Notice of Annual Adjustment of the Cap on Average Total Assets That Defines Community Financial Institutions, 7438 [E9-3369]
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7438
Federal Register / Vol. 74, No. 30 / Tuesday, February 17, 2009 / Notices
that they carry out their public policy
missions through authorized activities.
See § 1102, 122 Stat. 2663–64. The
Enterprises and the Banks continue to
operate under regulations promulgated
by OFHEO and the FHFB until the
FHFA issues its own regulations. See id.
at §§ 1302, 1312, 122 Stat. 2795, 2798.
FEDERAL HOUSING FINANCE
AGENCY
[No. 2009–N–02]
Notice of Annual Adjustment of the
Cap on Average Total Assets That
Defines Community Financial
Institutions
AGENCY:
Federal Housing Finance
Agency.
ACTION: Notice.
SUMMARY: The Federal Housing Finance
Agency has adjusted the cap on average
total assets that defines a ‘‘Community
Financial Institution’’ based on the
annual percentage increase in the
Consumer Price Index for all urban
consumers (CPI–U) as published by the
Department of Labor (DOL). These
changes took effect on January 1, 2009.
FOR FURTHER INFORMATION CONTACT:
Patricia L. Sweeney, Division of Federal
Home Loan Bank Regulation, by
telephone at 202–408–2872, by
electronic mail at
Pat.Sweeney@fhfa.gov, or by regular
mail at the Federal Housing Finance
Agency, 1625 Eye Street, NW.,
Washington, DC 20006–4001.
SUPPLEMENTARY INFORMATION:
sroberts on PROD1PC70 with NOTICES
I. Background
A. Establishment of Federal Housing
Finance Agency
Effective July 30, 2008, Division A of
the Housing and Economic Recovery
Act of 2008 (HERA), Public Law No.
110–289, 122 Stat. 2654 (2008), titled
the Federal Housing Finance Regulatory
Reform Act of 2008 (Reform Act),
created the Federal Housing Finance
Agency (FHFA) as an independent
agency of the federal government. The
Reform Act transferred the supervisory
and oversight responsibilities over the
Federal National Mortgage Association
(Fannie Mae), Federal Home Loan
Mortgage Corporation (Freddie Mac)
(collectively, Enterprises), the 12
Federal Home Loan Banks (Banks), and
the Bank System’s Office of Finance
(which acts as the Banks’ fiscal agent),
from the Office of Federal Housing
Enterprise Oversight (OFHEO) and the
Federal Housing Finance Board (FHFB)
to the FHFA. The Reform Act provides
for the abolishment of OFHEO and the
FHFB 1 year after the date of enactment.
The FHFA is responsible for ensuring
that the Enterprises and the Banks
operate in a safe and sound manner,
including maintenance of adequate
capital and internal controls, that their
operations and activities foster liquid,
efficient, competitive, and resilient
national housing finance markets, and
VerDate Nov<24>2008
19:45 Feb 13, 2009
Jkt 217001
B. Statutory and Regulatory Background
Section 2(10)(A) of the Federal Home
Loan Bank Act (Bank Act) defines a
‘‘Community Financial Institution’’
(CFI) as any member that has deposits
insured by the Federal Deposit
Insurance Corporation and that has
average total assets below a statutory
cap, which cap is to be adjusted
annually for inflation. See 12 U.S.C.
1422(10)(A) (as amended); 12 CFR
925.1. Section 1211(a) of the Reform Act
amended the definition of ‘‘CFI’’ to
increase the average total assets cap for
CFIs from $500 million to $1 billion,
and retained the requirement for annual
inflation adjustments. This Notice
announces the annual CPI–U
adjustment for the CFI asset cap,
effective January 1, 2009, as further
discussed below. Section 1202 of the
Reform Act also removed the annual
compensation limits and CPI–U
adjustment requirement in former
section 7(i)(2) of the Bank Act for
members of the boards of directors of
the Banks. See 12 U.S.C. 1427(i)(2) (as
amended); 12 CFR 918.3(a). As a result,
this Notice does not include any CPI
adjustment for such limits.
II. Calculating the Annual Adjustment
Consistent with the practice of other
federal agencies, and based on past
practice of the FHFB, the annual
adjustment to the CFI asset cap is based
on the percentage increase in the CPI–
U from November 2007 to November
2008. Specifically, the annual
adjustment to the CFI asset cap reflects
the percentage by which the CPI–U
published for November of the
preceding calendar year exceeds the
CPI–U published for November of the
year before the preceding calendar year.
The DOL encourages use of CPI–U
data that have not been seasonally
adjusted in ‘‘escalation agreements’’
because seasonal factors are updated
annually and seasonally adjusted data
are subject to revision for up to 5 years
following the original release.
Unadjusted data are not routinely
subject to revision, and previously
published unadjusted data are only
corrected when significant calculation
errors are discovered. Accordingly, the
FHFA is continuing the practice of the
FHFB in using data that have not been
seasonally adjusted.
PO 00000
Frm 00049
Fmt 4703
Sfmt 4703
As noted above, the Reform Act raised
the CFI asset cap to $1 billion, effective
July 30, 2008, the date of enactment.
Because the FHFA believes that there
are benefits to the Banks and their
members from retaining the FHFB’s
practice of scheduling the annual
adjustments to take effect as of the first
of each year, it has decided to continue
that practice, rather than delay the
adjustment to the anniversary of the
enactment of the Reform Act. Such a
delay also would result in a 19 month
gap between regulatory adjustments,
which arguably would be contrary to the
statutory requirement for annual
inflation adjustments. Hence, applying
the unadjusted CPI–U data results in a
1.1 percent increase in the CFI asset cap,
effective as of January 1, 2009, as
summarized below.
CFI Asset Cap: The CFI asset cap was
$625 million prior to the enactment of
the Reform Act on July 30, 2008. Upon
enactment of the Reform Act, the CFI
asset cap automatically increased to $1
billion. Applying the unadjusted CPI–U,
the current CFI asset cap must be
increased by 1.1 percent to reflect
inflation over the prior year. Thus, as of
January 1, 2009, the CFI asset cap is
$1,011,000,000, which amount was
obtained by rounding to the nearest
million, which has been the practice for
all prior adjustments.
Dated: February 10, 2009.
James B. Lockhart III,
Director, Federal Housing Finance Agency.
[FR Doc. E9–3369 Filed 2–13–09; 8:45 am]
BILLING CODE 8070–01–P
FEDERAL RESERVE SYSTEM
Formations of, Acquisitions by, and
Mergers of Bank Holding Companies
The companies listed in this notice
have applied to the Board for approval,
pursuant to the Bank Holding Company
Act of 1956 (12 U.S.C. 1841 et seq.)
(BHC Act), Regulation Y (12 CFR Part
225), and all other applicable statutes
and regulations to become a bank
holding company and/or to acquire the
assets or the ownership of, control of, or
the power to vote shares of a bank or
bank holding company and all of the
banks and nonbanking companies
owned by the bank holding company,
including the companies listed below.
The applications listed below, as well
as other related filings required by the
Board, are available for immediate
inspection at the Federal Reserve Bank
indicated. The applications also will be
available for inspection at the offices of
the Board of Governors. Interested
E:\FR\FM\17FEN1.SGM
17FEN1
Agencies
[Federal Register Volume 74, Number 30 (Tuesday, February 17, 2009)]
[Notices]
[Page 7438]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-3369]
[[Page 7438]]
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FEDERAL HOUSING FINANCE AGENCY
[No. 2009-N-02]
Notice of Annual Adjustment of the Cap on Average Total Assets
That Defines Community Financial Institutions
AGENCY: Federal Housing Finance Agency.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: The Federal Housing Finance Agency has adjusted the cap on
average total assets that defines a ``Community Financial Institution''
based on the annual percentage increase in the Consumer Price Index for
all urban consumers (CPI-U) as published by the Department of Labor
(DOL). These changes took effect on January 1, 2009.
FOR FURTHER INFORMATION CONTACT: Patricia L. Sweeney, Division of
Federal Home Loan Bank Regulation, by telephone at 202-408-2872, by
electronic mail at Pat.Sweeney@fhfa.gov, or by regular mail at the
Federal Housing Finance Agency, 1625 Eye Street, NW., Washington, DC
20006-4001.
SUPPLEMENTARY INFORMATION:
I. Background
A. Establishment of Federal Housing Finance Agency
Effective July 30, 2008, Division A of the Housing and Economic
Recovery Act of 2008 (HERA), Public Law No. 110-289, 122 Stat. 2654
(2008), titled the Federal Housing Finance Regulatory Reform Act of
2008 (Reform Act), created the Federal Housing Finance Agency (FHFA) as
an independent agency of the federal government. The Reform Act
transferred the supervisory and oversight responsibilities over the
Federal National Mortgage Association (Fannie Mae), Federal Home Loan
Mortgage Corporation (Freddie Mac) (collectively, Enterprises), the 12
Federal Home Loan Banks (Banks), and the Bank System's Office of
Finance (which acts as the Banks' fiscal agent), from the Office of
Federal Housing Enterprise Oversight (OFHEO) and the Federal Housing
Finance Board (FHFB) to the FHFA. The Reform Act provides for the
abolishment of OFHEO and the FHFB 1 year after the date of enactment.
The FHFA is responsible for ensuring that the Enterprises and the Banks
operate in a safe and sound manner, including maintenance of adequate
capital and internal controls, that their operations and activities
foster liquid, efficient, competitive, and resilient national housing
finance markets, and that they carry out their public policy missions
through authorized activities. See Sec. 1102, 122 Stat. 2663-64. The
Enterprises and the Banks continue to operate under regulations
promulgated by OFHEO and the FHFB until the FHFA issues its own
regulations. See id. at Sec. Sec. 1302, 1312, 122 Stat. 2795, 2798.
B. Statutory and Regulatory Background
Section 2(10)(A) of the Federal Home Loan Bank Act (Bank Act)
defines a ``Community Financial Institution'' (CFI) as any member that
has deposits insured by the Federal Deposit Insurance Corporation and
that has average total assets below a statutory cap, which cap is to be
adjusted annually for inflation. See 12 U.S.C. 1422(10)(A) (as
amended); 12 CFR 925.1. Section 1211(a) of the Reform Act amended the
definition of ``CFI'' to increase the average total assets cap for CFIs
from $500 million to $1 billion, and retained the requirement for
annual inflation adjustments. This Notice announces the annual CPI-U
adjustment for the CFI asset cap, effective January 1, 2009, as further
discussed below. Section 1202 of the Reform Act also removed the annual
compensation limits and CPI-U adjustment requirement in former section
7(i)(2) of the Bank Act for members of the boards of directors of the
Banks. See 12 U.S.C. 1427(i)(2) (as amended); 12 CFR 918.3(a). As a
result, this Notice does not include any CPI adjustment for such
limits.
II. Calculating the Annual Adjustment
Consistent with the practice of other federal agencies, and based
on past practice of the FHFB, the annual adjustment to the CFI asset
cap is based on the percentage increase in the CPI-U from November 2007
to November 2008. Specifically, the annual adjustment to the CFI asset
cap reflects the percentage by which the CPI-U published for November
of the preceding calendar year exceeds the CPI-U published for November
of the year before the preceding calendar year.
The DOL encourages use of CPI-U data that have not been seasonally
adjusted in ``escalation agreements'' because seasonal factors are
updated annually and seasonally adjusted data are subject to revision
for up to 5 years following the original release. Unadjusted data are
not routinely subject to revision, and previously published unadjusted
data are only corrected when significant calculation errors are
discovered. Accordingly, the FHFA is continuing the practice of the
FHFB in using data that have not been seasonally adjusted.
As noted above, the Reform Act raised the CFI asset cap to $1
billion, effective July 30, 2008, the date of enactment. Because the
FHFA believes that there are benefits to the Banks and their members
from retaining the FHFB's practice of scheduling the annual adjustments
to take effect as of the first of each year, it has decided to continue
that practice, rather than delay the adjustment to the anniversary of
the enactment of the Reform Act. Such a delay also would result in a 19
month gap between regulatory adjustments, which arguably would be
contrary to the statutory requirement for annual inflation adjustments.
Hence, applying the unadjusted CPI-U data results in a 1.1 percent
increase in the CFI asset cap, effective as of January 1, 2009, as
summarized below.
CFI Asset Cap: The CFI asset cap was $625 million prior to the
enactment of the Reform Act on July 30, 2008. Upon enactment of the
Reform Act, the CFI asset cap automatically increased to $1 billion.
Applying the unadjusted CPI-U, the current CFI asset cap must be
increased by 1.1 percent to reflect inflation over the prior year.
Thus, as of January 1, 2009, the CFI asset cap is $1,011,000,000, which
amount was obtained by rounding to the nearest million, which has been
the practice for all prior adjustments.
Dated: February 10, 2009.
James B. Lockhart III,
Director, Federal Housing Finance Agency.
[FR Doc. E9-3369 Filed 2-13-09; 8:45 am]
BILLING CODE 8070-01-P