Federal Home Loan Bank Appointive Directors, 3028-3039 [07-271]

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Download as PDF 3028 Federal Register / Vol. 72, No. 15 / Wednesday, January 24, 2007 / Rules and Regulations FEDERAL HOUSING FINANCE BOARD 12 CFR Part 915 [No. 2007–01] RIN 3069–AB–33 Federal Home Loan Bank Appointive Directors AGENCY: Federal Housing Finance Board. Interim final rule with request for comments. ACTION: rmajette on PROD1PC67 with RULES SUMMARY: The Federal Housing Finance Board (Finance Board) is adopting procedures for the selection of Federal Home Loan Bank (Bank) appointive directors. The procedures require the boards of directors of the Banks to submit to the Finance Board a list of individuals that includes information regarding each individual’s eligibility and qualifications to serve as a Bank director. The Finance Board will use the lists provided by each Bank to select well-qualified individuals to serve on the Bank’s board of directors. DATES: This interim final rule is effective on January 24, 2007. The Finance Board will accept written comments on the interim final rule on or before February 23, 2007. Comments: Submit comments to the Finance Board using any one of the following methods: E-mail: comments@fhfb.gov. Fax: 202–408–2580. Mail/Hand Delivery: Federal Housing Finance Board, 1625 Eye Street NW., Washington, DC 20006, ATTENTION: Public Comments. Federal eRulemaking Portal: http:// www.regulations.gov. Follow the instructions for submitting comments. If you submit your comment to the Federal eRulemaking Portal, please also send it by e-mail to the Finance Board at comments@fhfb.gov to ensure timely receipt by the agency. Include the following information in the subject line of your submission: Federal Housing Finance Board. Interim Final Rule: Federal Home Loan Bank Appointive Directors. RIN Number 3069–AB–33. Docket Number 2007–01. We will post all public comments we receive without change, including any personal information you provide, such as your name and address, on the Finance Board Web site at http:// www.fhfb.gov/ Default.aspx?Page=93&Top=93. Neil R. Crowley, Deputy General Counsel, 202–408–2990, crowleyn@fhfb.gov; or Thomas P. Jennings, Senior Attorney Advisor, Office of General Counsel, FOR FURTHER INFORMATION CONTACT: VerDate Aug<31>2005 15:02 Jan 23, 2007 Jkt 211001 202–408–2553, jenningst@fhfb.gov. You can send regular mail to the Federal Housing Finance Board, 1625 Eye Street NW., Washington, DC 20006. SUPPLEMENTARY INFORMATION: I. Background Section 7(a) of the Federal Home Loan Bank Act (Bank Act) (12 U.S.C. 1427(a)), authorizes the Finance Board to appoint directors to the board of each Bank. Section 7(f)(2) (12 U.S.C. 1427(f)(2)) authorizes the Finance Board to fill any vacancy in an appointive directorship for the remainder of the unexpired term. The current rule implementing this statutory authority provides only for the selection of appointive directors in the sole discretion of the Finance Board, but lacks any procedures for accomplishing this. See 12 CFR 915.10(a). The Finance Board has determined that adopting procedures for the selection of appointive directors will enhance its ability to identify and appoint wellqualified individuals to serve as Bank directors. Accordingly, the Finance Board is amending § 915.10 to adopt procedures under which the board of directors of each Bank will submit to the Finance Board a list of individuals that includes information regarding each individual’s eligibility and qualifications to serve as a Bank director. The Finance Board will use the lists provided by each Bank to select well-qualified individuals to serve on the Bank’s board of directors. II. Analysis of the Interim Final Rule A. Bank Responsibilities An effective board of directors is an important element in maintaining the safety and soundness of a Bank and ensuring that it serves its housing and community finance mission. The Banks and other interested parties with knowledge of the district likely will be familiar with individuals who have the background and skills necessary to serve on the board of a large financial institution such as a Bank. The Finance Board believes that the appointment process will be enhanced by allowing those most familiar with the resources in a Bank’s district to play a greater role in identifying a pool of well-qualified individuals from which the Finance Board can appoint Bank directors. Accordingly, the rule seeks to utilize the local and regional knowledge of the Bank, as well as of any other interested parties, in seeking out or otherwise identifying individuals who have the background and skills necessary to serve as an effective Bank director. Under the rule, the Banks are responsible at the initial stages of the PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 selection process for identifying potential appointive directors, assessing their eligibility and qualifications, and nominating them to the Finance Board. In doing so, the Finance Board expects each Bank to assess the appropriate experience and abilities its board must possess in order to operate effectively. When the Bank’s board identifies potential appointive directors, it will perform a preliminary assessment of their qualifications prior to sending a list of nominations to the Finance Board. The board’s preliminary assessment should include, but is not limited to, a review of the individuals’ executed eligibility form and their community reputation. In the case of an individual seeking to be designated as a community interest director, the Finance Board expects that each Bank will assess the individual’s prior experience in serving the consumer and community interests specified in the Bank Act. As noted below, in order to allow for a well-diversified applicant pool, the rule permits any interested party to submit to the Banks the names of prospective directors, which the Banks will evaluate based on each individual’s qualifications. Section 915.10(a)(1) requires the board of directors of each Bank annually, on or before October 1st, to submit to the Finance Board a list of nominees who meet the statutory eligibility requirements and are otherwise well-qualified for the appointive directorships that will become vacant at the end of that calendar year. Determining who to include on the list is left to the boards of directors of the Banks, which may exercise discretion in determining how to identify and present individuals to the Finance Board. The board should consider each individual in light of his or her background and experience as it relates to being a director of a Bank, and should select nominees based on the totality of their qualifications. Section 915.10(a)(3) of the rule further requires that the list of individuals a Bank submits include 2 times the number of appointive directorships that are to be filled that year. Under § 915.15(b), the Finance Board has the discretion to require a Bank to provide information about additional eligible and wellqualified individuals. Along with the list of eligible and qualified individuals, the Bank must provide the original executed appointive director application form on which each individual describes in detail the business, financial, housing, community and economic development, or other leadership experiences that qualify him or her to serve on the board E:\FR\FM\24JAR1.SGM 24JAR1 Federal Register / Vol. 72, No. 15 / Wednesday, January 24, 2007 / Rules and Regulations of the Bank. A copy of the form is attached as an exhibit. Section 915.10(a)(2) extends this procedure to filling vacancies that arise before the completion of a full term, by requiring the board of directors of the Bank to submit a list of 2 individuals for any appointive directorship that becomes vacant prior to the end of its term. The rule requires a Bank to act promptly to provide the list to fill the remaining term of a vacant appointive directorship. rmajette on PROD1PC67 with RULES B. Finance Board Selection Section 915.10(b) provides that the Finance Board has sole discretion to appoint individuals to the boards of the Banks. In exercising this discretion, the Finance Board intends to look principally to the qualifications of the nominees, and will appoint only those individuals who have demonstrated that they possess the experience necessary to serve effectively on the board of a large and sophisticated financial institution with an important housing finance and economic development mission, such as a Bank. By relying on the demonstrated qualifications of the nominees, the Finance Board expects that any individuals it appoints will possess the experience and skills necessary to serve as the independent voices on the board of directors, a role that can best be played by the appointive directors of the Banks. The rule also makes clear that the Finance Board may decline, in its sole discretion, to appoint any of the individuals on the initial list submitted by the Bank. If this occurs, the Finance Board can direct a Bank to submit the names of additional eligible and wellqualified individuals for the Finance Board’s consideration. C. Prospective Appointive Directors To ensure a diverse pool of prospective directors, § 915.10(c) allows any individual who is interested in being appointed to the board of a Bank to submit to the Bank an executed appointive director application form. The rule also allows any interested party to make recommendations to a Bank regarding individuals who are well-qualified to serve on the board of the Bank, but requires any such individual to submit to the Bank the same application form before the Bank may consider that person for inclusion in the list it submits to the Finance Board. The rule does not provide for any individuals to submit applications directly to the Finance Board. The board of the Bank has discretion to determine which individuals it submits to the Finance Board for consideration, VerDate Aug<31>2005 15:02 Jan 23, 2007 Jkt 211001 although the Finance Board expects that the Bank’s board will give due consideration to all persons seeking to be nominated to the board. D. Term of Office Section 915.10(d) is substantially similar to § 915.10(b) of the current rule. It has been revised to delete outdated language that addressed how the Finance Board would stagger the terms of appointive directors with terms commencing in 2001 and 2002, to achieve a one-third staggering of the boards of directors, as required by section 7(d) of the Bank Act (12 U.S.C. 1427(d)). Because the Finance Board has adjusted the terms of office for those directorships and has established 3 approximately equal classes of directors at each of the Banks that language is no longer necessary and is deleted. E. Appointive Directorship Vacancies Existing on January 1, 2007 Section 915.10(e) is a temporary provision for filling appointive directorships that are vacant on January 1, 2007. The rule requires the boards of directors of the Banks to submit the list of eligible and qualified individuals to the Finance Board on or before March 31, 2007, instead of October 1, 2007. In all other respects, the changes made by the interim final rule will apply. For these directorships the Finance Board intends to consider nominations as they are received, and the rule thus does not require a Bank to submit nominations for all vacancies at one time. III. Notice and Public Participation The notice and comment procedure required by the Administrative Procedure Act is inapplicable to this interim final rule because it is a rule of agency procedure. See 5 U.S.C. 553(b)(3)(A). In addition, it is in the public interest to fill appointive directorships at the Banks with well qualified individuals as soon as it is practicable to do so. See 5 U.S.C. 553(b)(3)(B). However, because the Finance Board believes that public comments are valuable, it encourages comments on this interim final rule, and will consider all comments received on or before February 23, 2007 in promulgating a final rule. IV. Effective Date For the reasons stated in part III above, the Finance Board for good cause finds that the interim final rule should become effective on January 24, 2007. See 5 U.S.C. 553(d)(3). PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 3029 V. Paperwork Reduction Act The appointive director application form is part of the information collection entitled ‘‘Federal Home Loan Bank Directors.’’ Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), the Office of Management and Budget (OMB) has assigned control number 3069–0002, which is due to expire on November 30, 2007. The Finance Board and the Banks use the information contained in the application form to determine whether prospective appointive Bank directors satisfy the statutory and regulatory eligibility requirements and are well qualified to serve as a Bank director. Only individuals meeting these requirements may serve as Bank directors. See 12 U.S.C. 1427. The interim final rule does not make substantive or material modifications to the ‘‘Federal Home Loan Bank Directors’’ information collection. Consequently, the Finance Board has not submitted any information to OMB for review. VI. Regulatory Flexibility Act The Finance Board is adopting this procedural amendment in the form of an interim final rule and not as a proposed rule. Therefore, the provisions of the Regulatory Flexibility Act do not apply. See 5 U.S.C. 601(2) and 603(a). List of Subjects in 12 CFR Part 915 Conflicts of interest, Elections, Federal home loan banks, Reporting and recordkeeping requirements. For the reasons stated in the preamble, the Finance Board amends 12 CFR part 915 as follows: I PART 915—BANK DIRECTOR ELIGIBILITY, APPOINTMENT, AND ELECTIONS 1. The authority citation for part 915 continues to read as follows: I Authority: 12 U.S.C. 1422a(a)(3), 1422b(a), 1426, 1427, and 1432. I 2. Revise § 915.10 to read as follows: § 915.10 Selection of appointive directors. (a) Bank responsibilities. (1) On or before October 1st of each year, the board of directors of each Bank shall submit to the Finance Board a list of eligible nominees who are wellqualified to fill the appointive directorships that will expire on December 31st of that year, along with the original Finance Board-prescribed appointive director application form executed by each individual on the list. (2) If an appointive directorship becomes vacant prior to the expiration E:\FR\FM\24JAR1.SGM 24JAR1 3030 Federal Register / Vol. 72, No. 15 / Wednesday, January 24, 2007 / Rules and Regulations rmajette on PROD1PC67 with RULES of its term, the board of directors of the Bank shall submit to the Finance Board a list of eligible nominees who are wellqualified to fill that directorship, along with each individual’s executed appointive director application form, promptly after the vacancy arises. (3) The number of nominees on any list submitted by a Bank’s board of directors pursuant to paragraphs (a)(1) or (2) of this section shall equal 2 times the number of appointive directorships to be filled. (b) Finance Board selection. As provided by the Act, the Finance Board has the sole responsibility for appointing individuals to the boards of directors of the Banks. In exercising that responsibility, the Finance Board shall select from among the nominees on the list submitted by the Bank pursuant to paragraph (a) of this section, provided, however, that if the Finance Board does not fill all of the appointive directorships from the list initially submitted by the Bank, it may require the Bank to submit a supplemental list of nominees for its consideration. VerDate Aug<31>2005 15:02 Jan 23, 2007 Jkt 211001 (c) Prospective applicants. Any individual who seeks to be appointed to the board of directors of a Bank may submit to the Bank an executed appointive director application form that demonstrates that the individual both is eligible and has business, financial, housing, community and economic development, and/or leadership experience. Any other interested party may recommend to the Bank that it consider a particular individual as a nominee for an appointive directorship, but the Bank may not do so until the individual has provided the Bank with an executed appointive director application form. The board of directors of the Bank may consider any individual for inclusion on the list it submits to the Finance Board provided it has determined that the individual is eligible and well-qualified for an appointive directorship at the Bank. (d) Term of office. The term of office of each appointive directorship is 3 years, except as adjusted pursuant to section 7(d) of the Act (12 U.S.C. PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 1427(d)) to achieve a staggered board, and shall commence on January 1st. In the case of a discretionary appointive directorship that is terminated pursuant to § 915.3(b)(5), the term of office of the directorship shall end after the close of business on December 31st of that year. (e) Appointive directorship vacancies existing on January 1, 2007. For appointive directorships that are vacant on January 1, 2007, the board of directors of each Bank shall submit the information required by paragraph (a) of this section on or before March 31, 2007. Dated: January 18, 2007. By the Board of Directors of the Federal Housing Finance Board. Ronald A. Rosenfeld, Chairman. Editorial Note: The following forms will not appear in the Code of Federal Regulations. BILLING CODE 6725–01–P E:\FR\FM\24JAR1.SGM 24JAR1 VerDate Aug<31>2005 15:02 Jan 23, 2007 Jkt 211001 PO 00000 Frm 00007 Fmt 4700 Sfmt 4725 E:\FR\FM\24JAR1.SGM 24JAR1 3031 ER24JA07.005</GPH> rmajette on PROD1PC67 with RULES Federal Register / Vol. 72, No. 15 / Wednesday, January 24, 2007 / Rules and Regulations VerDate Aug<31>2005 Federal Register / Vol. 72, No. 15 / Wednesday, January 24, 2007 / Rules and Regulations 15:02 Jan 23, 2007 Jkt 211001 PO 00000 Frm 00008 Fmt 4700 Sfmt 4725 E:\FR\FM\24JAR1.SGM 24JAR1 ER24JA07.006</GPH> rmajette on PROD1PC67 with RULES 3032 VerDate Aug<31>2005 15:02 Jan 23, 2007 Jkt 211001 PO 00000 Frm 00009 Fmt 4700 Sfmt 4725 E:\FR\FM\24JAR1.SGM 24JAR1 3033 ER24JA07.007</GPH> rmajette on PROD1PC67 with RULES Federal Register / Vol. 72, No. 15 / Wednesday, January 24, 2007 / Rules and Regulations VerDate Aug<31>2005 Federal Register / Vol. 72, No. 15 / Wednesday, January 24, 2007 / Rules and Regulations 15:02 Jan 23, 2007 Jkt 211001 PO 00000 Frm 00010 Fmt 4700 Sfmt 4725 E:\FR\FM\24JAR1.SGM 24JAR1 ER24JA07.008</GPH> rmajette on PROD1PC67 with RULES 3034 VerDate Aug<31>2005 15:02 Jan 23, 2007 Jkt 211001 PO 00000 Frm 00011 Fmt 4700 Sfmt 4725 E:\FR\FM\24JAR1.SGM 24JAR1 3035 ER24JA07.009</GPH> rmajette on PROD1PC67 with RULES Federal Register / Vol. 72, No. 15 / Wednesday, January 24, 2007 / Rules and Regulations VerDate Aug<31>2005 Federal Register / Vol. 72, No. 15 / Wednesday, January 24, 2007 / Rules and Regulations 15:02 Jan 23, 2007 Jkt 211001 PO 00000 Frm 00012 Fmt 4700 Sfmt 4725 E:\FR\FM\24JAR1.SGM 24JAR1 ER24JA07.010</GPH> rmajette on PROD1PC67 with RULES 3036 VerDate Aug<31>2005 15:02 Jan 23, 2007 Jkt 211001 PO 00000 Frm 00013 Fmt 4700 Sfmt 4725 E:\FR\FM\24JAR1.SGM 24JAR1 3037 ER24JA07.011</GPH> rmajette on PROD1PC67 with RULES Federal Register / Vol. 72, No. 15 / Wednesday, January 24, 2007 / Rules and Regulations VerDate Aug<31>2005 Federal Register / Vol. 72, No. 15 / Wednesday, January 24, 2007 / Rules and Regulations 15:02 Jan 23, 2007 Jkt 211001 PO 00000 Frm 00014 Fmt 4700 Sfmt 4725 E:\FR\FM\24JAR1.SGM 24JAR1 ER24JA07.012</GPH> rmajette on PROD1PC67 with RULES 3038 3039 [FR Doc. 07–271 Filed 1–23–07; 8:45 am] BILLING CODE 6725–01–C VerDate Aug<31>2005 15:02 Jan 23, 2007 Jkt 211001 PO 00000 Frm 00015 Fmt 4700 Sfmt 4700 E:\FR\FM\24JAR1.SGM 24JAR1 ER24JA07.013</GPH> rmajette on PROD1PC67 with RULES Federal Register / Vol. 72, No. 15 / Wednesday, January 24, 2007 / Rules and Regulations

Agencies

[Federal Register Volume 72, Number 15 (Wednesday, January 24, 2007)]
[Rules and Regulations]
[Pages 3028-3039]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 07-271]



[[Page 3028]]

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FEDERAL HOUSING FINANCE BOARD

12 CFR Part 915

[No. 2007-01]
RIN 3069-AB-33


Federal Home Loan Bank Appointive Directors

AGENCY: Federal Housing Finance Board.

ACTION: Interim final rule with request for comments.

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SUMMARY: The Federal Housing Finance Board (Finance Board) is adopting 
procedures for the selection of Federal Home Loan Bank (Bank) 
appointive directors. The procedures require the boards of directors of 
the Banks to submit to the Finance Board a list of individuals that 
includes information regarding each individual's eligibility and 
qualifications to serve as a Bank director. The Finance Board will use 
the lists provided by each Bank to select well-qualified individuals to 
serve on the Bank's board of directors.

DATES: This interim final rule is effective on January 24, 2007. The 
Finance Board will accept written comments on the interim final rule on 
or before February 23, 2007.
    Comments: Submit comments to the Finance Board using any one of the 
following methods:
    E-mail: comments@fhfb.gov.
    Fax: 202-408-2580.
    Mail/Hand Delivery: Federal Housing Finance Board, 1625 Eye Street 
NW., Washington, DC 20006, ATTENTION: Public Comments.
    Federal eRulemaking Portal: http://www.regulations.gov. Follow the 
instructions for submitting comments. If you submit your comment to the 
Federal eRulemaking Portal, please also send it by e-mail to the 
Finance Board at comments@fhfb.gov to ensure timely receipt by the 
agency. Include the following information in the subject line of your 
submission: Federal Housing Finance Board. Interim Final Rule: Federal 
Home Loan Bank Appointive Directors. RIN Number 3069-AB-33. Docket 
Number 2007-01.
    We will post all public comments we receive without change, 
including any personal information you provide, such as your name and 
address, on the Finance Board Web site at http://www.fhfb.gov/
Default.aspx?Page=93&Top=93.

FOR FURTHER INFORMATION CONTACT: Neil R. Crowley, Deputy General 
Counsel, 202-408-2990, crowleyn@fhfb.gov; or Thomas P. Jennings, Senior 
Attorney Advisor, Office of General Counsel, 202-408-2553, 
jenningst@fhfb.gov. You can send regular mail to the Federal Housing 
Finance Board, 1625 Eye Street NW., Washington, DC 20006.

SUPPLEMENTARY INFORMATION: 

I. Background

    Section 7(a) of the Federal Home Loan Bank Act (Bank Act) (12 
U.S.C. 1427(a)), authorizes the Finance Board to appoint directors to 
the board of each Bank. Section 7(f)(2) (12 U.S.C. 1427(f)(2)) 
authorizes the Finance Board to fill any vacancy in an appointive 
directorship for the remainder of the unexpired term. The current rule 
implementing this statutory authority provides only for the selection 
of appointive directors in the sole discretion of the Finance Board, 
but lacks any procedures for accomplishing this. See 12 CFR 915.10(a). 
The Finance Board has determined that adopting procedures for the 
selection of appointive directors will enhance its ability to identify 
and appoint well-qualified individuals to serve as Bank directors. 
Accordingly, the Finance Board is amending Sec.  915.10 to adopt 
procedures under which the board of directors of each Bank will submit 
to the Finance Board a list of individuals that includes information 
regarding each individual's eligibility and qualifications to serve as 
a Bank director. The Finance Board will use the lists provided by each 
Bank to select well-qualified individuals to serve on the Bank's board 
of directors.

II. Analysis of the Interim Final Rule

A. Bank Responsibilities

    An effective board of directors is an important element in 
maintaining the safety and soundness of a Bank and ensuring that it 
serves its housing and community finance mission. The Banks and other 
interested parties with knowledge of the district likely will be 
familiar with individuals who have the background and skills necessary 
to serve on the board of a large financial institution such as a Bank. 
The Finance Board believes that the appointment process will be 
enhanced by allowing those most familiar with the resources in a Bank's 
district to play a greater role in identifying a pool of well-qualified 
individuals from which the Finance Board can appoint Bank directors. 
Accordingly, the rule seeks to utilize the local and regional knowledge 
of the Bank, as well as of any other interested parties, in seeking out 
or otherwise identifying individuals who have the background and skills 
necessary to serve as an effective Bank director.
    Under the rule, the Banks are responsible at the initial stages of 
the selection process for identifying potential appointive directors, 
assessing their eligibility and qualifications, and nominating them to 
the Finance Board. In doing so, the Finance Board expects each Bank to 
assess the appropriate experience and abilities its board must possess 
in order to operate effectively. When the Bank's board identifies 
potential appointive directors, it will perform a preliminary 
assessment of their qualifications prior to sending a list of 
nominations to the Finance Board. The board's preliminary assessment 
should include, but is not limited to, a review of the individuals' 
executed eligibility form and their community reputation. In the case 
of an individual seeking to be designated as a community interest 
director, the Finance Board expects that each Bank will assess the 
individual's prior experience in serving the consumer and community 
interests specified in the Bank Act. As noted below, in order to allow 
for a well-diversified applicant pool, the rule permits any interested 
party to submit to the Banks the names of prospective directors, which 
the Banks will evaluate based on each individual's qualifications.
    Section 915.10(a)(1) requires the board of directors of each Bank 
annually, on or before October 1st, to submit to the Finance Board a 
list of nominees who meet the statutory eligibility requirements and 
are otherwise well-qualified for the appointive directorships that will 
become vacant at the end of that calendar year. Determining who to 
include on the list is left to the boards of directors of the Banks, 
which may exercise discretion in determining how to identify and 
present individuals to the Finance Board. The board should consider 
each individual in light of his or her background and experience as it 
relates to being a director of a Bank, and should select nominees based 
on the totality of their qualifications. Section 915.10(a)(3) of the 
rule further requires that the list of individuals a Bank submits 
include 2 times the number of appointive directorships that are to be 
filled that year. Under Sec.  915.15(b), the Finance Board has the 
discretion to require a Bank to provide information about additional 
eligible and well-qualified individuals.
    Along with the list of eligible and qualified individuals, the Bank 
must provide the original executed appointive director application form 
on which each individual describes in detail the business, financial, 
housing, community and economic development, or other leadership 
experiences that qualify him or her to serve on the board

[[Page 3029]]

of the Bank. A copy of the form is attached as an exhibit.
    Section 915.10(a)(2) extends this procedure to filling vacancies 
that arise before the completion of a full term, by requiring the board 
of directors of the Bank to submit a list of 2 individuals for any 
appointive directorship that becomes vacant prior to the end of its 
term. The rule requires a Bank to act promptly to provide the list to 
fill the remaining term of a vacant appointive directorship.

B. Finance Board Selection

    Section 915.10(b) provides that the Finance Board has sole 
discretion to appoint individuals to the boards of the Banks. In 
exercising this discretion, the Finance Board intends to look 
principally to the qualifications of the nominees, and will appoint 
only those individuals who have demonstrated that they possess the 
experience necessary to serve effectively on the board of a large and 
sophisticated financial institution with an important housing finance 
and economic development mission, such as a Bank. By relying on the 
demonstrated qualifications of the nominees, the Finance Board expects 
that any individuals it appoints will possess the experience and skills 
necessary to serve as the independent voices on the board of directors, 
a role that can best be played by the appointive directors of the 
Banks.
    The rule also makes clear that the Finance Board may decline, in 
its sole discretion, to appoint any of the individuals on the initial 
list submitted by the Bank. If this occurs, the Finance Board can 
direct a Bank to submit the names of additional eligible and well-
qualified individuals for the Finance Board's consideration.

C. Prospective Appointive Directors

    To ensure a diverse pool of prospective directors, Sec.  915.10(c) 
allows any individual who is interested in being appointed to the board 
of a Bank to submit to the Bank an executed appointive director 
application form. The rule also allows any interested party to make 
recommendations to a Bank regarding individuals who are well-qualified 
to serve on the board of the Bank, but requires any such individual to 
submit to the Bank the same application form before the Bank may 
consider that person for inclusion in the list it submits to the 
Finance Board. The rule does not provide for any individuals to submit 
applications directly to the Finance Board. The board of the Bank has 
discretion to determine which individuals it submits to the Finance 
Board for consideration, although the Finance Board expects that the 
Bank's board will give due consideration to all persons seeking to be 
nominated to the board.

D. Term of Office

    Section 915.10(d) is substantially similar to Sec.  915.10(b) of 
the current rule. It has been revised to delete outdated language that 
addressed how the Finance Board would stagger the terms of appointive 
directors with terms commencing in 2001 and 2002, to achieve a one-
third staggering of the boards of directors, as required by section 
7(d) of the Bank Act (12 U.S.C. 1427(d)). Because the Finance Board has 
adjusted the terms of office for those directorships and has 
established 3 approximately equal classes of directors at each of the 
Banks that language is no longer necessary and is deleted.

E. Appointive Directorship Vacancies Existing on January 1, 2007

    Section 915.10(e) is a temporary provision for filling appointive 
directorships that are vacant on January 1, 2007. The rule requires the 
boards of directors of the Banks to submit the list of eligible and 
qualified individuals to the Finance Board on or before March 31, 2007, 
instead of October 1, 2007. In all other respects, the changes made by 
the interim final rule will apply. For these directorships the Finance 
Board intends to consider nominations as they are received, and the 
rule thus does not require a Bank to submit nominations for all 
vacancies at one time.

III. Notice and Public Participation

    The notice and comment procedure required by the Administrative 
Procedure Act is inapplicable to this interim final rule because it is 
a rule of agency procedure. See 5 U.S.C. 553(b)(3)(A). In addition, it 
is in the public interest to fill appointive directorships at the Banks 
with well qualified individuals as soon as it is practicable to do so. 
See 5 U.S.C. 553(b)(3)(B). However, because the Finance Board believes 
that public comments are valuable, it encourages comments on this 
interim final rule, and will consider all comments received on or 
before February 23, 2007 in promulgating a final rule.

IV. Effective Date

    For the reasons stated in part III above, the Finance Board for 
good cause finds that the interim final rule should become effective on 
January 24, 2007. See 5 U.S.C. 553(d)(3).

V. Paperwork Reduction Act

    The appointive director application form is part of the information 
collection entitled ``Federal Home Loan Bank Directors.'' Under the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), the Office of 
Management and Budget (OMB) has assigned control number 3069-0002, 
which is due to expire on November 30, 2007. The Finance Board and the 
Banks use the information contained in the application form to 
determine whether prospective appointive Bank directors satisfy the 
statutory and regulatory eligibility requirements and are well 
qualified to serve as a Bank director. Only individuals meeting these 
requirements may serve as Bank directors. See 12 U.S.C. 1427. The 
interim final rule does not make substantive or material modifications 
to the ``Federal Home Loan Bank Directors'' information collection. 
Consequently, the Finance Board has not submitted any information to 
OMB for review.

VI. Regulatory Flexibility Act

    The Finance Board is adopting this procedural amendment in the form 
of an interim final rule and not as a proposed rule. Therefore, the 
provisions of the Regulatory Flexibility Act do not apply. See 5 U.S.C. 
601(2) and 603(a).

List of Subjects in 12 CFR Part 915

    Conflicts of interest, Elections, Federal home loan banks, 
Reporting and recordkeeping requirements.


0
For the reasons stated in the preamble, the Finance Board amends 12 CFR 
part 915 as follows:

PART 915--BANK DIRECTOR ELIGIBILITY, APPOINTMENT, AND ELECTIONS

0
1. The authority citation for part 915 continues to read as follows:

    Authority: 12 U.S.C. 1422a(a)(3), 1422b(a), 1426, 1427, and 
1432.


0
2. Revise Sec.  915.10 to read as follows:


Sec.  915.10  Selection of appointive directors.

    (a) Bank responsibilities. (1) On or before October 1st of each 
year, the board of directors of each Bank shall submit to the Finance 
Board a list of eligible nominees who are well-qualified to fill the 
appointive directorships that will expire on December 31st of that 
year, along with the original Finance Board-prescribed appointive 
director application form executed by each individual on the list.
    (2) If an appointive directorship becomes vacant prior to the 
expiration

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of its term, the board of directors of the Bank shall submit to the 
Finance Board a list of eligible nominees who are well-qualified to 
fill that directorship, along with each individual's executed 
appointive director application form, promptly after the vacancy 
arises.
    (3) The number of nominees on any list submitted by a Bank's board 
of directors pursuant to paragraphs (a)(1) or (2) of this section shall 
equal 2 times the number of appointive directorships to be filled.
    (b) Finance Board selection. As provided by the Act, the Finance 
Board has the sole responsibility for appointing individuals to the 
boards of directors of the Banks. In exercising that responsibility, 
the Finance Board shall select from among the nominees on the list 
submitted by the Bank pursuant to paragraph (a) of this section, 
provided, however, that if the Finance Board does not fill all of the 
appointive directorships from the list initially submitted by the Bank, 
it may require the Bank to submit a supplemental list of nominees for 
its consideration.
    (c) Prospective applicants. Any individual who seeks to be 
appointed to the board of directors of a Bank may submit to the Bank an 
executed appointive director application form that demonstrates that 
the individual both is eligible and has business, financial, housing, 
community and economic development, and/or leadership experience. Any 
other interested party may recommend to the Bank that it consider a 
particular individual as a nominee for an appointive directorship, but 
the Bank may not do so until the individual has provided the Bank with 
an executed appointive director application form. The board of 
directors of the Bank may consider any individual for inclusion on the 
list it submits to the Finance Board provided it has determined that 
the individual is eligible and well-qualified for an appointive 
directorship at the Bank.
    (d) Term of office. The term of office of each appointive 
directorship is 3 years, except as adjusted pursuant to section 7(d) of 
the Act (12 U.S.C. 1427(d)) to achieve a staggered board, and shall 
commence on January 1st. In the case of a discretionary appointive 
directorship that is terminated pursuant to Sec.  915.3(b)(5), the term 
of office of the directorship shall end after the close of business on 
December 31st of that year.
    (e) Appointive directorship vacancies existing on January 1, 2007. 
For appointive directorships that are vacant on January 1, 2007, the 
board of directors of each Bank shall submit the information required 
by paragraph (a) of this section on or before March 31, 2007.

    Dated: January 18, 2007.

    By the Board of Directors of the Federal Housing Finance Board.
Ronald A. Rosenfeld,
Chairman.

    Editorial Note: The following forms will not appear in the Code 
of Federal Regulations.
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[FR Doc. 07-271 Filed 1-23-07; 8:45 am]
BILLING CODE 6725-01-C