Examination Rating System for the Federal Home Loan Banks and the Office of Finance, 547-565 [06-9984]

Download as PDF Federal Register / Vol. 72, No. 3 / Friday, January 5, 2007 / Notices SUMMARY: The Export-Import Bank, as a part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal Agencies to comment on the proposed information collection as required by the Paperwork Reduction Act of 1995. This notice is soliciting comments from the public concerning the proposed collection of information to (1) evaluate whether the proposed collection is necessary for the paper performance of the functions of the agency, including whether the information will have practical utility; (2) evaluate the accuracy of the agency’s estimate of the burden of the proposed information collection of information; (3) enhance the quality, utility, and clarity of the information to be collected; and minimize the burden of collection of information on those who are to respond, including through the use of appropriated automated collection techniques or other forms of information technology, e.g., permitting electronic submission of responses. SUPPLEMENTARY INFORMATION: Written comments should be received on or before February 5, 2007 to be assured of consideration. DATES: Direct all comments to David Rostker, Office of Management and Budget, Office of Information and Regulatory Affairs, NEOB, Room 10202, Washington, DC 20503 (202) 395–3897. Titles and Form Numbers: ExportImport Bank of the United States Application for Long-Term Loan or Guarantee, EIB 95–10. OMB Number: 3048–0013. Type of Review: Extension of a currently approved collection. Need and Use: The information requested enables the applicant to provide Ex-Im Bank, with the information necessary to determine eligibility for the loan and guarantee programs. Affected Public: Business or other forprofit. Respondents: Entities involved in the provision of financing or arranging of financing for foreign buyers of U.S. exports. Estimated Annual Respondents: 86 (revised). Estimated Time Per Respondent: 2.0 hours (revised). Estimated Annual Burden: 172 hours. Frequency of Response: When applying for a long-time preliminary or final commitment. sroberts on PROD1PC70 with NOTICES ADDRESSES: VerDate Aug<31>2005 17:29 Jan 04, 2007 Jkt 211001 Dated: December 27, 2006. Solomon Bush, Agency Clearance Officer. [FR Doc. 06–9978 Filed 1–4–07; 8:45 am] BILLING CODE 6690–01–M FEDERAL HOUSING FINANCE BOARD [No. 2006–N–10] Examination Rating System for the Federal Home Loan Banks and the Office of Finance AGENCY: Federal Housing Finance Board. ACTION: Notice. SUMMARY: The Federal Housing Finance Board (Finance Board) is adopting an examination rating system known as the Federal Home Loan Bank Rating System (Rating System). DATES: The Finance Board will use the Rating System for all examinations that begin after December 31, 2006. FOR FURTHER INFORMATION CONTACT: Anthony Cornyn, Associate Director, Supervision and Examination, Office of Supervision, cornyna@fhfb.gov or 202– 408–2522, or Kari Walter, Associate Director, Supervisory and Regulatory Policy, Office of Supervision, walterk@fhfb.gov or 202–408–2829. You can send regular mail to the Federal Housing Finance Board, 1625 Eye Street, NW., Washington DC 20006. SUPPLEMENTARY INFORMATION: I. Background In September 2006, the Finance Board published a proposed Rating System for the Federal Home Loan Banks (Banks) and the Office of Finance (OF) in the Federal Register for public comment. See 71 FR 55181 (Sept. 21, 2006) (available at the Finance Board’s Web site: http://www.fhfb.gov/ Default.aspx?Page=59& ListCategory=4#4). The 30-day comment period closed on October 23, 2006. The Finance Board received 7 comments (the comments are available at the Finance Board’s Web site: http:// www.fhfb.gov/ Default.aspx?Page=93&Top=93). Based on the comments, the Office of Supervision revised the Introduction and Overview to clarify that the composite rating will be based on the relative importance of each component as determined case-by-case within the parameters established by the Rating System. The proposal stated that the Finance Board would give special consideration to corporate governance in assigning a composite rating. Although the importance of corporate PO 00000 Frm 00025 Fmt 4703 Sfmt 4703 547 governance cannot be over-emphasized, our intent is not to weight the corporate governance component more heavily than other components. Rather than giving special consideration to any one component, examiners will use judgment and a case-by-case approach when assigning composite ratings. The Office of Supervision made no other significant changes to the Rating System as proposed. II. The Federal Home Loan Bank Rating System In 2005, the Office of Supervision began to provide an overall conclusion—Satisfactory, Fair, Marginal, or Unsatisfactory—as part of its Report of Examination. The Rating System, which is the next step in communicating exam results to the Banks, is a risk-focused system under which each Bank and the OF is assigned a composite rating from ‘‘1’’ to ‘‘4’’ based on an evaluation of various aspects of their operations. The composite rating of each Bank is based on an evaluation and rating of 5 key components: corporate governance, market risk, credit risk, operational risk, and financial condition and performance. The composite rating of the OF is based primarily on an evaluation of 2 components: corporate governance and operational risk. A ‘‘1’’ rating indicates the lowest degree of supervisory concern, while a ‘‘4’’ rating indicates the highest degree of supervisory concern. The composite rating is based on the ratings of the underlying components, which also are rated on a scale of ‘‘1’’ to ‘‘4.’’ The composite rating is not an arithmetic average of the component ratings. Instead, the relative importance of each component is determined case-by-case within the parameters established by the Rating System. Under the Rating System, examiners take administration of a Bank’s affordable housing and community investment activities into account in assigning component ratings for corporate governance and operational risk. Given the importance of affordable housing and community investment activities to the mission of the Bank System, the Office of Supervision may consider the need for a separate rating system or a separate ratings component to evaluate and rate the affordable housing and community investment programs of each Bank after gaining experience with the Rating System. The Rating System is intended to serve 2 purposes. First, it is designed to reflect in a comprehensive, systematic, and consistent fashion the overall condition and performance of an E:\FR\FM\05JAN1.SGM 05JAN1 548 Federal Register / Vol. 72, No. 3 / Friday, January 5, 2007 / Notices sroberts on PROD1PC70 with NOTICES institution, taking into consideration all significant financial, operational, and compliance factors addressed in the Finance Board’s examination. Second, the Rating System is meant to further enhance communication and transparency between the Office of Supervision and each Bank and the OF VerDate Aug<31>2005 17:29 Jan 04, 2007 Jkt 211001 regarding the results of the examination process. The ratings for individual Banks and the OF will not be made public or released to other Banks, but will be supplied to the individual Banks and the OF on a confidential basis as part of the examination and supervisory process. PO 00000 Frm 00026 Fmt 4703 Sfmt 4703 The Federal Home Loan Bank Rating System is attached as an Exhibit to this Notice. Dated: December 28, 2006. By the Federal Housing Finance Board. John P. Kennedy, General Counsel. BILLING CODE 6725–01–P E:\FR\FM\05JAN1.SGM 05JAN1 VerDate Aug<31>2005 17:29 Jan 04, 2007 Jkt 211001 PO 00000 Frm 00027 Fmt 4703 Sfmt 4725 E:\FR\FM\05JAN1.SGM 05JAN1 549 EN05JA07.000</GPH> sroberts on PROD1PC70 with NOTICES Federal Register / Vol. 72, No. 3 / Friday, January 5, 2007 / Notices VerDate Aug<31>2005 Federal Register / Vol. 72, No. 3 / Friday, January 5, 2007 / Notices 17:29 Jan 04, 2007 Jkt 211001 PO 00000 Frm 00028 Fmt 4703 Sfmt 4725 E:\FR\FM\05JAN1.SGM 05JAN1 EN05JA07.001</GPH> sroberts on PROD1PC70 with NOTICES 550 VerDate Aug<31>2005 17:29 Jan 04, 2007 Jkt 211001 PO 00000 Frm 00029 Fmt 4703 Sfmt 4725 E:\FR\FM\05JAN1.SGM 05JAN1 551 EN05JA07.002</GPH> sroberts on PROD1PC70 with NOTICES Federal Register / Vol. 72, No. 3 / Friday, January 5, 2007 / Notices VerDate Aug<31>2005 Federal Register / Vol. 72, No. 3 / Friday, January 5, 2007 / Notices 17:29 Jan 04, 2007 Jkt 211001 PO 00000 Frm 00030 Fmt 4703 Sfmt 4725 E:\FR\FM\05JAN1.SGM 05JAN1 EN05JA07.003</GPH> sroberts on PROD1PC70 with NOTICES 552 VerDate Aug<31>2005 17:29 Jan 04, 2007 Jkt 211001 PO 00000 Frm 00031 Fmt 4703 Sfmt 4725 E:\FR\FM\05JAN1.SGM 05JAN1 553 EN05JA07.004</GPH> sroberts on PROD1PC70 with NOTICES Federal Register / Vol. 72, No. 3 / Friday, January 5, 2007 / Notices VerDate Aug<31>2005 Federal Register / Vol. 72, No. 3 / Friday, January 5, 2007 / Notices 17:29 Jan 04, 2007 Jkt 211001 PO 00000 Frm 00032 Fmt 4703 Sfmt 4725 E:\FR\FM\05JAN1.SGM 05JAN1 EN05JA07.005</GPH> sroberts on PROD1PC70 with NOTICES 554 VerDate Aug<31>2005 17:29 Jan 04, 2007 Jkt 211001 PO 00000 Frm 00033 Fmt 4703 Sfmt 4725 E:\FR\FM\05JAN1.SGM 05JAN1 555 EN05JA07.006</GPH> sroberts on PROD1PC70 with NOTICES Federal Register / Vol. 72, No. 3 / Friday, January 5, 2007 / Notices VerDate Aug<31>2005 Federal Register / Vol. 72, No. 3 / Friday, January 5, 2007 / Notices 17:29 Jan 04, 2007 Jkt 211001 PO 00000 Frm 00034 Fmt 4703 Sfmt 4725 E:\FR\FM\05JAN1.SGM 05JAN1 EN05JA07.007</GPH> sroberts on PROD1PC70 with NOTICES 556 VerDate Aug<31>2005 17:29 Jan 04, 2007 Jkt 211001 PO 00000 Frm 00035 Fmt 4703 Sfmt 4725 E:\FR\FM\05JAN1.SGM 05JAN1 557 EN05JA07.008</GPH> sroberts on PROD1PC70 with NOTICES Federal Register / Vol. 72, No. 3 / Friday, January 5, 2007 / Notices VerDate Aug<31>2005 Federal Register / Vol. 72, No. 3 / Friday, January 5, 2007 / Notices 17:29 Jan 04, 2007 Jkt 211001 PO 00000 Frm 00036 Fmt 4703 Sfmt 4725 E:\FR\FM\05JAN1.SGM 05JAN1 EN05JA07.009</GPH> sroberts on PROD1PC70 with NOTICES 558 VerDate Aug<31>2005 17:29 Jan 04, 2007 Jkt 211001 PO 00000 Frm 00037 Fmt 4703 Sfmt 4725 E:\FR\FM\05JAN1.SGM 05JAN1 559 EN05JA07.010</GPH> sroberts on PROD1PC70 with NOTICES Federal Register / Vol. 72, No. 3 / Friday, January 5, 2007 / Notices VerDate Aug<31>2005 Federal Register / Vol. 72, No. 3 / Friday, January 5, 2007 / Notices 17:29 Jan 04, 2007 Jkt 211001 PO 00000 Frm 00038 Fmt 4703 Sfmt 4725 E:\FR\FM\05JAN1.SGM 05JAN1 EN05JA07.011</GPH> sroberts on PROD1PC70 with NOTICES 560 VerDate Aug<31>2005 17:29 Jan 04, 2007 Jkt 211001 PO 00000 Frm 00039 Fmt 4703 Sfmt 4725 E:\FR\FM\05JAN1.SGM 05JAN1 561 EN05JA07.012</GPH> sroberts on PROD1PC70 with NOTICES Federal Register / Vol. 72, No. 3 / Friday, January 5, 2007 / Notices VerDate Aug<31>2005 Federal Register / Vol. 72, No. 3 / Friday, January 5, 2007 / Notices 17:29 Jan 04, 2007 Jkt 211001 PO 00000 Frm 00040 Fmt 4703 Sfmt 4725 E:\FR\FM\05JAN1.SGM 05JAN1 EN05JA07.013</GPH> sroberts on PROD1PC70 with NOTICES 562 VerDate Aug<31>2005 17:29 Jan 04, 2007 Jkt 211001 PO 00000 Frm 00041 Fmt 4703 Sfmt 4725 E:\FR\FM\05JAN1.SGM 05JAN1 563 EN05JA07.014</GPH> sroberts on PROD1PC70 with NOTICES Federal Register / Vol. 72, No. 3 / Friday, January 5, 2007 / Notices VerDate Aug<31>2005 Federal Register / Vol. 72, No. 3 / Friday, January 5, 2007 / Notices 17:29 Jan 04, 2007 Jkt 211001 PO 00000 Frm 00042 Fmt 4703 Sfmt 4725 E:\FR\FM\05JAN1.SGM 05JAN1 EN05JA07.015</GPH> sroberts on PROD1PC70 with NOTICES 564 565 [FR Doc. 06–9984 Filed 1–4–07; 8:45 am] BILLING CODE 6725–01–C VerDate Aug<31>2005 17:29 Jan 04, 2007 Jkt 211001 PO 00000 Frm 00043 Fmt 4703 Sfmt 4703 E:\FR\FM\05JAN1.SGM 05JAN1 EN05JA07.016</GPH> sroberts on PROD1PC70 with NOTICES Federal Register / Vol. 72, No. 3 / Friday, January 5, 2007 / Notices

Agencies

[Federal Register Volume 72, Number 3 (Friday, January 5, 2007)]
[Notices]
[Pages 547-565]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-9984]


=======================================================================
-----------------------------------------------------------------------

FEDERAL HOUSING FINANCE BOARD

[No. 2006-N-10]


Examination Rating System for the Federal Home Loan Banks and the 
Office of Finance

AGENCY: Federal Housing Finance Board.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The Federal Housing Finance Board (Finance Board) is adopting 
an examination rating system known as the Federal Home Loan Bank Rating 
System (Rating System).

DATES: The Finance Board will use the Rating System for all 
examinations that begin after December 31, 2006.

FOR FURTHER INFORMATION CONTACT: Anthony Cornyn, Associate Director, 
Supervision and Examination, Office of Supervision, cornyna@fhfb.gov or 
202-408-2522, or Kari Walter, Associate Director, Supervisory and 
Regulatory Policy, Office of Supervision, walterk@fhfb.gov or 202-408-
2829. You can send regular mail to the Federal Housing Finance Board, 
1625 Eye Street, NW., Washington DC 20006.

SUPPLEMENTARY INFORMATION:

I. Background

    In September 2006, the Finance Board published a proposed Rating 
System for the Federal Home Loan Banks (Banks) and the Office of 
Finance (OF) in the Federal Register for public comment. See 71 FR 
55181 (Sept. 21, 2006) (available at the Finance Board's Web site: 
http://www.fhfb.gov/
Default.aspx?Page=59&ListCategory=4#4). The 30-day comment 
period closed on October 23, 2006. The Finance Board received 7 
comments (the comments are available at the Finance Board's Web site: 
http://www.fhfb.gov/Default.aspx?Page=93&Top=93). Based on the 
comments, the Office of Supervision revised the Introduction and 
Overview to clarify that the composite rating will be based on the 
relative importance of each component as determined case-by-case within 
the parameters established by the Rating System. The proposal stated 
that the Finance Board would give special consideration to corporate 
governance in assigning a composite rating. Although the importance of 
corporate governance cannot be over-emphasized, our intent is not to 
weight the corporate governance component more heavily than other 
components. Rather than giving special consideration to any one 
component, examiners will use judgment and a case-by-case approach when 
assigning composite ratings. The Office of Supervision made no other 
significant changes to the Rating System as proposed.

II. The Federal Home Loan Bank Rating System

    In 2005, the Office of Supervision began to provide an overall 
conclusion--Satisfactory, Fair, Marginal, or Unsatisfactory--as part of 
its Report of Examination. The Rating System, which is the next step in 
communicating exam results to the Banks, is a risk-focused system under 
which each Bank and the OF is assigned a composite rating from ``1'' to 
``4'' based on an evaluation of various aspects of their operations. 
The composite rating of each Bank is based on an evaluation and rating 
of 5 key components: corporate governance, market risk, credit risk, 
operational risk, and financial condition and performance. The 
composite rating of the OF is based primarily on an evaluation of 2 
components: corporate governance and operational risk. A ``1'' rating 
indicates the lowest degree of supervisory concern, while a ``4'' 
rating indicates the highest degree of supervisory concern. The 
composite rating is based on the ratings of the underlying components, 
which also are rated on a scale of ``1'' to ``4.'' The composite rating 
is not an arithmetic average of the component ratings. Instead, the 
relative importance of each component is determined case-by-case within 
the parameters established by the Rating System.
    Under the Rating System, examiners take administration of a Bank's 
affordable housing and community investment activities into account in 
assigning component ratings for corporate governance and operational 
risk. Given the importance of affordable housing and community 
investment activities to the mission of the Bank System, the Office of 
Supervision may consider the need for a separate rating system or a 
separate ratings component to evaluate and rate the affordable housing 
and community investment programs of each Bank after gaining experience 
with the Rating System.
    The Rating System is intended to serve 2 purposes. First, it is 
designed to reflect in a comprehensive, systematic, and consistent 
fashion the overall condition and performance of an

[[Page 548]]

institution, taking into consideration all significant financial, 
operational, and compliance factors addressed in the Finance Board's 
examination. Second, the Rating System is meant to further enhance 
communication and transparency between the Office of Supervision and 
each Bank and the OF regarding the results of the examination process.
    The ratings for individual Banks and the OF will not be made public 
or released to other Banks, but will be supplied to the individual 
Banks and the OF on a confidential basis as part of the examination and 
supervisory process.
    The Federal Home Loan Bank Rating System is attached as an Exhibit 
to this Notice.

    Dated: December 28, 2006.

    By the Federal Housing Finance Board.
John P. Kennedy,
General Counsel.
BILLING CODE 6725-01-P

[[Page 549]]

[GRAPHIC] [TIFF OMITTED] TN05JA07.000


[[Page 550]]


[GRAPHIC] [TIFF OMITTED] TN05JA07.001


[[Page 551]]


[GRAPHIC] [TIFF OMITTED] TN05JA07.002


[[Page 552]]


[GRAPHIC] [TIFF OMITTED] TN05JA07.003


[[Page 553]]


[GRAPHIC] [TIFF OMITTED] TN05JA07.004


[[Page 554]]


[GRAPHIC] [TIFF OMITTED] TN05JA07.005


[[Page 555]]


[GRAPHIC] [TIFF OMITTED] TN05JA07.006


[[Page 556]]


[GRAPHIC] [TIFF OMITTED] TN05JA07.007


[[Page 557]]


[GRAPHIC] [TIFF OMITTED] TN05JA07.008


[[Page 558]]


[GRAPHIC] [TIFF OMITTED] TN05JA07.009


[[Page 559]]


[GRAPHIC] [TIFF OMITTED] TN05JA07.010


[[Page 560]]


[GRAPHIC] [TIFF OMITTED] TN05JA07.011


[[Page 561]]


[GRAPHIC] [TIFF OMITTED] TN05JA07.012


[[Page 562]]


[GRAPHIC] [TIFF OMITTED] TN05JA07.013


[[Page 563]]


[GRAPHIC] [TIFF OMITTED] TN05JA07.014


[[Page 564]]


[GRAPHIC] [TIFF OMITTED] TN05JA07.015


[[Page 565]]


[GRAPHIC] [TIFF OMITTED] TN05JA07.016

[FR Doc. 06-9984 Filed 1-4-07; 8:45 am]
BILLING CODE 6725-01-C