[Federal Register: January 7, 2003 (Volume 68, Number 4)]
[Notices]
[Page 780-782]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07ja03-57]
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FEDERAL HOUSING FINANCE BOARD
[No. 2002-N-15]
Notice of Annual Adjustment of the Cap on Average Total Assets
That Defines Community Financial Institutions, and Notice of Annual
Adjustment of the Limits on Annual Compensation for Federal Home Loan
Bank Directors, and Notice of Annual Adjustment of the Maximum Dollar
Limits on Certain Allocations by a Bank of its Annual Required
Affordable Housing Program Contributions
AGENCY: Federal Housing Finance Board.
[[Page 781]]
ACTION: Notice.
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SUMMARY: Notice is hereby given that the Federal Housing Finance Board
(Finance Board) has adjusted the cap on average total assets that
defines a ``Community Financial Institution'' (CFI) based on the annual
percentage increase in the Consumer Price Index for all urban consumers
(CPI-U), as published by the Department of Labor (DOL), pursuant to the
requirements of section 2(13)(B) of the Federal Home Loan Bank Act
(Bank Act) requirements of the Finance Board's regulations. Notice is
hereby given that the Finance Board has made similar adjustments to the
limits on annual compensation for the Federal Home Loan Bank (Bank)
directors, based on the CPI-U, as published by the DOL, pursuant to the
requirements of section 7(i)(2)(B) of the Bank Act and requirements of
the Finance Board's regulations. In addition, notice is hereby given
that the Finance Board has made similar adjustments to the maximum
dollar limits on certain allocations by a Bank of its annual required
Affordable Housing Program (AHP) contributions, pursuant to the
requirements of the Finance Board's regulations.
FOR FURTHER INFORMATION CONTACT: Scott L. Smith, Associate Director,
Economic and Financial Analysis, Office of Supervision, (202) 408-2991,
or Kirsten L. Landeryou, Economic and Financial Analysis, Office of
Supervision, (202) 408-2552. Staff also can be reached by regular mail
at the Federal Housing Finance Board, 1777 F Street, NW., Washington,
DC 20006.
SUPPLEMENTARY INFORMATION: Section 2(13)(B) of the Bank Act (12 U.S.C.
1422(13)(B)), and Sec. 900.1 of the Finance Board's regulations (12
CFR 900.1) require the Finance Board, beginning in 2001, to adjust
annually the cap on average total assets (CFI Asset Cap) set forth in
section 2(13)(A)(ii) of the Bank Act (12 U.S.C. 1422(13)(A)(ii)) and
Sec. 900.1 of the Finance Board's regulations that defines a CFI,
based on the annual percentage increase, if any, in the CP-U, as
published by the DOL.
Section 7(i)(2)(B) of the Bank Act (12 U.S.C. 1427(i)(2)(B)) and
Sec. 918.3(a)(1) of the Finance Board's regulations (12 CFR
918.3(a)(1)), require the Finance Board, beginning January 1, 2001, to
make similar annual adjustments to the annual compensation limits set
forth in section 7(i)(2)(A) of the Bank Act (12 U.S.C. 1427(i)(2)(A))
and Sec. 918.3(a)(1), for members of the boards of directors of the
Banks. Section 951.3(a)(1)(iii) of the Finance Board's regulations (12
CFR 951.3(a)(1)(iii)) requires the Finance Board, beginning in 2003, to
make similar annual adjustments to the maximum dollar limits set forth
in Sec. 951.3(a)(1)(i), on the amounts that a Bank may set aside
annually from its annual required AHP contributions for the current
year and the subsequent year, towards homeownership set-aside programs.
In addition, Sec. 951.3(a)(1)(iii) of the Finance Board's regulations
(12 CFR 951.3(a)(1)(iii)) requires the Finance Board, beginning in
2003, to make similar annual adjustments to the maximum dollar limits
set forth in Sec. 951.3(a)(1)(ii), on the amounts that a Bank may set
aside annually from its annual required AHP contributions for the
current year and the subsequent year, towards an additional first-time
homebuyer set-aside program. Section 951.3(a)(2) of the Finance Board's
regulations (12 CFR 951.3(a)(2)), requires the Finance Board, beginning
in 2002, to make a similar annual adjustment to the maximum dollar
limit set forth in Sec. 951.3(a)(2), on the amount that a Bank may
allocate from its annual required AHP contribution for the subsequent
year to the current year's competitive application program.
For purposes of the CFI Asset Cap, the Finance Board is required to
publish notice by Federal Register of the CP-U-adjusted Cap. See 12 CFR
900.1. For purposes of the Banks' board of directors annual
compensation limits, the Finance Board is required to publish notice,
by Federal Register, distribution of a memorandum or otherwise, of the
CP-U-adjusted limits on such compensation. See 12 CFR 918.3(a)(1). For
purposes of the maximum dollar limits on Banks' allocations from annual
required AHP contributions, the Finance Board is required to publish
notice, by Federal Register, distribution of a memorandum or otherwise,
of the CP-U-adjusted maximum dollar limits.
The annual adjustments of the existing CFI Asset Cap, annual Bank
director compensation limits and maximum dollar limits on Bank
allocations from annual required AHP contributions, effective January 1
of a particular calendar year, reflect the percentage by which the CP-U
published for November of the preceding calendar year exceeds the CP-U
published for November of the year before the preceding calendar year
(if at all). For example, the adjustments of the limits effective
January 1, 2003 are based on the percentage increase in the CP-U from
November 2001 to November 2002. The CFI Asset Cap is rounded to the
nearest million dollars, the annual compensation limits are rounded to
the nearest dollar and the limits on allocations from AHP contributions
are rounded to the nearest $100,000.\1\
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\1\ All adjusted limits referred to in this notice have been
rounded to some dollar level. However, the calculations of new
limits are based on cumulative CP-U changes applied to the limits as
they first appeared in Finance Board regulations, and hence are not
distorted over time by rounding.
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The Finance Board has determined that it is appropriate to use data
from November rather than waiting for the December data to become
available so that the Banks can be notified of the adjusted CFI Asset
Cap, annual Bank director compensation limits and AHP maximum dollar
allocation limits as close to the January 1 effective date as possible.
Other Federal agencies do not rely on December data, which is published
in mid-January, when calculating annual inflation adjustments and, as a
result, are able to announce their adjustments prior to the effective
date of January 1.
The DOL encourages the use of CPI-U data that has not been
seasonally adjusted in ``escalation agreements'' because seasonal
factors are updated annually and seasonally adjusted data are subject
to revision for up to five years following the original release.
Unadjusted data are not routinely subject to revision, and previously
published unadjusted data are only corrected when significant
calculation errors are discovered. Accordingly, the Finance Board is
using data that has not been seasonally adjusted to calculate the new
CFI Asset Cap, annual Bank director compensation limits and AHP maximum
dollar allocation limits.
The unadjusted CPI-U increased 2.2 percent between November of 2001
and November of 2002. Based on this data, pursuant to the requirements
of Sec. 900.1, the Finance Board has adjusted the CFI Asset Cap from
the 2002 limit of $527 million to $538 million, effective January 1,
2003. The Finance Board arrived at the adjusted limit of $538 million
by rounding to the nearest million.
Pursuant to Sec. 918.3(a)(1), based on the 2.2 percent increase in
the unadjusted CPI-U, the Finance Board has adjusted the annual
compensation limits for the members of the boards of directors of the
Banks as follows, effective January 1, 2003: for a Chairperson--
$26,921; for a Vice-Chairperson--$21,537; for any other member of a
Bank's board of directors--$16,152. The Finance Board arrived at the
adjusted annual compensation limits by rounding to the nearest dollar.
Pursuant to Sec. 951.3(a)(1)(iii), based on the 2.2 percent
increase in the unadjusted CPI-U, the Finance Board has adjusted the
maximum dollar limits
[[Page 782]]
on the amounts that a Bank may set aside from its annual required AHP
contributions for the current year and the subsequent year, toward
homeownership set-aside programs, from the 2002 limit of $3.0 million
to $3.1 million, effective January 1, 2003. The Finance Board arrived
at the adjusted limit of $3.1 million by rounding to the nearest
$100,000.
Pursuant to Sec. 951.3(a)(1)(iii), the Finance Board also applied
the 2.2 percent increase in the unadjusted CPI-U to the 2002 maximum
dollar limit on the amount that a Bank may set aside from its annual
required AHP contributions, for the current year and the subsequent
year, towards an additional first-time homebuyer set-aside program.
Rounding the resulting number to the nearest $100,000, the maximum
dollar limit remains at the 2002 level of $1.5 million, effective
January 1, 2003. In addition, pursuant to Sec. 951.3(a)(2), based on
the 2.2 percent increase in the unadjusted CPI-U, the Finance Board has
adjusted the maximum dollar limit on the amount that a Bank may
allocate from its annual required AHP contribution for the subsequent
year to the current year's competitive application program, from the
2002 limit of $3.0 million to $3.1 million, effective January 1, 2003.
The Finance Board arrived at the adjusted limit of $3.1 million by
rounding to the nearest $100,000.
Dated: December 31, 2002.
Federal Housing Finance Board.
John T. Korsmo,
Chairman.
[FR Doc. 03-196 Filed 1-6-03; 8:45 am]
BILLING CODE 6725-01-P