Federal Housing Finance Board October 2009 – Federal Register Recent Federal Regulation Documents

This proposed rule would implement section 1202 of the Housing and Economic Recovery Act of 2008 (HERA), which amended section 7(i) of the Federal Home Loan Bank Act (Bank Act) by repealing the statutory caps on the annual compensation that can be paid to Federal Home Loan Bank (Bank) directors. The proposed rule would allow each Bank to pay its directors reasonable compensation and expenses, subject to the authority of the Director (Director) of the Federal Housing Finance Agency (FHFA) to object to, and to prohibit prospectively, compensation and/or expenses that the Director determines are not reasonable.

Governed by the Federal Housing Finance Agency's (FHFA) regulations, the Federal Home Loan Bank System's (System) Office of Finance (OF), issues debt (``consolidated obligations'') on which the Federal Home Loan Banks (Banks) are jointly and severally liable and publishes combined financial reports on the Banks. The OF is governed by a board of directors, the composition and functions of which are determined by FHFA's regulations. The FHFA's experience with the System and with the OF's combined financial reports during the recent period of market stress suggests that the OF and the System could benefit from a reconstituted and strengthened board. Consequently, the FHFA published a proposed regulation for comment on August 4, 2009, which was intended to achieve that end. The proposal had a comment period of 60 days, but the FHFA has decided to extend the comment period an additional 30 days.