ROCIS 3yrApprvl_ Membership2590-0003SuppStatmnt

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

A.

JUSTIFICATION

1. Circumstances necessitating the collection of information
Section 4 of the Federal Home Loan Bank Act (Bank Act) establishes the eligibility requirements
an institution must meet in order to become a member of a Federal Home Loan Bank (Bank). 1
FHFA’s Bank membership regulation, located at 12 CFR part 1263, implements section 4 of the
Bank Act by providing uniform requirements an institution must meet to be approved for Bank
membership and review criteria a Bank must apply to determine if an institution satisfies the
statutory and regulatory membership eligibility requirements, and by specifying the information
and materials an institution must submit as part of its application. 2 Although the membership
regulation authorizes the Banks to approve or deny applications for membership, it also provides
institutions that have been denied membership in a Bank the option of appealing the decision to
FHFA. 3 The membership regulation also addresses the requirements for withdrawal from Bank
membership and for the transfer of an institution’s membership from one Bank to another. 4
This information collection may require four different types of submissions by Bank members or
by institutions wishing to become a Bank member: (I) applications for membership and
supporting materials; (II) notices of appeal to FHFA by institutions that have been denied
membership by a Bank; (III) requests to withdrawal from Bank membership; and (IV)
applications for transfer of membership to a different Bank and supporting materials. The
information collection is necessary to enable a Bank to determine whether prospective and
current Bank members, or transferring members of other Banks, satisfy the statutory and
regulatory requirements to be certified initially and maintain their status as members eligible to
obtain Bank advances. The collection is also necessary to inform a Bank of when to initiate the
withdrawal process where a member so desires. On appeals, FHFA uses the information
collection to determine whether to uphold or overrule a Bank's decision to deny Bank
membership to an applicant.

2. Use of data
The Banks use the information collection to: (i) determine whether an institution satisfies the
statutory and regulatory requirements for Bank membership; (ii) process member withdrawals;
1

See 12 U.S.C. 1424.
See 12 CFR part 1263.
3
See 12 CFR 1263.5.
4
See 12 CFR 1263.26; 1263.18(d), (e).
2

“Members of the Banks”
OMB Number 2590-0003: Supporting Statement
and (iii) process member transfers to a different Bank district. When appropriate, FHFA uses the
information collection to determine whether an institution that has been denied membership by a
Bank should be permitted to become a member of that Bank.

3. Use of information technology
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 Thompson Media Group LLC (TMG), which
calculates performance ratios required in the membership application process, to reduce the
information collection burden.

4. Efforts to identify duplication
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
respondent can submit information already required for the Federal Deposit Insurance
Corporation Report of Condition and Income, audited financial statements, or the public portion
of its Community Reinvestment Act examination.

5. Impact on small entities
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. Consequences of less frequent collection and obstacles to burden reduction
If the information is not collected at the times specified in the regulation, the Banks could not
determine whether: (i) an institution satisfies the statutory and regulatory requirements for Bank
membership; (ii) a member may withdraw; or (iii) a member may transfer to a different Bank
district.

7. Circumstances requiring special information collection
There are no special circumstances requiring FHFA to conduct the information collection in a
manner inconsistent with the guidelines provided in Question 7.

2

“Members of the Banks”
OMB Number 2590-0003: Supporting Statement
8. Solicitation of comments on information collection
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 July 1, 2013. See 78
FR 39293 (July 1, 2013). The 60-day comment period closed on August 30, 2013. FHFA
received no comments FHFA also contacted Vicki Benson of the Federal Home Loan Bank of
Boston, (617) 292-9647, [email protected]; Susan Krzus of the Federal Home Loan
Bank of Chicago, (312) 565-5374, [email protected]; and Sondra Ekey of the Federal Home
Loan Bank of Topeka, (785) 438-6007, Sondra.Ekey@fhlbTopeka.

9. Provision of payments or gifts to respondents
No payment or gift will be provided to any respondent.

10. Assurance of confidentiality
The Banks and FHFA maintain the confidentiality of information obtained from respondents as
required by applicable statute, regulation or agency policy.

11. Questions of a sensitive nature
There are no questions of a sensitive nature in the information collection.

12. Estimates of the hour burden of the information collection
FHFA has analyzed the cost and hour burden for the four facets of this information collection: (I)
membership applications; (II) appeals of membership denials; (III) withdrawals from
membership; and (IV) transfers of membership to another Bank district.
The aggregate total annual cost to members and applicants is $175,613. The estimated total
annual hour burden is 2,261 hours. The estimated total annual number of submissions is 434.
The method FHFA used to determine the annual cost and hour burden for each facet of the
information collection is explained in detail below.
I.

Membership Applications

FHFA based the calculations upon an annual average of 157 applications for membership
processed by the Banks.
The estimated annualized cost to applicants is $135,365. The estimated annualized hour burden
is 1,837 hours. These estimates are based on the following calculations:

3

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

Applicant Staff Analyst prepares the membership application.
•
•
•
•
•

Processing time: 5.3 hours
Total applications: 157
Total hours: 832
Hourly rate: $54 (includes salary, benefits, and overhead)
Total cost: $44,933

Outside attorney reviews application to ensure compliance with statutory and regulatory
requirements.
•
•
•
•
•

Review time: 1.4 hours
Total applications: 157
Total hours: 220 hours
Hourly rate: $140 (includes salary, benefits, and overhead)
Total cost: $30,772

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

Review time: 4 hours
Total applications: 157
Total hours: 628 hours
Hourly rate: $95 (includes salary, benefits, and overhead)
Total cost: $59,660

Applicant’s board of directors discusses and approves membership application.
•
•
•

Review time: 1 hours
Total applications: 157
Total hours: 157

There are no charges/expenses for board of director reviews for membership applications as the
review typically occurs at a regularly scheduled board of directors meeting.

II.

Appellate Membership Application

FHFA based the calculations upon an annual average of 1 appellate application processed by
FHFA. No membership applicant has yet submitted an appellate application to FHFA. The
estimated annualized cost to members is $950. The estimated annualized hour burden is 10
hours. These estimates are based on the following calculations:
Management of appealing institution prepares and submits an appellate application to FHFA.

4

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

III.

Processing time: 10 hours
Total appellate applications: 1
Total hours: 10
Hourly rate: $95 (includes salary, benefits, and overhead)
Total cost: $950

Withdrawals From Membership

FHFA based the calculations upon an annual average of 275 Bank members requesting
withdrawal, which includes members that must withdraw because they have been merged into
another institution or otherwise relinquished their charter. The estimated annualized cost to
Bank members is $39,188. The estimated annualized hour burden is 413 hours. These estimates
are based on the following calculations:
Management prepares and submits a notice of intent to withdraw from membership.
•
•
•
•
•

Processing time: 1.5 hours
Total notices: 275
Total hours: 413
Hourly rate: $95 (includes salary, benefits, and overhead)
Total cost: $39,188

IV.

Transfer of Membership

The estimated annualized cost to members is $110. The estimated annualized hour burden is 1.5
hours. These estimates are based on the following calculations:
Management prepares request to transfer membership to another Bank district.
•
•
•
•
•

Processing time: 1 hour
Total requests: 1
Total hours: 1
Hourly rate: $95 (includes salary, benefits, and overhead)
Total cost: $95

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

Processing time: 0.5 hours
Total requests: 1
Total hours: 0.5
Hourly rate: $30 (includes salary, benefits, and overhead)
Total cost: $15

5

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

13. Estimated total annualized cost burden to respondents
FHFA has not identified any costs to respondents other than the hourly personnel costs detailed
under item #12.

14. Estimated cost to the federal government
The estimated annual cost burden to FHFA is $23,837 and 481 hours, calculated as follows:
I.

Membership Applications

The estimated annualized cost to FHFA is $23,079. The estimated annual hour burden is 471
hours. These estimates are based on the following calculations:
Financial analyst tracks all Bank membership applications and associated docket
number requests and performs general clerical functions.
•
•
•
•
•

Processing time: 3 hours
Total applications: 157
Total hours: 471
Hourly rate: $49 (includes salary, benefits and overhead)
Total cost: $23,079

II.

Appellate Membership Application

The estimated annualized cost to FHFA is $758. The estimated annual hour burden is 1 0
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: $49 (includes salary, benefits, and overhead)
Total cost: $98

Staff attorney reviews appellate application to confirm eligibility and to ensure the absence
of any special legal issues.
•

Review time: 4 hours

6

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

Total applications: 1
Total hours: 4
Hourly rate: $70 (includes salary, benefits, and overhead)
Total cost: $280

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

III.

Withdrawals from Membership

FHFA is not involved in membership withdrawals.

IV.

Transfer of Membership

FHFA is not involved in transfer of membership determinations.

15. Reasons for change in burden
FHFA last requested review of this information collection in 2010. The Supporting Statement
submitted at that time showed 5,564 burden hours and a total cost of $535,549 imposed upon
members/applicants by this collection. In comparison, item #12 of this Supporting Statement
shows 2,261 burden hours and a total cost of $175,613 imposed upon members/applicants. The
main reason for the reduction in the burden of the member application process is the reduction in
the time burden reported by applicants preparing the application materials from nearly nine hours
per application to slightly above 5 average hours and, the time burden of member applicant
attorney review time burden from an average of 8 hours to 4 hours. Additionally, additional cost
reduction stems from the fact that the average number of applications for Bank membership that
were filed annually in the three years preceding the submission fell from 283 in 2010 to 157 in
2013. Counter-balancing that reduction to some extent was an increase in the average number of
withdrawals from Bank membership—from only 8 in 2010 to 275 in 2013. In 2010 only
voluntary withdrawals were counted, whereas in the current review those members which
withdrew due to acquisition and merger with another entity are now included.
The calculation of a new member’s Bank stock purchase requirement, which in 2010 accounted
for 71 total hours and $9,727 in cost, was removed from the burden estimates, because this

7

“Members of the Banks”
OMB Number 2590-0003: Supporting Statement
activity is already subsumed within the burdens reported for FHFA’s “Capital Requirements for
Federal Home Loan Banks” collection (OMB No. 2590-0002).
The estimated annual burden to the federal government fell from 873 hours/$40,654 in 2010 to
481 hours/$23,837 in 2013. This is mainly due to the fact that most of the decision-making
authority over membership applications, transfers and withdrawals has now been given to the
Banks and FHFA’s role in the process in primarily one of recordkeeping.
FHFA has not included in the burden estimates time spent by the Banks in connection with this
information collection as was mistakenly included in the 2010 Supporting Statement. The Banks
are instrumentalities of the United States and, thus, are not subject to the information collection
requirements of the Paperwork Reduction Act. See 44 U.S.C. § 3502(3)(A)(i).

16. Plans for tabulation, statistical analysis and publication
FHFA will not publish the results of this information collection.

17. If seeking approval to not display the expiration date for OMB approval of the
information collection, explain the reasons why display would be inappropriate
FHFA plans to display the expiration date for OMB approval.

18. Explain each exception to the topics of the certification statement identified in
“certification for paperwork reduction act submission”
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.

8