PRA Members of Banks Supporting Statement_for Upload

“MEMBERS OF THE BANKS”
OMB NUMBER 2590-0003
SUPPORTING STATEMENT

A.

Justification

1. Section 4 of the Federal Home Loan Bank Act (Bank Act) establishes the eligibility
requirements an institution must meet to become a member of a Federal Home Loan Bank
(Bank). See 12 U.S.C § 1424. Part 1263 – the membership regulation – implements section 4 of
the Bank Act. See 12 CFR part 1263. The membership regulation provides uniform application
requirements an applicant for Bank membership must meet, and review criteria a Bank, and
where appropriate, the Federal Housing Finance Agency (FHFA), must apply to determine
whether an applicant satisfies the statutory and regulatory membership requirements. More
specifically, the regulation implements the statutory eligibility requirements and provides
guidance to an applicant on how it may satisfy the requirements. It authorizes a Bank to approve
or deny each membership application and permits an applicant to appeal a Bank denial to FHFA.
The regulation also imposes a continuing obligation on a current Bank member to provide
information necessary to determine if it remains in compliance with applicable statutory and
regulatory eligibility requirements.
2. The Banks and, where appropriate, the FHFA use the information collection to determine: (i)
if an institution satisfies the statutory and regulatory membership requirements; (ii) a member’s
initial capital stock purchase in a Bank; (iii) member withdrawals; and, (iii) where a member
transfers to a different Bank district.
3. The information collection permits the use of automated, electronic, mechanical, or other
technological collection techniques or other forms of information technology. Respondents can
use these techniques or technologies, such as Sheshunoff Information Services Inc., which
calculates performance ratios required in the membership application process, to reduce the
information collection burden.
4. The information collection avoids duplication because it requires the submission of
information that already is available to, or compiled by, respondents for other purposes. For
instance, an applicant can submit information already required for the Federal Deposit Insurance
Corporation Report of Condition and Income, Office of Thrift Supervision Thrift Financial
Report, audited financial statements, or the public portion of the Community Reinvestment Act
examination.
5. The information collection does not have a significant economic impact on a substantial
number of small entities. The membership regulation implements statutory requirements and is
applicable to all institutions regardless of their size. FHFA does not have the authority to make
adjustments to the statutory requirements to accommodate small entities.

6. If the information is not collected at the times specified in the regulation, the Banks and,
where appropriate, the FHFA could not determine whether: (i) an institution satisfies the
statutory and regulatory membership requirements; (ii) a new member purchases the correct
amount for its initial stock subscription; (iii) a member may withdraw; or (iv) a member can
transfer to a different Bank district.
7. There are no special circumstances requiring FHFA to conduct the information collection in
a manner inconsistent with the guidelines provided in Question 7.
8. In accordance with the requirements of 5 CFR § 1320.8(d), FHFA published a request for
public comments regarding this information collection in the Federal Register on March 29,
2010. See 75 FR 15431 (Mar. 29, 2010). The 60-day comment period closed on May 28, 2010.
FHFA received one comment that referred to another proposed collection of information that
was not related to this collection. FHFA also contacted Vicki Benson of the Boston Bank (617)
292-9647, [email protected]; Michael Sims of the Dallas Bank, (214) 441-8760,
[email protected]; and Kevin Gottlieb of the New York Bank, (212) 441-6756,
[email protected].
9. No payment or gift will be provided to any respondent.
10. The Banks and FHFA maintain the confidentiality of information obtained from respondents
as required by applicable statute, regulation or agency policy.
11. There are no questions of a sensitive nature in the information collection.
12. FHFA has analyzed the cost and hour burden for the four facets of the information collection
– membership application process, initial capital stock calculation, membership withdrawals, and
transfer of membership to another Bank district. The aggregate total annual cost and hour
burden for the information collection is as follows:

Cost:
Hours:

FHFA
$40,654
873

Banks
$444,150
4,663

Applicants/Members
$535,549
5,564

TOTALS
$1,020,353
11,100

The method FHFA used to determine the annual cost and hour burden is explained in detail
below.
I.

Membership Application and Appeal Process

FHFA based the calculations upon an annual average of 283 applications for membership
processed by the Banks and 1 appellate application processed by FHFA. The aggregate total
annual cost and hour burden is as follows:

“Members of the Banks”
OMB Number 2590-0003: Supporting Statement

Cost:
Hours:

FHFA
$39,742
859

Banks
$429,279
4,358

Membership Applicants
$521,136
5,458

TOTALS
$990,157
10,675

A. FHFA's Annualized Burden – Membership Application and Appellate Application Process
The estimated annualized cost to FHFA is $39,742. The estimated annual hour burden is 859
hours. These estimates are based on the following calculations:
Financial analyst reviews appellate application to ensure compliance with statutory and
regulatory membership eligibility requirements.






Review time: 2 hours
Total applications: 1
Total hours: 2
Hourly rate: $46 (includes salary, benefits, and overhead)
Total cost: $92

Attorney reviews appellate application to confirm eligibility and to ensure the absence of any
special legal issues.






Review time: 4 hours
Total applications: 1
Total hours: 4
Hourly rate: $54 (includes salary, benefits, and overhead)
Total cost: $216

Management reviews appellate application and Bank and FHFA staff recommendations and
makes a determination on the application.






Review time: 4 hours
Total applications: 1
Total hours: 4
Hourly rate: $95 (includes salary, benefits, and overhead)
Total cost: $380

Financial analyst tracks all Bank membership applications and associated docket number
requests and performs general clerical functions.






Processing time: 3 hours
Total applications: 283
Total hours: 849
Hourly rate: $46 (includes salary, benefits and overhead)
Total cost: $39,054

3

“Members of the Banks”
OMB Number 2590-0003: Supporting Statement

B. Banks’ Annualized Burden – Membership Application Process
The estimated annualized cost to the Banks is $429,279. The estimated annualized hour burden
is 4,358 hours. These estimates are based on the following calculations:
Credit/financial analyst reviews application to ensure compliance with statutory and regulatory
membership eligibility requirements.






Review time: 10 hours
Total applications: 283
Total hours: 2,830
Hourly rate: $46 (includes salary, benefits, and overhead)
Total cost: $130,180

Attorney reviews application to confirm eligibility and ensure the absence of any special legal
issues.






Review time: 1 hour
Total applications: 283
Total hours: 283
Hourly rate: $132 (includes salary, benefits, and overhead)
Total cost: $37,356

Management reviews application and staff recommendations regarding membership eligibility.






Review time: 4.4 hours
Total applications: 283
Total hours: 1,245
Hourly rate: $160 (includes salary, benefits, and overhead)
Total cost: $199,200

Research on applicants’ directors and officers, preparation of membership certificates, and other
administrative costs related to membership application processing.




Average cost per application: $21
Total applications: 283
Total cost: $5,943

Obtain copies of the supervisory and Community Reinvestment Act examination reports.




Average cost per examination report: $100
Total reports: 566 (283 applicants x 2 reports)
Total cost: $56,600

4

“Members of the Banks”
OMB Number 2590-0003: Supporting Statement

C. Applicants' Annualized Burden – Membership Application Process
The estimated annualized cost to applicants is $521,136. The estimated annualized hour burden
is 5,458 hours. These estimates are based on the following calculations:
Applicant Staff Analyst prepares the membership application.






Processing time: 8 hours
Total applications: 283
Total hours: 2,264
Hourly rate: $47 (includes salary, benefits, and overhead)
Total cost: $106,408

Attorney reviews application to ensure compliance with statutory and regulatory requirements.






Review time: 1 hour
Total applications: 283
Total hours: 283
Hourly rate: $125 (includes salary, benefits, and overhead)
Total cost: $35,375

Management reviews and then presents the application to the board of directors for approval.






Review time: 9.75 hours
Total applications: 283
Total hours: 2,759
Hourly rate: $137 (includes salary, benefits, and overhead)
Total cost: $377,983

Applicant’s Board of Directors discusses and approves membership application.




Review time: 0.5 hours
Total applications: 283
Total hours: 142

Applicants noted there were no charges/expenses for board of director reviews for Bank
membership as the review would occur at a regularly scheduled, board of directors meeting.

5

“Members of the Banks”
OMB Number 2590-0003: Supporting Statement

Appellate Applications
Applicant management prepares and submits an appellate application to FHFA.






II.

Processing time: 10 hours
Total appellate applications: 1
Total hours: 10
Hourly rate: $137 (includes salary, benefits, and overhead)
Total cost: $1,370
Initial Capital Stock Calculation

FHFA based the calculations upon an annual average of 283 applications for membership. The
aggregate total annual cost and hour burden is as follows:

Cost:
Hours:

FHFA
$0
0

Banks
$12,780
284

New Members
$9,727
71

TOTALS
$22,507
355

A. FHFA’s Annualized Burden – Initial Capital Stock Subscription Calculation
The FHFA is not involved in the calculation of initial capital stock purchase requirements.
B. Banks’ Annualized Burden – Initial Capital Stock Subscription Calculation
The estimated annualized cost to the Banks is $12,780. The estimated annualized hour burden is
284 hours. These estimates are based on the following calculations:
Administrative assistant provides capital stock subscription calculation worksheet to member and
requests confirmation of financial data.






Processing time: 0.5 hours
Total applications: 283
Total hours: 142
Hourly rate: $39 (includes salary, benefits, and overhead)
Total cost: $5,538

Sr. Credit/financial analyst reviews member financial data and initial capital stock subscription
requirement.





Review time: 0.5 hours
Total applications: 283
Total hours: 142
Hourly rate: $51 (includes salary, benefits, and overhead)

6

“Members of the Banks”
OMB Number 2590-0003: Supporting Statement


Total cost: $7,242

C. Members' Annualized Burden – Initial Capital Stock Subscription Calculation
The estimated annualized cost to members is $9,727. The estimated annualized hour burden is
71 hours. These estimates are based on the following calculations:
Management confirms accuracy of the capital stock subscription calculation.






III.

Review time: 0.25 hours
Total members: 283
Total hours: 71
Hourly rate: $137 (includes salary, benefits, and overhead)
Total cost: $9,727

Withdrawals From Membership

FHFA based the calculations upon an annual average of 8 notices of intent to withdraw from
membership. The aggregate total annual cost and hour burden is as follows:

Cost:
Hours:

FHFA
$912
14

Banks
$1,436
12

Members
$3,836
28

TOTAL
$6,184
54

A. FHFA’s Annualized Burden – Withdrawals from Membership
The estimated annualized cost to FHFA is $912. The estimated annual hour burden is 14 hours.
These estimates are based on the following calculations:
Program/financial analyst reviews notice of intent to withdraw from membership to ensure
compliance with statutory and regulatory requirements.






Review time: 0.5 hours
Total withdrawal requests: 8
Total hours: 4
Hourly rate: $46 (includes salary, benefits, and overhead)
Total cost: $184

Management analyst reviews analyst's summary on member's notice of intent to withdraw and
prepares letter of acknowledgement for member.



Review time: .25 hours
Total withdrawal requests: 8

7

“Members of the Banks”
OMB Number 2590-0003: Supporting Statement




Total hours: 2
Hourly rate: $66 (includes salary, benefits, and overhead)
Total cost: $132

Attorney reviews of letter of withdrawal acknowledgement to member and reviews to confirm
absence of any special legal issues.






Review time: 0.5 hours
Total applications: 8
Total hours: 4
Hourly rate: $54 (includes salary, benefits, and overhead)
Total cost: $216

Management reviews member withdrawal and signs of letter of withdrawal acknowledgement.






Review time: 0.5 hours
Total applications: 8
Total hours: 4
Hourly rate: $95 (includes salary, benefits, and overhead)
Total cost: $380

B. Banks' Annualized Burden – Withdrawals from Membership
The estimated annualized cost to the Banks is $1,436. The estimated annual hour burden is 12
hours. These estimates are based on the following calculation:
Administrative assistant receives and reviews records for member’s notice of intent to withdraw.






Review time: .5 hours
Total withdrawal requests: 8
Total hours: 4
Hourly rate: $39 (includes salary, benefits, and overhead)
Total cost: $156

Management reviews on member’s notice of intent to withdraw.






Review time: 1 hour
Total withdrawal requests: 8
Total hours: 8
Hourly rate: $160 (includes salary, benefits, and overhead)
Total cost: $1,280

8

“Members of the Banks”
OMB Number 2590-0003: Supporting Statement

C. Members’ Annualized Burden – Withdrawals from Membership
The estimated annualized cost to Bank members is $3,836. The estimated annualized hour
burden is 28 hours. These estimates are based on the following calculations:
Management prepares and submits a notice of intent to withdraw from membership.






IV.

Processing time: 3.5 hours
Total notices: 8
Total hours: 28
Hourly rate: $137 (includes salary, benefits, and overhead)
Total cost: $3,836
Transfer of Membership

FHFA based the calculations upon an annual average of 2 requests from members to transfer
membership to another Bank district. The aggregate total annual cost and hour burden is as
follows:

Cost:
Hours:

FHFA
$0
0

Banks
$655
9

Members
$850
7

TOTALS
$1,505
16

A. FHFA’s Annualized Burden – Transfer of Membership
The FHFA generally is not involved in transfer of membership determinations.
B. Banks’ Annualized Burden – Transfer of Membership
The estimated annualized cost to the Banks is $655. The estimated annualized hour burden is
9 hours. These estimates are based on the following calculations:
Program/financial analyst reviews request to transfer membership to another Bank district.






Review time: 2 hours
Total requests: 2
Total hours: 4
Hourly rate: $48 (includes salary, benefits, and overhead)
Total cost: $192

Attorney reviews request to transfer membership to another Bank district to ensure compliance
with statutory and regulatory requirements.

9

“Members of the Banks”
OMB Number 2590-0003: Supporting Statement






Review time: 1 hour
Total requests: 2
Total hours: 2
Hourly rate: $132 (includes salary, benefits ,and overhead)
Total cost: $264

Management reviews staff recommendation regarding transfer of membership.






Review time: 0.5 hours
Total requests: 2
Total hours: 1
Hourly rate: $160 (includes salary, benefits, and overhead)
Total cost: $160

Board of Directors discusses and approves transfer of membership.




Review time: 0.5 hours
Total applications: 2
Total hours: 1

The Banks noted there were no charges/expenses for board of director reviews of requests for
membership transfers as the review would occur at a regularly scheduled, board of directors
meetings.
Administrative assistant prepares and submits notice of determination on transfer of membership
to FHFA.






Processing time: 0.5 hours
Total requests: 2
Total hours: 1
Hourly rate: $39 (includes salary, benefits, and overhead)
Total cost: $39

C. Members’ Annualized Burden – Transfer of Membership
The estimated annualized cost to members is $850. The estimated annualized hour burden is 7
hours. These estimates are based on the following calculations:
Management prepares request to transfer membership to another Bank district.





Processing time: 3 hours
Total requests: 2
Total hours: 6
Hourly rate: $137 (includes salary, benefits, and overhead)

10

“Members of the Banks”
OMB Number 2590-0003: Supporting Statement


Total cost: $822

Administrative assistant prepares and submits to the Bank a request to transfer membership to
another Bank district.






Processing time: 0.5 hours
Total requests: 2
Total hours: 1
Hourly rate: $28 (includes salary, benefits, and overhead)
Total cost: $28

13. FHFA has not identified any costs to respondents other than the costs discussed in detail
under Question 12.
14. The estimated annual cost burden to the Federal government is $40,654. The method used
to determine these costs is discussed in detail under Question 12.
15. FHFA reported adjustments in Items 13 and 14 of this supporting statement to reflect better
estimates, costs and hour burden updates. Adjustments reported on the burden worksheets are
explained below:
I. Membership Application and Appeal Process
The overall cost of membership application processing has decreased from $778,320
to $519,766 because the review for membership conducted by the applicant’s Board
of Director occurs at regularly scheduled Board of Directors meetings, therefore
accounting for this expense is not necessary. The number of membership applications
has increased from 240 to 283 and the hour burden has increased from 4,680 to 5,448
because the member applicants are processing and submitting more applications.
Additionally, the overall cost of appeal processing has increased from $510 to $1,370
due to the Cost-of-Living Adjustment (COLA) increases applied to the hourly rate.
II. Initial Capital Stock Calculation for Applicants
The number of capital stock subscription applications has increased from 240 to 283
and the hour burden has increased from 24 to 71 because the member applicants are
processing and submitting more subscription applications. The overall cost of
subscription processing has increased from $3,168 to $9,727 due to COLA increases
applied to the hourly rate.

11

“Members of the Banks”
OMB Number 2590-0003: Supporting Statement

III. Withdrawals of Membership
Applications for membership withdrawals have decreased, therefore the number of
notices of intent to withdraw have decreased from 14 to 8, the hour burden has
decreased from 49 to 28 and the overall cost has decreased from $6,468 to $3,836.
IV. Transfer of Membership
The overall cost to process transfers of membership has increased from $819 to $850
due to COLA increases applied to the hourly rate.
16. FHFA will not publish the results of this information collection.
17. FHFA plans to display the expiration date for OMB approval.
18. There are no exceptions to the certification statement identified in “Certification for
Paperwork Reduction Act Submissions.”

B. Collection of Information Employing Statistical Methods
The information collection does not employ statistical methods.

12