[Federal Register: June 2, 2003 (Volume 68, Number 105)]
[Rules and Regulations]
[Page 32627-32629]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02jn03-2]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of Federal Housing Enterprise Oversight
12 CFR Part 1700
RIN 2550-AA27
Organization and Functions
AGENCY: Office of Federal Housing Enterprise Oversight, HUD.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Office of Federal Housing Enterprise Oversight (OFHEO) is
revising its regulation that describes the Agency's organization and
functions. Specifically, OFHEO is revising sections in the regulation
that describe and display the Agency's official seal and logo. The logo
is the official symbol representing OFHEO and is displayed on
correspondence, selected documents, and signage of the Agency.
In promulgating this rule, OFHEO finds that notice and public
comment are not necessary. Section 553(b)(3)(A) of title 5, United
States Code, provides that when regulations involve matters of agency
organization, procedure or practice, the Agency may publish regulations
in final form. In addition, OFHEO finds, in accordance with 5 U.S.C.
553(d), that a delayed effective date is unnecessary. Accordingly,
these regulations are effective upon publication.
EFFECTIVE DATE: The final rule is effective June 2, 2003.
FOR FURTHER INFORMATION CONTACT: Christine C. Dion, Associate General
Counsel, telephone (202) 414-3838 (not a toll-free number), Office of
Federal Housing Enterprise Oversight, 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:
Discussion of the Final Regulation
This final rule informs the public about changes to the official
symbol of OFHEO.
Background on OFHEO
OFHEO was established as an independent entity within the
Department of Housing and Urban Development by the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (1992 Act)
(title XIII of Pub. L. 102-550, 12 U.S.C. 4501 et seq.). OFHEO's
primary mission is ensuring the capital adequacy and financial safety
and soundness of Fannie Mae and Freddie Mac (collectively, the
Enterprises).
OFHEO began operating when its first employee, the first director,
took office on June 1, 1993. The Agency was built from the ground up.
It had to acquire staff and address hundreds of administrative issues
involved in establishing an agency infrastructure. OFHEO needed to
procure office space, equipment, computers, telecommunications, and
other logistical support for the lawyers, economists, examiners and
administrative personnel who would carry out the duties of the Agency.
In its early years, OFHEO's experienced staff worked to develop an
in-depth understanding of the operations of the Enterprises. OFHEO grew
from a one-person agency into a strong and well-rounded regulator,
fully capable of meeting its regulatory responsibilities.
While the Agency was being built, it was still obligated to fulfill
its mission of regulating two extremely large and enormously complex
financial institutions. OFHEO now has all the key elements of a strong,
thorough oversight program in place: Capital Standards, Examinations,
and Research.
As required by the 1992 Act, OFHEO established minimum and risk-
based capital standards as part of its role as a safety and soundness
regulator. These capital requirements are intended to ensure that both
Enterprises continue to operate and perform their crucial roles in the
secondary mortgage market, keeping constant the flow of funds to
mortgage lenders and prospective American homeowners.
In addition to its quarterly release with respect to the minimum
capital requirement, OFHEO has adopted a risk-based capital standard
that is unique among financial regulators. Unlike ratio-based capital
rules, OFHEO's standard is based on a 10-year stress test. A stress
test measures risk in the context of a company's overall portfolio,
including the company's risk management activities. While companies
often use stress tests for internal risk management, and rating
agencies use stress tests to rate companies and securities, OFHEO is
among the first of the financial institutions regulators to use a
comprehensive stress test to determine capital adequacy.
In addition to developing a strong, rigorous risk-based capital
standard, OFHEO has an annual risk-based examination program that is an
integral part of a system designed to ensure the ongoing safety and
soundness of the Enterprises. OFHEO's comprehensive risk-based
examinations apply a consistent set of standards to assess and evaluate
each Enterprise's financial condition, business operations, and
internal controls. These standards remain consistent from year-to-year
and are appropriately updated to reflect enhancements in regulatory
best practice, developments in risk management or market practices, and
innovations at either Enterprise.
[[Page 32628]]
OFHEO's examination program contributes to OFHEO's capital adequacy
framework by further informing the Director's evaluation about the
appropriateness of the balance of risk and capital at each Enterprise.
OFHEO has implemented a plan to enhance its examination program and
double the size of the examination staff.
Complementing its Capital and Examination regulatory elements,
OFHEO has developed a Research element to ensure that ongoing research
and analysis is conducted on a variety of topics to understand how
changes in the market impact the Enterprises and, conversely, how
changes in the Enterprises' operations impact the market. A recent
example of the Agency's research and analysis is a February 4, 2003,
report released by OFHEO's Director, which is entitled: ``Systemic
Risk: Fannie Mae, Freddie Mac and the Role of OFHEO.'' The report
analyzes how the Enterprises operate in the housing finance system and
the financial sector, how their activities affect economic activity and
how they can affect systemic risk in different circumstances.
In addition to its research and analysis, OFHEO presents symposiums
on issues relating to the Enterprises and the mortgage markets, e.g.,
the March 10, 2003, symposium on ``House Prices in the U.S. Economy.''
Moreover, OFHEO advises the public and market participants on housing
activities through issuance of periodic reports, such as the Agency's
quarterly report analyzing housing appreciation trends, i.e., OFHEO's
House Price Index (HPI) report.
In support of its regulatory infrastructure based on Capital,
Examination, and Research, OFHEO has adopted guidelines, policy
guidances, and regulations, which are accessible on the Agency's
website. The guidelines relate to risk-based capital and information
quality. The policy guidance includes guidance on Non-Mortgage
Liquidity Investments, and Safety and Soundness Standards for
Information. OFHEO's rulemaking ranges from administrative regulations,
e.g., rules of practice and procedure, to regulatory oversight
regulations, e.g., a regulation that requires public disclosure by the
Enterprises of their securities and financial information, and a
regulation addressing corporate governance, which enhances the
transparency of regulatory standards for the executives and boards of
directors of the Enterprises.
The preceding background was provided to summarize OFHEO's first 10
years as a Federal financial regulatory agency. The public is
encouraged to visit OFHEO's Web site for a fuller understanding about
the Agency and its accomplishments to date.
Over the past 10 years, OFHEO has met and continues to meet its
mandate to ensure that the Enterprises are well-capitalized and
operating in a safe and sound manner. Accordingly, on the occasion of
OFHEO's successful completion of a range of regulatory duties and its
10 year anniversary, the Agency has determined to update its logo. The
triangle representing the roof has been properly centered. In a sense,
the roof in the logo, like OFHEO, has been strengthened and put in good
working order. OFHEO looks forward to continued success.
Changes to the Official Symbol of OFHEO
OFHEO is revising sections of this regulation that describe and
display the official seal and logo representing the Agency. Under the
revisions, the seal and logo are combined to be the sole official
symbol of OFHEO that will be displayed on correspondence, selected
documents, and signage. The logo, as restructured, also will serve as
the official seal to authenticate official documents of the Agency.
Specifically, the logo is a disc consisting of two concentric
circles enclosing the words ``Office of Federal Housing Enterprise
Oversight'' and the Agency's inaugural year, 1993. In the center of the
disc is a stylized image of a structure consisting of a solid two-
tiered pedestal base topped by a solid triangular shape. The structure
represents a house or home, symbolic of the role of OFHEO in promoting
a stable and efficient housing finance system. The triangular top of
the symbol represents the roof of the structure. The base represents
the foundation. The two tiers of the foundation represent the safety
and soundness oversight of OFHEO. The Agency's role with respect to the
Enterprises is emphasized by placement of the acronym of the Agency
(OFHEO) between the base and top of the symbol.
It is noted that the official symbol of OFHEO, as revised by this
final regulation, is effective on June 2, 2003. However, for purposes
of cost efficiency, OFHEO will continue to use and recognize its
original seal and logo until such time as supplies containing them are
exhausted and signage displaying them is replaced.
This final rule is not classified as a significant rule under
Executive Order 12866 because it will not result in (1) an annual
effect on the economy of $100 million or more; (2) a major increase in
costs or prices for consumers, individual industries, Federal, State,
or local government agencies, or geographic regions; or (3) significant
adverse effects on competition, employment, investment, productivity,
innovation, or on the ability of United States-based enterprises to
compete with foreign-based enterprises in domestic or foreign markets.
Accordingly, no regulatory impact assessment is required and this final
rule has not been submitted to the Office of Management and Budget for
review.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires that
a rule 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). OFHEO has considered the impact of this
final rule under the Regulatory Flexibility Act. The General Counsel
certifies that this final rule will not have a significant economic
impact on a substantial number of small business entities.
Paperwork Reduction Act
This final rule does not contain any information collection
requirements that require the approval of the Office of Management and
Budget under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).
Unfunded Mandates Reform Act of 1995
This final rule does not require the preparation of an assessment
statement in accordance with the Unfunded Mandates Reform Act of 1995,
2 U.S.C. 1531. Assessment statements are not required for regulations
that incorporate requirements specifically set forth in law. As
explained in the preamble, this rule implements specific statutory
requirements. In addition, this rule does not include a Federal mandate
that may result in the expenditure by State, local, and tribal
governments, in the aggregate, or by the private sector, of $100
million or more (adjusted annually for inflation) in any one year.
List of Subjects in 12 CFR Part 1700
Organization and functions (government agencies).
[[Page 32629]]
0
For the reasons stated in the preamble, OFHEO is amending 12 CFR part
1700 as follows:
PART 1700--ORGANIZATION AND FUNCTIONS
0
1. The authority citation for part 1700 continues to read as follows:
Authority: 5 U.S.C. 552; 12 U.S.C. 4513 and 4526.
0
2. Revise Sec. 1700.3 to read as follows:
Sec. 1700.3 Official logo and seal.
The section describes and displays the logo adopted by the Director
as the official symbol representing the Office of Federal Housing
Enterprise Oversight. It is displayed on correspondence, selected
documents, and signage. The logo serves as the official seal to
authenticate official documents of the Agency.
(a) Description. The logo is a disc consisting of two concentric
circles enclosing the words ``Office of Federal Housing Enterprise
Oversight'' and the inaugural year, 1993. In the center of the disc is
a stylized image of a structure consisting of a solid two-tiered
pedestal base topped by a solid triangular shape, which represents the
roof of the structure. Placed between the base and the top are the
letters ``OFHEO.'' These letters spell out the acronym of the Office of
Federal Housing Enterprise Oversight and act as a visual link between
the top and bottom of the structure.
(b) Display. The Office of Federal Housing Enterprise Oversight's
official logo and seal appears below:
[GRAPHIC] [TIFF OMITTED] TR02JN03.002
Sec. 1700.4 [Removed]
0
3. Remove Sec. 1700.4.
Dated: May 22, 2003.
Armando Falcon, Jr.,
Director, Office of Federal Housing Enterprise Oversight.
[FR Doc. 03-13281 Filed 5-30-03; 8:45 am]
BILLING CODE 4220-01-P