in its discretion,

continue to consider its three-year average, along

with other factors, in determining it annual number

of meetings, provided that number is no less than

six.

FEDERAL HOUSING FINANCE BOARD

12 CFR Part 918

[No. 2001–06]

RIN 3069–AB05

Maintenance of Effort—Minimum

Number of Annual Bank Board of

Directors Meetings

AGENCY: Federal Housing Finance

Board.

ACTION: Interim final rule.

SUMMARY: The Federal Housing Finance

Board (Finance Board) is amending the

maintenance of effort provision of its

regulations to eliminate the three-year

averaging requirement and to reduce the

required minimum number of in-person

board of directors meetings that a

Federal Home Loan Bank (Bank) must

hold annually to six meetings.

DATES: The interim final rule shall

become effective on May 14, 2001. The

Finance Board will accept written

comments on the interim final rule on

or before June 13, 2001.

ADDRESSES: Address written comments

to Elaine L. Baker, Secretary to the

Board, by regular mail at the Federal

Housing Finance Board, 1777 F Street,

NW., Washington, DC 20006. Comments

will be available for inspection at this

address.

FOR FURTHER INFORMATION CONTACT:

Scott L. Smith, Acting Director, at (202)

408–2991, Patricia L. Sweeney, Program

Analyst, at (202) 408–2872, Office of

Policy, Research, and Analysis; or

Sharon B. Like, Senior AttorneyAdvisor, at (202) 408–2930, Thomas

Hearn, Senior Attorney-Advisor, at (202)

408–2976, Office of the General

Counsel; or by regular mail at the

Federal Housing Finance Board, 1777 F

Street, NW., Washington, DC 20006. A

telecommunications device for deaf

persons (TDD) is available at (202) 408–

2579.

SUPPLEMENTARY INFORMATION:

I. Statutory and Regulatory Background

The Gramm-Leach-Bliley Act (GLB

Act) amended section 7(i) of the Federal

Home Loan Bank Act (Bank Act) (12

U.S.C. 1427(i)) by imposing specific

limits on annual compensation for the

Chairperson, Vice Chairperson, and

other members of a Bank’s board of

directors. See GLB Act, § 606(b), Pub. L.

No. 106–102, 113 Stat. 1338 (Nov. 12,

1999). Because the new statutory limits

generally would result in most directors

receiving less compensation than

allowed under the then existing Finance

Board regulation, for safety and

soundness reasons, the Finance Board

included in its interim final rule

implementing the new statutory limits a

requirement that each Bank’s board of

directors continue to maintain its level

of oversight of the management of the

Bank (maintenance of effort standard).

The interim final rule further required

that, consistent with this maintenance

of effort standard, each Bank’s board of

directors must hold no fewer in-person

meetings in any year than it held on

average over the immediately preceding

three years (three-year averaging

requirement). See 64 FR 71275 (Dec. 21,

1999).

In the SUPPLEMENTARY INFORMATION

section of the final rule that finalized

the interim final rule, the Finance Board

recognized that a pure averaging

requirement incorporates the vagaries of

timing into the calculation of the

minimum meetings requirement for a

particular Bank. See 65 FR 13663, 13664

(March 14, 2000). For that reason, in

order to reflect the operational reality at

the Banks regarding the average number

of meetings held over the preceding

three years, the Finance Board revised

the minimum meetings requirement in

§ 918.7(a) of the final rule to the lesser

of: (1) nine; or (2) the three-year

averaging requirement. See id. In

addition, § 918.7(b) of the final rule

clarified that a Bank could apply to the

Finance Board for a waiver of the

minimum meetings requirement

pursuant to the procedures of 12 CFR

part 907. See 12 CFR 918.7(b).

II. Analysis of Interim Final Rule

Since the maintenance of effort

standard was adopted, the Finance

Board has received several requests

from Banks for waivers under § 918.7(b)

to hold fewer annual in-person board of

directors meetings than mandated by

their three-year averaging requirement.

Two Banks, in particular, have argued

that they would be able to more

efficiently and effectively conduct their

business by holding only six annual inperson board meetings. The Banks

indicated that they would be able to

continue to maintain their level of

oversight over the management of the

Banks by conducting more business at

fewer, but longer, board meetings, and/

or placing greater reliance on board

committees for the conduct of board

business. The Banks noted that the

three-year averaging requirement creates

a standard that varies among the Banks.

For example, one Bank, based on its

three-year averaging requirement,

already holds only six in-person board

meetings annually.

Based on the experience with the

minimum meetings requirement over

the past year, the Finance Board is

persuaded that the three-year averaging

requirement should be eliminated from

§ 918.7(a)(2). In addition, based on the

Banks’ arguments that they can operate

more efficiently and effectively, while

continuing to maintain their level of

oversight of the management of the

Bank, with six annual in-person board

meetings, the Finance Board is

persuaded that it would be reasonable to

reduce the minimum of nine meetings

in § 918.7(a)(1) to six meetings.1

The Finance Board also surveyed the

number of board of directors meetings

held in 1999 by 12 bank holding

companies with total assets ranging

from $11.0 billion to $99.8 billion, four

thrift institution holding companies

with total assets ranging from $35

billion to $186.5 billion, and two

housing Government-Sponsored

Enterprises (GSEs)—the Federal

National Mortgage Association (Fannie

Mae) and the Federal Home Loan

Mortgage Corporation (Freddie Mac)—

with total assets of $575.2 billion and

$386.7 billion, respectively. In 1999, the

total assets of the 12 Banks ranged from

$24.4 billion to $115.9 billion. The

number of directors on the boards of the

financial institution holding companies,

Fannie Mae and Freddie Mac generally

ranged from 14 to 18, which is

24264 Federal Register / Vol. 66, No. 93 / Monday, May 14, 2001 / Rules and Regulations

comparable in size to the number of

directors serving on the boards of the

Banks. For only two of the bank holding

companies, the board was comprised of

12 directors, and for a third bank

holding company, the board was

comprised of 21 directors. The number

of board meetings for the bank holding

companies ranged from 4 to 12,

averaging 7.33 meetings in 1999. The

number of board meetings for the thrift

institution holding companies ranged

from 4 to 9, averaging 7.00 meetings in

1999. Fannie Mae held 8 board meetings

in 1999, and Freddie Mac held 5 board

meetings in 1999.

In short, requiring at least six inperson Bank board of directors meetings

in any year is within the range of the

number of annual board meetings held

by financial institution holding

companies and other housing GSEs.

Providing the boards of the Banks with

greater discretion in determining the

number of board meetings to hold

annually also is consistent with the GLB

Act’s emphasis on devolving

governance issues to the Banks.

Although the interim final rule

reduces the minimum meetings

requirement, § 918.7(a) still requires the

board of directors of a Bank to continue

to maintain its level of oversight of the

management of the Bank,

notwithstanding the limits on annual

directors’ compensation established by

section 7(i) of the Bank Act. See 12

U.S.C. 1427(i). Therefore, if a Bank’s

board intends to hold fewer annual inperson board meetings than it has held

in past years, it would be in the board’s

best interest to document how it will

continue to meet the maintenance of

effort standard and its fiduciary duties

regarding the Bank’s safety and

soundness.

The interim final rule also removes

the waiver provision of § 918.7(b), since

the right to seek a waiver generally of

Finance Board regulatory provisions is

already provided for in 12 CFR part 907.

III. Regulatory Flexibility Act

Because no notice of proposed

rulemaking is required for this interim

final rule, the provisions of the

Regulatory Flexibility Act, 5 U.S.C. 601

et seq., do not apply.

IV. Notice and Public Participation

Because of the exigency of the Banks

setting their schedules of board of

directors meetings for 2001, the Finance

Board finds for good cause that the

notice and public comment procedure

required by the Administrative

Procedure Act is impracticable,

unnecessary, or contrary to the public

interest in this instance. See 5 U.S.C.

553(b)(B). The Finance Board welcomes

written comments on this interim final

rule.

V. Paperwork Reduction Act

This interim final rule does not

contain any collections of information

pursuant to the Paperwork Reduction

Act of 1995. See 44 U.S.C. 601 et seq.

Therefore, the Finance Board has not

submitted any information to the Office

of Management and Budget for review.

List of Subjects in 12 CFR Part 918

Federal home loan banks, Reporting

and recordkeeping requirements, Wages.

Accordingly, the Finance Board

hereby amends title 12, chapter IX, part

918, Code of Federal Regulations, as

follows:

1. The authority citation for part 918

continues to read as follows:

Authority: 12 U.S.C. 1422b(a), and 1427.

2. Revise § 918.7 to read as follows:

§ 918.7 Maintenance of effort.

Notwithstanding the limits on annual

directors’ compensation established by

section 7(i) of the Act, as amended, the

board of directors of each Bank shall

continue to maintain its level of

oversight of the management of the

Bank. In maintaining its level of

oversight, the board of directors of a

Bank shall hold at least six in-person

meetings in any year.

Dated: May 2, 2001.

By the Board of Directors of the Federal

Housing Finance Board.

Allan I. Mendelowitz,

Chairman.

[FR Doc. 01–11993 Filed 5–11–01; 8:45 am]

BILLING CODE 6725–01–P

DEPARTMENT OF COMMERCE

Bureau of Export Administration

15 CFR Part 744

[Docket No. 9704–28099–0127–10]

RIN 0694–AB60

Entity List: Revisions and Additions

AGENCY: Bureau of Export

Administration, Commerce.

ACTION: Final rule.

SUMMARY: The Export Administration

Regulations (EAR) provide that the

Bureau of Export Administration (BXA)

may inform exporters, individually or

through amendment to the EAR, that a

license is required for exports or

reexports to certain entities. The EAR

contain a list of such entities called the

Entity List. This rule adds to the Entity

List twelve entities located in the

People’s Republic of China (PRC). This

rule also modifies three Russian entity

listings and one Chinese entity listing,

and makes one correction to an Israeli

entity.

EFFECTIVE DATE: This rule is effective

May 14, 2001.

FOR FURTHER INFORMATION CONTACT:

Eileen M. Albanese, Office of Exporter

Services, Bureau of Export

Administration, Telephone: (202) 482–

0436.

SUPPLEMENTARY INFORMATION:

Background

General Prohibition Five (§ 736.2(b)(5)

of the EAR) prohibits exports and

reexports to certain end-users or enduses (described in part 744 of the EAR)

without a license. In the form of

Supplement No. 4 to part 744, BXA

maintains an ‘‘Entity List’’ to provide

notice informing the public of certain

entities subject to such licensing

requirements.

There are three levels of license

requirements for the twelve entities

added to the Entity List by this rule. A

license will be required for the export or

reexport of all items subject to the EAR

having a classification other than EAR99

to the following two PRC entities:

Baotou Guanghua Chemical Industrial

Corporation and Xian Research Institute

of Navigation Technology. A license

will be required for the export or

reexport of all items subject to the EAR

to the following five PRC entities: 13

Institute, China Academy of Launch

Vehicle Technology, (CALT), aka 713

Institute or Beijing Institute of Control

Devices, PRC; Beijing Power Machinery

Institute, PRC; Beijing University of

Aeronautics and Astronautics (BUAA),

PRC; First Department, China Academy

of Launch Vehicle Technology, (CALT),

PRC; and Xiangdong Machinery Factory,

PRC. A license will be required for the

export or reexport of all items subject to

the EAR having a classification other

than EAR99 or a classification where the

third through fifth digits are ‘‘999’’ of

the ECCN, e.g., XX999 to the following

five PRC entities: 35 Institute, aka

Beijing Huahang Radio Measurements

Research Institute; 33 Institute, aka

Beijing Institute of Automatic Control

Equipment; Southwest Research

Institute of Electronics Technology,

Chengdu; Northwestern Polytechnical

University; and 54th Research Institute

of China, aka Communication,

Telemetry and Telecontrol Research

Institute (CTI).

License applications to export or

reexport these items to all but one of the