Proposed Collection; Comment Request

AGENCY:

Federal Housing Finance Agency.

ACTION:

Federal Home Loan Bank Directors—30-day notice of submission of information collection for approval from Office of Management and Budget.

SUMMARY:

In accordance with the requirements of the Paperwork Reduction Act of 1995 (PRA), the Federal Housing Finance Agency (FHFA or the Agency) is seeking public comments concerning an information collection known as “Federal Home Loan Bank Directors,” which has been assigned control number 2590-0006 by the Office of Management and Budget (OMB). FHFA intends to submit the information collection to OMB for review and approval of a three-year extension of the control number, which expired on February 28, 2021.

DATES:

Interested persons may submit comments on or before June 21, 2021.

ADDRESSES:

Submit comments to the Office of Information and Regulatory Affairs of the Office of Management and Budget, Attention: Desk Officer for the Federal Housing Finance Agency, Washington, DC 20503, Fax: (202) 395-3047, Email: OIRA_submission@omb.eop.gov. Please also submit comments to FHFA, identified by “Proposed Collection; Comment Request: `Federal Home Loan Bank Directors, (No. 2021-N-6)' ” by any of the following methods:

• Agency Website: www.fhfa.gov/open-for-comment-or-input.
• 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 email to FHFA at RegComments@fhfa.gov to ensure timely receipt by the agency.
• Mail/Hand Delivery: Federal Housing Finance Agency, Eighth Floor, 400 Seventh Street SW, Washington, DC 20219, ATTENTION: Proposed Collection; Comment Request: “Federal Home Loan Bank Directors, (No. 2021-N-6).”

We will post all public comments we receive without change, including any personal information you provide, such as your name and address, email address, and telephone number, on the FHFA website at http://www.fhfa.gov. In addition, copies of all comments received will be available for examination by the public through the electronic comment docket for this PRA Notice also located on the FHFA website.

FOR FURTHER INFORMATION CONTACT:

Vickie Olafson, Assistant General Counsel, Vickie.Olafson@fhfa.gov, (202) 649-3025; or Angela Supervielle, Counsel, Angela.Supervielle@fhfa.gov, (202) 649-3973 (these are not toll-free numbers); Federal Housing Finance Agency, 400 Seventh Street SW, Washington, DC 20219. The Telecommunications Device for the Deaf is (800) 877-8339.

SUPPLEMENTARY INFORMATION:

A. Need for and Use of the Information Collection

Section 7 of the Federal Home Loan Bank Act (Bank Act) vests the management of each Federal Home Loan Bank (Bank) in its board of directors. As required by section 7, each Bank's board comprises two types of directors: (1) Member directors, who are drawn from the officers and directors of member institutions located in the Bank's district and who are elected to represent members in a particular state in that district; and (2) independent directors, who are unaffiliated with any of the Bank's member institutions, but who reside in the Bank's district and are elected on an at-large basis. Both types of directors serve four-year terms, which are staggered so that approximately one-quarter of a Bank's total directorships are up for election every year. Section 7 and FHFA's implementing regulation, codified at 12 CFR part 1261, establish the eligibility requirements for both types of Bank directors and the professional qualifications for independent directors, and set forth the procedures for their election.

Part 1261 requires that each Bank administer its own annual director election process. As part of this process, a Bank must require each nominee for both types of directorship, including any incumbent that may be a candidate for re-election, to complete and return to the Bank a form that solicits information about the candidate's statutory eligibility to serve and, in the case of independent director candidates, about his or her professional qualifications for the directorship being sought. Specifically, member director candidates are required to complete the Federal Home Loan Bank Member Director Eligibility Certification Form (Member Director Eligibility Certification Form), while independent director candidates must complete the Federal Home Loan Bank Independent Director Application Form (Independent Director Application Form). Each Bank must also require all of its incumbent directors to certify annually that they continue to meet all eligibility requirements. Member directors do this by completing the Member Director Eligibility Certification Form again every year, while independent directors complete the abbreviated Federal Home Loan Bank Independent Director Annual Certification Form (Independent Director Annual Certification Form) to certify their ongoing eligibility.

The Banks use the information collection contained in the Independent Director Application Form and part 1261 to determine whether individuals who wish to stand for election or re-election as independent directors satisfy the statutory eligibility requirements and possess the professional qualifications required under the statute and regulations. Only individuals meeting those requirements and qualifications may serve as an independent director. On an annual basis, the Banks use the information collection contained in the Independent Director Annual Certification Form and part 1261 to determine whether their incumbent independent directors continue to meet the statutory eligibility requirements. The Banks use the information collection contained in the Member Director Eligibility Certification Form and part 1261 to determine whether individuals who wish to stand for election or re-election as member directors satisfy the statutory eligibility requirements. Only individuals meeting these requirements may serve as a member director. On an annual basis, the Banks also use the information collection contained in the Member Director Eligibility Certification Form and part 1261 to determine whether their incumbent member directors continue to meet the statutory eligibility requirements.

The OMB control number for this information collection is 2590-0006. The current clearance for the information collection expired on February 28, 2021. The likely respondents are individuals who are prospective and incumbent Bank directors.

B. Revisions to the Bank Director Forms

In advance of the 2021 Bank director election cycle, FHFA has revised each of the three Bank Director Application and Certification forms, all of which have existed in substantially their current form since the current statutory requirements for Bank directors were adopted in 2008.

The Independent Director Application Form, by far the longest of the three forms and requiring a number of essay-type answers, is completed by all independent directorship nominees, including incumbents seeking re-nomination. The information requested on the form is designed to confirm that the nominee is legally eligible to serve as an independent director, has the required professional qualifications for the type of independent directorship being sought, and is of high personal integrity and to identify any potential conflicts of interest of which the Bank should be aware. The revisions tie the questions more closely to statutory and regulatory requirements, provide more structured answer choices so as to ensure responses are relevant, solicit more comprehensive information on issues about which the Bank must weigh facts to make a legal judgment about the nominee's eligibility, and generally streamline the questions. The revisions should allow nominees to complete the form more quickly by providing preset answer choices for many questions, permitting attachments in answer to certain questions, and eliminating some superfluous questions. FHFA estimates that, in addition to encouraging more accurate and complete answers, the revisions will reduce the amount of time it takes a nominee to complete the form from three to two hours.

The Independent Director Annual Certification Form is completed by incumbent independent directors annually to certify that they remain legally eligible to serve. The prior form provided independent directors with the option merely to check a box stating that “no changes have occurred” with respect to the director's compliance with the statutory eligibility requirements. In the Agency's view, providing this option resulted in some independent directors overlooking changes in residence or employment that might have rendered them ineligible to continue to serve. The revised form requires independent directors to provide current information on residence and employment to allow the Bank to determine whether there may be new information leading to eligibility concerns.

The Member Director Eligibility Certification Form is completed both by nominees running for a member directorship and annually by incumbent member directors to certify their continuing eligibility. The form is intended to confirm that member directors and member directorship nominees are legally eligible to serve in the directorship positions they occupy or are seeking. Although some questions on the form have been revised to provide preset answers, the substance of the questions on the revised form remain essentially the same as those on the prior form. The Member Director Eligibility Certification Form was most recently revised in August 2020 to remove a notarization requirement (neither of the other two Bank director forms had such a requirement).

The revised questions, including preset answer selections, and instructions for each of the Bank director forms appear at the end of this notice. The final formatting of the revised forms is currently in process.

C. Burden Estimate

FHFA estimates the total annual hour burden imposed upon respondents by the three Bank director forms comprising this information collection to be 119 hours (39 hours + 50 hours + 30 hours = 119 hours, as detailed below).

The Agency estimates the total annual hour burden on all member director candidates and incumbent member directors associated with review and completion of the Member Director Eligibility Certification Form to be 39 hours. This includes a total annual average of 72 member director nominees (24 open seats per year with three nominees for each) completing the form as an application, with 1 response per nominee taking an average of 15 minutes (.25 hours) (72 respondents × .25 hours = 18 hours). It also includes a total annual average of 84 incumbent member directors not up for election completing the form as an annual certification, with 1 response per individual taking an average of 15 minutes (.25 hours) (84 individuals × .25 hours = 21 hours).

The Agency estimates the total annual hour burden on all independent director candidates associated with review and completion of the Independent Director Application Form to be 50 hours. This includes a total annual average of 25 independent director candidates (22 open seats per year, plus three vacancies, with one nominee for each), with 1 response per individual taking an average of 2.0 hours (25 individuals × 2.0 hours = 50 hours).

The Agency estimates the total annual hour burden on all incumbent independent directors associated with review and completion of the Independent Director Annual Certification Form to be 30 hours. This includes a total annual average of 60 incumbent independent directors not up for election, with 1 response per individual taking an average of 30 minutes (.5 hours) (60 individuals × .5 hours = 30 hours).

D. Comments Request

In accordance with the requirements of 5 CFR 1320.8(d), FHFA published an initial notice and request for public comments regarding this information collection in the Federal Register on March 3, 2021. The 60-day comment period closed on May 3, 2021. FHFA received two comment letters—one from the eleven Banks jointly and one from a trade association.

In their joint letter, the Banks made a number of suggestions regarding the rephrasing of questions and instructions on each of the forms for greater clarity and to better elicit pertinent information. FHFA has further revised the forms to incorporate most of those suggestions, some verbatim and others in essence. The Banks also requested that FHFA add more detail to the Independent Director Application Form questions and instructions regarding the Agency's interpretations of the statutory and regulatory independence requirements applying to independent directors and the qualifications requirements for public interest independent directors. FHFA has declined to make those revisions (although it has slightly modified the material on public interest director qualifications for greater clarity). Agency interpretations of statutory and regulatory requirements pertaining to Bank director eligibility are discussed in the forms only to the extent necessary to clarify the purpose of particular questions so as to better ensure the provision of accurate and relevant responses. The Bank director forms are not intended to serve as guidance documents.

The trade association's comment letter focused on FHFA's interpretations of the statutory qualifications requirements for public interest independent directors. Neither comment letter questioned the need for the information collection or addressed the Agency's burden estimates.

FHFA requests written comments on the following: (1) Whether the collection of information is necessary for the proper performance of FHFA functions, including whether the information has practical utility; (2) the accuracy of FHFA's estimates of the burdens of the collection of information; (3) ways to enhance the quality, utility, and clarity of the information collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.