13688 Federal Register / Vol. 66, No. 45 / Wednesday, March 7, 2001 / Proposed Rules

1The Chairman of the Bank Presidents’

Conference requested an extension of the March 1,

2001 effective date for complying with the new

unsecured credit limits. In response, the Finance

Board has waived the March 1, 2001 date by

Resolution, dated February 28, 2001, and has

extended the date for compliance with § 932.9 by

120 days until July 2, 2001.

2 If extension of credit to GSEs are not included,

at year-end 2000, the Banks in aggregate had only

just over $4.4 billion in unsecured extensions of

credit that would be in excess of the limits set forth

in 12 CFR § 932.9 compared with a total unsecured

extensions of credit to private counterparties of just

over $84 billion.

(ii) Payments or costs deemed to be

coordinated expenditures for general

public political communications,

pursuant to 11 CFR 100.23;

(iii) Payments or costs associated with

any general public political

communication that refers to a

candidate for federal office and has been

tested to determine its probable impact

on the candidate preference of voters;

(iv) Payments or costs associated with

any general public political

communication that refers to a

candidate for federal office, where the

intended audience has been selected

based on its voting behavior; or

(v) Payments made to a commercial

vendor for a service or product, with the

express understanding that the service

or product be designed to influence one

or more federal elections.

(3) Notwithstanding any other

provision of this section, a business

entity organized for profit that provides

goods or services to others at the usual

and normal charge for such goods or

services shall not be considered a

political committee. Discounts may be

provided as set forth in 11 CFR

9008.9(a).

* * * * *

Dated: March 1, 2001.

Danny L. McDonald,

Chairman, Federal Election Commission.

[FR Doc. 01–5473 Filed 3–6–01; 8:45 am]

BILLING CODE 6715–01–P

FEDERAL HOUSING FINANCE BOARD

12 CFR Part 932

[No. 2001–03]

RIN 3069–AB11

Unsecured Credit Limits for Federal

Home Loan Banks

AGENCY: Federal Housing Finance

Board.

ACTION: Proposed rule.

SUMMARY: On December 20, 2000, as

part of its new capital rule, the Federal

Housing Finance Board (Finance Board)

approved new limits on the amounts of

unsecured credit that a Federal Home

Loan Bank (Bank) may extend to a

single counterparty or group of affiliated

counterparties. These new unsecured

limits revised and codified the

unsecured credit guidelines set forth in

the Finance Board’s Financial

Management Policy (FMP). The Finance

Board is, hereby, proposing

amendments to the unsecured credit

provisions of the capital rule to increase

the limit on a Bank’s unsecured credit

exposure to government-sponsored

enterprises (GSEs).

DATES: The Finance Board will consider

written comments on the proposed

rulemaking that are received on or

before April 23, 2001.

ADDRESSES: Send comments to: Elaine

L. Baker, Secretary to the Board, by

electronic mail at bakere@fhfb.gov, or by

regular mail to the Board, at the Federal

Housing Finance Board, 1777 F Street,

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

Comments will be available for

inspection at this address.

FOR FURTHER INFORMATION CONTACT:

James L. Bothwell, Managing Director,

(202) 408–2821; Scott L. Smith, Acting

Director, (202) 408–2991; or Julie Paller,

Senior Financial Analyst, (202) 408–

2842, Office of Policy, Research and

Analysis; or Thomas E. Joseph,

Attorney-Advisor, (202) 408–2512,

Office of General Counsel, Federal

Housing Finance Board, 1777 F Street,

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

SUPPLEMENTARY INFORMATION:

I. Background

On December 20, 2000, in accordance

with the Gramm-Leach-Bliley Act, Pub.

Law No. 106–102, 133 Stat. 1338 (Nov.

12, 1999) (GLB Act), the Finance Board

adopted a final rule to implement the

new capital structure that the GLB Act

established for the Banks. See 66 FR

8262 (Jan. 30, 2001). As part of the final

capital rule, the Finance Board adopted

new limits on the permitted amounts of

a Bank’s unsecured credit exposures to

a single counterparty or a group of

affiliated counterparties. Id. at 8318–19

(to be codified at 12 CFR 932.9). These

new limits represent a revision and

codification of the unsecured credit

guidelines of Section VI of the FMP,

Finance Board Res. No. 96–45 (July 3,

1996), as amended by Finance Board

Res. No. 96–90 (Dec. 6, 1996), Finance

Board Res. No. 97–05 (Jan. 14, 1997),

and Finance Board Res. 97–86 (Dec. 17,

1997), which will remain in effect until

these new limits take effect on July 2,

2001.1 During the comment period for

the proposed capital rule, many

commenters generally opposed the

implementation of the unsecured credit

guidelines in § 932.9, but did not

comment on the specific limits set in

the rule, which are designed to address

safety and soundness concerns related

to the risk created by credit

concentrations in a single counterparty

or group of affiliated counterparties. See

66 FR 8301–02.

The new unsecured credit limits in 12

CFR 932.9 are more restrictive than

those that are applied under the FMP.

They allow the Banks, however, to

extend unsecured credit to lower-rated

counterparties than is now allowed

under the FMP and will remove

maturity constraints on extensions of

unsecured credit that are contained in

Section VI of the FMP. Before a Bank

may extend unsecured credit to any

counterparty (or affiliated

counterparties) to which a Bank could

not previously lend because of the

credit rating restrictions or maturity

limits in the FMP, the Bank must obtain

the Finance Board’s approval for the

lending activity as a new business

activity pursuant to 12 CFR Part 980.

The new limits do not apply to

obligations backed by the full faith and

credit of the United States government,

which is the case under the unsecured

credit guidelines of the FMP. Section

932.9 also does not require a Bank to

unwind positions that do not conform to

the new requirements provided the

credit was extended in accordance with

the FMP before the effective date of the

new rule.

II. Proposed Rule

As discussed in the SUPPLEMENTARY

INFORMATION section of the adopting

release of the final capital rule, the

Finance Board believes that the

diversification of risk, particularly with

regard to unsecured credit, promotes the

safety and soundness of the Banks and

that the specific limits adopted in 12

CFR 932.9 are necessary to address the

increase in credit risk associated with

concentrations of credit exposures. The

limits are not unduly onerous 2 and

generally are consistent with those

applicable to commercial banks. See 12

CFR Part 32.

It has been suggested, however, that

as applied to debt issued by the GSEs,

the new limits may present problems for

some Banks. Under the FMP, the Banks

could maintain unsecured credit

exposures with a single GSE in an

amount equal to 100 percent of the

Bank’s capital. The new unsecured

credit limits would treat GSEs like other

private counterparties and base the

unsecured credit limit on the long- or

Federal Register / Vol. 66, No. 45 / Wednesday, March 7, 2001 / Proposed Rules 13689

1 65 FR 75627 (Dec. 4, 2000).

short-term ratings assigned to the GSE

by a Nationally Recognized Statistical

Rating Organization (NRSRO). Generally

speaking, GSEs currently receive the

highest investment grade rating assigned

by an NRSRO. For all such

counterparties, a Bank’s maximum

allowable unsecured credit exposure

under § 932.9 cannot exceed 15 percent

of the Bank’s total capital or of the

counterparty’s regulatory capital,

whichever amount is lower.

Some Banks have indicated that,

given the magnitude of the reduction in

the allowable credit exposure to a GSE

under § 932.9, they will experience

difficulty in developing new investment

strategies to conform to these new

limits. Since publication of the final

unsecured credit rule, some Banks have

indicated that GSE debt offers an

attractive risk-return profile not

available from other investments,

especially in the immediate future.

Some Banks also have suggested that

GSEs are a better credit risk than other

counterparties, even those

counterparties with the highest

investment grade ratings, and point to

the premium over corporate debt at

which GSE debt trades in the markets as

an indication of the GSEs’ special status.

These Banks further claim that the new

restrictions on their credit exposures to

GSEs may result in greater investment

in instruments with a lesser credit

quality.

In the SUPPLEMENTARY INFORMATION

section of the final capital rule, the

Finance Board noted that it ‘‘may solicit

additional comments regarding the

appropriateness of the [unsecured

credit] limits in future rulemaking and

may consider revising them at that

time.’’ 66 FR 8302. The Finance Board

also recognizes that for some Banks, the

magnitude of the reduction in the

allowable unsecured credit limit

applicable to GSEs could be disruptive

and that, historically, GSEs have been

viewed more favorably by debt markets

than even the highest-rated corporate

debt issuers. Thus, the Finance Board is

proposing to amend 12 CFR 932.9 to

raise the limit on a Bank’s unsecured

extensions of credit to a GSE and is

requesting comment and supporting

analysis concerning the appropriate

level for this new limit.

It also has been suggested that the

Finance Board amend 12 CFR 932.9 to

exclude from the unsecured credit

limits the sale of Federal funds with a

maturity of one day or less, or Federal

funds sold under a continuing contract,

as do commercial bank regulators. See

12 CFR Part 32. The Finance Board

requests comment on whether it should

adopt such an exclusion, although it is

not proposing to do so at this time. If

commenters support such an exclusion,

they should provide data indicating

how the lack of such an overnight

Federal funds exclusion in 12 CFR 932.9

would negatively affect the Banks and

should address why such an exclusion

would not raise safety and soundness

concerns.

III. Regulatory Flexibility Act

The proposed rule applies only to the

Banks, which do not come within the

meaning of small entities as defined in

the Regulatory Flexibility Act (RFA).

See 5 U.S.C. 601(6). Therefore, in

accordance with section 605(b) of the

RFA, 5 U.S.C. 605(b), the Finance Board

hereby certifies that this proposed rule,

if promulgated as a final rule, will not

have a significant economic effect on a

substantial number of small entities.

IV. Paperwork Reduction Act

The proposed rule does not contain

any collections of information pursuant

to the Paperwork Reduction Act of 1995.

See 33 U.S.C. 3501 et seq. Therefore, the

Finance Board has not submitted any

information to the Office of

Management and Budget for review.

Dated: February 28, 2001.

By the Board of Directors of the Federal

Housing Finance Board.

Allan I. Mendelowitz,

Chairman.

[FR Doc. 01–5474 Filed 3–6–01; 8:45 am]

BILLING CODE 6725–01–P

DEPARTMENT OF ENERGY

Federal Energy Regulatory

Commission

18 CFR Part 284

[Docket No. PL00–1–000]

Dialog Concerning Natural Gas

Transportation Policies Needed To

Facilitate Development of Competitive

Natural Gas Markets

March 2, 2001.

AGENCY: Federal Energy Regulatory

Commission, Department of Energy.

ACTION: Notice organizing staff

conference.

SUMMARY: In Order 637, issued on

February 9, 2000, the Federal Energy

Regulatory Commission (Commission)

revised its regulatory policies, amended

its regulations, and established new

procedures to enhance the

competitiveness and efficiency of

markets for the transportation of natural

gas in interstate commerce. This notice

provides the organizational framework

for the second of three public staff

conferences in a dialog between the

industry and Commission staff. This

conference focuses on affiliate issues.

EFFECTIVE DATE: The conference will

take place on March 15, 2001, starting

at 1 p.m. Persons wishing to submit

further comments following the

conclusion of the conference must

submit them by April 30, 2001.

ADDRESSES: Federal Energy Regulatory

Commission, 888 First Street, NE.,

Washington, DC 20426.

FOR FURTHER INFORMATION CONTACT:

Robert A. Flanders, Office of Markets,

Tariffs and Rates, Federal Energy

Regulatory Commission, 888 First

Street, NE., Washington, DC 20426,

(202) 208–2084, e-mail:

Robert.Flanders@ferc.fed.us

Notice Organizing Staff Conference on

Competitive Natural Gas Markets

This notice provides the

organizational format for the Federal

Energy Regulatory Commission staff

conference to be held on March 15, 2001

to discuss how the changes in the

natural gas market affect the way in

which the Commission should regulate

transportation transactions between

pipelines and their affiliates, as well as

between pipeline capacity holders and

their affiliates, capacity managers and

agents. The purpose of this conference

is to continue the dialog begun with the

September 19, 2000 staff conference to

enable the industry to discuss with staff,

as well as with each other, issues

relating to the development of

Commission policy and regulatory

responses to rate and service revisions

to meet the needs of the changing

natural gas market. The conference will

begin at 1:00 p.m. at the Commission’s

offices, 888 First Street, NE.,

Washington, DC in the Commission’s

Meeting Room.

The November 22, 2000 notice 1 of the

conference requested those who were

interested in making presentations or

participating to indicate their interest by

January 5, 2001. Sixteen requests to

participate in the roundtable debate

were made and comments from twentysix interested persons were received.

The conference will be structured as

a roundtable debate with staff as

moderator. Panel participants are

identified below. In order to facilitate a

robust discussion of the affiliate issues

identified in the November 22, 2000

notice, a roundtable debate format was

selected. Accordingly, participants will

not have the opportunity to make oral