Office of the Ombudsman, 7479-7482 [2011-2845]
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7479
Rules and Regulations
Federal Register
Vol. 76, No. 28
Thursday, February 10, 2011
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents. Prices of
new books are listed in the first FEDERAL
REGISTER issue of each week.
FEDERAL HOUSING FINANCE BOARD
12 CFR Part 907
FEDERAL HOUSING FINANCE
AGENCY
12 CFR Part 1213
RIN 2590–AA20
Office of the Ombudsman
Federal Housing Finance
Board; Federal Housing Finance
Agency.
ACTION: Final regulation.
AGENCIES:
The Federal Housing Finance
Agency (FHFA) is adopting a final
regulation that establishes an Office of
the Ombudsman, which is responsible
for considering complaints and appeals
from the Federal National Mortgage
Association, the Federal Home Loan
Mortgage Corporation, the Federal
Home Loan Banks (collectively,
regulated entities), the Federal Home
Loan Bank System’s Office of Finance,
and any person that has a business
relationship with a regulated entity or
the Office of Finance, regarding any
matter relating to the regulation and
supervision of the regulated entities or
the Office of Finance by FHFA.
DATES: Effective Date: March 14, 2011.
FOR FURTHER INFORMATION CONTACT:
Sandy Comenetz, Executive Advisor to
the Acting Director, (202) 414–3771, or
Andra Grossman, Senior Counsel, (202)
343–1313 (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:
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SUMMARY:
I. Background
The Housing and Economic Recovery
Act of 2008 (HERA), Public Law 110–
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289, 122 Stat. 2654 (2008), 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.1 FHFA was established to
oversee the prudential operations of the
Federal National Mortgage Association
(Fannie Mae) and the Federal Home
Loan Mortgage Corporation (Freddie
Mac) (together, Enterprises), and the
Federal Home Loan Banks (FHLBanks);
and to ensure that they operate in a safe
and sound manner; remain adequately
capitalized; foster liquid, efficient,
competitive and resilient national
housing finance markets; comply with
the Safety and Soundness Act and their
respective authorizing statutes, as well
as all rules, regulations, guidelines, and
orders and carry out their missions
through activities that are authorized by
their respective statutes and are
consistent with the public interest.
FHFA also has regulatory authority over
the FHLBank System’s Office of Finance
under section 1311(b)(2) of the Safety
and Soundness Act (12 U.S.C.
4511(b)(2)).
Section 1105(e) of HERA amended
section 1317(i) of the Safety and
Soundness Act (12 U.S.C. 4517(i)) to
require the Director of FHFA to
establish, by regulation, an Office of the
Ombudsman (Office). The Office must
be headed by an Ombudsman who will
consider complaints and appeals from
any regulated entity and any person that
has a business relationship with a
regulated entity regarding any matter
relating to the regulation and
supervision of such regulated entity.
The regulation must specify the
authority and duties of the Office.
On August 6, 2010, FHFA published
for comment a proposed regulation to
establish an Office of the Ombudsman at
FHFA.2 The proposed regulation set
forth the authority and duties of the
Office, and included provisions
concerning retaliation and
confidentiality.
FHFA received comment letters from
Fannie Mae; Freddie Mac; the
FHLBanks of Des Moines, Pittsburgh,
Seattle, and Topeka; and Wells Fargo
Home Mortgage. All comments were
1 See Division A, ‘‘Federal Housing Finance
Regulatory Reform Act of 2008,’’ Title I, Section
1101 of HERA.
2 74 FR 47495.
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considered and have been posted on the
FHFA Web site at https://www.fhfa.gov.
A discussion of significant comments as
they relate to the final regulation
follows.
II. Final Regulation
Specific concerns raised by
commenters are described and
addressed below. After considering the
comments, FHFA adopts a final
regulation implementing section 1317(i)
of the Safety and Soundness Act as
amended by section 1105(e) of HERA to
establish an FHFA Office of the
Ombudsman.
Scope of Ombudsman’s Authority
Several commenters requested that
the final regulation clarify that the
following types of matters—business
decisions of the regulated entities,
disputes between the regulated entities
or the Office of Finance and vendors,
and matters in litigation—are not within
the scope of the Office’s responsibilities.
They requested that the Ombudsman’s
authority be expressly limited to
complaints concerning FHFA’s
regulatory and supervisory activities.
FHFA’s view is that business
decisions of the regulated entities, and
disputes between the regulated entities
or the Office of Finance and vendors
may relate to the regulation and
supervision of the regulated entities. It
is the Ombudsman’s responsibility to
consider the facts of each case to
determine whether the matter is
appropriate for consideration.
Accordingly, there is no need for
clarifying language.
As to the requested language about
matters in litigation, FHFA agrees, and
the final regulation specifically provides
that the Ombudsman will not consider
matters in litigation, arbitration, or
mediation.
Several commenters requested that
the final regulation permit appeals of
non-final decisions or conclusions, and
also in situations where there is an
existing avenue or another forum for
appeal. FHFA declines to allow appeals
to the Ombudsman in such
circumstances on the grounds that to do
so would be inefficient and would lead
to confusion as to the status of the
respective appeals.
One commenter requested that the
regulation authorize the Ombudsman to
(i) Engage in a collaborative dialogue
with the person that has a business
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relationship with the regulated entity,
(ii) revise a requirement of the regulated
entities, and (iii) revise an interpretation
of the regulated entities.
Engaging in a collaborative dialogue
as a facilitator or mediator is the essence
of the Ombudsman’s role and does not
need further clarification. In contrast,
revising a requirement of a regulated
entity or an interpretation of a regulated
entity’s charter does not come within
the Ombudsman’s authority because the
Ombudsman is not a decision maker.
However, as with any complaint or
appeal, where a supervisory or
regulatory requirement or a charter
interpretation is challenged, the
Ombudsman is authorized to conduct
inquiries and submit findings of fact
and make a recommendation to the
Director concerning resolution of the
issue. Accordingly, FHFA concludes
there is no need for further clarification
of these issues.
Definitions
Business Relationship. In the
proposed regulation ‘‘business
relationship’’ means a relationship or
potential relationship between a person
and a regulated entity or the Office of
Finance that involves the provision of
goods or services, but does not mean a
relationship between a mortgagor and a
regulated entity that directly or
indirectly owns, purchased, guarantees,
or sold the mortgage.
Several commenters requested that
the definition exclude ‘‘potential
relationships’’ because including them
would, in their terms, exponentially
increase the universe of persons to
whom the regulation would apply. They
noted that the operative provision, 12
U.S.C. 4517(i), does not use the word
‘‘potential.’’ FHFA will not make the
change because, like existing business
relationships, a potential business
relationship may relate to FHFA’s
regulation and supervision of a
regulated entity. FHFA has made a
technical revision to the definition of
the term ‘‘business relationship,’’ by
substituting the term ‘‘interaction’’ for
‘‘relationship’’ in the body of the
definition.
Person. In the proposed regulation,
‘‘person’’ means an organization,
business entity, or individual that has a
business relationship with a regulated
entity or the Office of Finance or that
represents directly or indirectly the
interests of a person that has a business
relationship with a regulated entity or
the Office of Finance. It does not mean
an individual borrower.
Some commenters requested that the
definition expressly exclude employees
to clarify that a dispute between a
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regulated entity or the Office of Finance
and an employee would not come
within the Ombudsman’s purview. The
commenters’ rationale is that there are
other forums for such disputes, namely
State or Federal court.
As the Ombudsman evaluates the
facts of each case to determine whether
the matter is appropriate for
consideration, FHFA’s view is that
adding the requested language is
unnecessary and could lead to
confusion as to whether employees may
complain about FHFA policies that
affect them.
The same commenters requested that
the Ombudsman be required to notify a
regulated entity of any whistleblower
complaint in which the entity is named
so that the entity will be able to address
the matter quickly. FHFA is not
required to provide such notification
under applicable law, but will do so as
it deems appropriate under the
circumstances. No additional language
will be added to the final regulation.
Reviews of Disputed Supervisory
Determinations
One commenter asked whether the
Office is intended to replace the process
under 12 CFR 907.9 by which
FHLBanks may seek review of a
disputed supervisory determination, or
whether it is intended to be an alternate
path of appeal. The answer is that the
Ombudsman’s responsibility to consider
complaints and appeals from regulated
entities replaces the § 907.9 process. All
of the regulated entities and the Office
of Finance may submit appeals of final
supervisory determinations to the
Ombudsman for consideration. The
Ombudsman will conduct an inquiry
and submit findings of fact and a
recommendation to the Director
concerning resolution of the case.
Consequently, 12 CFR 907.9 will be
removed on the effective date of this
part.
No Retaliation
Proposed § 1213.6 provides that
neither FHFA nor any FHFA employee
may retaliate against a regulated entity,
the Office of Finance, or a person for
submitting a complaint or appeal. As
proposed, the Ombudsman would
receive and address complaints of
retaliation and upon completion of an
investigation, report the findings to the
Director with recommendations,
including a recommendation to take
disciplinary action against any FHFA
employee found to have retaliated.
FHFA did not receive comments from
the public on the proposed section.
However, subsequent to publication of
the proposed rule, the FHFA Inspector
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General was appointed and confirmed.
Accordingly, FHFA has revised § 1213.6
to provide that the Ombudsman, in
coordination with the Inspector General,
is to examine the basis of the alleged
retaliation. At the completion of the
examination, the Ombudsman is to
report the findings to the Director with
recommendations, including any
recommendation to take disciplinary
action against any FHFA employee
found to have retaliated.
Confidentiality
One commenter requested that
§ 1213.7 of the final regulation permit
parties to request that their identity or
specific information remain
confidential. The final regulation, as
does the proposed regulation, requires
the Ombudsman to ensure that
safeguards exist to preserve
confidentiality, and prohibits the
Ombudsman from disclosing
information, including a party’s
identity, provided by a party except to
appropriate reviewing or investigating
officials or if disclosure is required by
law. The final regulation clarifies that
an appropriate investigating official may
include the Inspector General.
Differences Between the FHLBanks and
the Enterprises
Section 1313(f) of the Safety and
Soundness Act (12 U.S.C. 4513(f)), as
amended by section 1201 of HERA,
requires the Director, when
promulgating regulations relating to the
FHLBanks, to consider the differences
between the FHLBanks and the
Enterprises with respect to the
FHLBanks’ cooperative ownership
structure, mission of providing liquidity
to members, affordable housing and
community development mission,
capital structure, and joint and several
liability. The Director may also consider
any other differences that are deemed
appropriate. The Director considered
the differences between the FHLBanks
and the Enterprises as they relate to the
above factors and concluded that none
of the unique factors relating to the
FHLBanks warranted establishing
different treatment under the final
regulation.
III. Regulatory Impact
Paperwork Reduction Act
The final regulation does not contain
any information collection requirement
that requires the approval of the Office
of Management and Budget under the
Paperwork Reduction Act (44 U.S.C.
3501 et seq.).
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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
will 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 final
regulation under the Regulatory
Flexibility Act. FHFA certifies that the
final regulation is not likely to have a
significant economic impact on a
substantial number of small entities for
purposes of the Regulatory Flexibility
Act.
List of Subjects
12 CFR Part 907
Administrative practice and
procedure, Federal home loan banks.
12 CFR Part 1213
Administrative practice and
procedure, Federal home loan banks,
Government-sponsored enterprises.
Authority and Issuance
Accordingly, for the reasons stated in
the preamble, under the authority of 12
U.S.C. 4511(b)(2), 4517(i), and 4526, the
Federal Housing Finance Agency
amends Chapters IX and XII of Title 12,
Code of Federal Regulations as follows:
CHAPTER IX—FEDERAL HOUSING
FINANCE BOARD
PART 907—PROCEDURES
1. The authority citation for part 907
continues to read as follows:
■
Authority: 12 U.S.C. 1422b(a)(1).
§ 907.9
■
[Removed and reserved]
2. Remove and reserve § 907.9.
CHAPTER XII—FEDERAL HOUSING
FINANCE AGENCY
SUBCHAPTER A—ORGANIZATION
AND OPERATIONS
3. Add part 1213 to subchapter A to
read as follows:
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■
PART 1213—OFFICE OF THE
OMBUDSMAN
Sec.
1213.1
1213.2
Purpose and scope.
Definitions.
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1213.3 Authorities and duties of the
Ombudsman.
1213.4 Complaints and appeals from a
regulated entity or the Office of Finance.
1213.5 Complaints from a person.
1213.6 No retaliation.
1213.7 Confidentiality.
Authority: 12 U.S.C. 4511(b)(2), 4517(i),
and 4526.
§ 1213.1
Purpose and scope.
(a) Purpose. The purpose of this part
is to establish within FHFA the Office
of the Ombudsman (Office) under
section 1317(i) of the Federal Housing
Enterprises Financial Safety and
Soundness Act of 1992 (12 U.S.C.
4517(i)), as amended, and to set forth
the authorities and duties of the
Ombudsman.
(b) Scope.—(1) This part applies to
complaints and appeals from any
regulated entity and any person that has
a business relationship with a regulated
entity regarding any matter relating to
the regulation and supervision of such
regulated entity or the Office of Finance
by FHFA.
(2) The establishment of the Office
does not alter or limit any other right or
procedure associated with appeals,
complaints, or administrative matters
submitted by a person regarding any
matter relating to the regulation and
supervision of a regulated entity or the
Office of Finance under any other law
or regulation.
§ 1213.2
Definitions.
For purposes of this part, the term:
Business relationship means any
existing or potential interaction between
a person and a regulated entity or the
Office of Finance for the provision of
goods or services. The term business
relationship does not include any
interaction between a mortgagor and a
regulated entity that directly or
indirectly owns, purchased, guarantees,
or sold the mortgage.
Director means the Director of FHFA
or his or her designee.
FHFA means the Federal Housing
Finance Agency.
Office of Finance means the Office of
Finance of the Federal Home Loan Bank
System.
Person means an organization,
business entity, or individual that has a
business relationship with a regulated
entity or the Office of Finance, or that
represents the interests of a person that
has a business relationship with a
regulated entity or the Office of Finance.
The term person does not include an
individual borrower.
Regulated entity means the Federal
National Mortgage Association and any
affiliate, the Federal Home Loan
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7481
Mortgage Corporation and any affiliate,
and any Federal Home Loan Bank.
§ 1213.3 Authorities and duties of the
Ombudsman.
(a) General. The Office shall be
headed by an Ombudsman, who shall
consider complaints and appeals from
any regulated entity, the Office of
Finance, and any person that has a
business relationship with a regulated
entity or the Office of Finance regarding
any matter relating to the regulation and
supervision of such regulated entity or
the Office of Finance by FHFA. In
considering any complaint or appeal
under this part, the Ombudsman shall:
(1) Conduct inquiries and submit
findings of fact and recommendations to
the Director concerning resolution of the
complaint or appeal, and
(2) Act as a facilitator or mediator to
advance the resolution of the complaint
or appeal.
(b) Other duties. The Ombudsman
shall:
(1) Establish procedures for carrying
out the functions of the Office,
(2) Establish and publish procedures
for receiving and considering
complaints and appeals, and
(3) Report annually to the Director on
the activities of the Office, or more
frequently, as determined by the
Director.
§ 1213.4 Complaints and appeals from a
regulated entity or the Office of Finance.
(a) Complaints.—(1) General. Any
regulated entity or the Office of Finance
may submit a complaint in accordance
with procedures established by the
Ombudsman.
(2) Matters subject to complaint. A
regulated entity or the Office of Finance
may submit a complaint regarding any
matter relating to the regulation and
supervision of a regulated entity or the
Office of Finance by FHFA that is not
subject to appeal or in litigation,
arbitration, or mediation. The
Ombudsman may further define what
matters are subject to complaint.
(b) Appeals.—(1) General. Any
regulated entity or the Office of Finance
may submit an appeal in accordance
with procedures established by the
Ombudsman.
(2) Matters subject to appeal. A
regulated entity or the Office of Finance
may submit an appeal regarding any
final, written regulatory or supervisory
conclusion, decision, or examination
rating by FHFA. The Ombudsman may
further define what matters are subject
to appeal.
(3) Matters not subject to appeal.
Matters for which there is an existing
avenue of appeal or for which there is
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another forum for appeal; non-final
decisions or conclusions; and matters in
ongoing litigation, arbitration, or
mediation, unless there has been a
breakdown in the process, may not be
appealed. Matters not subject to appeal
include, but are not limited to,
appointments of conservators or
receivers, preliminary examination
conclusions, formal enforcement
decisions, formal and informal
rulemakings, Freedom of Information
Act appeals, final FHFA decisions
subject to judicial review, and matters
within the jurisdiction of the FHFA
Inspector General. The Ombudsman
may further define what matters are not
subject to appeal.
(4) Effect of filing an appeal. An
appeal under this section does not
excuse a regulated entity or the Office
of Finance from complying with any
regulatory or supervisory decision while
the appeal is pending. However, the
Director, upon consideration of a
written request, may waive compliance
with a regulatory or supervisory
decision during the pendency of the
appeal.
§ 1213.5
Complaints from a person.
(a) General. Any person that has a
business relationship with a regulated
entity or the Office of Finance may
submit a complaint in accordance with
procedures established by the
Ombudsman.
(b) Matters subject to complaint. A
person may submit a complaint
regarding any matter relating to the
regulation and supervision of a
regulated entity or the Office of Finance
by FHFA that is not a matter in
litigation, arbitration, or mediation. The
Ombudsman may further define what
matters are subject to complaints.
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§ 1213.6
No retaliation.
Neither FHFA nor any FHFA
employee may retaliate against a
regulated entity, the Office of Finance,
or a person for submitting a complaint
or appeal under this part. The
Ombudsman shall receive and address
claims of retaliation. Upon receiving a
complaint, the Ombudsman, in
coordination with the Inspector General,
shall examine the basis of the alleged
retaliation. Upon completion of the
examination, the Ombudsman shall
report the findings to the Director with
recommendations, including a
recommendation to take disciplinary
action against any FHFA employee
found to have retaliated.
§ 1213.7
Confidentiality.
The Ombudsman shall ensure that
safeguards exist to preserve
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confidentiality. If a party requests that
information and materials remain
confidential, the Ombudsman shall not
disclose the information or materials,
without approval of the party, except to
appropriate reviewing or investigating
officials, such as the Inspector General,
or as required by law. However, the
resolution of certain complaints (such as
complaints of retaliation against a
regulated entity or the Office of Finance)
may not be possible if the identity of the
party remains confidential. In such
cases, the Ombudsman shall discuss
with the party the circumstances
limiting confidentiality.
Dated: February 3, 2011.
Edward J. DeMarco,
Acting Director, Federal Housing Finance
Agency.
[FR Doc. 2011–2845 Filed 2–9–11; 8:45 am]
BILLING CODE 8070–01–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Parts 45, 110, 119, 121, 129,
and 135
[Docket No. FAA–2009–0140; Amendment
Nos. 45–27, 110–1, 119–14, 121–353, 129–
49, and 135–124]
RIN 2120–AJ45
Operations Specifications
Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule.
AGENCY:
This amendment clarifies and
standardizes the rules for applications
by foreign air carriers and foreign
persons for part 129 operations
specifications and establishes new
standards for amendment, suspension,
and termination of those operations
specifications. In addition, the FAA has
moved definitions currently contained
in a subpart to a separate part for clarity
with no substantive changes to the
definitions. The amendment also
applies to foreign persons operating
U.S.-registered aircraft in common
carriage solely outside the United
States. This action is necessary to
update the process for issuing
operations specifications and
establishes a regulatory basis for current
practices, such as amending,
terminating, or suspending operations
specifications.
DATES: Effective Date: These
amendments become effective April 11,
2011.
Compliance Date: The compliance
date for § 129.9(a)(2) and (b)(2) is
SUMMARY:
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February 10, 2012. Affected parties do
not have to comply with the information
collection requirement in § 129.7 until
the FAA publishes in the Federal
Register the control number assigned by
the Office of Management and Budget
(OMB) for this information collection
requirement. Publication of the control
number notifies the public that OMB
has approved this information
collection requirement under the
Paperwork Reduction Act of 1995.
Compliance with all other provisions of
the final rule is required by April 11,
2011.
FOR FURTHER INFORMATION CONTACT: For
technical questions concerning this final
rule contact Darcy D. Reed,
International Programs and Policy
Division, AFS–50, Flight Standards
Service, Federal Aviation
Administration, 800 Independence
Avenue, SW., Washington, DC 20591;
e-mail: Darcy.D.Reed@faa.gov;
Telephone: 202–385–8078. For legal
questions concerning this final rule
contact Lorna John, Office of the Chief
Counsel, Regulations Division, AGC–
200, Federal Aviation Administration,
800 Independence Avenue, SW.,
Washington, DC 20591; e-mail:
Lorna.John@faa.gov; Telephone: 202–
267–3921.
SUPPLEMENTARY INFORMATION:
Authority for This Rulemaking
The FAA’s authority to issue rules on
aviation safety is found in Title 49 of the
United States Code. Subtitle I, section
106 describes the authority of the FAA
Administrator. Subtitle VII, Aviation
Programs, describes in more detail the
scope of the agency’s authority.
This rulemaking is issued under the
authority described in Title 49 of the
United States Code, subtitle VII, part A,
subpart III, section 44701(a)(5). Under
that section, the Administrator is
charged with promoting safe flight of
civil aircraft in air commerce by
prescribing regulations and minimum
standards for practices, methods, and
procedures the Administrator finds
necessary to ensure safety in air
commerce. Clarifying and standardizing
the rules for application and
establishing new standards for
amendment, suspension, and
termination of operations specifications
issued to foreign air carriers operating in
the United States and to foreign air
carriers or foreign persons conducting
common carriage operations with U.S.registered aircraft solely outside the
United States enhances the FAA’s
oversight of U.S.-registered aircraft and
those foreign air carriers’ operations
within the United States.
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]]>Agencies
[Federal Register Volume 76, Number 28 (Thursday, February 10, 2011)]
[Rules and Regulations]
[Pages 7479-7482]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-2845]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 76, No. 28 / Thursday, February 10, 2011 /
Rules and Regulations
[[Page 7479]]
FEDERAL HOUSING FINANCE BOARD
12 CFR Part 907
FEDERAL HOUSING FINANCE AGENCY
12 CFR Part 1213
RIN 2590-AA20
Office of the Ombudsman
AGENCIES: Federal Housing Finance Board; Federal Housing Finance
Agency.
ACTION: Final regulation.
-----------------------------------------------------------------------
SUMMARY: The Federal Housing Finance Agency (FHFA) is adopting a final
regulation that establishes an Office of the Ombudsman, which is
responsible for considering complaints and appeals from the Federal
National Mortgage Association, the Federal Home Loan Mortgage
Corporation, the Federal Home Loan Banks (collectively, regulated
entities), the Federal Home Loan Bank System's Office of Finance, and
any person that has a business relationship with a regulated entity or
the Office of Finance, regarding any matter relating to the regulation
and supervision of the regulated entities or the Office of Finance by
FHFA.
DATES: Effective Date: March 14, 2011.
FOR FURTHER INFORMATION CONTACT: Sandy Comenetz, Executive Advisor to
the Acting Director, (202) 414-3771, or Andra Grossman, Senior Counsel,
(202) 343-1313 (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. Background
The Housing and Economic Recovery Act of 2008 (HERA), Public Law
110-289, 122 Stat. 2654 (2008), 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.\1\ FHFA was established to oversee the
prudential operations of the Federal National Mortgage Association
(Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie
Mac) (together, Enterprises), and the Federal Home Loan Banks
(FHLBanks); and to ensure that they operate in a safe and sound manner;
remain adequately capitalized; foster liquid, efficient, competitive
and resilient national housing finance markets; comply with the Safety
and Soundness Act and their respective authorizing statutes, as well as
all rules, regulations, guidelines, and orders and carry out their
missions through activities that are authorized by their respective
statutes and are consistent with the public interest. FHFA also has
regulatory authority over the FHLBank System's Office of Finance under
section 1311(b)(2) of the Safety and Soundness Act (12 U.S.C.
4511(b)(2)).
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\1\ See Division A, ``Federal Housing Finance Regulatory Reform
Act of 2008,'' Title I, Section 1101 of HERA.
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Section 1105(e) of HERA amended section 1317(i) of the Safety and
Soundness Act (12 U.S.C. 4517(i)) to require the Director of FHFA to
establish, by regulation, an Office of the Ombudsman (Office). The
Office must be headed by an Ombudsman who will consider complaints and
appeals from any regulated entity and any person that has a business
relationship with a regulated entity regarding any matter relating to
the regulation and supervision of such regulated entity. The regulation
must specify the authority and duties of the Office.
On August 6, 2010, FHFA published for comment a proposed regulation
to establish an Office of the Ombudsman at FHFA.\2\ The proposed
regulation set forth the authority and duties of the Office, and
included provisions concerning retaliation and confidentiality.
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\2\ 74 FR 47495.
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FHFA received comment letters from Fannie Mae; Freddie Mac; the
FHLBanks of Des Moines, Pittsburgh, Seattle, and Topeka; and Wells
Fargo Home Mortgage. All comments were considered and have been posted
on the FHFA Web site at https://www.fhfa.gov. A discussion of
significant comments as they relate to the final regulation follows.
II. Final Regulation
Specific concerns raised by commenters are described and addressed
below. After considering the comments, FHFA adopts a final regulation
implementing section 1317(i) of the Safety and Soundness Act as amended
by section 1105(e) of HERA to establish an FHFA Office of the
Ombudsman.
Scope of Ombudsman's Authority
Several commenters requested that the final regulation clarify that
the following types of matters--business decisions of the regulated
entities, disputes between the regulated entities or the Office of
Finance and vendors, and matters in litigation--are not within the
scope of the Office's responsibilities. They requested that the
Ombudsman's authority be expressly limited to complaints concerning
FHFA's regulatory and supervisory activities.
FHFA's view is that business decisions of the regulated entities,
and disputes between the regulated entities or the Office of Finance
and vendors may relate to the regulation and supervision of the
regulated entities. It is the Ombudsman's responsibility to consider
the facts of each case to determine whether the matter is appropriate
for consideration. Accordingly, there is no need for clarifying
language.
As to the requested language about matters in litigation, FHFA
agrees, and the final regulation specifically provides that the
Ombudsman will not consider matters in litigation, arbitration, or
mediation.
Several commenters requested that the final regulation permit
appeals of non-final decisions or conclusions, and also in situations
where there is an existing avenue or another forum for appeal. FHFA
declines to allow appeals to the Ombudsman in such circumstances on the
grounds that to do so would be inefficient and would lead to confusion
as to the status of the respective appeals.
One commenter requested that the regulation authorize the Ombudsman
to (i) Engage in a collaborative dialogue with the person that has a
business
[[Page 7480]]
relationship with the regulated entity, (ii) revise a requirement of
the regulated entities, and (iii) revise an interpretation of the
regulated entities.
Engaging in a collaborative dialogue as a facilitator or mediator
is the essence of the Ombudsman's role and does not need further
clarification. In contrast, revising a requirement of a regulated
entity or an interpretation of a regulated entity's charter does not
come within the Ombudsman's authority because the Ombudsman is not a
decision maker. However, as with any complaint or appeal, where a
supervisory or regulatory requirement or a charter interpretation is
challenged, the Ombudsman is authorized to conduct inquiries and submit
findings of fact and make a recommendation to the Director concerning
resolution of the issue. Accordingly, FHFA concludes there is no need
for further clarification of these issues.
Definitions
Business Relationship. In the proposed regulation ``business
relationship'' means a relationship or potential relationship between a
person and a regulated entity or the Office of Finance that involves
the provision of goods or services, but does not mean a relationship
between a mortgagor and a regulated entity that directly or indirectly
owns, purchased, guarantees, or sold the mortgage.
Several commenters requested that the definition exclude
``potential relationships'' because including them would, in their
terms, exponentially increase the universe of persons to whom the
regulation would apply. They noted that the operative provision, 12
U.S.C. 4517(i), does not use the word ``potential.'' FHFA will not make
the change because, like existing business relationships, a potential
business relationship may relate to FHFA's regulation and supervision
of a regulated entity. FHFA has made a technical revision to the
definition of the term ``business relationship,'' by substituting the
term ``interaction'' for ``relationship'' in the body of the
definition.
Person. In the proposed regulation, ``person'' means an
organization, business entity, or individual that has a business
relationship with a regulated entity or the Office of Finance or that
represents directly or indirectly the interests of a person that has a
business relationship with a regulated entity or the Office of Finance.
It does not mean an individual borrower.
Some commenters requested that the definition expressly exclude
employees to clarify that a dispute between a regulated entity or the
Office of Finance and an employee would not come within the Ombudsman's
purview. The commenters' rationale is that there are other forums for
such disputes, namely State or Federal court.
As the Ombudsman evaluates the facts of each case to determine
whether the matter is appropriate for consideration, FHFA's view is
that adding the requested language is unnecessary and could lead to
confusion as to whether employees may complain about FHFA policies that
affect them.
The same commenters requested that the Ombudsman be required to
notify a regulated entity of any whistleblower complaint in which the
entity is named so that the entity will be able to address the matter
quickly. FHFA is not required to provide such notification under
applicable law, but will do so as it deems appropriate under the
circumstances. No additional language will be added to the final
regulation.
Reviews of Disputed Supervisory Determinations
One commenter asked whether the Office is intended to replace the
process under 12 CFR 907.9 by which FHLBanks may seek review of a
disputed supervisory determination, or whether it is intended to be an
alternate path of appeal. The answer is that the Ombudsman's
responsibility to consider complaints and appeals from regulated
entities replaces the Sec. 907.9 process. All of the regulated
entities and the Office of Finance may submit appeals of final
supervisory determinations to the Ombudsman for consideration. The
Ombudsman will conduct an inquiry and submit findings of fact and a
recommendation to the Director concerning resolution of the case.
Consequently, 12 CFR 907.9 will be removed on the effective date of
this part.
No Retaliation
Proposed Sec. 1213.6 provides that neither FHFA nor any FHFA
employee may retaliate against a regulated entity, the Office of
Finance, or a person for submitting a complaint or appeal. As proposed,
the Ombudsman would receive and address complaints of retaliation and
upon completion of an investigation, report the findings to the
Director with recommendations, including a recommendation to take
disciplinary action against any FHFA employee found to have retaliated.
FHFA did not receive comments from the public on the proposed
section. However, subsequent to publication of the proposed rule, the
FHFA Inspector General was appointed and confirmed. Accordingly, FHFA
has revised Sec. 1213.6 to provide that the Ombudsman, in coordination
with the Inspector General, is to examine the basis of the alleged
retaliation. At the completion of the examination, the Ombudsman is to
report the findings to the Director with recommendations, including any
recommendation to take disciplinary action against any FHFA employee
found to have retaliated.
Confidentiality
One commenter requested that Sec. 1213.7 of the final regulation
permit parties to request that their identity or specific information
remain confidential. The final regulation, as does the proposed
regulation, requires the Ombudsman to ensure that safeguards exist to
preserve confidentiality, and prohibits the Ombudsman from disclosing
information, including a party's identity, provided by a party except
to appropriate reviewing or investigating officials or if disclosure is
required by law. The final regulation clarifies that an appropriate
investigating official may include the Inspector General.
Differences Between the FHLBanks and the Enterprises
Section 1313(f) of the Safety and Soundness Act (12 U.S.C.
4513(f)), as amended by section 1201 of HERA, requires the Director,
when promulgating regulations relating to the FHLBanks, to consider the
differences between the FHLBanks and the Enterprises with respect to
the FHLBanks' cooperative ownership structure, mission of providing
liquidity to members, affordable housing and community development
mission, capital structure, and joint and several liability. The
Director may also consider any other differences that are deemed
appropriate. The Director considered the differences between the
FHLBanks and the Enterprises as they relate to the above factors and
concluded that none of the unique factors relating to the FHLBanks
warranted establishing different treatment under the final regulation.
III. Regulatory Impact
Paperwork Reduction Act
The final regulation does not contain any information collection
requirement that requires the approval of the Office of Management and
Budget under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).
[[Page 7481]]
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 will 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 final
regulation under the Regulatory Flexibility Act. FHFA certifies that
the final regulation is not likely to have a significant economic
impact on a substantial number of small entities for purposes of the
Regulatory Flexibility Act.
List of Subjects
12 CFR Part 907
Administrative practice and procedure, Federal home loan banks.
12 CFR Part 1213
Administrative practice and procedure, Federal home loan banks,
Government-sponsored enterprises.
Authority and Issuance
Accordingly, for the reasons stated in the preamble, under the
authority of 12 U.S.C. 4511(b)(2), 4517(i), and 4526, the Federal
Housing Finance Agency amends Chapters IX and XII of Title 12, Code of
Federal Regulations as follows:
CHAPTER IX--FEDERAL HOUSING FINANCE BOARD
PART 907--PROCEDURES
0
1. The authority citation for part 907 continues to read as follows:
Authority: 12 U.S.C. 1422b(a)(1).
Sec. 907.9 [Removed and reserved]
0
2. Remove and reserve Sec. 907.9.
CHAPTER XII--FEDERAL HOUSING FINANCE AGENCY
SUBCHAPTER A--ORGANIZATION AND OPERATIONS
0
3. Add part 1213 to subchapter A to read as follows:
PART 1213--OFFICE OF THE OMBUDSMAN
Sec.
1213.1 Purpose and scope.
1213.2 Definitions.
1213.3 Authorities and duties of the Ombudsman.
1213.4 Complaints and appeals from a regulated entity or the Office
of Finance.
1213.5 Complaints from a person.
1213.6 No retaliation.
1213.7 Confidentiality.
Authority: 12 U.S.C. 4511(b)(2), 4517(i), and 4526.
Sec. 1213.1 Purpose and scope.
(a) Purpose. The purpose of this part is to establish within FHFA
the Office of the Ombudsman (Office) under section 1317(i) of the
Federal Housing Enterprises Financial Safety and Soundness Act of 1992
(12 U.S.C. 4517(i)), as amended, and to set forth the authorities and
duties of the Ombudsman.
(b) Scope.--(1) This part applies to complaints and appeals from
any regulated entity and any person that has a business relationship
with a regulated entity regarding any matter relating to the regulation
and supervision of such regulated entity or the Office of Finance by
FHFA.
(2) The establishment of the Office does not alter or limit any
other right or procedure associated with appeals, complaints, or
administrative matters submitted by a person regarding any matter
relating to the regulation and supervision of a regulated entity or the
Office of Finance under any other law or regulation.
Sec. 1213.2 Definitions.
For purposes of this part, the term:
Business relationship means any existing or potential interaction
between a person and a regulated entity or the Office of Finance for
the provision of goods or services. The term business relationship does
not include any interaction between a mortgagor and a regulated entity
that directly or indirectly owns, purchased, guarantees, or sold the
mortgage.
Director means the Director of FHFA or his or her designee.
FHFA means the Federal Housing Finance Agency.
Office of Finance means the Office of Finance of the Federal Home
Loan Bank System.
Person means an organization, business entity, or individual that
has a business relationship with a regulated entity or the Office of
Finance, or that represents the interests of a person that has a
business relationship with a regulated entity or the Office of Finance.
The term person does not include an individual borrower.
Regulated entity means the Federal National Mortgage Association
and any affiliate, the Federal Home Loan Mortgage Corporation and any
affiliate, and any Federal Home Loan Bank.
Sec. 1213.3 Authorities and duties of the Ombudsman.
(a) General. The Office shall be headed by an Ombudsman, who shall
consider complaints and appeals from any regulated entity, the Office
of Finance, and any person that has a business relationship with a
regulated entity or the Office of Finance regarding any matter relating
to the regulation and supervision of such regulated entity or the
Office of Finance by FHFA. In considering any complaint or appeal under
this part, the Ombudsman shall:
(1) Conduct inquiries and submit findings of fact and
recommendations to the Director concerning resolution of the complaint
or appeal, and
(2) Act as a facilitator or mediator to advance the resolution of
the complaint or appeal.
(b) Other duties. The Ombudsman shall:
(1) Establish procedures for carrying out the functions of the
Office,
(2) Establish and publish procedures for receiving and considering
complaints and appeals, and
(3) Report annually to the Director on the activities of the
Office, or more frequently, as determined by the Director.
Sec. 1213.4 Complaints and appeals from a regulated entity or the
Office of Finance.
(a) Complaints.--(1) General. Any regulated entity or the Office of
Finance may submit a complaint in accordance with procedures
established by the Ombudsman.
(2) Matters subject to complaint. A regulated entity or the Office
of Finance may submit a complaint regarding any matter relating to the
regulation and supervision of a regulated entity or the Office of
Finance by FHFA that is not subject to appeal or in litigation,
arbitration, or mediation. The Ombudsman may further define what
matters are subject to complaint.
(b) Appeals.--(1) General. Any regulated entity or the Office of
Finance may submit an appeal in accordance with procedures established
by the Ombudsman.
(2) Matters subject to appeal. A regulated entity or the Office of
Finance may submit an appeal regarding any final, written regulatory or
supervisory conclusion, decision, or examination rating by FHFA. The
Ombudsman may further define what matters are subject to appeal.
(3) Matters not subject to appeal. Matters for which there is an
existing avenue of appeal or for which there is
[[Page 7482]]
another forum for appeal; non-final decisions or conclusions; and
matters in ongoing litigation, arbitration, or mediation, unless there
has been a breakdown in the process, may not be appealed. Matters not
subject to appeal include, but are not limited to, appointments of
conservators or receivers, preliminary examination conclusions, formal
enforcement decisions, formal and informal rulemakings, Freedom of
Information Act appeals, final FHFA decisions subject to judicial
review, and matters within the jurisdiction of the FHFA Inspector
General. The Ombudsman may further define what matters are not subject
to appeal.
(4) Effect of filing an appeal. An appeal under this section does
not excuse a regulated entity or the Office of Finance from complying
with any regulatory or supervisory decision while the appeal is
pending. However, the Director, upon consideration of a written
request, may waive compliance with a regulatory or supervisory decision
during the pendency of the appeal.
Sec. 1213.5 Complaints from a person.
(a) General. Any person that has a business relationship with a
regulated entity or the Office of Finance may submit a complaint in
accordance with procedures established by the Ombudsman.
(b) Matters subject to complaint. A person may submit a complaint
regarding any matter relating to the regulation and supervision of a
regulated entity or the Office of Finance by FHFA that is not a matter
in litigation, arbitration, or mediation. The Ombudsman may further
define what matters are subject to complaints.
Sec. 1213.6 No retaliation.
Neither FHFA nor any FHFA employee may retaliate against a
regulated entity, the Office of Finance, or a person for submitting a
complaint or appeal under this part. The Ombudsman shall receive and
address claims of retaliation. Upon receiving a complaint, the
Ombudsman, in coordination with the Inspector General, shall examine
the basis of the alleged retaliation. Upon completion of the
examination, the Ombudsman shall report the findings to the Director
with recommendations, including a recommendation to take disciplinary
action against any FHFA employee found to have retaliated.
Sec. 1213.7 Confidentiality.
The Ombudsman shall ensure that safeguards exist to preserve
confidentiality. If a party requests that information and materials
remain confidential, the Ombudsman shall not disclose the information
or materials, without approval of the party, except to appropriate
reviewing or investigating officials, such as the Inspector General, or
as required by law. However, the resolution of certain complaints (such
as complaints of retaliation against a regulated entity or the Office
of Finance) may not be possible if the identity of the party remains
confidential. In such cases, the Ombudsman shall discuss with the party
the circumstances limiting confidentiality.
Dated: February 3, 2011.
Edward J. DeMarco,
Acting Director, Federal Housing Finance Agency.
[FR Doc. 2011-2845 Filed 2-9-11; 8:45 am]
BILLING CODE 8070-01-P
