Release in the Public Use Database of Certain Mortgage Data and Annual Housing Activities Report (AHAR) Information of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), 1774-1779 [05-316]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 70, Number 6 (Monday, January 10, 2005)]
[Proposed Rules]
[Pages 1774-1779]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-316]



[[Page 1773]]

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Part III





Department of Housing and Urban Development





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24 CFR Part 81



Release in the Public Use Database of Certain Mortgage Data and Annual 
Housing Activities Report (AHAR) Information of the Federal National 
Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage 
Corporation (Freddie Mac); Proposed Rule

Federal Register / Vol. 70, No. 6 / Monday, January 10, 2005 / 
Proposed Rules

[[Page 1774]]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 81

[Docket No. FR-4947-P-01; HUD-2004-0019]
RIN 2501-AD09


Release in the Public Use Database of Certain Mortgage Data and 
Annual Housing Activities Report (AHAR) Information of the Federal 
National Mortgage Association (Fannie Mae) and the Federal Home Loan 
Mortgage Corporation (Freddie Mac)

AGENCY: Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner, HUD.

ACTION: Proposed rule.

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SUMMARY: The Department of Housing and Urban Development is proposing a 
change to its regulations to permit the release to the public of 
certain data and information that have been, and will be, submitted to 
HUD by the Federal National Mortgage Association (Fannie Mae) and the 
Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, the 
government sponsored enterprises, or GSEs). The changes the Department 
is proposing would allow for the release of GSE mortgage data that fall 
into two separate categories. The first category involves the 
Department's public release, both prospectively and in all preceding 
years' public use databases, of GSE mortgage data that the Secretary, 
by regulation or order, reclassifies from proprietary to non-
proprietary status. This first category also involves the Department's 
public release, both prospectively and for all preceding years, of 
certain aggregated data derived from proprietary loan-level mortgage 
data that the Secretary determines are not proprietary when presented 
in aggregated form. The second category involves the release of certain 
GSE mortgage data that are at least five years old and that the 
Secretary determines, by regulation or order, to reclassify from 
proprietary to non-proprietary status because of the passage of time. 
The Department is proposing that such data may lose proprietary status 
once they have aged a minimum of five years, with the time interval for 
particular data elements to be determined by the Secretary on a case-
by-case basis. The proposed rule describes the procedures and standards 
that the Secretary would use to make determinations under both of these 
categories, and clarifies that these same procedures and standards are 
equally applicable whenever the Secretary seeks to modify the list of 
proprietary determinations. In addition, the Department is proposing 
some minor technical and editorial changes to its regulations at 24 CFR 
81.75.

DATES: Comment Due Date: March 11, 2005.

ADDRESSES: Interested persons are invited to submit written comments 
regarding this proposed rule to the Regulations Division, Office of 
General Counsel, Room 10276, Department of Housing and Urban 
Development, 451 Seventh Street, SW., Washington, DC 20410-0500. 
Interested persons may also submit comments electronically through 
either:
     The Federal eRulemaking Portal at: https://
www.regulations.gov; or
     The HUD electronic Web site at: https://www.epa.gov/
feddocket. Follow the link entitled, ``View Open HUD Dockets''. 
Commenters should follow the instructions provided on that site to 
submit their comments electronically.
    Facsimile (FAX) comments are not acceptable. In all cases, 
communications must refer to the above docket number and title.
    All comments and communications submitted will be available, 
without charge, for public inspection and copying between 8 a.m. and 5 
p.m. weekdays at the above address. Copies are also available for 
inspection and downloading at https://www.epa.gov/feddocket. Comments 
that are submitted electronically to the above websites, or that are 
submitted to the HUD Regulations Division at the above address, during 
the 60-day opportunity for notice and comment are placed in the public 
rules docket and are available to the public for inspection and 
copying. As a result, these comments are in the public domain and will 
be treated by the Department as public comments.

FOR FURTHER INFORMATION CONTACT: Sandra Fostek, Director, Office of 
Government Sponsored Enterprises, Office of Housing, Room 3150, 
telephone 202-708-2224. For questions on data, contact John L. Gardner, 
Director, Financial Institutions Regulation Division, Office of Policy 
Development and Research, Room 8212, telephone (202) 708-1464. For 
legal questions, contact Paul S. Ceja, Assistant General Counsel for 
Government Sponsored Enterprises/RESPA, or Sharmeen Dosky, Senior GSE/
RESPA Division Attorney, Office of the General Counsel, Room 9262, 
telephone 202-708-3137. The address for all of these persons is the 
Department of Housing and Urban Development, 451 Seventh Street, SW., 
Washington, DC 20410-0500. Persons with hearing and speech impairments 
may access the phone numbers via TTY by calling the Federal Information 
Relay Service at (800) 877-8399.

SUPPLEMENTARY INFORMATION:

I. Purpose of This Proposed Rule

    The Department of Housing and Urban Development (HUD) is proposing 
to release to the public certain mortgage data and aggregated data that 
have been, and will be, submitted to HUD by the Federal National 
Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage 
Corporation (Freddie Mac) (collectively, the government sponsored 
enterprises, or GSEs). The data that HUD proposes to release fall into 
two separate categories:
     The first category involves the Department's public 
release of GSE mortgage data after the Secretary modifies the list of 
proprietary determinations and reclassifies certain mortgage data as 
non-proprietary. The GSE mortgage data would be released to the public 
both prospectively and for all years preceding the date of the 
Secretary's determination, unless otherwise provided by the Secretary. 
Such data would be released to the public via the public use database 
established by section 1323 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (Pub. L. 102-550, approved 
October 28, 1992) (FHEFSSA). This proposal to release prior years' data 
would also apply to the Department's public release of certain 
aggregated data derived from proprietary loan-level mortgage data that 
the Secretary determines are not proprietary when presented in 
aggregated form. The aggregated data also would be released to the 
public both prospectively and for all years preceding the date of the 
Secretary's determination, unless otherwise provided by the Secretary. 
The Department would release periodically to the public such aggregated 
data in the form of a compendium, or by other means.
     The second category involves the release of certain GSE 
mortgage data included on the list of proprietary determinations that 
are at least five years old and that the Secretary has determined, by 
regulation or order, to reclassify from proprietary to non-proprietary 
status because of the passage of time. The Department is proposing 
that, subject to the Secretary's determination, data classified as 
proprietary that have aged a minimum of five years could be subject to 
reclassification as non-proprietary data for release to the public. 
However, the

[[Page 1775]]

time interval for particular data elements would be determined by the 
Secretary on a case-by-case basis.
    To implement the public release of GSE mortgage data and aggregated 
data, as described above, the Department is proposing to change its 
regulations at 24 CFR 81.75. These changes would include redesignating 
a portion of the current text as paragraph (a) and moving to a new 
paragraph (b)(1) the Secretary's existing authority to modify, by 
regulation or order, the list of proprietary determinations. The 
Department also is proposing to eliminate the name of the list of 
proprietary information (which currently is identified as ``GSE 
Mortgage Data and AHAR Information: Proprietary Information/Public Use 
Data''). The Department will continue to issue such a list, but 
believes it is unnecessary for its regulations to specify the name of 
the list.
    Section 81.75(b)(2) of the proposed rule provides that whenever the 
Secretary determines to modify the list of proprietary determinations 
by reclassifying certain GSE mortgage data on that list as non-
proprietary, the Secretary will release to the public the reclassified, 
non-proprietary mortgage data both prospectively and for all years 
preceding the effective date of the Secretary's determination, unless 
otherwise provided by the Secretary.
    Section 81.75(b)(3) of the proposed rule provides that certain GSE 
mortgage data that are included on the list of proprietary 
determinations may lose their proprietary status if they are at least 
five years old (as measured from the end of the calendar year to which 
the mortgage data pertain). If the Secretary determines that such 
mortgage data have lost their proprietary status, the proposed rule 
provides that these data shall be released publicly.
    Section 81.75(c) of the proposed rule provides that the Secretary 
may determine that certain aggregated data derived from proprietary 
loan-level GSE mortgage data are not proprietary and that, in such 
case, the Secretary will release the aggregated data to the public both 
prospectively and for all years preceding the effective date of the 
Secretary's determination, unless otherwise provided by the Secretary.
    The Department provides in Sec.  81.75(b) that the Secretary may, 
based upon a consideration of the regulatory factors in Sec.  81.74(b), 
modify the list of proprietary determinations by regulation, or by 
order using the procedures in Sec.  81.74(f)(1) and (f)(2), as 
applicable. This proposal represents a codification of the Department's 
existing practice of using the standards in Sec.  81.74(b) whenever the 
Secretary seeks to modify under Sec.  81.75 the list of proprietary 
determinations. Similarly, the proposal represents a codification of 
the Department's existing practice of using the procedures in Sec.  
81.74(f)(1) and (f)(2) (with the exception of Sec.  81.74(f)(2)(i), 
which does not apply to the reclassification of GSE mortgage data from 
proprietary to non-proprietary status) whenever the Secretary seeks to 
modify, by order under Sec.  81.75, the list of proprietary 
determinations.
    The Department proposes similar language in Sec.  81.74(c), which 
deals with the release of aggregated data that the Secretary determines 
to be non-proprietary. The proposed rule provides that the Secretary 
may, based upon a consideration of the factors in Sec.  81.74(b) and 
using the procedures in Sec.  81.74(f)(1) and (f)(2), as applicable, 
determine that certain aggregated data derived from proprietary loan-
level mortgage data are not proprietary.
    In addition to the above changes, minor editorial corrections to 
Sec.  81.75 are proposed.

II. Background

A. FHEFSSA and the Public Use Database

    The Federal Housing Enterprises Financial Safety and Soundness Act 
of 1992 requires HUD to establish and monitor the performance of Fannie 
Mae and Freddie Mac in meeting annual goals for purchases of mortgages 
on housing for low- and moderate-income families, housing located in 
central cities, rural areas, and other underserved areas, and special 
affordable housing (i.e., housing meeting the needs of and affordable 
to low-income families in low-income areas and very low-income 
families).
    Section 1323 of FHEFSSA requires the Department to make available 
to the public, in forms useful to the public (including forms 
accessible by computers) data relating to the GSEs' mortgage purchases.
    Fannie Mae submits to the Department data on its mortgage purchases 
and aggregated data pursuant to sections 309(m) and (n) of the Fannie 
Mae Charter Act. Freddie Mac makes these submissions pursuant to 
sections 307(e) and (f) of the Freddie Mac Act.\1\
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    \1\ HUD defines the term ``mortgage data'' at 24 CFR 81.2 to 
mean ``data obtained by the Secretary from the GSEs under subsection 
309(m) of the Fannie Mae Charter Act and subsection 307(e) of the 
Freddie Mac Act.''
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    In conjunction with this mandate of public access to GSE mortgage 
data, the law prohibits the Secretary from disclosing mortgage data 
that he or she determines to be proprietary.\2\ Specifically, section 
1326 of FHEFSSA states that the Secretary may, by regulation or order, 
``provide that certain information shall be treated as proprietary 
information and not subject to disclosure under section 1323 of [title 
12 of the United States Code], section 309(n)(3) of the [Fannie Mae 
Charter Act], or section 307(f)(3) of the [Freddie Mac Act].''
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    \2\ HUD's regulations at 24 CFR 81.2 define the term 
``proprietary information'' to mean ``all mortgage data and all AHAR 
information that the GSEs submit to the Secretary in the AHARs that 
contain trade secrets or privileged or confidential, commercial, or 
financial information that, if released, would be likely to cause 
substantial competitive harm.''
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    This prohibition on the disclosure of proprietary information is 
repeated in section 1323(b)(1) of FHEFSSA, which states that ``[e]xcept 
as provided in paragraph (2) [of this section], the Secretary may not 
make available to the public data that the Secretary determines 
pursuant to section 1326 are proprietary information.'' The exception 
set forth in paragraph (2) of section 1323(b) of FHEFSSA states that 
the Secretary may not restrict access to GSE single-family mortgage 
data submitted to the Secretary under section 309(m)(1)(A) of the 
Fannie Mae Charter Act or section 307(e)(1)(A) of the Freddie Mac Act 
relating to ``the income, census tract location, race, and gender of 
mortgagors under such mortgages.''
    Thus, the Secretary is authorized by section 1326 of FHEFSSA to 
make determinations, by regulation or order, that certain GSE mortgage 
data are proprietary, except as expressly prohibited by section 
1323(b)(2) of FHEFSSA.

B. Department's Authority To Propose Rule Changes

    The Department notes that section 1326(a) of FHEFSSA broadly 
confers on the Secretary the authority to determine, through either 
regulation or order, ``that certain information shall be treated as 
proprietary information and not subject to disclosure under section 
1323.''
    Inherent in this authority is the Secretary's authority to 
reconsider and modify a prior determination that information is 
proprietary. This inherent authority is expressed in the Department's 
implementing regulations at 24 CFR 81.75, which authorize HUD to issue 
a list providing that certain information shall be treated as 
proprietary information, but expressly authorizing the Secretary to 
modify the list by regulation or order.

[[Page 1776]]

    Moreover, the Department's express authority to modify the list of 
proprietary data and information is repeated in each of HUD's prior 
public use database orders.\3\ Thus, by the terms of HUD's regulations 
and prior orders, the Department has provided the GSEs, and the public 
at large, with notice that it may seek to withdraw or modify its list 
of proprietary determinations ``by regulation or order.''
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    \3\ See the discussion under Section III of this proposed rule 
regarding HUD's prior issuances in 1994, 1995, and 1996 of orders 
relating to the public use database. Each of these orders provides 
that it ``shall be effective until such time as it is determined 
necessary or appropriate to withdraw or modify it.''
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    The Department believes that its proposed disclosure of additional 
GSE mortgage data and aggregated data will bring it into greater 
conformity with data that currently are available from the Home 
Mortgage Disclosure Act (HMDA) database. The legislative history of 
FHEFSSA specifically provides that `` * * * every effort should be made 
to provide public disclosure of the information required to be 
collected and/or reported to the regulator consistent with the 
exemption for proprietary data.'' \4\ The FHEFSSA legislative history 
further indicates that Congress intended that the GSE public use 
database would help fill the ``information vacuum'' on GSE mortgage 
activities and complement the database established under HMDA.\5\ In 
addition, the FHEFSSA legislative history affirmed that ``public access 
and disclosure of information is a key tool for permitting appropriate 
public scrutiny and oversight of the activities of the [GSEs] and in 
evaluating possible improvements in housing finance markets.'' \6\
    More recently, the Comptroller General of the United States echoed 
this view when he testified before the U.S. Senate Committee on 
Banking, Housing and Urban Affairs. In specifically identifying a 
framework for strengthening GSE governance and oversight that described 
the need to establish standards to measure GSE mission compliance,\7\ 
the Comptroller General testified that:
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    \4\ See S. Rep. No. 102-282, 102d Cong., 2d Sess. 40 (1992).
    \5\ Id. at 39.
    \6\ Id. at 44.
    \7\ See testimony of David M. Walker, Comptroller General of the 
United States, before the U.S. Senate Committee on Banking, Housing 
and Urban Affairs in a report entitled, ``Government Sponsored 
Enterprises: A Framework for Strengthening GSE Governance and 
Oversight'', Report No. GAO-04-269T, issued for release on February 
10, 2004.

    GSEs should strive to achieve * * * reasonable transparency of 
financial and performance activities * * * Because of a lack of 
clear measures, it is difficult for Congress, accountability 
organizations, and the public to determine whether the benefits 
provided by the GSEs' activities are in the public interest and 
outweigh their financial risks. * * * In some cases, there is a lack 
of measurable mission-related criteria that would allow for a 
meaningful assessment of the GSEs' mission achievement or whether 
the GSEs' activities are consistent with their charters.\8\
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    \8\ Id. at 9.

    Congress has mandated in the GSEs' charter acts that the GSEs carry 
out public purposes not required of other private sector entities in 
the housing finance industry. Public disclosure, including disclosure 
via the public use database authorized by section 1323 of FHEFSSA, is 
critical to ensure that there is public accountability and transparency 
concerning the GSEs' accomplishment of their clear and explicit 
Congressional missions and charters.
    Accordingly, the Department believes that it has both the legal 
authority and obligation, as the GSEs' housing mission regulator, to 
ensure that the GSEs provide as much data as possible to the public, 
via the public use database and otherwise, to heighten the level of 
public transparency and accountability while also protecting GSE 
mortgage data that qualify as ``proprietary information.''

III. Summary of Prior HUD Regulatory Actions

    Beginning with October 13, 1993, the Department has issued a series 
of orders detailing the type of loan level mortgage data and other 
information on mortgages the GSEs purchase that it would make available 
to the public and the data elements it would classify as proprietary 
and not release to the public. Orders addressing these classifications 
and the structure of the GSE public use database were issued on June 7, 
1994 (59 FR 29514; the ``1994 Temporary Order''), October 17, 1996 (61 
FR 54322; the ``1996 Final Order''), and October 4, 2004 (69 FR 59476; 
the ``2004 Final Order''). The Department has also addressed the 
structure and content of the public use database in its final order and 
rulemaking of December 1, 1995 (60 FR 61846; the ``1995 Final Order'') 
and its proposed rule dated March 9, 2000 (65 FR 12660; the ``2000 
Proposed Rule'').
    In 2000 and 2001, the Department further determined that certain 
data, when aggregated at the national level, were not proprietary and 
could be released into tables for public use. In April 2002, the 
Department released a compendium of 18 tables of aggregated data 
describing the GSEs' loan purchases in 1999-2000.

IV. Discussion of HUD's Proposals

A. Release of Prior Years' Mortgage Data and Aggregated Data

    As the Department noted in its 2000 Proposed Rule, it has 
previously taken ``a conservative approach in making determinations 
about the proprietary nature of the loan level data elements.'' \9\ 
Consequently, the Department believes that mortgage data that it 
previously and conservatively determined to be proprietary could, with 
the benefit of several years of experience, be reclassified as non-
proprietary as HUD reviews its initial determinations of data elements. 
Moreover, significant portions of the GSE mortgage data that the 
Department has previously determined to be proprietary are, in fact, 
available publicly through private vendors, or are otherwise made 
available by lenders under HMDA. As the Department noted in the 2000 
Proposed Rule, most of the changes to the GSE public use database were 
intended ``* * * to make available to the public the same data from the 
GSEs that is made available by primary lenders under HMDA'' and thus 
``* * * affirm Congress' intent that the HMDA database and the GSE 
database complement each other.'' \10\ The Senate Committee Report 
accompanying Senate bill S. 2733, which preceded the enactment of 
FHEFSSA, stated that ``[i]mposing data collection requirements on the 
enterprises will close gaps that exist in the current HMDA system.'' 
\11\ These are the reasons why the Department recently undertook in the 
2004 Final Order to re-examine the proprietary status of certain GSE 
mortgage data that it had previously classified as proprietary and 
which, upon re-examination, the Department determined to reclassify as 
non-proprietary.
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    \9\ See 65 FR 12632, 12670 (March 9, 2000).
    \10\ Id. at 12669; also, see, S. Rep. 102-282, 102d Cong., 2d 
Sess. 39 (1992).
    \11\ S. Rep. 102-282, 102d Cong., 2d Sess. 39 (1992).
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    The Department is concerned, however, that even after reclassifying 
proprietary mortgage data as non-proprietary, or even after determining 
that proprietary loan-level mortgage data are not proprietary when 
presented in aggregated form, a significant gap in the public 
availability of these data will remain. It is this gap that HUD 
proposes to fill in this proposed rule. Accordingly, the Department is 
proposing that upon a reclassification, by regulation or order, of 
mortgage data from proprietary to non-proprietary

[[Page 1777]]

status, the reclassified mortgage data will be released to the public 
both prospectively and for all preceding years' public use databases. 
Similarly, the Department is proposing that, upon making a 
determination that certain aggregated data derived from proprietary 
loan-level mortgage data are not proprietary, the aggregated data will 
be released to the public both prospectively and for all preceding 
years, in the form of compendia or by other means.
    The Department believes that any concerns about the public release 
of multiple and successive prior years' mortgage data and aggregated 
data under the above circumstances are unwarranted. Multiple and 
successive prior years' data already are available in the public use 
database for any mortgage data that HUD has previously determined to be 
non-proprietary.
    Moreover, even with respect to newly reclassified mortgage data, or 
with respect to aggregated data that the Department has determined can 
be released to the public, there will emerge after a number of years 
data and information that cover multiple and successive years of GSE 
mortgage purchases. Consequently, the Department believes that its 
determinations to reclassify mortgage data from proprietary to non-
proprietary status, and to release to the public in one-year increments 
data and information covering successive future years (e.g., covering 
the years 2004-2014), equally support and justify the automatic release 
to the public of data and information covering successive prior years 
(e.g., covering the years 1993-2003) for such mortgage data. This same 
rationale also supports the Department's release to the public of 
successive prior years of aggregated data following a determination 
that such data does not qualify for proprietary status.
    The proposed rule also would codify the Department's existing 
practice of: (1) Using the regulatory factors described in 81.74(b) 
whenever the Secretary seeks to modify, by regulation or order, the 
list of proprietary determinations; and (2) using the procedures in 
Sec.  81.74(f)(1) and (f)(2), as applicable, whenever the Secretary 
seeks to modify, by order under Sec.  81.75, the list of proprietary 
determinations. The Department also is proposing to use the regulatory 
factors in Sec.  81.74(b) and the procedures in Sec.  81.74(f)(1) and 
(f)(2), as applicable, whenever the Secretary evaluates whether certain 
aggregated data derived from proprietary loan-level mortgage data are 
non-proprietary and can be released to the public.
    In its recent 2004 Final Order, the Department noted that it would 
release in the public use database, beginning in 2005, the mortgage 
data elements that were reclassified in that Order from proprietary to 
non-proprietary status and covering the GSEs' 2004 mortgage purchases. 
When the Department finalizes this rulemaking by issuing a final and 
effective rule, it will release in the public use database GSE mortgage 
data that HUD has determined to be non-proprietary for the years 1993 
through 2003, including GSE mortgage data that HUD has determined in 
the 2004 Final Order to be non-proprietary.
    In the future, the Department intends that whenever it makes a 
determination that certain GSE mortgage data, or aggregated data, are 
non-proprietary and may be released to the public, it will release 
mortgage data and aggregated data both prospectively and for all years 
preceding the effective date of HUD's determination.
    The Department is proposing to implement this regulatory authority 
by its addition of a new Sec.  81.75(b)(2) (which applies to the 
Secretary's release of prior and future years' GSE mortgage data 
following a reclassification from proprietary to non-proprietary 
status) and a new Sec.  81.75(c) (which applies to the Secretary's 
release of prior and future years' aggregated data derived from 
proprietary loan-level data after the Secretary determines that such 
data are not proprietary).

B. Release of Aged Data

    In its 2000 Proposed Rule, the Department requested comments on 
whether certain data elements that are classified as proprietary when 
submitted to the Department might no longer be so classified after 
several years because they would be unlikely to provide proprietary 
information about the GSEs' current business activities.\12\ While 
numerous commenters on the 2000 Proposed Rule expressed general views 
favoring, or opposing, expanded release of GSE mortgage data, only 
three commenters responded specifically to the Department's request for 
comments on the release of aged data. These included Fannie Mae and 
Freddie Mac (which both opposed disclosure of aged data) and an 
academic organization (which supported the Department's proposal to 
release aged data that it determines, on reconsideration, to no longer 
be proprietary).
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    \12\ See 65 FR 12632, 12674 (published March 9, 2000).
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    After considering the comments submitted on the 2000 Proposed Rule, 
the Department has decided to propose the addition of a new regulatory 
provision to address the issue of aged data that would be codified at 
Sec.  81.75(b)(3). Under this proposal, the Secretary could determine 
by regulation--or by order using the procedures in Sec.  81.74(f)(1) 
and (f)(2), as applicable--that certain GSE mortgage data that are 
included on the list of proprietary determinations may lose their 
proprietary status if they are at least five years old. The Secretary 
would make his or her determination based upon a consideration of the 
regulatory factors in Sec.  81.74(b). This consideration of the 
proprietary status of data would affect only mortgage data after the 
expiration of the minimum five-year period, as measured from the end of 
the calendar year to which that mortgage data pertain. Mortgage data 
that are less than five years old would remain proprietary and, as a 
result, could not be released publicly until at least five years have 
elapsed.
    A commenter on the 2000 Proposed Rule asked the Department to 
conform any regulation that it may ultimately adopt authorizing the 
release of aged GSE data with the 10-year confidentiality period 
granted under the Department's regulations implementing the Freedom of 
Information Act (FOIA). In response to this comment, the Department 
notes that its current proposal to establish a minimum five-year period 
for the reconsideration of aged data is fully consistent with its 
existing regulations implementing the FOIA. Under the Department's 
Exemption 4 FOIA regulations at 24 CFR 15.108(b)(1), a submitter may 
request confidential treatment of business information at the time the 
information is submitted to HUD, or within a reasonable time 
thereafter.\13\ A submitter's designation of confidentiality expires 10 
years after the date the information is submitted to HUD, unless the 
submitter provides a reasonable explanation in support of a later 
expiration date.\14\ However, the Department does not make a 
determination under FOIA as to whether the submitter's assertion of 
confidentiality is valid until it actually receives a request for 
disclosure of the information.\15\
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    \13\ Under section 15.108(b)(2), the submitter must support its 
request with an authorized statement or a certification giving the 
facts and the legal justification for the confidential request and 
stating that the information has not been made public. In addition, 
the submitter must designate the specific information that it deems 
to be confidential.
    \14\ See 24 CFR 15.108(b)(3).
    \15\ See 24 CFR 15.108(g)(2).
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    The Secretary does, however, make determinations (or 
reconsiderations of

[[Page 1778]]

initial determinations) about the confidential and proprietary status 
of GSE information under its separate and independent authority under 
section 1326 of FHEFSSA and the implementing regulations under 24 CFR 
part 81, subpart F (``Access to Information''). Under the current 
proposed rule, the Secretary would also have the authority to determine 
based on the criteria in Sec.  81.74(b), either by regulation, or by 
order using the procedures in Sec.  81.74(f)(1) and (f)(2), as 
applicable, that data may lose proprietary status once they have aged a 
minimum of five years.
    Thus, if the Secretary determines in accordance with its proposed 
regulations that certain aged data do not qualify for confidential and 
proprietary treatment under FHEFSSA and its regulations at 24 CFR part 
81, then this information would be released to the public. Since this 
would constitute an official and lawful Departmental release of GSE 
information to the public in accordance with FHEFSSA and its 
regulations at 24 CFR part 81, the information also would not be 
withholdable under Exemption 4 of FOIA.\16\
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    \16\ See 24 CFR 15.108(c)(2)(ii).
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    Conversely, the Secretary will not release to the public data that 
he or she has determined to be proprietary under FHEFSSA and its 
implementing regulations even after the expiration of the 10-year 
period described in the FOIA regulations. Thus, the expiration of the 
10-year confidentiality period under FOIA does not affect the continued 
confidentiality of the same information under FHEFSSA and its 
implementing regulations.
    For all of the above reasons, the Department believes that its 
proposal to adopt a minimum five-year period for the release of aged 
data pursuant to FHEFSSA does not in any way contradict the ten-year 
confidentiality period referred to in HUD's FOIA regulations.
    The Department wishes to clarify that its proposal in Sec.  
81.75(b)(3) to release certain mortgage data that have aged a minimum 
of five years does not limit its current ability under Sec.  
81.75(b)(1) to seek, at any time, to reclassify GSE mortgage data from 
proprietary to non-proprietary status. This is because the Department's 
current proposal deals only with the reclassification and release of 
aged GSE mortgage data. This provision is independent of, and does not 
remove or limit, the Department's existing authority under Sec.  81.75 
(Sec.  81.75(b)(1) in this proposed rule) to modify at any time the 
list of proprietary determinations by changing the current 
classification of GSE mortgage data from proprietary to non-proprietary 
status.
    Public comment is solicited, in particular, on whether five years 
represent a reasonable minimum period after which mortgage data might 
lose their proprietary character and, as a result, warrant a 
reconsideration of proprietary status under HUD's regulations. The 
Department also solicits public comment on whether a longer or shorter 
period should be adopted in the final rule, and the point at which the 
period should begin to run.
    The Department is proposing to implement this regulatory authority 
by its addition of a new paragraph (b)(3) to 24 CFR 81.75.

V. Findings and Certifications

    Executive Order 12866. The Office of Management and Budget (OMB) 
reviewed this proposed rule under Executive Order 12866, Regulatory 
Planning and Review, which the President issued on September 30, 1993. 
Any changes made to this proposed rule subsequent to its submission to 
OMB are identified in the docket file, which is available for public 
inspection between 8 a.m. and 5 p.m. weekdays in the Office of the 
Rules Docket Clerk, Office of General Counsel, Room 10276, Department 
of Housing and Urban Development, 451 Seventh Street, SW., Washington, 
DC.
    Paperwork Reduction Act. HUD's collection of information on the 
GSEs' activities has been reviewed and authorized by the Office of 
Management and Budget (OMB) under the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501-3520), as implemented by OMB in regulations at 5 CFR 
part 1320. The OMB control number is 2502-0514.
    Environmental Impact. This proposed rule does not direct, provide 
for assistance or loan and mortgage insurance for, or otherwise govern 
or regulate real property acquisition, disposition, leasing, 
rehabilitation, alteration, demolition, or new construction; or 
establish, revise, or provide for standards for construction or 
construction materials, manufactured housing, or occupancy. 
Accordingly, under 24 CFR 50.19(c)(1), this proposed rule is 
categorically excluded from environmental review under the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321).
    Regulatory Flexibility Act. The undersigned, in accordance with the 
Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed this rule 
before publication and by approving it certifies that this rule would 
not have a significant economic impact on a substantial number of small 
entities. This final regulation is applicable only to the GSEs, which 
are not small entities for purposes of the Regulatory Flexibility Act, 
and, thus, does not have a significant economic impact on a substantial 
number of small entities.
    Executive Order 13132, Federalism. Executive Order 13132 
(``Federalism'') prohibits, to the extent practicable and permitted by 
law, an agency from promulgating a regulation that has federalism 
implications and either imposes substantial direct compliance costs on 
State and local governments and is not required by statute, or preempts 
State law, unless the relevant requirements of section 6 of the 
Executive Order are met. This proposed rule does not have federalism 
implications and does not impose substantial direct compliance costs on 
State and local governments or preempt State law within the meaning of 
the Executive Order.
    Unfunded Mandates Reform Act. Title II of the Unfunded Mandates 
Reform Act of 1995 (12 U.S.C. 1531-1538) (UMRA) establishes 
requirements for Federal agencies to assess the effects of their 
regulatory actions on State, local, and tribal governments, and the 
private sector. This proposed rule would not impose any Federal 
mandates on any State, local, or tribal governments, or on the private 
sector, within the meaning of the UMRA.

List of Subjects in 24 CFR Part 81

    Accounting, Federal Reserve System, Mortgages, Reporting and 
recordkeeping requirements, Securities.

    Accordingly, 24 CFR part 81 is proposed to be amended as follows:

PART 81--THE SECRETARY OF HUD'S REGULATION OF THE FEDERAL NATIONAL 
MORTGAGE ASSOCIATION (FANNIE MAE) AND THE FEDERAL HOME LOAN 
MORTGAGE CORPORATION (FREDDIE MAC)

    1. The authority citation for 24 CFR part 81 continues to read as 
follows:

    Authority: 12 U.S.C. 1451 et seq., 1716-1723h, and 4501-4641; 42 
U.S.C. 3535(d) and 3601-3619.

    2. Section 81.75 is proposed to be revised to read as follows:


Sec.  81.75  Proprietary information withheld by order or regulation.

    (a) Secretarial determination of proprietary classification. 
Following a determination by the Secretary that mortgage data or AHAR 
information are proprietary under FHEFSSA, the Secretary shall 
expeditiously issue a

[[Page 1779]]

temporary order, final order, or regulation withholding the mortgage 
data or AHAR information from the public-use database and from public 
disclosure by HUD in accordance with 12 U.S.C. 4546. The Secretary may, 
from time to time, by regulation or order, issue a list providing that 
certain information shall be treated as proprietary.
    (b) Modification of proprietary classification. (1) General. The 
Secretary may, based upon a consideration of the factors in Sec.  
81.74(b), modify the list of proprietary determinations by regulation, 
or by order using the procedures in Sec.  81.74(f)(1) and (f)(2), as 
applicable.
    (2) Release of data following a modification of proprietary 
classification. Following the Secretary's determination under paragraph 
(b)(1) of this section to modify the list of proprietary determinations 
by reclassifying certain mortgage data on that list as non-proprietary, 
the Secretary shall release the reclassified, non-proprietary mortgage 
data to the public both prospectively and for all years preceding the 
effective date of HUD's determination, unless otherwise provided by the 
Secretary.
    (3) Release of aged data. The Secretary may determine under 
paragraph (b)(1) of this section that certain mortgage data that are 
included on the list of proprietary determinations may lose their 
proprietary status if they are at least five years old (as measured 
from the end of the calendar year to which the mortgage data pertain). 
If the Secretary determines that such aged mortgage data have lost 
their proprietary status, these data shall be released publicly.
    (c) Release of aggregated data derived from proprietary loan-level 
data. The Secretary may, based upon a consideration of the factors in 
Sec.  81.74(b) and using the procedures in Sec.  81.74(f)(1) and 
(f)(2), as applicable, determine that certain aggregated data derived 
from proprietary loan-level mortgage data are not proprietary. If the 
Secretary makes such a determination, then the aggregated data shall be 
released to the public both prospectively and for all years preceding 
the effective date of the Secretary's determination, unless otherwise 
provided by the Secretary.

    Dated: December 3, 2004.
John C. Weicher,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 05-316 Filed 1-7-05; 8:45 am]
BILLING CODE 4210-27-P