[Federal Register Volume 64, Number 110 (Wednesday, June 9, 1999)]
[Rules and Regulations]
[Pages 30880-30888]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-14240]
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FEDERAL HOUSING FINANCE BOARD
12 CFR Parts 902 and 903
[No. 99-34]
RIN 3069-AA86
Procedures
AGENCY: Federal Housing Finance Board.
ACTION: Final rule.
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SUMMARY: The Federal Housing Finance Board (Finance Board) has adopted
a final rule that establishes procedures governing applications for
Approvals or Waivers, requests for No-Action Letters or Regulatory
Interpretations, and Petitions for Case-by-Case Determination or Review
of Disputed Supervisory Determinations. The Finance Board determined
that it was necessary and in the public interest to establish uniform
procedural rules to encourage focused presentation of issues, ensure
expeditious consideration of submissions, promote clarity and
consistency in interpretation and application of the Federal Home Loan
Bank Act (Bank Act) and Finance Board rules, regulations, policies, and
orders, and minimize the expenditure of staff resources. The rule
codifies procedures that currently are in effect.
EFFECTIVE DATE: The final rule will become effective on June 9, 1999.
FOR FURTHER INFORMATION CONTACT: Karen H. Crosby, Director, Office of
Strategic Planning, by telephone at 202/408-2983, by electronic mail at
crosbyk@fhfb.gov, or by regular mail at the Federal Housing Finance
Board, 1777 F Street, N.W., Washington, D.C. 20006.
SUPPLEMENTARY INFORMATION:
I. Statutory and Regulatory Background
Pursuant to the authority provided by section 2B(a)(1) of the
Federal Home Loan Bank Act (Bank Act), 12 U.S.C. 1422b(a)(1), to
``promulgate such regulations and orders as are necessary from time to
time to carry out the provisions of'' the Bank Act, the Finance Board
in 1998 adopted three sets of procedures governing the submission to
and processing by the Finance Board of applications, requests, and
petitions. The Finance Board determined that it was necessary and in
the public interest to establish uniform procedural rules. The intent
of the three sets of procedures is to encourage focused presentation of
issues, ensure expeditious consideration of
[[Page 30881]]
submissions, promote clarity and consistency in interpretation and
application of the Bank Act and Finance Board rules, regulations,
policies, and orders, and minimize the expenditure of staff resources.
The procedures have functioned effectively since their adoption.
The first set of procedures, adopted on July 10, 1998 and titled
Revised Procedures for Review of Disputed Supervisory Determinations,
governs review by the Board of Directors of the Finance Board of
disputes regarding examination findings and other supervisory
determinations that cannot be resolved informally. The Revised
Procedures replaced procedures adopted by the Finance Board on July 30,
1996, and amended on October 24 and December 18, 1996. The second set
of procedures, adopted on October 28, 1998 and titled Procedures for
Adjudications by the Finance Board of Issues Other than the Review of
Disputed Supervisory Determinations, establishes a process for the
Board of Directors of the Finance Board to reach a decision on matters
that in its judgment require a determination, finding, or approval, and
for which no controlling statutory, regulatory, or other Finance Board
standard previously has been established. The third set of procedures,
adopted on October 28, 1998 and titled Procedures for Requests and
Applications, governs the issuance of Approvals, Waivers, and written
interpretations of the Bank Act or Finance Board rules, regulations,
policies, or orders issued in the form of No-Action Letters or
Regulatory Interpretations.
The final rule codifies the three sets of procedures with minor and
technical changes made in the interests of clarity, concision, and
consistency. The final rule does not include provisions relating only
to internal processes and intended solely for the guidance of Finance
Board staff.
II. Analysis of the Final Rule
A. Definitions
Subpart A, Sec. 903.1 of the final rule, sets forth definitions of
terms used in the rule. Section 903.1 restates definitions of terms
used elsewhere in the Finance Board's regulations and includes
definitions of terms used only in part 903. Definitions of terms unique
to part 903 are discussed below with the substantive provisions in
which the terms are used.
B. Waivers, Approvals, No-Action Letters, and Regulatory
Interpretations
Subpart B of the final rule, Secs. 903.2-903.7, governs
applications for Waivers and Approvals and requests for No-Action
Letters and Regulatory Interpretations.
1. Waivers
The term ``Waiver'' is defined in Sec. 903.1(u) of the final rule
as a written statement issued to a Federal Home Loan Bank (Bank), a
member of a Bank (Member), or the Office of Finance that waives a
provision, restriction, or requirement of a Finance Board rule,
regulation, policy, or order, or a required submission of information,
not otherwise required by law, in connection with a particular
transaction or activity. Section 903.2 authorizes the Board of
Directors of the Finance Board to issue a Waiver and provides for
filing a Waiver application in accordance with the requirements of
Sec. 903.6 of the final rule. Section 903.2 replaces Sec. 902.6 of the
Finance Board's regulations. See 12 CFR 902.6. Issuance of a Waiver is
entirely within the Board of Directors' discretion. Thus, the Board of
Directors may deny or decline to consider or respond to an application
for a Waiver for any reason or without stating a reason. A Waiver is
applicable only to a Bank, a Member, or the Office of Finance and the
particular transaction or activity it addresses.
2. Approvals
In Sec. 903.1(a) of the final rule, the term ``Approval'' is
defined as a written statement approving a transaction, activity, or
item that requires Finance Board approval under the Bank Act or a
Finance Board rule, regulation, policy, or order. Under Sec. 903.3, the
Finance Board may issue an Approval only to a Bank or the Office of
Finance. Unlike Waivers, Approvals are not discretionary--the Finance
Board must grant or deny each application for an Approval, with or
without conditions, based on the governing standard in the Bank Act or
Finance Board rule, regulation, policy, or order for the particular
category of Approval. Section 903.3(a) provides that an application for
Approval generally must be filed in accordance with the requirements of
Sec. 903.6 of the final rule. However, under Sec. 903.3(b), the Finance
Board retains the authority to prescribe additional or alternative
application procedures for Approval of any transaction, activity, or
item. An Approval may be issued by the Board of Directors of the
Finance Board or, by delegation, by the Chairperson of the Board of
Directors or Finance Board staff.
3. No-Action Letters and Regulatory Interpretations
Sections 903.4 and 903.5 of the final rule govern issuance by
Finance Board staff of two types of written interpretations of the Bank
Act or Finance Board rules, regulations, policies, or orders, with
respect to a particular transaction or activity. The two types of
interpretations are No-Action Letters and Regulatory Interpretations.
In Sec. 903.1(1), the term ``No-Action Letter'' is defined as a
written statement providing that Finance Board staff will not recommend
supervisory or other action to the Board of Directors of the Finance
Board for failure to comply with a specific provision of the Bank Act
or a Finance Board rule, regulation, policy, or order, if the requester
undertakes a proposed transaction or activity. Under Sec. 903.4 of the
final rule, Finance Board staff may issue a No-Action Letter only to a
Bank or the Office of Finance. A No-Action Letter is applicable only to
the entity addressed by the letter. Issuance of a No-Action Letter is
entirely within the discretion of Finance Board staff, which may deny
or decline to consider or respond to a request for a No-Action Letter
for any reason or without stating a reason. A No-Action Letter is
prospective in nature and must relate to a specific proposed
transaction or activity. Finance Board staff will not issue a No-Action
Letter based upon a hypothetical situation. A No-Action Letter
represents only the position of staff, and may be modified or
superseded by the Board of Directors of the Finance Board. All requests
for a No-Action Letter must be filed in accordance with the
requirements of Sec. 903.6 of the final rule.
In Sec. 903.1(q), the term ``Regulatory Interpretation'' is defined
as written guidance issued by the Finance Board with respect to
application of the Bank Act or a Finance Board rule, regulation,
policy, or order to a proposed transaction or activity. Section 903.5
of the final rule provides that Finance Board staff may issue a
Regulatory Interpretation to any person or entity. Issuance of
Regulatory Interpretations is entirely within the discretion of Finance
Board staff, which may deny or decline to consider or respond to a
request for a Regulatory Interpretation for any reason or without
stating a reason. A Regulatory Interpretation must relate to a proposed
transaction or activity--Finance Board staff will not issue a
Regulatory Interpretation based upon a hypothetical situation. A
Regulatory
[[Page 30882]]
Interpretation is applicable only to the requester and the specific
matter addressed in the Interpretation. Like a No-Action Letter, a
Regulatory Interpretation represents only the position of staff, and
may be modified or superseded by the Board of Directors of the Finance
Board. A request for a Regulatory Interpretation must be filed in
accordance with the requirements of Sec. 903.6 of the final rule.
4. Submission Requirements and Issuance
Section 903.6 of the final rule sets forth requirements applicable
to applications for Waiver or Approval and requests for a No-Action
Letter or Regulatory Interpretation. All submissions must comply with
the requirements of Sec. 903.6, except those applications for Approval
for which the Finance Board has prescribed alternative or additional
procedures. Under Sec. 903.6(d), the Managing Director of the Finance
Board may waive any submission requirement for a particular submission,
subject to review by the Board of Directors.
Section 903.7 of the final rule concerns issuance of Waivers,
Approvals, No-Action Letters, and Regulatory Interpretations. Section
903.7(a) requires the Secretary to the Board of Directors of the
Finance Board to provide a copy of all staff interpretations other than
Waivers to the Board of Directors for review at least three business
days prior to transmission to the requester. A Waiver, Approval, No-
Action Letter, or Regulatory Interpretation is not effective until the
Secretary to the Board has transmitted it in final form to the
requester. Oral indications from Finance Board staff are not binding.
Section 903.7(c) of the rule permits the Finance Board to provide
an abbreviated response to an application or request. Examples of an
abbreviated response include ``Approved;'' ``Denied;'' or ``Finance
Board staff agrees with the interpretation stated in the request.''
C. Case-by-Case Determinations; Review of Disputed Supervisory
Determinations
Subpart C, Secs. 903-8-903.15, establishes procedures governing two
categories of Petitions, Petitions for Case-by-Case Determination and
Petitions for Review of Disputed Supervisory Determination.
Under Sec. 903.1(e), the term ``Case-by-Case Determination'' means
a Final Decision concerning any matter that requires a determination,
finding, or approval by the Board of Directors under the Bank Act or
Finance Board regulations, for which no controlling statutory,
regulatory, or other Finance Board standard previously has been
established, and that in the judgment of the Board of Directors is best
resolved on a case-by-case basis by a ruling applicable only to the
Petitioner and any Intervener, and not by adoption of a rule of general
applicability. Section 903.1(g) defines the term ``Final Decision'' as
a decision rendered by the Board of Directors on issues raised in a
Petition or Request to Intervene that have been accepted for
consideration. In order to avoid ambiguity or confusion arising from
the use of the term ``adjudication'' in the Administrative Procedure
Act, 5 U.S.C. 551-559, the term ``Case-by-Case Determination'' replaces
the term ``Adjudication'' as used in the Procedures for Adjudications
by the Finance Board of Issues Other than the Review of Disputed
Supervisory Determinations.
The Finance Board has dealt with most provisions that require a
determination, finding, or approval by the Board of Directors in
policies or through rulemaking. However, if a matter requiring a
determination, finding, or approval affects only a limited number of
parties, the Board of Directors may determine that the best way to
address the matter is to develop standards on a case-by-case basis
prior to or in lieu of promulgating system-wide standards. Case-by-Case
Determinations by the Board of Directors are intended to serve as an
alternative to rulemaking under these limited circumstances. Under
Sec. 903.8(a) of the final rule, a Petition for Case-by-Case
Determination must be filed in accordance with the requirements of
Sec. 903.10 of the final rule. Decisions as to whether a matter is best
addressed through a Case-by-Case Determination, system-wide rulemaking,
Approval, Waiver, or some other procedure, lie solely within the
discretion of the Board of Directors.
Under Sec. 903.1(t) of the final rule, the term ``Supervisory
Determination'' means a Finance Board finding in a report of
examination, order, or directive, or a Finance Board order or directive
concerning safety and soundness or compliance matters that requires
mandatory action by a Bank or the Office of Finance. Section 903.9(a)
requires the Office of Finance or a Bank seeking review of a disputed
Supervisory Determination by the Board of Directors, to file a Petition
within 60 calendar days of the date of the disputed Supervisory
Determination in accordance with the requirements of Sec. 903.10 of the
final rule. Notwithstanding this provision, the Finance Board expects
most disputes to be resolved through voluntary agreement, and Bank,
Office of Finance, and Finance Board staffs are encouraged to maintain
cooperative communication to resolve disputes informally and
expeditiously. Section 903.9(b) makes clear that a disputed Supervisory
Determination remains in effect while a Petition is pending.
All Petitions should comply with the requirements of Sec. 903.10 of
the final rule. However, Sec. 903.12(c) requires the Managing Director
of the Finance Board to afford a Petitioner a reasonable opportunity to
cure any defects and bring a Petition into compliance with the
requirements. In addition, Sec. 903.15(a) of the rule authorizes the
Managing Director to waive any filing requirements or deadlines,
subject to review by the Board of Directors.
Section 903.11 of the final rule sets forth requirements applicable
to Requests to Intervene, as provided for by Secs. 903.8(b) and
903.9(d). As for Petitions, under Sec. 903.15(a) the Managing Director
may waive any filing requirements or deadlines, subject to review by
the Board of Directors.
Section 903.12 of the final rule sets forth provisions relating to
Finance Board processing of Petitions. Section 903.12(a) requires the
Finance Board to publish notice of receipt of a Petition for Case-by-
Case Determination in the Federal Register. This provision does not
apply to Petitions for Review of Disputed Supervisory Determinations.
Pursuant to Sec. 903.12(c), the Managing Director may request
additional information from a Petitioner to ensure that the matters
presented in the Petition are ripe for review and the record contains
all information necessary for consideration of the Petition by the
Board of Directors. If a Petition is the subject of such a request, the
time periods established for Notice of Board Consideration and Final
Decision under Secs. 903.12(g) and 903.13(c), respectively, will not
begin to run until the Managing Director has determined that the Bank
has provided the information necessary for the Board of Directors to
consider the Petition.
Section 903.12(g) requires the Managing Director, after
consultation with the Board of Directors, to provide all parties with a
Notice of Board Consideration through the Secretary to the Board that
includes: (1) the issues accepted for consideration; (2) any decision
to consolidate or sever pursuant to Sec. 903.12(f); (3) whether the
Petition will be considered by the Board of Directors on the written
record under Sec. 903.13(a)(1) or at a meeting under Sec. 903.13(a)(2);
and (4) if the Petition will
[[Page 30883]]
be considered by the Board of Directors at a meeting, the date, time
and place of the meeting, and a decision as to any Request to Appear
filed pursuant to Secs. 903.10(d) or 903.11(a)(4). In preparing this
Notice, the Managing Director should consult with the Office of
Supervision and other Finance Board offices, as appropriate, in
addition to the Board of Directors. Under Sec. 903.15(b), all matters
contained in the Notice of Board Consideration are subject to
modification by the Board of Directors.
Section 903.13(a) permits the Board of Directors to consider a
Petition either solely on the basis of the written record or at a
meeting. The meeting may be either a regularly scheduled meeting or a
meeting convened specifically for the purpose of considering the
Petition. The final rule does not establish any deadline or requirement
regarding the date of such meeting. Normally the Finance Board will
provide at least 30 calendar days notice for consideration of a
Petition at a meeting.
Section 903.13(c) provides that the Board of Directors will
normally complete consideration of a Petition and issue a Final
Decision within 120 calendar days from the date the Managing Director
deems the Petition complete. However, the Board of Directors may extend
this time period for any additional period they reasonably require to
reach a decision.
Section 903.14 of the final rule sets forth the procedures that
govern consideration of a Petition at a meeting. The rule provides for
the Chairperson of the Board of Directors, or a member of the Board of
Directors designated by the Chairperson, to preside at such a meeting.
All references to the Chairperson in Sec. 903.14 are deemed also to
apply to the Chairperson's designee.
A Final Decision is effective upon adoption by the Board of
Directors. Section 903.13(b) provides that a Final Decision is binding
upon all parties and is a Final Decision for purposes of obtaining
judicial review. Section 903.15(f) makes clear that following the
procedures in subpart C is a prerequisite to obtaining judicial review
of any Case-by-Case Determination or Review of a Disputed Supervisory
Determination. Section 903.15(i) makes clear that the procedures in
subpart C are exclusive with regard to Case-by-Case Determinations by
the Board of Directors and Review of Disputed Supervisory
Determinations.
Section 903.15(d) permits the parties to enter into a settlement
agreement resolving issues raised in a Petition while the Petition is
pending. The Finance Board expressly encourages parties to discuss
possible settlement agreements.
III. Notice and Public Participation
The notice and publication requirements of the Administrative
Procedures Act do not apply to this rule of agency procedure and
practice. See 5 U.S.C. 553(b)(3)(A). In addition, because it is in the
public interest to codify these uniform procedural rules governing the
submission to and processing by the Finance Board of applications,
requests, and petitions, the Finance Board for good cause finds that
notice and public procedure are unnecessary. See 5 U.S.C. 553(b)(3)(B).
IV. Effective Date
For the reasons stated in part III above, the Finance Board for
good cause finds that the final rule should become effective on June 9,
1999. See 5 U.S.C. 553(d)(3).
V. Regulatory Flexibility Act
The Finance Board is adding part 903 in the form of a final rule
and not as a proposed rule. Therefore, the provisions of the Regulatory
Flexibility Act do not apply. See 5 U.S.C. 601(2), 603(a).
VI. Paperwork Reduction Act
The final rule does not contain any collections of information
pursuant to the Paperwork Reduction Act of 1995. See 44 U.S.C. 3501 et
seq. Consequently, the Finance Board has not submitted any information
to the Office of Management and Budget for review.
List of Subjects
12 CFR Part 902
Assessments, Federal home loan banks, Government contracts,
Minority businesses, Mortgages, Reporting and recordkeeping
requirements.
12 CFR Part 903
Administrative practice and procedure, Federal home loan banks.
For the reasons stated in the preamble, the Finance Board hereby
amends 12 CFR chapter IX as follows:
PART 902--OPERATIONS
1. The authority citation for part 902 continues to read as
follows:
Authority: 12 U.S.C. 1422b and 1438(b).
Sec. 902.6 [Removed]
2. Remove Sec. 902.6.
3. Add part 903 to read as follows:
PART 903--PROCEDURES
Subpart A--Definitions
Sec.
903.1 Definitions.
Subpart B--Waivers, Approvals, No-Action Letters, and Regulatory
Interpretations
903.2 Waivers.
903.3 Approvals.
903.4 No-Action Letters.
903.5 Regulatory Interpretations.
903.6 Submission requirements.
903.7 Issuance of Waivers, Approvals, No-Action Letters, and
Regulatory Interpretations.
Subpart C--Case-by-Case Determinations; Review of Disputed Supervisory
Determinations
903.8 Case-by-Case Determinations.
903.9 Review of Disputed Supervisory Determinations.
903.10 Petitions.
903.11 Requests to Intervene.
903.12 Finance Board procedures.
903.13 Consideration and Final Decisions.
903.14 Meetings of the Board of Directors to consider Petitions.
903.15 General provisions.
Authority: 12 U.S.C. 1422b(a)(1).
Subpart A--Definitions
Sec. 903.1 Definitions.
For purposes of this part:
(a) Approval means a written statement issued to a Bank or the
Office of Finance approving a transaction, activity, or item that
requires Finance Board approval under the Bank Act or a Finance Board
rule, regulation, policy, or order.
(b) Bank means a Federal Home Loan Bank.
(c) Bank Act means the Federal Home Loan Bank Act (12 U.S.C. 1421-
1449).
(d) Board of Directors means the Board of Directors of the Finance
Board.
(e) Case-by-Case Determination means a Final Decision concerning
any matter that requires a determination, finding, or approval by the
Board of Directors under the Bank Act or Finance Board regulations, for
which no controlling statutory, regulatory, or other Finance Board
standard previously has been established, and that, in the judgment of
the Board of Directors, is best resolved on a case-by-case basis by a
ruling applicable only to the Petitioner and any Intervener, and not by
adoption of a rule of general applicability.
(f) Chairperson means the Chairperson of the Board of Directors of
the Finance Board.
(g) Final Decision means a decision rendered by the Board of
Directors on issues raised in a Petition or Request to Intervene that
have been accepted for consideration.
(h) Finance Board means the agency established as the Federal
Housing Finance Board.
(i) Intervener means a Bank, Member, or other entity that has been
granted leave to intervene in the consideration of a Petition by the
Board of Directors.
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(j) Managing Director means the Managing Director of the Finance
Board.
(k) Member means an institution admitted to membership and owning
capital stock in a Bank.
(l) No-Action Letter means a written statement issued to a Bank or
the Office of Finance providing that Finance Board staff will not
recommend supervisory or other action to the Board of Directors for
failure to comply with a specific provision of the Bank Act or a
Finance Board rule, regulation, policy, or order, if a requester
undertakes a proposed transaction or activity.
(m) Office of Finance means the joint office of the Banks
established pursuant to 12 CFR part 941.
(n) Party means a Petitioner, an Intervener, or the Finance Board.
(o) Petition means a Petition for Case-by-Case Determination or a
Petition for Review of a Disputed Supervisory Determination.
(p) Petitioner means the Office of Finance or a Bank that has filed
a Petition.
(q) Regulatory Interpretation means written guidance issued by
Finance Board staff with respect to application of the Bank Act or a
Finance Board rule, regulation, policy, or order to a proposed
transaction or activity.
(r) Requester means an entity or person that has submitted an
application for a Waiver or Approval or a request for a No-Action
Letter or Regulatory Interpretation.
(s) Secretary to the Board means the Secretary to the Board of
Directors of the Finance Board.
(t) Supervisory determination means a Finance Board finding in a
report of examination, order, or directive, or a Finance Board order or
directive concerning safety and soundness or compliance matters that
requires mandatory action by a Bank or the Office of Finance.
(u) Waiver means a written statement issued to a Bank, a Member, or
the Office of Finance that waives a provision, restriction, or
requirement of a Finance Board rule, regulation, policy, or order, or a
required submission of information, not otherwise required by law, in
connection with a particular transaction or activity.
Subpart B--Waivers, Approvals, No-Action Letters, and Regulatory
Interpretations
Sec. 903.2 Waivers.
(a) Authority. The Board of Directors reserves the right, in its
discretion and in connection with a particular transaction or activity,
to waive any provision, restriction, or requirement of this chapter, or
any required submission of information, not otherwise required by law,
if such waiver is not inconsistent with the law and does not adversely
affect any substantial existing rights, upon a determination that
application of the provision, restriction, or requirement would
adversely affect achievement of the purposes of the Bank Act, or upon a
showing of good cause.
(b) Application. A Bank, a Member, or the Office of Finance may
apply for a Waiver in accordance with Sec. 903.6.
Sec. 903.3 Approvals.
(a) Application. A Bank or the Office of Finance may apply for an
Approval of any transaction, activity, or item that requires Finance
Board approval under the Bank Act or a Finance Board rule, regulation,
policy, or order in accordance with Sec. 903.6, unless alternative
application procedures are prescribed by the Bank Act or a Finance
Board rule, regulation, policy, or order for the transaction, activity,
or item at issue.
(b) Reservation. The Finance Board reserves the right, in its
discretion, to prescribe additional or alternative procedures for any
application for Approval of a transaction, activity, or item.
Sec. 903.4 No-Action Letters.
(a) Authority. Finance Board staff, in its discretion, may issue a
No-Action Letter to a Bank or the Office of Finance stating that staff
will not recommend supervisory or other action to the Board of
Directors for failure to comply with a specific provision of the Bank
Act or a Finance Board rule, regulation, policy, or order, if a
requester undertakes a proposed transaction or activity. The Board of
Directors may modify or supersede a No-Action Letter.
(b) Requests. A Bank or the Office of Finance may request a No-
Action Letter in accordance with Sec. 903.6.
Sec. 903.5 Regulatory Interpretations.
(a) Authority. Finance Board staff, in its discretion, may issue a
Regulatory Interpretation to a Bank, a Member, an official of a Bank or
Member, the Office of Finance, or any other entity or person, providing
guidance with respect to application of the Bank Act or a Finance Board
rule, regulation, policy, or order to a proposed transaction or
activity. The Board of Directors may modify or supersede a Regulatory
Interpretation.
(b) Requests. A Bank, a Member, an official of a Bank or Member,
the Office of Finance, or any other entity or person may request a
Regulatory Interpretation in accordance with Sec. 903.6.
Sec. 903.6 Submission requirements.
Applications for a Waiver or Approval and requests for a No-Action
Letter or Regulatory Interpretation shall comply with the following
requirements:
(a) Filing. Each application or request shall be in writing. The
original and three copies shall be filed with the Secretary to the
Board, Federal Housing Finance Board, 1777 F Street NW, Washington,
D.C. 20006.
(b) Authorization--(1) Waivers and Approvals. Applications for
Waivers and Approvals shall be signed by an official with authority to
sign such applications on behalf of the requester. Applications for
Waivers and Approvals from a Bank or the Office of Finance shall be
accompanied by a resolution of the board of directors of the Bank or
the Office of Finance concurring in the substance and authorizing the
filing of the application.
(2) Requests for No-Action Letters. The president of the Bank
making a Request for a No-Action Letter shall sign the Request.
Requests for a No-Action Letter from the Office of Finance shall be
signed by the chairperson of the Board of Directors of the Office of
Finance.
(3) Requests for Regulatory Interpretations. The requester or an
authorized representative of the requester shall sign a request for a
Regulatory Interpretation.
(c) Information requirements. Each application or request shall
contain:
(1) The name of the requester, and the name, title, address,
telephone number, and electronic mail address, if any, of the official
filing the application or request on its behalf;
(2) The name, address, telephone number, and electronic mail
address, if any, of a contact person from whom Finance Board staff may
seek additional information if necessary;
(3) The section numbers of the particular provisions of the Bank
Act or Finance Board rules, regulations, policies, or orders to which
the application or request relates;
(4) Identification of the determination or relief requested,
including any alternative relief requested if the primary relief is
denied, and a clear statement of why such relief is needed;
(5) A statement of the particular facts and circumstances giving
rise to the application or request and identifying all relevant legal
and factual issues;
(6) References to all relevant authorities, including the Bank Act,
Finance Board rules, regulations, policies, and orders, judicial
decisions, administrative decisions, relevant statutory
interpretations, and policy statements;
[[Page 30885]]
(7) References to any Waivers, No-Action Letters, Approvals, or
Regulatory Interpretations issued to the requester in the past in
response to circumstances similar to those surrounding the request or
application;
(8) For any application or request involving interpretation of the
Bank Act or Finance Board regulations, a reasoned opinion of counsel
supporting the relief or interpretation sought and distinguishing any
adverse authority;
(9) Any non-duplicative, relevant supporting documentation; and
(10) A certification by a person with knowledge of the facts that
the representations made in the application or request are accurate and
complete. The following form of certification is sufficient for this
purpose: ``I hereby certify that the statements contained in the
submission are true and complete to the best of my knowledge. [Name and
Title].''
(d) Waiver of requirements. The Managing Director may waive any
requirement of this section for good cause. The Managing Director shall
provide prompt notice of any such waiver to the Board of Directors. The
Board of Directors may overrule any waiver granted by the Managing
Director under this paragraph.
(e) Withdrawal. Once filed, an application or request may be
withdrawn only upon written request. The Finance Board will not
consider a request for withdrawal after transmission by the Secretary
to the Board to the requester of a response in final form.
Sec. 903.7 Issuance of Waivers, Approvals, No-Action Letters, and
Regulatory Interpretations.
(a) Board of Directors review. At least three business days prior
to issuance to the requester, the Secretary to the Board shall transmit
each Approval, No-Action Letter, or Regulatory Interpretation issued by
the Chairperson or Finance Board staff to the Board of Directors for
review.
(b) Issuance and effectiveness. A Waiver, Approval, No-Action
Letter, or Regulatory Interpretation is not effective until the
Secretary to the Board has transmitted it in final form to the
requester.
(c) Abbreviated form. The Finance Board may respond to an
application or request in an abbreviated form, consisting of a concise
statement of the nature of the response, without restatement of the
underlying facts.
Subpart C--Case-by-Case Determinations; Review of Disputed
Supervisory Determinations
Sec. 903.8 Case-by-Case Determinations.
(a) Petition for Case-by-Case Determination. A Bank or the Office
of Finance may seek a Case-by-Case Determination concerning any matter
that may require a determination, finding or approval under the Bank
Act or Finance Board regulations by the Board of Directors, and for
which no controlling statutory, regulatory or other Finance Board
standard previously has been established. The Office of Finance or a
Bank seeking a Case-by-Case Determination shall file a Petition for
Case-by-Case Determination in accordance with Sec. 903.10.
(b) Intervention. A Member, a Bank, or the Office of Finance may
file a Request to Intervene in the consideration of the Petition in
accordance with Sec. 903.11 if it believes its rights may be affected.
Sec. 903.9 Review of Disputed Supervisory Determinations.
(a) Petition for Review of a Disputed Supervisory Determination. A
Bank or the Office of Finance may seek review by the Board of Directors
of a Finance Board finding in a report of examination, order, or
directive, or a Finance Board order or directive concerning safety and
soundness or compliance matters requiring mandatory action by the Bank
or Office of Finance. The Office of Finance or a Bank seeking review of
a disputed Supervisory Determination shall file a Petition for Review
of a Disputed Supervisory Determination within 60 calendar days from
the date of the disputed Supervisory Determination in accordance with
Sec. 903.10.
(b) No stay while Petition is pending. All Supervisory
Determinations directed to a Bank or the Office of Finance shall remain
in full force and effect while a Petition is pending. That a Petition
is pending shall not operate or be deemed to operate as a suspension of
the obligation of a Bank or the Office of Finance to take corrective
action as required by a Supervisory Determination, except as the Bank
or the Office of Finance may be otherwise directed by order of the
Board of Directors.
(c) Notice to affected entities. With the approval of the Managing
Director, a Petitioner may, pursuant to 12 CFR 960.12(d) or otherwise,
provide notice of the issuance of a Supervisory Determination or the
filing of a Petition for Review of a Disputed Supervisory
Determination, to another Bank, the Office of Finance, or a Member or
other entity named in 12 CFR 960.12(d), if the Petitioner believes the
entity's rights may be affected by the Supervisory Determination or the
Petition.
(d) Intervention. A Bank, the Office of Finance, a Member, or other
entity named in 12 CFR 960.12(d) may file a Request to Intervene in the
consideration of a Petition in accordance with Sec. 903.11 if it
believes its rights may be adversely affected by a Final Decision on
the Petition.
Sec. 903.10 Petitions.
Each Petition brought pursuant to this subpart shall comply with
the following requirements:
(a) Filing. The Petition shall be in writing. The original and
three copies shall be filed with the Secretary to the Board, Federal
Housing Finance Board, 1777 F Street NW, Washington, D.C. 20006.
(b) Information requirements. Each Petition shall contain:
(1) The name of the Petitioner, and the name, title, address,
telephone number, and electronic mail address, if any, of the official
filing the Petition on its behalf;
(2) The name, address, telephone number, and electronic mail
address, if any, of a contact person from whom Finance Board staff may
seek additional information if necessary;
(3) The section numbers of the particular provisions of the Bank
Act or Finance Board rules, regulations, policies, or orders to which
the Petition relates, and, if the Petition is for Review of a Disputed
Supervisory Determination, identification of the disputed Supervisory
Determination;
(4) Identification of the determination or relief requested,
including any alternative relief requested if the primary relief is
denied, and a clear statement of why such relief is needed;
(5) A statement of the particular facts and circumstances giving
rise to the Petition and identifying all relevant legal and factual
issues;
(6) A summary of any steps taken to date by the Petitioner to
address or resolve the dispute or issue; or, in cases involving safety
and soundness or compliance issues, a summary of any actions taken by
the Petitioner in the interim to implement corrective action;
(7) The Petitioner's argument in support of its position, including
citation to any supporting legal opinions, policy statements, or other
relevant precedent and supporting documentation, if any;
(8) References to all relevant authorities, including the Bank Act,
Finance Board rules, regulations, policies, and orders, judicial
decisions,
[[Page 30886]]
administrative decisions, relevant statutory interpretations, and
policy statements;
(9) A reasoned opinion of counsel supporting the relief or
interpretation sought and distinguishing any adverse authority;
(10) Any non-duplicative, relevant supporting documentation; and
(11) A certification by a person with knowledge of the facts that
the representations made in the Petition are accurate and complete. The
following form of certification is sufficient for this purpose: ``I
hereby certify that the statements contained in the Petition are true
and complete to the best of my knowledge. [Name and Title].''
(c) Authorization. Each Petition shall be accompanied by a
resolution of the Petitioner's board of directors concurring in the
substance and authorizing the filing of the Petition.
(d) Request to Appear. The Petition may contain a request that
staff or an agent of the Petitioner be permitted to make a personal
appearance before the Board of Directors at any meeting convened to
consider the Petition pursuant to these procedures. A statement of the
reasons a written presentation would not suffice shall accompany a
Request to Appear. The statement shall specifically:
(1) Identify any questions of fact that are in dispute;
(2) Summarize the evidence that would be presented at the meeting;
and
(3) Identify any proposed witnesses, and state the substance of
their anticipated testimony.
Sec. 903.11 Requests to Intervene.
(a) Filing--(1) Date. Any Request to Intervene in consideration of
a Petition under this subpart shall be in writing and shall be filed
with the Secretary to the Board within 45 days from the date the
Petition is filed.
(2) Information requirements. A Request to Intervene shall include
the information required by Sec. 903.10(b), where applicable, and a
concise statement of the position and interest of the Intervener and
the grounds for the proposed intervention.
(3) Authorization. If the entity requesting intervention is a Bank
or the Office of Finance, the Request to Intervene shall be accompanied
by a resolution of the Petitioner's board of directors concurring in
the substance and authorizing the filing of the Request. If the entity
requesting intervention is not a Bank or the Office of Finance, the
Request to Intervene shall be signed by an official of the entity with
authority to authorize the filing of the Request, and shall include a
statement describing such authority.
(4) Request to Appear. A Request to Intervene may include a Request
to Appear before the Board of Directors in any meeting conducted under
these procedures to consider a Petition. A Request to Appear shall be
accompanied by a statement containing the information required by
Sec. 903.10(d), and, in addition, setting forth the likely impact that
intervention will have on the expeditious progress of the meeting. A
Request to Appear shall be filed with the Secretary to the Board either
with the Request to Intervene or at least 20 days prior to the meeting
scheduled to consider the Petition.
(5) Intervener is bound. Any Request to Intervene shall include a
statement that, if such leave to intervene is granted, the Intervener
shall be bound expressly by the Final Decision of the Board of
Directors, as described in Sec. 903.13(b), subject only to judicial
review or as otherwise provided by law.
(b) Grounds for approval. The Managing Director may grant leave to
intervene if the entity requesting intervention has complied with
paragraph (a) of this section and, in the judgment of Managing
Director:
(1) The presence of the entity requesting intervention would not
unduly prolong or otherwise prejudice the adjudication of the rights of
the original parties; and
(2) The entity requesting intervention may be adversely affected by
a Final Decision on the Petition.
Sec. 903.12 Finance Board procedures.
(a) Notice of Receipt of Petition or Request to Intervene. No later
than three business days following receipt of a Petition or Request to
Intervene, the Secretary to the Board shall transmit a written Notice
of Receipt to the Petitioner or Intervener. In the case of a Petition
for Case-by-Case Determination, the Finance Board shall promptly
publish a notice of receipt of Petition, including a brief summary of
the issue(s) involved, in the Federal Register.
(b) Transmittal of filings. The Secretary to the Board shall
promptly transmit copies of any Petition, Request to Intervene, or
other filing under this subpart to the Board of Directors and all other
parties to the filing.
(c) Opportunity to cure defects. The Managing Director shall afford
the Petitioner or Intervener a reasonable opportunity to cure any
failure to comply with the requirements of Sec. 903.10.
(d) Information request. The Managing Director may request
additional information from the Petitioner or Intervener. No later than
20 calendar days after the date of a request under this paragraph, the
Petitioner shall provide to the Secretary to the Board all information
requested.
(e) Supplemental information. Upon good cause shown, the Managing
Director may grant permission to a Petitioner or Intervener to submit
supplemental written information pertaining to the Petition or Request
to Intervene.
(f) Consolidation and severance--(1) Consolidation. The Managing
Director may consolidate any or all matters at issue in two or more
meetings on Petitions where:
(i) There exist common parties or common questions of fact or law;
(ii) Consolidation would expedite and simplify consideration of the
issues; and (iii) Consolidation would not adversely affect the rights
of parties engaged in otherwise separate proceedings.
(2) Severance. The Managing Director may order any meetings and
issues severed with respect to any or all parties or issues.
(g) Notice of Board Consideration. Within 30 calendar days of
receipt of a Petition deemed by the Managing Director to be in
compliance with the requirements of Sec. 903.10, or, if the Petition
has been the subject of a request under paragraph (d) of this section,
within 30 calendar days of receipt of a response from the Petitioner
deemed by the Managing Director to complete the information necessary
for the Board of Directors to consider the Petition, the Managing
Director, after consultation with the Board of Directors, through the
Secretary to the Board, shall provide all parties with a Notice of
Board Consideration containing the following information:
(1) Identification of the issues accepted for consideration;
(2) Any decision to consolidate or sever pursuant to paragraph (f)
of this section;
(3) Whether the Petition will be considered by the Board of
Directors on the written record pursuant to Sec. 903.13(a)(1), or at a
meeting pursuant to Sec. 903.13(a)(2); and
(4) If the Petition will be considered by the Board of Directors at
a meeting:
(i) The date, time and place of the meeting; and
(ii) A decision as to any Request to Appear filed pursuant to
Secs. 903.10(d) or 903.11(a)(4).
Sec. 903.13 Consideration and Final Decisions.
(a) Consideration by Board of Directors. The Board of Directors may
[[Page 30887]]
consider a Petition and render a decision:
(1) Solely on the basis of the written record; or
(2) At a regularly scheduled meeting or a meeting convened
specifically for the purpose of considering the Petition. Consideration
of a Petition at a meeting shall be governed by the procedures
described in Sec. 903.14.
(b) Final Decision. The Board of Directors shall render a Final
Decision on the issue(s) presented in a Petition or Request to
Intervene that has been accepted for consideration, based upon
consideration of the entire record of the proceeding. The terms and
conditions of the Final Decision shall bind the parties as to any
issue(s) presented in the Petition or Request to Intervene and decided
by the Board of Directors. The decision of the Board of Directors is a
final decision for purposes of obtaining judicial review or as
otherwise provided by law.
(c) Time periods. Subject to extension by such additional time as
may reasonably be required, the Board of Directors shall render a Final
Decision within 120 calendar days of the date the Petition is received
in a form deemed by the Managing Director to be in compliance with the
requirements of Sec. 903.10 or, if the Petition has been the subject of
a request under Sec. 903.12(d), within 120 calendar days of receipt of
a response from the Petitioner deemed by the Managing Director to
complete the information necessary for the Board of Directors to
consider the Petition.
(d) Transmittal of Final Decision. The Secretary to the Board shall
transmit the Final Decision of the Board of Directors to all parties to
the submission.
Sec. 903.14 Meetings of the Board of Directors to consider Petitions.
(a) Full and fair opportunity to be heard. Any meeting of the Board
of Directors to consider a Petition shall be conducted in a manner that
provides the parties a full and fair opportunity to be heard on the
issues accepted for consideration. Any such meeting shall be conducted
so as to permit an expeditious presentation of such issues.
(b) Participation in meeting. (1) The presence of a quorum of the
Board if Directors is required to conduct a meeting under this section.
Members of the Board of Directors are deemed present if they appear in
person or by telephone.
(2) An act of the Board of Directors requires the vote of a
majority of the members of the Board of Directors voting at a meeting
at which a quorum of the Board of Directors is present.
(3) A Final Decision may be reached by a vote of the Board of
Directors after the meeting at which the Petition has been considered.
Only those members of the Board of Directors present at the meeting at
which the Petition was considered may vote on issues presented in the
Petition and accepted for consideration. A vote of the majority of the
members of the Board of Directors eligible to vote and voting shall be
an act of the Board of Directors.
(c) Chairperson--(1) Presiding officer. The Chairperson, or a
member of the Board of Directors designated by the Chairperson, shall
preside over a meeting of the Board of Directors convened under this
section.
(2) Authority of the Chairperson. The Chairperson shall have all
powers and discretion necessary to conduct the meeting in a fair and
impartial manner, to avoid unnecessary delay, to regulate the course of
the meeting and the conduct of the parties and their counsel, and to
discharge the duties of a presiding officer.
(3) Board of Directors may overrule the Chairperson. Any member of
the Board of Directors may, by motion, challenge any action, finding,
or determination made by the Chairperson in the course of the meeting,
and the Board of Directors, by majority vote, may overrule any action,
finding or determination of the Chairperson.
(d) Meeting may be closed. A party may request that the meeting, or
portion thereof, be closed to public observation. A request to close a
meeting shall be processed in accordance with the requirements of the
Government in the Sunshine Act (5 U.S.C. 552b) and the Finance Board's
implementing regulation (12 CFR part 906).
(e) Location of meeting. Unless otherwise specified, all meetings
of the Board of Directors will be held in the Board Room of the Finance
Board at 1777 F Street, N.W., Washington, D.C., at the time specified
in the notice of meeting issued pursuant to 12 CFR 906.6.
(f) Presentation of issues--(1) Stipulations. Subject to the
Chairperson's discretion, the parties may agree to stipulations of law
or fact, including stipulations as to the admissibility of exhibits,
and present such stipulations at the meeting. Stipulations shall be
made a part of the record of the proceeding.
(2) Order of presentation. The Chairperson shall determine the
order of presentation of the issues, testimony of any witnesses,
presentation of any other information or document, and all other
procedural matters at the meeting.
(g) Record. The meeting shall be recorded and transcribed.
Transcripts of the proceedings shall be governed by 12 CFR 906.5(c).
The Petition and all supporting documentation shall be made a part of
the record, unless otherwise determined by the Chairperson. The
Chairperson may order the record corrected, upon motion to correct,
upon stipulation of the parties, or at the Chairperson's discretion.
(h) Admissibility of documents and testimony. (1) The Chairperson
has discretion to admit and make a part of the record documents and
testimony that are relevant, material, and reliable, and may elect not
to admit documents and testimony that are privileged, unduly
repetitious, or of little probative value.
(2) The Board of Directors shall give such weight to documents and
testimony admitted and made part of the record as it may deem
reasonable and appropriate.
(3) The Chairperson may admit and make a part of the record, in
lieu of oral testimony, statements of fact or opinion prepared by a
witness. The admissibility of the information contained in the
statement shall be subject to the same rules as if the testimony were
provided orally.
(i) Official notice. All matters officially noticed by the
Chairperson shall appear on the record.
(j) Exhibits and documents--(1) Copies. A legible duplicate copy of
a document shall be admissible to the same extent as the original.
(2) Exhibits. Witnesses may use existing or newly created charts,
exhibits, calendars, calculations, outlines, or other graphic materials
to summarize, illustrate, or simplify the presentation of testimony.
Subject to the Chairperson's discretion, such materials may be used
with or without being admitted into the record.
(3) Identification. All exhibits offered into the record shall be
numbered sequentially and marked with a designation identifying the
sponsor. The original of each exhibit offered into the record or marked
for identification shall be retained in the record of the meeting,
unless the Chairperson permits substitution of a copy for the original.
(4) Exchange of Exhibits. One copy of each exhibit offered into the
record shall be furnished to each of the parties and to each member of
the Board of Directors. If the Chairperson does not fix a time for the
exchange of exhibits, the parties shall exchange copies of proposed
exhibits at the earliest practicable time before the commencement of
the meeting to
[[Page 30888]]
consider the Petition. Parties are not required to exchange exhibits
submitted as rebuttal information before the meeting commences if
submission of the exhibits is not reasonably certain at that time.
(5) Authenticity. The authenticity of all documents submitted or
exchanged as proposed exhibits prior to the meeting shall be admitted
unless written objection is filed before the commencement of the
meeting, or unless good cause is shown for failing to file such a
written objection.
(k) Sanction for obstruction of the proceedings. The Board of
Directors may impose sanctions it deems appropriate for violation of
any applicable provision of this subpart or any applicable law, rule,
regulation, or order, or any dilatory, frivolous, or obstructionist
conduct by any witness or counsel during the course of a meeting.
Sec. 903.15 General provisions.
(a) Waiver of requirements. The Managing Director may waive any
filing requirement or deadline in this subpart for good cause shown.
The Managing Director shall provide prompt notice of any such waiver to
the Board of Directors.
(b) Actions of the Managing Director subject to the authority of
the Board of Directors. The Board of Directors may overrule any action
by the Managing Director under this subpart.
(c) Withdrawal. At any time prior to the issuance by the Managing
Director of a Notice of Board Consideration pursuant to Sec. 903.12(g),
an authorized representative of a Petitioner may withdraw the Petition,
or an authorized representative of an Intervener may withdraw the
Request to Intervene, by filing a written request to withdraw with the
Secretary to the Board. Only the Board of Directors may grant a request
to withdraw after issuance by the Managing Director of a Notice of
Board Consideration pursuant to Sec. 903.12(g). Unless otherwise
agreed, withdrawal of a Petition or Request to Intervene shall not
foreclose a Petitioner from resubmitting a Petition, or an Intervener
from submitting a Request to Intervene, on the same or similar issues.
(d) Settlement agreement. (1) At any time during the course of
proceedings pursuant to this subpart, the Finance Board shall give
Petitioners and Interveners the opportunity to submit offers of
settlement when the nature of the proceedings and the public interest
permit. With the approval of the Managing Director, an authorized
representative of a Petitioner or Intervener may enter into a proposed
settlement agreement with the Finance Board disposing of some or all of
the issues presented in a Petition or Request to Intervene.
(2) No proposed settlement agreement shall be final until approved
by the Board of Directors. The Board of Directors shall consider any
proposed settlement agreement within 30 calendar days of receiving a
notice of the proposed settlement agreement. If the Board of Directors
disapproves or fails to approve a proposed settlement agreement within
30 days, the proposed settlement agreement shall be null and void and
the previously filed Petition or Request to Intervene shall be
considered in accordance with this subpart.
(3) A settlement agreement approved by the Board of Directors shall
be deemed final and binding on all parties to the agreement. At the
time a proposed settlement agreement becomes final, a Petition or
Request to Intervene previously filed by a party to the agreement shall
be deemed withdrawn as to all issues resolved in the agreement, and the
parties to the agreement shall be estopped from raising objection to
those issues or to the terms of the settlement agreement.
(e) No rights created; Finance Board not prohibited. Nothing in
this subpart shall be deemed to create any substantive or discovery
right in any party. Nothing in this subpart shall limit in any manner
the right of the Finance Board to conduct any examination or inspection
of any Bank or the Office of Finance, or to take any action with
respect to a Bank or the Office of Finance, or its directors, officers,
employees or agents, otherwise authorized by law.
(f) Exhaustion requirement. When seeking a Case-by-Case
Determination of any matter or review by the Board of Directors of any
Supervisory Determination, a Bank or the Office of Finance shall follow
the procedures in this subpart as a prerequisite to seeking judicial
review. Failure to do so shall be deemed to be a failure to exhaust all
available administrative remedies.
(g) Improper conduct prohibited. No party shall, by act or
omission, unduly burden or frustrate the efforts of the Board of
Directors to carry out its duties under the laws and regulations of the
Finance Board. A Petitioner or Intervener shall confine its
communications with the Board of Directors, or any individual member
thereof, concerning issues raised in a pending Petition, to written
communications for inclusion in the record of the proceeding, filed
with the Secretary to the Board.
(h) Costs. Petitioners are encouraged to contain costs associated
with the preparation and filing of Petitions and related personal
appearances, if any, at any meeting held by the Board of Directors
under this subpart. The Petitioner shall be solely responsible for all
costs associated with any such Petitions and appearances.
(i) Procedures are exclusive. All Case-by-Case Determinations by
the Board of Directors and all Reviews of Disputed Supervisory
Determinations shall be considered exclusively pursuant to the
procedures described in this subpart.
Dated: May 28, 1999.
By the Board of Directors of the Federal Housing Finance Board.
Bruce A. Morrison,
Chairman.
[FR Doc. 99-14240 Filed 6-8-99; 8:45 am]
BILLING CODE 6725-01-P
