2010-21520. Privacy Act of 1974; System of Records

AGENCY:

Federal Housing Finance Agency.

ACTION:

Notice of the establishment of a new system of records.

SUMMARY:

In accordance with the requirements of the Privacy Act of 1974, as amended (Privacy Act), the Federal Housing Finance Agency (FHFA) gives notice of a proposed Privacy Act system of records to replace a system of records issued by FHFA's predecessor agency, the Office of Federal Housing Enterprise Oversight (OFHEO) which was abolished July 30, 2009, and to fulfill FHFA's statutory requirement to collect the records. Upon the effective date of this notice, system OFHEO-07, “Mortgage Fraud System” published at 71 FR 6085 on February 6, 2006 will be deleted.

The proposed system named “Fraud Reporting System” (FHFA-6) will maintain information of fraud or possible fraud involving the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, and the Federal Home Loan Banks (collectively, “regulated entities”). This system is being established so that FHFA may carry out its statutory authority to require the regulated entities to report fraud or possible fraud upon discovery and in furtherance of its authority for oversight of the safe and sound operations of the regulated entities. The deleted system of records is being replaced as a result of FHFA's statutory authority. The proposed system will include information formerly maintained in the system, OFHEO-07, “Mortgage Fraud System” published at 71 FR 6085 on February 6, 2006.

DATES:

The new system of records will become effective on October 12, 2010 without further notice unless comments necessitate otherwise. FHFA will publish a new notice if the effective date is delayed to review comments or if changes are made based on comments received. To be assured of consideration, comments should be received on or before September 29, 2010.

ADDRESSES:

Submit comments to FHFA only once, identified by “2010-N-13,” using any one of the following methods:

• E-mail: Comments to Alfred M. Pollard, General Counsel, may be sent by e-mail to [e-mail]. Please include “Comments/No. 2010-N-13,” in the subject line of the message.
• Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments. If you submit your comment to the Federal eRulemaking Portal, please also send it by e-mail to FHFA at [e-mail] to ensure timely receipt by the agency. Please include “Comments/No. 2010-N-13” in the subject line of the message.
• Hand Delivered/Courier: The hand delivery address is: Alfred M. Pollard, General Counsel, Attention: Comments/No. 2010-N-13, Federal Housing Finance Agency, Fourth Floor, 1700 G Street, NW., Washington, DC 20552. The package should be logged at the Guard Desk, First Floor, on business days between 9 a.m. and 5 p.m.
• U.S. Mail, United Parcel Service, Federal Express, or Other Mail Service: The mailing address for comments is: Alfred M. Pollard, General Counsel, Attention: Comments/No. 2010-N-13, Federal Housing Finance Agency, Fourth Floor, 1700 G Street, NW., Washington, DC 20552.

See SUPPLEMENTARY INFORMATION for additional information on submission and posting of comments.

FOR FURTHER INFORMATION CONTACT:

John Major, Privacy Act Officer, [e-mail], 202-408-2849, or David A. Lee, Senior Agency Official for Privacy, [e-mail], 202-408-2514 (not toll-free numbers), Federal Housing Finance Agency, 1700 G Street, NW., Fourth Floor, Washington, DC 20552. The telephone number for the Telecommunications Device for the Deaf is 800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Comments

Instructions: FHFA seeks public comments on the proposed new system of records and will take all comments into consideration before issuing the final notice. See 5 U.S.C. 552a(e)(4) and (11). In addition to referencing “Comments/No. 2010-N-13,” please reference the title and number of the system of records your comment addresses: “Fraud Reporting System” (FHFA-6).

Posting and Public Availability of Comments: All comments received will be posted without change on the FHFA Web site at http://www.fhfa.gov,, and will include any personal information provided. In addition, copies of all comments received will be available for examination by the public on business days between the hours of 10 a.m. and 3 p.m., at the Federal Housing Finance Agency, Fourth Floor, 1700 G Street, NW., Washington, DC 20552. To make an appointment to inspect comments, please call the Office of General Counsel at 202-414-6924.

II. Introduction

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) and transferred to FHFA the supervisory and oversight responsibilities over the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, and the Federal Home Loan Banks (collectively, regulated entities). FHFA is responsible for ensuring that the regulated entities operate in a safe and sound manner and carry out their public policy missions. The OFHEO and the Federal Housing Finance Board were abolished on July 30, 2009, one year after the enactment of HERA.^[1]

Section 1379E of the Safety and Soundness Act (section 1379E) (12 U.S.C. 4642(a)) subjects the regulated entities to both fraud reporting and internal control requirements. Under this statutory provision, the Director of FHFA must require a regulated entity to submit a timely report upon discovery that it has purchased or sold a fraudulent loan or financial instrument, or suspects a possible fraud relating to the purchase or sale of any loan or financial instrument. Additionally, the Director must require each regulated entity to establish and maintain procedures designed to discover any such transactions.

This notice informs the public of FHFA's proposal to establish and maintain a new system of records and to delete an obsolete system of records. The proposed new system of records is: FHFA-6, Fraud Reporting System. The deleted system of records is: OFHEO-07 Mortgage Fraud System.

This notice satisfies the Privacy Act requirement that an agency publish a system of records notice in the Federal Register when there is an addition to the agency's system of records. Congress recognized that application of all requirements of the Privacy Act to certain categories of records may have an undesirable and often unacceptable effect upon agencies in the conduct of necessary public business. Consequently, Congress established general exemptions and specific exemptions that could be used to exempt records from provisions of the Privacy Act. Congress also required that exempting records from provisions of the Privacy Act would require the head of an agency to publish a determination to exempt a record from the Privacy Act as a rule in accordance with the Administrative Procedures Act. The Director of FHFA has determined that records and information in this new system of records is not exempt from requirements of the Privacy Act.

As required by the Privacy Act, 5 U.S.C. 552a(r), and pursuant to paragraph 4c of Appendix I to OMB Circular No. A-130, “Federal Agency Responsibilities for Maintaining Records About Individuals,” dated February 8, 1996 (February 20, 1996; 61 FR 6427, 35), FHFA has submitted a report describing the new system of records covered by this notice, to the Committee on Oversight and Government Reform of the House of Representatives, the Committee on Governmental Affairs of the Senate, and the Office of Management and Budget.

The proposed new system of records described above is set forth in its entirety below.

Dated: August 26, 2010.

Edward J. DeMarco,

Acting Director, Federal Housing Finance Agency.

FHFA-6

system name:

Fraud Reporting System.

security classification:

Unclassified but sensitive.

system location:

Federal Housing Finance Agency, 1700 G Street, NW., Washington, 20552; 1625 Eye Street, NW., Washington, DC 20006; and any alternate work site utilized by employees of the Federal Housing Finance Agency or by individuals assisting such employees.

categories of individuals covered by the system:

The “Fraud Reporting System” contains information about individuals that are suspects of a fraud or possible fraud in connection with a loan or financial instrument purchased or sold involving the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, or the Federal Home Loan Banks (collectively, “regulated entities”). Such records may include information on:

(a) Individuals who are directors, officers, employees, agents, of a regulated entity;

(b) Individuals that are actual or potential victims of fraud or possible fraud;

(c) Individuals who are named as possible witnesses;

(d) Individuals who have or might have information about reported matters;

(e) Individuals named as preparers of any reports; or

(f) Individuals named as persons to be contacted for assistance by FHFA.

categories of records in the system:

Records in the “Fraud Reporting System” contain information about the individuals specified in “Categories of Individuals Covered by the System” such as name, address, social security numbers, and financial information. The records may also contain information pertaining to criminal prosecutions, civil actions, enforcement proceedings, and investigations resulting from or relating to the records.

authority for maintenance of the system:

The system is established and maintained pursuant to 12 U.S.C. 4513, 4514, 4526 and 4642 and 12 CFR part 1233.

Purpose(s):

The information in this system of records will be analyzed by FHFA staff in carrying out the statutory authorities of the Director to require the regulated entities to report fraud or possible fraud involving a loan or financial instrument purchased or sold by the regulated entity upon discovery consistent with the safety and soundness responsibilities of FHFA under the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended.

routine uses of records maintained in the system, including categories of users and the purposes of such uses:

It shall be a routine use to disclose information contained in this system for the purposes and to the users identified below:

1. FHFA personnel authorized as having a need to access the records in performance of their official functions.

2. The Financial Crimes Enforcement Network and other law enforcement and government entities, as determined by FHFA to be appropriate.

3. A regulated entity.

4. A consultant, person, or entity that contracts or subcontracts with FHFA, to the extent necessary for the performance of the contract or subcontract and consistent with the purpose of the system, provided that the person or entity acknowledges in writing that it is required to maintain Privacy Act safeguards for the information.

disclosure to consumer reporting agencies:

None.

policies and practice for storing, retrieving, accessing, retaining and disposing of records in the system:

storage:

Records in this system are stored in paper and electronic format.

retrievability:

Records may be retrieved by sectionalized data fields or by the use of search and selection criteria, such as an individual's or entity's name.

Safeguards:

Records are maintained in controlled access areas. Electronic records are protected by restricted access procedures, including user identifications and passwords. Only FHFA staff whose official duties require access are allowed to view, administer, or control these records.

retention and disposal:

Records are maintained in accordance with National Archives and Records Administration and FHFA retention schedules. Records are disposed of according to accepted techniques.

system manager(s) and address:

Division of Enterprise Regulation, Federal Housing Finance Agency, 1700 G Street, NW., Washington, DC 20552 and the Division of Bank Regulation, Federal Housing Finance Agency, 1625 Eye Street, NW., Washington, DC 20006.

notification procedures:

Direct inquiries as to whether this system contains a record pertaining to an individual to the Privacy Act Officer by electronic mail, regular mail, or fax. The electronic mail address is: [e-mail]. The regular mail address is: Privacy Act Officer, Federal Housing Finance Agency, 1625 Eye Street, NW., Washington, DC 20006. The fax number is: 202-408-2580. For the quickest possible handling, you should mark your electronic mail, letter, or fax and the subject line, envelope, or fax cover sheet “Privacy Act Request” in accordance with the procedures set forth in 12 CFR part 1204.

record access procedures:

Direct requests to access, amend, or correct a record to the Privacy Act Officer, Federal Housing Finance Agency, 1625 Eye Street, NW., Washington, DC 20006, in accordance with the procedures set forth in 12 CFR part 1204.

contesting record procedures:

Direct requests to contest or appeal an adverse determination for a record to the Privacy Act Appeals Officer, Federal Housing Finance Agency, 1700 G Street, NW., Washington, DC 20552, in accordance with the procedures set forth in 12 CFR part 1204.

record source categories:

The information is obtained from the regulated entities.

exemptions claimed for the system:

Some information in this system that is investigatory and compiled for law enforcement purposes is exempt under subsection 552a(k)(2) of the Privacy Act.

Footnotes

1.  See HERA, Division A, Title I, Section 1101 “Establishment of the Federal Housing Finance Agency” and Title III, Section 1301 “Abolishment of OFHEO.”