[Federal Register Volume 90, Number 9 (Wednesday, January 15, 2025)]
[Notices]
[Page 3865]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-00720]
[[Page 3865]]
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FEDERAL HOUSING FINANCE AGENCY
[No. 2025-N-2]
Notice of Annual Adjustment of the Cap on Average Total Assets
That Defines Community Financial Institutions
AGENCY: Federal Housing Finance Agency.
ACTION: Notice.
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SUMMARY: The Federal Housing Finance Agency (FHFA) has adjusted the cap
on average total assets that is used in determining whether a Federal
Home Loan Bank (Bank) member qualifies as a ``community financial
institution'' (CFI) to $1,500,000,000, 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). This change is effective
as of January 1, 2025.
FOR FURTHER INFORMATION CONTACT: Janna Bruce, Senior Financial Analyst,
Division of Federal Home Loan Bank Regulation, (202) 649-3202,
Janna.Bruce@fhfa.gov; or RG Yamba, Honors Counsel, Office of General
Counsel, (202) 649-3399, RG.Yamba@fhfa.gov, (these are not toll-free
numbers), Federal Housing Finance Agency, Constitution Center, 400
Seventh Street SW, Washington, DC 20219. For TTY/TRS users with hearing
and speech disabilities, dial 711 and ask to be connected to any of the
contact numbers above.
SUPPLEMENTARY INFORMATION:
I. Statutory and Regulatory Background
The Federal Home Loan Bank Act (Bank Act) confers upon insured
depository institutions that meet the statutory definition of a CFI
certain advantages over non-CFI insured depository institutions in
qualifying for Bank membership, and in the purposes for which they may
receive long-term advances and the collateral they may pledge to secure
advances.\1\ Section 2(10)(A) of the Bank Act and Sec. 1263.1 of
FHFA's regulations define a CFI as any Bank member the deposits of
which are insured by the Federal Deposit Insurance Corporation and that
has average total assets below the statutory cap.\2\ The Bank Act was
amended in 2008 to set the statutory cap at $1 billion and to require
FHFA to adjust the cap annually to reflect the percentage increase in
the CPI-U, as published by the DOL.\3\ For 2024, FHFA set the CFI asset
cap at $1,461,000,000, which reflected a 3.1 percent increase over
2023, based upon the increase in the CPI-U between 2022 and 2023.\4\
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\1\ See 12 U.S.C. 1424(a), 1430(a).
\2\ See 12 U.S.C. 1422(10)(A); 12 CFR 1263.1.
\3\ See 12 U.S.C. 1422(10)(B); 12 CFR 1263.1 (defining the term
``CFI asset cap'').
\4\ See 89 FR 2225 (Jan. 12, 2024).
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II. The CFI Asset Cap for 2025
As of January 1, 2025, FHFA will increase the CFI asset cap to
$1,500,000,000, which reflects a 2.7 percent increase in the unadjusted
CPI-U from November 2023 to November 2024. Consistent with the practice
of other Federal agencies required to calculate and make annual
adjustments based on CPI-U changes, FHFA bases the annual adjustment to
the CFI asset cap on the percentage increase in the CPI-U from November
of the year prior to the preceding calendar year to November of the
preceding calendar year. The November figures represent the most recent
available data as of January 1st of the current calendar year. FHFA
determined the new CFI asset cap by applying the percentage increase in
the CPI-U to the unrounded amount for the preceding year and rounding
to the nearest million, as has been FHFA's practice for all previous
adjustments.
In calculating the CFI asset cap, FHFA uses CPI-U data that have
not been seasonally adjusted (i.e., the data have not been adjusted to
remove the estimated effect of price changes that normally occur at the
same time and in about the same magnitude every year). The DOL
encourages use of unadjusted CPI-U data in applying ``escalation''
provisions such as that governing the CFI asset cap, because the
factors that are used to seasonally adjust the data are amended
annually, and seasonally adjusted data that are published earlier are
subject to revision for up to five years following their original
release. Unadjusted data are not routinely subject to revision, and
previously published unadjusted data are only corrected when
significant calculation errors are discovered.
Joshua R. Stallings,
Deputy Director, Division of Federal Home Loan Bank Regulation, Federal
Housing Finance Agency.
[FR Doc. 2025-00720 Filed 1-14-25; 8:45 am]
BILLING CODE 8070-01-P