Portfolio Holdings, 81405-81409 [2010-32531]

Agencies

• FEDERAL HOUSING FINANCE AGENCY

[Federal Register Volume 75, Number 248 (Tuesday, December 28, 2010)]
[Rules and Regulations]
[Pages 81405-81409]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-32531]


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FEDERAL HOUSING FINANCE AGENCY

12 CFR Part 1252

RIN 2590-AA22


Portfolio Holdings

AGENCY: Federal Housing Finance Agency.

ACTION: Final rule; response to comments on the interim final rule.

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SUMMARY: The Federal Housing Finance Agency (FHFA) is issuing a final 
regulation that will govern the portfolio holdings of Fannie Mae and 
Freddie Mac (collectively, the Enterprises) during the pendency of the 
conservatorships. The final regulation adopts FHFA's interim final rule 
on portfolio holdings, without change. See 74 FR 5609, January 30, 
2009. That interim rule adopted the portfolio limits specified in each 
Enterprise's Senior Preferred Stock Purchase Agreement (PSPA) with the 
Department of the Treasury (Treasury) as the regulation limits. 
Specifically, it provides that each Enterprise comply with the 
portfolio limits contained in the respective PSPAs, as they may be 
amended from time to time. The interim regulation also stipulated that 
the regulation is to be in effect until amended or the Enterprises are 
no longer subject to the PSPAs.

DATES: Effective December 28, 2010, the interim final rule published on 
January 30, 2009 (74 FR 5609), which was effective January 30, 2009, is 
confirmed as final.

FOR FURTHER INFORMATION CONTACT: Ming-Yuen Meyer-Fong, Office of the 
General Counsel, (202) 414-3798, or Valerie Smith, Office of Policy 
Analysis and Research, (202) 414-3770, Federal Housing Finance Agency, 
1700 G Street, NW., Washington, DC 20552. The telephone number for the 
Telecommunications Device for the Deaf is (800) 877-8339. For more 
information on this Final Regulation, see the

[[Page 81406]]

SUPPLEMENTARY INFORMATION section of this document.

SUPPLEMENTARY INFORMATION:

I. Background

A. Federal Housing Finance Agency and Recent Legislation

    On July 30, 2008, the Housing and Economic Recovery Act (HERA) 
(Pub. L. 110-289, 122 Stat. 2564) was signed into law. Among other 
things, HERA established FHFA as a new independent agency and 
transferred the supervisory and oversight responsibilities for Fannie 
Mae and Freddie Mac from the Office of Federal Housing Enterprise 
Oversight (OFHEO) to FHFA. HERA amended the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (Safety and Soundness Act), 
Public Law 102-550 (codified at 12 U.S.C. 4501 et seq.). The Safety and 
Soundness Act required FHFA to establish criteria, by regulation, 
governing the portfolio holdings of the Enterprises. 12 U.S.C. 4624. 
The purpose of such regulation is to ensure that the portfolio holdings 
are backed by sufficient capital and consistent with the mission and 
the safe and sound operations of the Enterprises. 12 U.S.C. 4624(a). In 
establishing criteria governing the portfolio holdings of the 
Enterprises, the Safety and Soundness Act directed FHFA to consider the 
ability of the Enterprises to provide a liquid secondary market through 
securitization activities, the portfolio holdings in relation to the 
overall mortgage market, and adherence to standards of prudential 
management and operations established by FHFA in accordance with 
section 1313B of the Safety and Soundness Act. 12 U.S.C. 4624. The 
Safety and Soundness Act further required that any criteria governing 
Enterprise portfolio holdings ensure that such holdings be consistent 
with the Enterprises' mission, which includes facilitating the 
financing of affordable housing for low- and moderate-income families 
in a manner consistent with their overall public purposes. 12 U.S.C. 
4624(a); 12 U.S.C. 4501(7).

B. The Enterprises, Generally

    Fannie Mae and Freddie Mac are government-sponsored enterprises 
(GSEs) chartered by Congress for the purposes of establishing secondary 
market facilities for residential mortgages. 12 U.S.C. 1716 et seq. 
(Fannie Mae Charter Act) and 12 U.S.C. 1451, et seq. (Freddie Mac 
Corporation Act). Specifically, Congress established the Enterprises to 
provide stability in the secondary market for residential mortgages, 
respond appropriately to the private capital market, provide ongoing 
assistance to the secondary market for residential mortgages, and 
promote access to mortgage credit throughout the country. 12 U.S.C. 
4624(b).
    The Enterprises grew rapidly during the late 1990s into the early 
2000's--nearly doubling their combined net holdings of mortgage assets 
from 1996 to 1999 and more than tripling those net holdings from 1996 
to 2002. Accounting and other internal control issues caused the 
Enterprises to slow the growth of, and in the case of Fannie Mae, 
shrink, their mortgage asset portfolios after 2003. Because of 
increased operational risk, OFHEO, predecessor to FHFA, imposed on each 
Enterprise a 30 percent capital surcharge, and in mid-2006, the 
Enterprises agreed to cap the growth of their mortgage portfolio 
holdings due to their accounting, internal control, and risk management 
weaknesses.
    At the end of 2009, the Enterprises had combined assets of just 
over $1.7 trillion and combined mortgage assets of approximately $1.5 
trillion. At that time, the Enterprises guaranteed the credit risk of 
mortgage loans backing nearly $3.9 trillion of mortgage-backed 
securities (MBS). In total, Fannie Mae and Freddie Mac owned and 
guaranteed approximately 46.7 percent of the nation's residential 
mortgage debt outstanding as of the end of 2009.

C. Establishment of the Conservatorships

    The U.S. housing markets began deteriorating in mid-2007, and the 
deterioration continued throughout 2008. The price volatility and 
liquidity problems in financial markets that ensued led to sizeable 
credit and market losses at both Enterprises, depletion of their 
capital, and an inability of the Enterprises to raise new capital and 
to access debt markets in their customary way. Significant safety and 
soundness issues and risk that the Enterprises would be unable to 
fulfill their missions caused FHFA, with the concurrence of the 
Secretary of the Treasury and the Chairman of the Board of Governors of 
the Federal Reserve, on September 6, 2008, to place the Enterprises 
into conservatorship. By board approval, each Enterprise consented to 
the appointment of a conservator. The goals of FHFA in placing the 
Enterprises into conservatorship included enhancing the capacity of 
each Enterprise to fulfill its mission of providing liquidity and 
stability to the mortgage markets and mitigating the systemic risk 
which each poses and which had contributed to instability in mortgage 
and broader financial markets.
    Critical to the establishment of the conservatorships were the 
actions taken at the same time by the Treasury--consistent with its 
authority granted in HERA--to provide ongoing financial support to the 
Enterprises to ensure they remain active participants in the 
marketplace. Upon establishment of conservatorships for the 
Enterprises, FHFA acting on behalf of each Enterprise entered into 
separate PSPAs with the Treasury on September 7, 2008. The PSPAs 
prevent Enterprise capital from being exhausted and are the cornerstone 
of the financial support that the Treasury is providing to Fannie Mae 
and Freddie Mac. Under the PSPAs, each Enterprise's business operations 
was fortified through an initial commitment by the Treasury to acquire 
up to $100 billion of senior preferred stock in each Enterprise as 
necessary to ensure that the Enterprise avoids a negative net worth, 
determined in accordance with generally accepted accounting principles.
    In return for the support provided through the PSPAs, Fannie Mae 
and Freddie Mac provided certain compensation to the Treasury and 
accepted various restrictions. The compensation to the Treasury 
initially included the issuance by each Enterprise of $1 billion in 
senior preferred stock and warrants for the purchase of common stock 
representing 79.9 percent of its outstanding common stock. In addition, 
the Enterprises agreed to limitations on their business activities. In 
particular, while the PSPAs do not restrict how each Enterprise can 
increase its net MBS outstanding (MBS held by others), they initially 
limited the growth of each Enterprise's mortgage asset portfolio to a 
maximum balance of $850 billion at the end of 2009. Thereafter, the 
PSPAs stipulated that the mortgage asset portfolios must shrink by at 
least 10 percent per year until each Enterprise's holdings of mortgage 
assets reached a balance of $250 billion, at which point, no further 
reduction would be required by the PSPA.
    The PSPAs were amended in September 2008 and in May 2009. The 
latter amendment, among other things, doubled Treasury's funding 
commitment to each Enterprise to $200 billion from $100 billion, and 
increased the size of each Enterprise's mortgage asset portfolio 
allowed under the PSPAs by $50 billion to $900 billion. The revised and 
amended PSPAs left unchanged the requirement that after December 31, 
2009, the portfolio holdings of each Enterprise be reduced by at least 
10 percent per year from the amount of mortgage assets held at the

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close of the preceding year until each Enterprise's portfolio holdings 
of mortgage assets reached a size of $250 billion.
    To further solidify Treasury support for the Enterprises and the 
role they continue to play in the housing and mortgage markets during 
the current crisis, the Treasury and FHFA, on December 24, 2009, again 
amended the PSPAs.\1\ That amendment let stand the maximum allowable 
amount of mortgage assets each Enterprise could own on December 31, 
2009--$900 billion. However, the covenant requiring the Enterprises to 
reduce their mortgage assets was revised such that it is based on the 
maximum amount that they were permitted to own as of December 31 of the 
immediately preceding calendar year, rather than the amounts they 
actually owned at that time. As revised, beginning on December 31, 2010 
and each year thereafter, each Enterprise is required to reduce its 
mortgage assets to at most 90 percent of the maximum allowable amount 
each was permitted to own as of December 31 of the immediately 
preceding calendar year, until the amount of their respective mortgage 
assets reaches $250 billion, at which point, no further reduction is 
required by the PSPA. As noted in FHFA's February 2, 2010 letter to the 
leaders of the Senate Banking Committee and the House Financial 
Services Committee on the status and future of the conservatorship, the 
amendment to the portfolio limits provides the Enterprises with 
flexibility to purchase delinquent loans out of guaranteed mortgage-
backed securities pools as necessary.
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    \1\ Besides amending the provisions relating to the Enterprises' 
portfolios, the Second Amendment to Amended and Restated Senior 
Preferred Stock Purchase Agreement (Second Amendment to PSPA) also 
increased the Treasury's funding commitment to each Enterprise. 
Specifically, the definition of ``maximum amount'' was amended to 
mean ``as of any date of determination, the greater of (a) 
$200,000,000,000 (two hundred billion dollars), or (b) 
$200,000,000,000 plus the cumulative total of Deficiency Amounts 
determined for calendar quarters in calendar years 2010, 2011, and 
2012, less any Surplus Amount determined as of December 31, 2012, 
and in the case of either (a) or (b), less the aggregate amount of 
funding under the Commitment prior to such date.'' Second Amendment 
to Amended and Restated Senior Preferred Stock Purchase Agreement 
(Terms and Conditions, para. 3).
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    Since the establishment of the conservatorships, the combined 
losses at the two Enterprises depleted all of their capital and 
required them to draw $150.8 billion of senior preferred stock pursuant 
to the PSPAs through September 2010. By providing a capital backstop to 
the Enterprises, the Treasury's commitment under the PSPAs effectively 
eliminated any mandatory triggering of receivership and ensures that 
the Enterprises have the ability to fulfill their financial obligations 
and perform their statutory mission without increasing their systemic 
risk.

D. Interim Final Rule

    On January 30, 2009, FHFA published in the Federal Register an 
interim final regulation which added new subchapter C of part 1252 to 
12 CFR Chapter XII. See 74 FR 5609. The interim final regulation 
adopted, by reference, the portfolio holdings criteria established in 
the PSPAs, as may be amended from time to time. The establishment of 
criteria governing Enterprise portfolio holdings in the PSPAs in the 
interim final rule represented an exercise of authority consistent with 
the authority granted by Congress under section 1369E of the Safety and 
Soundness Act. FHFA's goals for the conservatorship include fortifying 
the capacity of the Enterprises to support the secondary mortgage 
market. The initial criteria for Enterprise portfolio holdings 
established in the PSPAs provided the Enterprises with some immediate 
capacity to provide stability and liquidity to the secondary mortgage 
market, while mitigating systemic risk, and facilitating Enterprise 
efforts to achieve a balance between their mission and safe and sound 
operations in the intermediate term. The February PSPA amendments 
provided some additional capacity to address market conditions. The 
December PSPA amendments provided additional flexibility to allow for 
the purchase of delinquent mortgages. Despite having some additional 
capacity to grow their retained portfolios since the establishment of 
the conservatorships, the primary source of Enterprise retained 
portfolio purchases has been delinquent mortgages. The Enterprises 
remain on track to be below the $810 billion retained portfolio limit 
as of December 31, 2010. The retained portfolio reduction provided for 
in the PSPAs avoids the need for potentially destabilizing liquidation 
in the near term, while ensuring that in the future the potential for 
systemic risk associated with these portfolios is reduced.
    The interim final regulation also solicited comments on the overall 
interim final rule and to a series of questions that relate to 
portfolio holdings when the Enterprises are no longer subject to their 
respective PSPAs. Specifically, the interim final rule raised a number 
of general questions related to the benefits of the Enterprises' 
purchases and holdings of mortgage assets and the risks, including 
systemic risk, posed by the mortgage asset holdings, and the mission-
related need for the portfolios. The interim final rule also posed 
specific questions related to the size, composition, and funding of the 
Enterprises' mortgage asset portfolios.
    Finally, the interim final rule solicited comments on a series of 
general questions related to the Enterprises' holding of non-mortgage 
assets as well as specific questions on the size and composition of the 
non-mortgage assets portfolios. While the portfolio holdings criteria 
set forth in the PSPAs do not address Enterprise holdings of non-
mortgage assets, FHFA noted in the interim final regulation the need 
for the Enterprises to maintain adequate levels of liquidity in order 
to carry out their day-to-day operating activities. Adequate levels of 
liquidity strengthen the Enterprises' ability to meet their statutory 
mission of providing stability and liquidity to the secondary mortgage 
market, during good times and during periods of market stress, without 
incurring extraordinary financing costs.
    The comment period for the interim final rule closed on June 1, 
2009; eight (8) comment letters were received. Those letters are 
available at the FHFA Web site, https://www.fhfa.gov/Default.aspx?Page=89&ListNumber=5&ListID=278&ListYear=2009&SortBy=#278.

II. Discussion of Comments

    FHFA requested comments on all aspects of the interim final rule as 
well as comments on the issues and questions set forth in the preamble 
concerning criteria governing Enterprise portfolio holdings that will 
apply when the Enterprises are no longer subject to the PSPAs. In 
response to that request, FHFA received eight (8) comment letters. 
Commenters represented trade and special interest groups of various 
sectors of the housing and mortgage markets. There were no comments 
from researchers, policymakers, lawmakers, or Enterprise competitors or 
counterparties.
    Two comments included discussion of the interim final regulation. 
The majority (five) of the public comments included responses to the 
questions posed regarding Enterprise portfolio holdings when the 
Enterprises are no longer subject to the PSPAs. Only two (2) commenters 
touched on Enterprise portfolio holdings while the Enterprises are in 
conservatorship. One commenter suggested strategies for reengineering 
the nation's mortgage finance system. In general, commenters were 
silent on

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questions regarding the Enterprises' non-mortgage portfolio holdings.
    While FHFA considered all comments received, it is important to 
note that the final rule is based on the fact that the Enterprises are 
in conservatorship, and that the question of their future status has 
not yet been resolved.

A. Comments Relating to the Questions Posed in the Interim Final 
Rulemaking

    Several commenters argued that the mortgage asset portfolios of 
Fannie Mae and Freddie Mac were beneficial because of the limited or 
lack of access to secondary markets for certain mortgage products. One 
commenter noted in particular, the absence of a secondary mortgage 
market for Home Equity Conversion Mortgages and argued that holding 
those mortgages in portfolio is the only way of providing liquidity to 
that segment of the mortgage market.
    Commenters also responded to FHFA's question concerning the ability 
of the Enterprises to fulfill their mission without the mortgage 
portfolios. One commenter stated that the Enterprises, through the 
1990s, had fulfilled their mission without portfolios. Some others, 
however, thought that some portfolio capacity is necessary to provide 
price stability and liquidity during periods of market stress. A number 
of commenters expressed concern about the implication of shrinking the 
portfolios on, for instance, multifamily and some non-standard loans.
    Several commenters argued that the Enterprises' purchase of 
mortgage assets should vary over the credit cycle or conditions in the 
secondary markets. One commenter suggested that the portfolios should 
be viewed as a ``safety valve'' for providing liquidity when secondary 
market conditions are adverse or mortgage credit conditions drive away 
other lending sources.
    Relative to the question about the type of mortgage assets the 
Enterprises should be allowed to hold, one commenter saw little 
rationale for allowing the Enterprises to hold their own, Ginnie Mae, 
or private-label mortgage-backed securities (MBS), except during 
periods of market illiquidity. That commenter suggested that the 
portfolios should generally be used only to meet mission goals that 
cannot be met though securitization.
    With respect to the question concerning the use of portfolio 
holdings criteria and the capital regulations and other supervisory 
tools to address the Enterprises' exposure to additional risk posed by 
their holdings, one commenter suggested that FHFA establish risk-based 
capital requirements to cover all portfolio activities. Another 
commenter suggested that the Enterprises' capital requirements be 
calibrated in such a manner as to provide incentives for the 
Enterprises to minimize their portfolio holdings. Still another 
commenter urged that the Enterprises be held to similar portfolio 
capitalization standards as commercial banks, noting also that loans 
held, which have interest rate and credit risk, should be 
differentiated from loans sold as MBS, which primarily have credit risk 
for the Enterprises.
    Given that the future status of the Enterprises is not yet 
resolved, FHFA has determined that it is premature to establish 
criteria or to address the substantive questions raised in the 
supplementary information to the interim final rule at this stage. 
There is currently no resolution as to the necessary reforms for the 
housing finance system or to the question of what form the Enterprises 
will take if or when they emerge from conservatorship. These issues 
affect the appropriate regulatory framework. Given these fundamental 
unresolved issues, the final rule adopts the portfolio limits set forth 
in the PSPAs. FHFA may revisit the rule when circumstances warrant.

B. Comments Relating to the Interim Final Rule

    The commenters raised several issues relating to the interim final 
rule. In one instance, a commenter suggested incorporating the Treasury 
portfolio limits by restating them in the rule itself, rather than 
reference the PSPAs. The commenter expressed concern over not knowing 
how long the PSPAs would remain in effect and over the lack of public 
notice and comment when the PSPAs are modified or terminated. The 
commenter noted that the May 2009 amendment to the PSPAs increasing the 
portfolio limits to $900 billion for each Enterprise was accomplished 
without notice and comment. Accordingly, the commenter suggested 
specifying the portfolio limits in the regulation, which would provide 
an opportunity for public notice and comment when modifications are 
made to those portfolio limits, and would ensure that limits remain in 
place should the PSPAs terminate.
    FHFA determined that the proposed change is not necessary or 
prudent at this time. Section 1369E of the Safety and Soundness Act, as 
amended by section 1109 of HERA, provides for regulatory portfolio 
criteria governing the Enterprises as self-sustaining, privately 
managed and owned companies, and does not specifically address an 
Enterprise's portfolio holdings when the Enterprise is in 
conservatorship. Currently, both Enterprises are in conservatorship and 
require regular Treasury capital infusions under the PSPAs to remain 
solvent.
    The circumstances of the portfolio regulation are such that it is 
not reasonable to interpret the Safety and Soundness Act's portfolio 
provision as requiring notice-and-comment rulemaking in order to change 
the portfolio limits when the Enterprises are in conservatorship and 
supported by Treasury infusions of capital. The principal concerns of 
the statute are safety and soundness, capital adequacy, and limiting 
systemic risk posed by the Enterprises' retained portfolios. Those 
concerns are addressed in conservatorship through the vehicles of the 
PSPAs and FHFA's on-going oversight of the Enterprises' risk management 
practices. Under the PSPAs, the Treasury provides capital, while 
enumerated significant business decisions require Treasury approval. 
While the Enterprises are operating under conservatorship, FHFA 
maintains continual oversight of the risk management practices 
associated with the Enterprises' retained portfolios, even more 
directly than it does in its capacity as regulator. In terms of 
systemic risk, the PSPAs prescribe an orderly reduction in the 
portfolios, reducing risk to the Enterprises while at the same time 
providing market stability by not requiring a too-rapid sell-off of 
portfolio assets. In addition, allowing room within the portfolio 
limits for repurchases of delinquent mortgages from outstanding MBS is 
necessary for loan modifications, which also contribute to overall 
market stability. Balancing these competing needs in a time of market 
stress such as the present requires greater flexibility in portfolio 
management than notice-and-comment rulemaking permits, and therefore in 
these circumstances, when the Enterprises are in conservatorship, we do 
not interpret the statute as requiring it. Accordingly, the final 
regulation retains the language from the interim final regulation.
    Another commenter suggested that, pursuant to HERA, FHFA establish 
a formal process of reviewing the Enterprises' portfolio holdings and a 
mechanism for adjusting the portfolio limits based on such reviews. 
Such a process would allow formal periodic adjustment of the portfolio 
parameters in response to conditions in the market. Related to the 
process of adjusting the portfolio parameters, a third commenter 
expressed concern over the 10 percent

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reduction in the Enterprise portfolios after December 31, 2009. This 
commenter asks for greater flexibility during times of crisis. FHFA 
monitors the Enterprises' portfolios through supervisory and 
conservatorship channels. If market conditions dictate a need to 
consider the portfolio reduction provisions in the PSPAs, FHFA will 
take the appropriate actions to seek amendments to the PSPAs. FHFA thus 
concludes no change to the interim final rule in this regard is 
necessary at this time.

III. Final Rule

    FHFA adopts the portfolio holdings criteria established by the 
PSPAs, as may be amended from time to time, as the standard governing 
the holding of mortgage assets by the Enterprises. Under the PSPAs, 
which currently have the same portfolio holdings criteria for both 
Enterprises, beginning on December 31, 2010, and each year thereafter, 
each Enterprise is required to reduce its mortgage assets to 90 percent 
of the maximum allowable amount it was permitted to hold as of December 
31 of the immediately preceding calendar year, until the maximum amount 
of the mortgage assets owned by each Enterprise reaches $250 billion. 
Thus, the maximum allowable amount of mortgage assets that each 
Enterprise may own as of December 31, 2010, is $810 billion.
    This regulation will remain in effect until amended or the 
Enterprises are no longer subject to the PSPAs. Amendments to the 
portfolio limits and criteria on the limits can be made by amendment of 
the PSPAs. Under the final regulation, the Enterprises are to comply 
with the PSPA portfolio limits as amended from time to time.
    While the final regulatory criteria incorporate the PSPAs' 
portfolio limits as agreed upon by the Treasury and FHFA as 
conservator, the Safety and Soundness Act provides that the Director 
monitor the portfolio of each Enterprise and authorizes the Director to 
order an Enterprise to dispose of or acquire any asset under terms and 
conditions to be determined by the Director, if the Director determines 
that such action is consistent with the purposes of the Safety and 
Soundness Act or the authorizing statute of the Enterprise. 12 U.S.C. 
4624(c).

IV. Section by Section Analysis

Section 1252.1

    Section 1252.1 adopts the portfolio holdings criteria established 
by the PSPAs, as they may be amended from time to time, as the standard 
for this rule.
    Under the current PSPAs, which have the same portfolio holdings 
criteria for both Enterprises, an Enterprise may hold mortgage assets 
up to $900 billion as of December 31, 2009. Starting on December 31, 
2010, the Enterprise portfolio limits will decrease annually by 10 
percent from the maximum limit in the preceding year until the limit 
reaches a level of $250 billion, at which point, no further decrease is 
currently required. Adjustments could be made to those criteria by 
amendment of the PSPAs.
    Compliance with the PSPAs is necessary to ensure that each 
Enterprise receives adequate capital to support its ongoing business 
operations. FHFA's goals for the conservatorship include strengthening 
Enterprise capacity to support the secondary mortgage market. The 
criteria for Enterprise portfolio holdings established in the PSPAs 
provided the Enterprises capacity to provide stability and liquidity to 
the secondary mortgage market (including the purchase of delinquent 
mortgages), while mitigating systemic risk, and facilitating Enterprise 
efforts to achieve a balance between their mission and safe and sound 
operations in the intermediate term. The retained portfolio reduction 
provided for in the PSPAs avoids the need for potentially destabilizing 
liquidation in the near term, while ensuring that in the future the 
potential for systemic risk associated with these portfolios is 
reduced.
    FHFA's establishment of PSPA portfolio criteria as its regulatory 
criteria represents an exercise of authority consistent with the 
authority granted by Congress under section 1369E of the Safety and 
Soundness Act.

Section 1252.2

    Section 1252.2 addresses the effective duration of the interim 
rule. FHFA expects these regulations to be effective until any 
amendment or until the Enterprises are no longer subject to the terms 
and obligations of the PSPAs.

V. Paperwork Reduction Act

    The regulation does not contain any collections of information 
pursuant to the Paperwork reduction Act of 1995 (44 U.S.C. 3501 et 
seq.). Therefore, FHFA has not submitted any information to the Office 
of Management and Budget for review.

VI. Regulatory Flexibility Act

    The regulation applies only to the Enterprises, which do not come 
within the meaning of small entities as defined in the Regulatory 
Flexibility Act (RFA). See 5 U.S.C. 601(6). Therefore, in accordance 
with section 605(b) of the RFA, 5 U.S.C. 605(b), FHFA, hereby, 
certifies that the regulation will not have a significant economic 
impact on a substantial number of small entities.

List of Subjects in 12 CFR Part 1252

    Government-sponsored enterprises, Mortgages, Portfolio holdings.

PART 1252--PORTFOLIO HOLDINGS

Authority and Issuance

0
Therefore, the Federal Housing Finance Agency hereby adopts the interim 
final rule, published at 74 FR 5609 (January 30, 2009) as final without 
change.

     Dated: December 17, 2010.
Edward J. DeMarco,
Acting Director, Federal Housing Finance Agency.
[FR Doc. 2010-32531 Filed 12-27-10; 8:45 am]
BILLING CODE 8070-01-P