Minimum Capital, 6151-6154 [2010-2677]
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Federal Register / Vol. 75, No. 25 / Monday, February 8, 2010 / Proposed Rules
NATIONAL CREDIT UNION
ADMINISTRATION
12 CFR Part 701
RIN 3133–AD65
Chartering and Field of Membership
for Federal Credit Unions
AGENCY: National Credit Union
Administration (NCUA).
ACTION: Notice of extension of comment
period.
WReier-Aviles on DSKGBLS3C1PROD with PROPOSALS
SUMMARY: On December 17, 2009, the
NCUA Board issued a proposed rule
amending its chartering and field of
membership manual to update its
community chartering policies and
define the terms ‘‘rural district’’ and ‘‘in
danger of insolvency’’ for emergency
merger purposes. 74 FR 68722
(December 29, 2009). NCUA has
received several requests to extend the
comment period set in the proposed
rule and has determined to extend the
comment period for an additional 45
days.
DATES: Comments must be postmarked
or received by April 15, 2010.
ADDRESSES: You may submit comments
by any of the following methods (Please
send comments by one method only):
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• NCUA Web Site: https://
www.ncua.gov/
RegulationsOpinionsLaws/
proposedregs/proposedregs.html.
Follow the instructions for submitting
comments.
• E-mail: Address to
regcomments@ncua.gov. Include ‘‘[Your
name] Comments on Proposed Rule
IRPS 09–1,’’ in the e-mail subject line.
• Fax: (703) 518–6319. Use the
subject line described above for e-mail.
• Mail: Address to Mary F. Rupp,
Secretary of the Board, National Credit
Union Administration, 1775 Duke
Street, Alexandria, Virginia 22314–
3428.
• Hand Delivery/Courier: Same as
mail address.
Public Inspection: All public
comments are available on the agency’s
website at https://www.ncua.gov/
RegulationsOpinionsLaws/comments as
submitted, except as may not be
possible for technical reasons. Public
comments will not be edited to remove
any identifying or contact information.
Paper copies of comments may be
inspected in NCUA’s law library at 1775
Duke Street, Alexandria, Virginia 22314,
by appointment weekdays between 9
a.m. and 3 p.m. To make an
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appointment, call (703) 518–6546 or
send an e-mail to OGCMail@ncua.gov.
FOR FURTHER INFORMATION CONTACT:
Frank Kressman, Staff Attorney, Office
of General Counsel, 1775 Duke Street,
Alexandria, Virginia 22314 or telephone
(703) 518–6540.
SUPPLEMENTARY INFORMATION: On
December 17, 2009, the NCUA Board
issued a proposed rule to amend its
chartering and field of membership
manual to update its community
chartering policies. The amendments
include using objective and quantifiable
criteria to determine the existence of a
local community and defining the term
‘‘rural district.’’ The amendments clarify
NCUA’s marketing plan requirements
for credit unions converting to or
expanding their community charters
and define the term ‘‘in danger of
insolvency’’ for emergency merger
purposes. 74 FR 68722 (December 29,
2009).
NCUA requested comments on its
proposal and set a 60-day comment
period. NCUA has received several
requests to extend the comment period.
The NCUA Board believes a 45-day
extension will help facilitate the
submission of comments without
causing undue delay to the rulemaking
process. Accordingly, the comment
period is extended and comments must
now be postmarked or received by April
15, 2010.
By the National Credit Union
Administration Board on February 1, 2010.
Mary Rupp,
Secretary of the Board.
[FR Doc. 2010–2605 Filed 2–5–10; 8:45 am]
BILLING CODE 7535–01–P
FEDERAL HOUSING FINANCE
AGENCY
12 CFR Part 1225
RIN 2590–AA01
Minimum Capital
AGENCY: Federal Housing Finance
Agency.
ACTION: Notice of proposed rulemaking.
SUMMARY: The Federal Housing Finance
Agency (FHFA) is issuing and seeking
comment on a proposed rule to effect a
provision of the Federal Housing
Enterprises Financial Safety and
Soundness Act that provides for a
temporary increase in the minimum
capital level for entities regulated by
FHFA—Federal National Mortgage
Association, Federal Home Loan
Mortgage Corporation or the Federal
Home Loan Banks. The proposed rule
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6151
provides clarity regarding standards for
imposing a temporary increase, for
rescinding such an increase and a time
frame for review of such an increase.
DATES: Comments on the proposed rule
must be received on or before April 9,
2010. For additional information, see
SUPPLEMENTARY INFORMATION.
ADDRESSES: You may submit your
comments on the proposed rulemaking,
identified by ‘‘[RIN 2590–AA01],’’ by
any one of the following methods:
• E-mail: Comments to Alfred M.
Pollard, General Counsel, may be sent
by e-mail to RegComments@fhfa.gov.
Please include ‘‘[RIN 2590–AA01]’’ in
the subject line of the message.
• Federal eRulemaking Portal: https://
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 FHFA at
RegComments@fhfa.gov to ensure
timely receipt by the agency. Include
the following information in the subject
line of your submission: ‘‘Minimum
Capital Proposed Rule, [RIN 2590–
AA01].’’
• U.S. Mail, United Parcel Post,
Federal Express, or Other Mail Service:
The mailing address for comments is:
Alfred M. Pollard, General Counsel,
Attention: Comments/[RIN 2590–AA01],
Federal Housing Finance Agency,
Fourth Floor, 1700 G Street, NW.,
Washington, DC 20552.
• Hand Delivery/Courier: The hand
delivery address is: Alfred M. Pollard,
General Counsel, Attention: Comments/
[RIN 2590–AA01], Federal Housing
Finance Agency, Fourth Floor, 1700 G
Street, NW., Washington, DC 20552. The
package should be logged at the Guard
Desk, First Floor, on business days
between 9 a.m. and 5 p.m.
FOR FURTHER INFORMATION CONTACT:
Christopher T. Curtis, Senior Deputy
General Counsel,
Christopher.Curtis@fhfa.gov, (202) 414–
8947 or Jamie Schwing, Associate
General Counsel,
Jamie.Schwing@fhfa.gov, (202) 414–
3787, (not toll-free numbers), Federal
Housing Finance Agency, Fourth Floor,
1700 G Street, NW., Washington, DC
20552. The telephone number for the
Telecommunications Device for the Deaf
is (800) 877–8339.
SUPPLEMENTARY INFORMATION:
I. Comments
The Federal Housing Finance Agency
(FHFA) invites comment on all aspects
of the proposed rule, and will take all
relevant comments into consideration
before issuing the final regulation.
Copies of all comments will be posted
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Federal Register / Vol. 75, No. 25 / Monday, February 8, 2010 / Proposed Rules
without change, including any personal
information you provide, such as your
name and address, on the FHFA Internet
Web site at https://www.fhfa.gov. In
addition, copies of all comments
received will be available for
examination by the public on business
days between the hours of 10 a.m. and
3 p.m. at the Federal Housing Finance
Agency, Fourth Floor, 1700 G Street,
NW., Washington, DC 20552. To make
an appointment to inspect comments,
please call the Office of General Counsel
at (202) 414–3751.
WReier-Aviles on DSKGBLS3C1PROD with PROPOSALS
II. Background
The Housing and Economic Recovery
Act of 2008 (HERA), Public Law 110–
289, 122 Stat. 2654, amended the
Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12
U.S.C. 4501 et seq.) (Safety and
Soundness Act) to establish FHFA as an
independent agency of the Federal
Government. FHFA was established to
oversee the prudential operations of the
Federal National Mortgage Association,
the Federal Home Loan Mortgage
Corporation (collectively, Enterprises),
and the Federal Home Loan Banks
(Banks) (collectively, regulated entities)
and to ensure they operate in a safe and
sound manner including being
capitalized adequately; foster liquid,
efficient, competitive and resilient
national housing finance markets;
comply with the Safety and Soundness
Act and other authorizing statutes, and
with rules, regulations, guidelines and
orders issued under these statutes and
the charters of the Enterprises and the
Banks; carry out their missions through
activities authorized and consistent
with the Safety and Soundness Act and
their charters; and, that the activities
and operations of the entities are
consistent with the public interest.1 The
regulated entities continue to operate
under regulations promulgated by the
Office of Federal Housing Enterprise
Oversight and the Federal Housing
Finance Board until such time as the
existing regulations are supplanted by
regulations promulgated by the FHFA.2
Section 1111 of HERA amended
section 1362 of the Safety and
Soundness Act to provide additional
authorities for FHFA regarding
minimum capital requirements. Section
1362(a) establishes a minimum capital
level for the Enterprises, while section
1362(b) incorporates the minimum
capital level for the Federal Home Loan
Banks established by the Federal Home
1 12
U.S.C. 4513.
sections 1302 and 1312 of HERA.
2 See
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Loan Bank Act (Bank Act).3 The section
explicitly authorizes the Director, by
regulation, to provide for capital levels
higher than the minimum levels
specified for the Enterprises or the
Banks or for both to promote safe and
sound operations.4 Also, section 1362(e)
provides for additional capital and
reserve requirements to be issued by
order or regulation with respect to a
product or activity.5 Section 1362(f)
provides for a periodic review of core
capital maintained by an Enterprise, the
amount of capital retained by the Banks
and the minimum capital levels set forth
for the regulated entities required under
this section.6
In addition, section 1362(d) provides
that the Director, by order, may
temporarily increase an established
minimum capital level, when the
director determines ‘‘that such an
increase is necessary and consistent
with the prudential regulation and the
safe and sound operations of a regulated
entity.’’ 7 The section also provides that
the Director shall rescind the temporary
minimum capital level when the
Director determines circumstances no
longer justify the temporary level.8 To
effect the higher temporary minimum
capital level, the Director must issue
regulations setting forth standards for
the imposition of a temporary increase,
standards and procedures that will be
used to make the determination
regarding rescission and a time frame
for periodic review of any temporary
increase in the minimum capital level to
make a determination regarding
rescission.9
Especially in times of economic stress
such as the present, it is important that
the Director be able to respond when
necessary to conditions affecting a
regulated entity by imposing an
appropriately higher capital
requirement in an expeditious manner.
Section 1362(d) recognizes that need,
and the proposed rule would implement
that authority. The proposed rule sets
3 The Bank Act’s current minimum capital
requirements apply to the eleven banks that have
converted to the capital structure provided in the
Bank Act as amended by the Gramm-Leach-Bliley
Act of 1999, see Bank Act section 6(a)(2), 12 U.S.C.
1426(a)(2), but do not apply to the Federal Home
Loan Bank of Chicago. The Federal Home Loan
Bank of Chicago is subject to capital requirements
as set forth in a 2007 Cease and Desist Order, as
amended. See 74 FR 5597 (January 30, 2009). As a
result, the definition of ‘‘minimum capital level’’ as
set forth in the proposed regulation is structured to
take into account the current supervisory status of
the Federal Home Loan Bank of Chicago.
4 12 U.S.C. 4612(c).
5 12 U.S.C. 4612(e).
6 12 U.S.C. 4612(f).
7 12 U.S.C. 4612(d)(1).
8 12 U.S.C. 4612(d)(2).
9 12 U.S.C. 4612(d)(3).
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forth procedures and standards as
required in the Safety and Soundness
Act for a temporary increase in the
minimum capital levels of the
Enterprises or the Banks, including a
determination to order an increase, to
rescind all or part of the increase and
the time for periodic review of an
increase as provided in section 1362(d).
The standards that the Director would
apply in determining whether to impose
a temporary capital increase, and its
amount, are those that experience has
shown are indicators of the financial
health of an institution and, in the worst
case, of its risk of failure.
Regulatory Impacts
Paperwork Reduction Act
The proposed regulation does not
contain any information collection
requirement that requires the approval
of OMB under the Paperwork Reduction
Act (44 U.S.C. 3501 et seq.).
Regulatory Flexibility Act
The Regulatory Flexibility Act (5
U.S.C. 601 et seq.) requires that a
regulation that has a significant
economic impact on a substantial
number of small entities, small
businesses, or small organizations must
include an initial regulatory flexibility
analysis describing the regulation’s
impact on small entities. Such an
analysis need not be undertaken if the
agency has certified that the regulation
does not have a significant economic
impact on a substantial number of small
entities 5 U.S.C. 605(b). FHFA has
considered the impact of the proposed
rule under the Regulatory Flexibility
Act. The Director of FHFA certifies that
the proposed rule is not likely to have
a significant economic impact on a
substantial number of small business
entities because the rule is applicable
only to the regulated entities, which are
not small entities for purposes of the
Regulatory Flexibility Act.
List of Subjects
Capital, Federal Home Loan Banks,
Federal National Mortgage Association,
Federal Home Loan Mortgage
Corporation, Filings, Minimum Capital,
Procedures, Standards.
Accordingly, for the reasons stated in
the preamble, under the authority of 12
U.S.C. 4513, 4526 and 4612, the Federal
Housing Finance Agency proposes to
amend Chapter XII of title 12 of the
Code of Federal Regulations by adding
part 1225 to Subchapter B to read as
follows:
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Federal Register / Vol. 75, No. 25 / Monday, February 8, 2010 / Proposed Rules
Subchapter B—Entity Regulations
PART 1225—MINIMUM CAPITAL—
TEMPORARY INCREASES
Sec.
1225.1
1225.2
1225.3
1225.4
Purpose.
Definitions.
Procedures.
Standards and Factors.
Authority: 12 U.S.C. 4513, 4526 and 4612.
§ 1225.1
Purpose.
FHFA is responsible for ensuring the
safe and sound operation of regulated
entities. In furtherance of that
responsibility, this part sets forth
standards and procedures FHFA will
employ to determine whether to require
or rescind a temporary increase in the
minimum capital levels for a regulated
entity or entities pursuant to 12 U.S.C.
4612(d).
§ 1225.2
Definitions.
For purposes of this part, the term:
Enterprise means the Federal National
Mortgage Association or the Federal
Home Loan Mortgage Corporation; and
the term Enterprises means, collectively,
the Federal National Mortgage
Association and the Federal Home Loan
Mortgage Corporation.
Minimum Capital Level means the
lowest amount of capital meeting any
regulation or orders issued pursuant to
12 U.S.C. 1426(a)(2) and 12 U.S.C. 4612,
or any similar requirement established
for a Federal Home Loan Bank by
regulation, order or other action.
Regulated Entity means—
(1) The Federal National Mortgage
Association and any affiliate thereof;
(2) The Federal Home Loan Mortgage
Corporation and any affiliate thereof;
and
(3) Any Federal Home Loan Bank.
Rescission means a removal in whole
or in part of an increase in the
temporary minimum capital level.
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§ 1225.3
Procedures.
(a) Information—(1) Information to
the Regulated Entity or Entities. If the
Director determines, based on standards
enunciated in this part, that a temporary
increase in the minimum capital level is
necessary, the Director will provide
notice to the affected regulated entity or
entities 30 days in advance of the
effective date of such increase, unless
the Director determines that an exigency
exists that does not permit such notice
or the Director determines a longer time
period would be appropriate.
(2) Information to the Government.
The Director shall inform the Secretary
of the Treasury, the Secretary of
Housing and Urban Development, and
the Chairman of the Securities and
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Exchange Commission of a temporary
increase in the minimum capital level
contemporaneously with informing the
affected regulated entity or entities.
(b) Comments. The affected regulated
entity or entities may provide comments
regarding or objections to the temporary
increase to FHFA within 15 days or
such other period as the Director
determines appropriate under the
circumstances. The Director may
determine to modify, delay, or rescind
the announced temporary increase in
response to such comments or objection,
but no further notice is required for the
temporary increase to become effective
upon the date originally determined by
the Director.
(c) Communication. The Director shall
transmit notice of a temporary increase
or rescission of a temporary increase in
the minimum capital level by written,
electronic, or such other means as
appropriate. Such communication shall
set forth, at a minimum, the bases for
the Director’s determination, the
amount of increase or decrease in the
minimum capital level, the duration of
such increase, and a description of the
procedures for requesting a rescission of
the temporary increase in the minimum
capital level.
§ 1225.4
Standards and factors.
(a) Standard for Imposing a
Temporary Increase. In making a
determination to increase temporarily a
minimum capital requirement for a
regulated entity or entities, the Director
will consider the necessity and
consistency of such an increase with the
prudential regulation and the safe and
sound operations of a regulated entity.
The Director may impose a temporary
minimum-capital increase if
consideration of one or more of the
following factors leads the Director to
the judgment that the current minimum
capital requirement for a regulated
entity is insufficient to address the
entity’s risks:
(1) Current or anticipated declines in
the value of assets held by a regulated
entity; the amounts of a regulated
entity’s outstanding mortgage backed
securities; and, its ability to access
liquidity and funding;
(2) Credit (including counterparty),
market, operational and other risks
facing a regulated entity, especially
where a depreciation in the value of its
capital or assets, a decline in liquidity,
or an increase in risks is foreseeable and
consequential;
(3) Current or projected declines in
the capital held by a regulated entity;
(4) The state of a regulated entity’s
compliance with regulations, written
orders, or agreements;
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6153
(5) Unsafe or unsound operations or
practices, or circumstances that reflect
unsafe and unsound conduct by a
regulated entity;
(6) Housing finance market
conditions;
(7) Level of reserves or retained
earnings;
(8) Initiatives, operations, products, or
practices that entail heightened risk;
(9) With respect to a Bank, the ratio
of the market value of its equity to the
par value of its capital stock; or
(10) Other conditions as detailed by
the Director in the notice provided
under § 1225.3.
(11) In making a finding under this
section, the Director may require a
written plan to augment capital to be
submitted on a timely basis to address
the methods by which such temporary
increase may be attained and the time
period for reaching the new temporary
minimum capital level.
(b) Rescission of a Temporary
Increase. In making a determination to
rescind a temporary increase in the
minimum capital level, whether in full
or in part, the Director shall consider
the following standards:
(1) Changes to the circumstances or
facts that led to the imposition of a
temporary increase in the minimum
capital levels;
(2) The meeting of targets set for a
regulated entity in advance of any
capital or capital-related plan agreed to
by the Director;
(3) Changed circumstances or facts
based on new developments occurring
since the imposition of the temporary
increase in the minimum capital level,
particularly where the original problems
or concerns have been successfully
addressed or alleviated in whole or in
part; or
(4) Such other standard as the
Director may consider as detailed by the
Director in the notice provided under
§ 1225.3.
(c) Time Frame for Review of
Temporary Increase for Purpose of
Rescission. (1) Absent an earlier
determination to rescind in whole or in
part a temporary increase in the
minimum capital level for a regulated
entity or entities, the Director shall no
less than every 12 months, consider the
need to maintain, modify, or rescind
such increase.
(2) A regulated entity or regulated
entities may at any time request in
writing such review by the Director.
(d) Guidances. The Director may
determine, from time to time, issue
guidance to elaborate, to refine or to
provide new information regarding
standards or procedures contained
herein.
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Federal Register / Vol. 75, No. 25 / Monday, February 8, 2010 / Proposed Rules
Dated: January 31, 2010.
Edward J. DeMarco,
Acting Director, Federal Housing Finance
Agency.
[FR Doc. 2010–2677 Filed 2–5–10; 8:45 am]
BILLING CODE P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2010–0033; Directorate
Identifier 2009–NM–099–AD]
RIN 2120–AA64
Airworthiness Directives; The Boeing
Company Model 767 Airplanes
Federal Aviation
Administration (FAA), Department of
Transportation (DOT).
ACTION: Notice of proposed rulemaking
(NPRM).
WReier-Aviles on DSKGBLS3C1PROD with PROPOSALS
AGENCY:
SUMMARY: The FAA proposes to
supersede an existing airworthiness
directive (AD) that applies to all Model
767 airplanes. The existing AD currently
requires repetitive detailed and high
frequency eddy current (HFEC)
inspections of the station (STA) 1809.5
bulkhead for cracking, and corrective
actions if necessary. This proposed AD
would expand the inspection area to
include the vertical inner chord at STA
1809.5. This proposed AD results from
reported fatigue cracking in the vertical
inner chord and the forward outer chord
while doing the detailed inspection of
the horizontal inner chord at STA
1809.5. We are proposing this AD to
detect and correct fatigue cracking in
the bulkhead structure at STA 1809.5
and the vertical inner chord at STA
1809.5, which could result in failure of
the bulkhead structure for carrying the
flight loads of the horizontal stabilizer,
and consequent loss of controllability of
the airplane.
DATES: We must receive comments on
this proposed AD by March 25, 2010.
ADDRESSES: You may send comments by
any of the following methods:
• Federal eRulemaking Portal: Go to
https://www.regulations.gov. Follow the
instructions for submitting comments.
• Fax: 202–493–2251.
• Mail: U.S. Department of
Transportation, Docket Operations, M–
30, West Building Ground Floor, Room
W12–140, 1200 New Jersey Avenue, SE.,
Washington, DC 20590.
• Hand Delivery: U.S. Department of
Transportation, Docket Operations, M–
30, West Building Ground Floor, Room
W12–140, 1200 New Jersey Avenue, SE.,
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Washington, DC 20590, between 9 a.m.
and 5 p.m., Monday through Friday,
except Federal holidays.
For service information identified in
this proposed AD, contact Boeing
Commercial Airplanes, Attention: Data
& Services Management, P. O. Box 3707,
MC 2H–65, Seattle, Washington 98124–
2207; telephone 206–544–5000,
extension 1; fax 206–766–5680; e-mail
me.boecom@boeing.com; Internet
https://www.myboeingfleet.com. You
may review copies of the referenced
service information at the FAA,
Transport Airplane Directorate, 1601
Lind Avenue, SW., Renton, Washington.
For information on the availability of
this material at the FAA, call 425–227–
1221 or 425–227–1152.
Examining the AD Docket
You may examine the AD docket on
the Internet at https://
www.regulations.gov; or in person at the
Docket Management Facility between 9
a.m. and 5 p.m., Monday through
Friday, except Federal holidays. The AD
docket contains this proposed AD, the
regulatory evaluation, any comments
received, and other information. The
street address for the Docket Office
(telephone 800–647–5527) is in the
ADDRESSES section. Comments will be
available in the AD docket shortly after
receipt.
FOR FURTHER INFORMATION CONTACT:
Berhane Alazar, Airframe Branch,
ANM–120S, FAA, Seattle Aircraft
Certification Office, 1601 Lind Avenue,
SW., Renton, Washington 98057–3356;
telephone (425) 917–6577; fax (425)
917–6590.
SUPPLEMENTARY INFORMATION:
Comments Invited
We invite you to send any written
relevant data, views, or arguments about
this proposed AD. Send your comments
to an address listed under the
ADDRESSES section. Include ‘‘Docket No.
FAA–2010–0033; Directorate Identifier
2009–NM–099–AD’’ at the beginning of
your comments. We specifically invite
comments on the overall regulatory,
economic, environmental, and energy
aspects of this proposed AD. We will
consider all comments received by the
closing date and may amend this
proposed AD because of those
comments.
We will post all comments we
receive, without change, to https://
www.regulations.gov, including any
personal information you provide. We
will also post a report summarizing each
substantive verbal contact we receive
about this proposed AD.
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Discussion
On November 9, 2006, we issued AD
2006–24–04, Amendment 39–14833 (71
FR 68432, November 27, 2006), for all
Model 767 airplanes. That AD requires
repetitive detailed and high frequency
eddy current (HFEC) inspections of the
station (STA) 1809.5 bulkhead for
cracking, and corrective actions if
necessary. That AD resulted from
fatigue cracks found in the forward
outer chord and horizontal inner chord
at STA 1809.5. We issued that AD to
detect and correct cracking in the
bulkhead structure at STA 1809.5,
which could result in failure of the
bulkhead structure for carrying the
flight loads of the horizontal stabilizer,
and consequent loss of controllability of
the airplane.
Actions Since Existing AD Was Issued
Since we issued AD 2006–24–04, an
operator reported fatigue cracking in the
vertical inner chord found while doing
the detailed inspection of the horizontal
inner chord required by that AD. A
surface HFEC inspection was done to
confirm the crack. The crack was found
on the right side of the structure at a
fastener hole near buttock line (BL) 28.5,
water line (WL) 257, common to both
the horizontal and vertical inner chord.
The vertical inner chord crack was
found on an airplane with 28,234 total
flight cycles.
Relevant Service Information
AD 2006–24–04 refers to Boeing Alert
Service Bulletin 767–53A0131, dated
March 30, 2006, as the appropriate
source of service information for the
required actions. We have reviewed
Boeing Alert Service Bulletin 767–
53A0131, Revision 1, dated March 12,
2009. Revision 1 adds a surface HFEC
inspection for the vertical inner chord,
and clarifies the procedures for
inspecting the horizontal inner chord.
The service bulletin specifies a
compliance time of before 15,000 total
flight cycles or within 6,000 flight
cycles after the previous PARTS 1–4
inspection, whichever occurs first, for
the surface HFEC inspection for the
vertical inner chord. The service
bulletin also specifies a repeat interval
6,000 flight cycles thereafter for the
surface HFEC inspection for the vertical
inner chord.
FAA’s Determination and Requirements
of the Proposed AD
We have evaluated all pertinent
information and identified an unsafe
condition that is likely to develop on
other airplanes of the same type design.
For this reason, we are proposing this
AD, which would supersede AD 2006–
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Agencies
[Federal Register Volume 75, Number 25 (Monday, February 8, 2010)]
[Proposed Rules]
[Pages 6151-6154]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-2677]
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FEDERAL HOUSING FINANCE AGENCY
12 CFR Part 1225
RIN 2590-AA01
Minimum Capital
AGENCY: Federal Housing Finance Agency.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Federal Housing Finance Agency (FHFA) is issuing and
seeking comment on a proposed rule to effect a provision of the Federal
Housing Enterprises Financial Safety and Soundness Act that provides
for a temporary increase in the minimum capital level for entities
regulated by FHFA--Federal National Mortgage Association, Federal Home
Loan Mortgage Corporation or the Federal Home Loan Banks. The proposed
rule provides clarity regarding standards for imposing a temporary
increase, for rescinding such an increase and a time frame for review
of such an increase.
DATES: Comments on the proposed rule must be received on or before
April 9, 2010. For additional information, see SUPPLEMENTARY
INFORMATION.
ADDRESSES: You may submit your comments on the proposed rulemaking,
identified by ``[RIN 2590-AA01],'' by any one of the following methods:
E-mail: Comments to Alfred M. Pollard, General Counsel,
may be sent by e-mail to RegComments@fhfa.gov. Please include ``[RIN
2590-AA01]'' in the subject line of the message.
Federal eRulemaking Portal: https://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 FHFA at RegComments@fhfa.gov to ensure timely receipt by the
agency. Include the following information in the subject line of your
submission: ``Minimum Capital Proposed Rule, [RIN 2590-AA01].''
U.S. Mail, United Parcel Post, Federal Express, or Other
Mail Service: The mailing address for comments is: Alfred M. Pollard,
General Counsel, Attention: Comments/[RIN 2590-AA01], Federal Housing
Finance Agency, Fourth Floor, 1700 G Street, NW., Washington, DC 20552.
Hand Delivery/Courier: The hand delivery address is:
Alfred M. Pollard, General Counsel, Attention: Comments/[RIN 2590-
AA01], Federal Housing Finance Agency, Fourth Floor, 1700 G Street,
NW., Washington, DC 20552. The package should be logged at the Guard
Desk, First Floor, on business days between 9 a.m. and 5 p.m.
FOR FURTHER INFORMATION CONTACT: Christopher T. Curtis, Senior Deputy
General Counsel, Christopher.Curtis@fhfa.gov, (202) 414-8947 or Jamie
Schwing, Associate General Counsel, Jamie.Schwing@fhfa.gov, (202) 414-
3787, (not toll-free numbers), Federal Housing Finance Agency, Fourth
Floor, 1700 G Street, NW., Washington, DC 20552. The telephone number
for the Telecommunications Device for the Deaf is (800) 877-8339.
SUPPLEMENTARY INFORMATION:
I. Comments
The Federal Housing Finance Agency (FHFA) invites comment on all
aspects of the proposed rule, and will take all relevant comments into
consideration before issuing the final regulation. Copies of all
comments will be posted
[[Page 6152]]
without change, including any personal information you provide, such as
your name and address, on the FHFA Internet Web site at https://www.fhfa.gov. In addition, copies of all comments received will be
available for examination by the public on business days between the
hours of 10 a.m. and 3 p.m. at the Federal Housing Finance Agency,
Fourth Floor, 1700 G Street, NW., Washington, DC 20552. To make an
appointment to inspect comments, please call the Office of General
Counsel at (202) 414-3751.
II. Background
The Housing and Economic Recovery Act of 2008 (HERA), Public Law
110-289, 122 Stat. 2654, amended the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.)
(Safety and Soundness Act) to establish FHFA as an independent agency
of the Federal Government. FHFA was established to oversee the
prudential operations of the Federal National Mortgage Association, the
Federal Home Loan Mortgage Corporation (collectively, Enterprises), and
the Federal Home Loan Banks (Banks) (collectively, regulated entities)
and to ensure they operate in a safe and sound manner including being
capitalized adequately; foster liquid, efficient, competitive and
resilient national housing finance markets; comply with the Safety and
Soundness Act and other authorizing statutes, and with rules,
regulations, guidelines and orders issued under these statutes and the
charters of the Enterprises and the Banks; carry out their missions
through activities authorized and consistent with the Safety and
Soundness Act and their charters; and, that the activities and
operations of the entities are consistent with the public interest.\1\
The regulated entities continue to operate under regulations
promulgated by the Office of Federal Housing Enterprise Oversight and
the Federal Housing Finance Board until such time as the existing
regulations are supplanted by regulations promulgated by the FHFA.\2\
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\1\ 12 U.S.C. 4513.
\2\ See sections 1302 and 1312 of HERA.
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Section 1111 of HERA amended section 1362 of the Safety and
Soundness Act to provide additional authorities for FHFA regarding
minimum capital requirements. Section 1362(a) establishes a minimum
capital level for the Enterprises, while section 1362(b) incorporates
the minimum capital level for the Federal Home Loan Banks established
by the Federal Home Loan Bank Act (Bank Act).\3\ The section explicitly
authorizes the Director, by regulation, to provide for capital levels
higher than the minimum levels specified for the Enterprises or the
Banks or for both to promote safe and sound operations.\4\ Also,
section 1362(e) provides for additional capital and reserve
requirements to be issued by order or regulation with respect to a
product or activity.\5\ Section 1362(f) provides for a periodic review
of core capital maintained by an Enterprise, the amount of capital
retained by the Banks and the minimum capital levels set forth for the
regulated entities required under this section.\6\
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\3\ The Bank Act's current minimum capital requirements apply to
the eleven banks that have converted to the capital structure
provided in the Bank Act as amended by the Gramm-Leach-Bliley Act of
1999, see Bank Act section 6(a)(2), 12 U.S.C. 1426(a)(2), but do not
apply to the Federal Home Loan Bank of Chicago. The Federal Home
Loan Bank of Chicago is subject to capital requirements as set forth
in a 2007 Cease and Desist Order, as amended. See 74 FR 5597
(January 30, 2009). As a result, the definition of ``minimum capital
level'' as set forth in the proposed regulation is structured to
take into account the current supervisory status of the Federal Home
Loan Bank of Chicago.
\4\ 12 U.S.C. 4612(c).
\5\ 12 U.S.C. 4612(e).
\6\ 12 U.S.C. 4612(f).
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In addition, section 1362(d) provides that the Director, by order,
may temporarily increase an established minimum capital level, when the
director determines ``that such an increase is necessary and consistent
with the prudential regulation and the safe and sound operations of a
regulated entity.'' \7\ The section also provides that the Director
shall rescind the temporary minimum capital level when the Director
determines circumstances no longer justify the temporary level.\8\ To
effect the higher temporary minimum capital level, the Director must
issue regulations setting forth standards for the imposition of a
temporary increase, standards and procedures that will be used to make
the determination regarding rescission and a time frame for periodic
review of any temporary increase in the minimum capital level to make a
determination regarding rescission.\9\
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\7\ 12 U.S.C. 4612(d)(1).
\8\ 12 U.S.C. 4612(d)(2).
\9\ 12 U.S.C. 4612(d)(3).
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Especially in times of economic stress such as the present, it is
important that the Director be able to respond when necessary to
conditions affecting a regulated entity by imposing an appropriately
higher capital requirement in an expeditious manner. Section 1362(d)
recognizes that need, and the proposed rule would implement that
authority. The proposed rule sets forth procedures and standards as
required in the Safety and Soundness Act for a temporary increase in
the minimum capital levels of the Enterprises or the Banks, including a
determination to order an increase, to rescind all or part of the
increase and the time for periodic review of an increase as provided in
section 1362(d). The standards that the Director would apply in
determining whether to impose a temporary capital increase, and its
amount, are those that experience has shown are indicators of the
financial health of an institution and, in the worst case, of its risk
of failure.
Regulatory Impacts
Paperwork Reduction Act
The proposed regulation does not contain any information collection
requirement that requires the approval of OMB under the Paperwork
Reduction Act (44 U.S.C. 3501 et seq.).
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires that
a regulation that has a significant economic impact on a substantial
number of small entities, small businesses, or small organizations must
include an initial regulatory flexibility analysis describing the
regulation's impact on small entities. Such an analysis need not be
undertaken if the agency has certified that the regulation does not
have a significant economic impact on a substantial number of small
entities 5 U.S.C. 605(b). FHFA has considered the impact of the
proposed rule under the Regulatory Flexibility Act. The Director of
FHFA certifies that the proposed rule is not likely to have a
significant economic impact on a substantial number of small business
entities because the rule is applicable only to the regulated entities,
which are not small entities for purposes of the Regulatory Flexibility
Act.
List of Subjects
Capital, Federal Home Loan Banks, Federal National Mortgage
Association, Federal Home Loan Mortgage Corporation, Filings, Minimum
Capital, Procedures, Standards.
Accordingly, for the reasons stated in the preamble, under the
authority of 12 U.S.C. 4513, 4526 and 4612, the Federal Housing Finance
Agency proposes to amend Chapter XII of title 12 of the Code of Federal
Regulations by adding part 1225 to Subchapter B to read as follows:
[[Page 6153]]
Subchapter B--Entity Regulations
PART 1225--MINIMUM CAPITAL--TEMPORARY INCREASES
Sec.
1225.1 Purpose.
1225.2 Definitions.
1225.3 Procedures.
1225.4 Standards and Factors.
Authority: 12 U.S.C. 4513, 4526 and 4612.
Sec. 1225.1 Purpose.
FHFA is responsible for ensuring the safe and sound operation of
regulated entities. In furtherance of that responsibility, this part
sets forth standards and procedures FHFA will employ to determine
whether to require or rescind a temporary increase in the minimum
capital levels for a regulated entity or entities pursuant to 12 U.S.C.
4612(d).
Sec. 1225.2 Definitions.
For purposes of this part, the term:
Enterprise means the Federal National Mortgage Association or the
Federal Home Loan Mortgage Corporation; and the term Enterprises means,
collectively, the Federal National Mortgage Association and the Federal
Home Loan Mortgage Corporation.
Minimum Capital Level means the lowest amount of capital meeting
any regulation or orders issued pursuant to 12 U.S.C. 1426(a)(2) and 12
U.S.C. 4612, or any similar requirement established for a Federal Home
Loan Bank by regulation, order or other action.
Regulated Entity means--
(1) The Federal National Mortgage Association and any affiliate
thereof;
(2) The Federal Home Loan Mortgage Corporation and any affiliate
thereof; and
(3) Any Federal Home Loan Bank.
Rescission means a removal in whole or in part of an increase in
the temporary minimum capital level.
Sec. 1225.3 Procedures.
(a) Information--(1) Information to the Regulated Entity or
Entities. If the Director determines, based on standards enunciated in
this part, that a temporary increase in the minimum capital level is
necessary, the Director will provide notice to the affected regulated
entity or entities 30 days in advance of the effective date of such
increase, unless the Director determines that an exigency exists that
does not permit such notice or the Director determines a longer time
period would be appropriate.
(2) Information to the Government. The Director shall inform the
Secretary of the Treasury, the Secretary of Housing and Urban
Development, and the Chairman of the Securities and Exchange Commission
of a temporary increase in the minimum capital level contemporaneously
with informing the affected regulated entity or entities.
(b) Comments. The affected regulated entity or entities may provide
comments regarding or objections to the temporary increase to FHFA
within 15 days or such other period as the Director determines
appropriate under the circumstances. The Director may determine to
modify, delay, or rescind the announced temporary increase in response
to such comments or objection, but no further notice is required for
the temporary increase to become effective upon the date originally
determined by the Director.
(c) Communication. The Director shall transmit notice of a
temporary increase or rescission of a temporary increase in the minimum
capital level by written, electronic, or such other means as
appropriate. Such communication shall set forth, at a minimum, the
bases for the Director's determination, the amount of increase or
decrease in the minimum capital level, the duration of such increase,
and a description of the procedures for requesting a rescission of the
temporary increase in the minimum capital level.
Sec. 1225.4 Standards and factors.
(a) Standard for Imposing a Temporary Increase. In making a
determination to increase temporarily a minimum capital requirement for
a regulated entity or entities, the Director will consider the
necessity and consistency of such an increase with the prudential
regulation and the safe and sound operations of a regulated entity. The
Director may impose a temporary minimum-capital increase if
consideration of one or more of the following factors leads the
Director to the judgment that the current minimum capital requirement
for a regulated entity is insufficient to address the entity's risks:
(1) Current or anticipated declines in the value of assets held by
a regulated entity; the amounts of a regulated entity's outstanding
mortgage backed securities; and, its ability to access liquidity and
funding;
(2) Credit (including counterparty), market, operational and other
risks facing a regulated entity, especially where a depreciation in the
value of its capital or assets, a decline in liquidity, or an increase
in risks is foreseeable and consequential;
(3) Current or projected declines in the capital held by a
regulated entity;
(4) The state of a regulated entity's compliance with regulations,
written orders, or agreements;
(5) Unsafe or unsound operations or practices, or circumstances
that reflect unsafe and unsound conduct by a regulated entity;
(6) Housing finance market conditions;
(7) Level of reserves or retained earnings;
(8) Initiatives, operations, products, or practices that entail
heightened risk;
(9) With respect to a Bank, the ratio of the market value of its
equity to the par value of its capital stock; or
(10) Other conditions as detailed by the Director in the notice
provided under Sec. 1225.3.
(11) In making a finding under this section, the Director may
require a written plan to augment capital to be submitted on a timely
basis to address the methods by which such temporary increase may be
attained and the time period for reaching the new temporary minimum
capital level.
(b) Rescission of a Temporary Increase. In making a determination
to rescind a temporary increase in the minimum capital level, whether
in full or in part, the Director shall consider the following
standards:
(1) Changes to the circumstances or facts that led to the
imposition of a temporary increase in the minimum capital levels;
(2) The meeting of targets set for a regulated entity in advance of
any capital or capital-related plan agreed to by the Director;
(3) Changed circumstances or facts based on new developments
occurring since the imposition of the temporary increase in the minimum
capital level, particularly where the original problems or concerns
have been successfully addressed or alleviated in whole or in part; or
(4) Such other standard as the Director may consider as detailed by
the Director in the notice provided under Sec. 1225.3.
(c) Time Frame for Review of Temporary Increase for Purpose of
Rescission. (1) Absent an earlier determination to rescind in whole or
in part a temporary increase in the minimum capital level for a
regulated entity or entities, the Director shall no less than every 12
months, consider the need to maintain, modify, or rescind such
increase.
(2) A regulated entity or regulated entities may at any time
request in writing such review by the Director.
(d) Guidances. The Director may determine, from time to time, issue
guidance to elaborate, to refine or to provide new information
regarding standards or procedures contained herein.
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Dated: January 31, 2010.
Edward J. DeMarco,
Acting Director, Federal Housing Finance Agency.
[FR Doc. 2010-2677 Filed 2-5-10; 8:45 am]
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