Supporting Statement 2007

"FEDERAL HOME LOAN BANK DIRECTORS"
OMB NUMBER 3069-0002
SUPPORTING STATEMENT

A.

Justification

1. Section 7 of the Federal Home Loan Bank Act (Bank Act) (12 U.S.C. § 1427) and the Federal
Housing Finance Board (Finance Board) implementing regulation, codified at 12 C.F.R. part
915, establish the eligibility requirements and the procedures for electing and appointing Federal
Home Loan Bank (Bank) directors. Under part 915, the Banks determine the eligibility of
elective directors and director nominees and run the annual director election process. To
determine eligibility, the Banks use the Federal Home Loan Bank Elective Director Eligibility
Certification Form, which has not changed since the information collection was last cleared in
2004.
In 2007, the Finance Board published two rules affecting the eligibility and selection of
appointive Bank directors. The first rule, published in April 2007, requires the boards of
directors of the Banks to submit to the Finance Board a list of individuals that includes
information regarding each individual’s eligibility and qualifications to serve as a Bank director.
The Finance Board uses the list provided by each Bank to select well-qualified individuals to
serve on the Bank’s board of directors. See 72 Fed. Reg. 15600 (Apr. 2, 2007). The second rule,
published in June 2007, clarifies the types of financial interests an appointive Bank director may
maintain in a member of the Bank on whose board the director serves. See 72 Fed. Reg. 33637
(June 19, 2007). As a result of these regulatory changes, the Finance Board revised the form the
Banks and the Finance Board use to determine whether prospective appointive directors satisfy
the statutory and regulatory eligibility requirements and renamed it the Federal Home Loan Bank
Appointive Director Application Form (Application Form). The revised Application Form asks
individuals for information about their background and qualifications to serve as an appointive
Bank director as well as compliance with statutory and regulatory eligibility requirements. It
also conforms the information about prohibited financial interests to the new rule. In addition, to
reduce the burden on incumbent appointive directors, the Finance Board created a new Federal
Home Loan Bank Appointive Bank Director Annual Certification Form (Annual Form) that
allows individuals simply to certify that they continue to meet the director eligibility
requirements.
2. The Finance Board uses the information collection contained in the Application and Annual
Forms and part 915 to determine whether prospective and incumbent appointive Bank directors
satisfy the statutory and regulatory eligibility and reporting requirements. The Banks use the
information collection in the Elective Director Form and part 915 to determine whether elective
directors and director nominees satisfy the statutory and regulatory eligibility and reporting
requirements. Only individuals meeting these requirements may serve as Bank directors. See 12
U.S.C. § 1427(a).

FEDERAL HOME LOAN BANK DIRECTORS: OMB NUMBER 3069-0002
SUPPORTING STATEMENT

3. The information collection does not involve the use of automated, electronic, mechanical or
other technological collection techniques or other forms of information technology. The rules
require original signatures of the individuals completing the Bank Director Forms.
4. The Finance Board has revised the Application Form to ask individuals for information about
their background and qualifications to serve as an appointive Bank director as well as
compliance with statutory and regulatory eligibility requirements. It also conforms the
information about prohibited financial interests to the new rule. To reduce the burden on
incumbent appointive directors, the new Annual Form allows individuals simply to certify that
they continue to meet the director eligibility requirements. The information requested on all
three Bank Director Forms is not available from any other source.
5. The information collection does not have a significant economic impact on a substantial
number of small entities. The regulation implements statutory requirements and is applicable to
all individual respondents and all Bank members regardless of their size. The Finance Board
does not have the authority to make adjustments to the statutory requirements to accommodate
small entities.
6. If the information were not collected at the times specified in part 915 or the Bank Director
Forms, the Finance Board would be unable to determine whether prospective and incumbent
appointive directors, and the Banks would be unable to determine whether elective directors and
director nominees satisfy the statutory and regulatory eligibility and reporting requirements.
Only individuals meeting these requirements may serve as Bank directors. See 12 U.S.C.
§ 1427.
7. There are no special circumstances that would require the Finance Board to conduct the
information collection in a manner inconsistent with the guidelines provided in Question 7.
8. In accordance with the requirements of 5 C.F.R. § 1320.8(d), the Finance Board published a
request for public comments regarding this information collection in the Federal Register on
August 8, 2007. See 72 Fed. Reg. 44540 (Aug. 8, 2007). During the 60-day comment period,
which closed on October 9, 2007, the Finance Board received two public comments, one from a
trade association that represents community banks and one from a Bank. The trade association
supported the use of the new and revised Forms, believing that the Application Form will elicit
valuable information about applicant’s skills and the Annual Form will reduce the reporting
burden on incumbent directors. The Bank suggested several changes that the Finance Board
adopted. On the Annual Form, the Finance Board clarified the instructions to make clear that
prohibited relationships between a director and a Bank or any member of the director’s Bank,
also apply to such relationships with the director’s spouse or minor children. On the Application
Form, the Finance Board made clear that an appointive director may not serve as an officer of
any Bank and that the provisions on a director’s contractual rights to the payment of money
apply also to the director’s spouse. The Finance Board also deleted the reference to interests
held through a trust or other similar arrangement from the definition of “indirect” since this type
of financial interest does not disqualify an individual from being appointed as a Bank director.
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FEDERAL HOME LOAN BANK DIRECTORS: OMB NUMBER 3069-0002
SUPPORTING STATEMENT

9. No payment or gift will be provided to any respondent.
10. The Finance Board and Banks 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. The Finance Board has analyzed the cost and hour burden to determine the eligibility of
elective directors and director nominees and run the annual director election process, and to
appoint Bank directors. The aggregate total annual cost and hour burden for the information
collection is as follows:
Applicants/
Banks
Members
Incumbents TOTAL
Finance Board
Cost:
Hours:

$9,090
101

$268,392
3156

$255,850
1075

$83,181
349.5

$616,513
4681.5

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

Elections and Elective Directors

The Finance Board based the calculations upon an annual average of 4,000 voting members, 100
prospective elective directors out of 300 individuals the Banks consider, and 80 incumbent
elective directors. The aggregate total annual cost and hour burden is as follows:

Cost:
Hours:
A.

Finance Board

Banks

Members

Applicants/
Incumbents

$0
0

$188,424
2,820

$255,850
1,075

$16,660
70

TOTAL
$460,934
3,965

Finance Board's Annualized Burden – Elections and Elective Directors

The Finance Board incurs no costs because the Banks run the director election process and
review all Elective Director Forms.
B.

Banks’ Annualized Burden – Elections and Elective Directors

The estimated annualized cost for the Banks to conduct the election of directors and to process
Elective Director Eligibility Certification Forms is $188,424. The estimated annualized hour
burden is 2,820 hours (12 Banks x 235 hours = 2,820 hours). These estimates are based on the
following calculations:

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FEDERAL HOME LOAN BANK DIRECTORS: OMB NUMBER 3069-0002
SUPPORTING STATEMENT

Administrative staff prepares and sends a director election announcement to members.
♦
♦
♦
♦
♦

Processing time: .1 hours
Total announcements: 8,700
Total hours: 870
Hourly rate: $60 (includes salary, benefits, and overhead)
Total cost: $52,200

Administrative staff prepares and sends a nomination notice and an Elective Director Form to
each individual nominated as a candidate for election.
♦
♦
♦
♦
♦

Processing time: .5 hours
Total announcements: 200
Total hours: 100
Hourly rate: $60 (includes salary, benefits, and overhead)
Total cost: $6,000

Legal staff reviews each Elective Director Form to confirm the nominee's statutory and
regulatory eligibility.
♦
♦
♦
♦
♦

Review time: .25 hours
Total Forms: 175
Total hours: 44
Hourly rate: $60 (includes salary, benefits, and overhead)
Total cost: $2,640

Administrative staff prepares and send an election ballot to members.
♦
♦
♦
♦
♦

Processing time: .1 hours
Total ballots: 6,000
Total hours: 600
Hourly rate: $60 (includes salary, benefits, and overhead)
Total cost: $36,000

Administrative staff tabulates election results.
♦
♦
♦
♦
♦

Processing time: .05 hours
Total ballots: 4,000
Total hours: 200
Hourly rate: $60 (includes salary, benefits, and overhead)
Total cost: $12,000

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FEDERAL HOME LOAN BANK DIRECTORS: OMB NUMBER 3069-0002
SUPPORTING STATEMENT

Management reviews election reports and declares nominees elected.
♦
♦
♦
♦
♦

Review/processing time: 2 hours
Total reports: 48
Total hours: 96
Hourly rate: $238 (includes salary, benefits, and overhead)
Total cost: $22,848

Administrative staff prepares and sends an election report to the Finance Board, each nominee,
and each member in the Bank district.
♦
♦
♦
♦
♦

Processing time: .1 hours
Total reports: 8,866
Total hours: 887
Hourly rate: $60 (includes salary, benefits, and overhead)
Total cost: $53,220

Legal staff reviews each annual update to the Elective Director Form submitted by an incumbent
elective director to confirm compliance with statutory and regulatory eligibility requirements.
♦
♦
♦
♦
♦

Review time: .1 hours
Total Forms: 110
Total hours: 11
Hourly rate: $60 (includes salary, benefits, and overhead)
Total cost: $660

Management completes process for filling vacant elective directorships.
♦
♦
♦
♦
♦

Review/processing time: 2 hours
Total vacant directorships: 6
Total hours: 12
Hourly rate: $238 (includes salary, benefits, and overhead)
Total cost: $2,856

C. Members Annualized Burden – Elections and Elective Directors
The estimated annualized cost for all Bank members to participate in the election of Bank
directors, including considering elective director candidates and casting votes, is $255,850. The
estimated annualized hour burden is 1,075 hours. These estimates are based on the following
calculations:

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FEDERAL HOME LOAN BANK DIRECTORS: OMB NUMBER 3069-0002
SUPPORTING STATEMENT

Each voting member reviews the election announcement and prepares, certifies, and returns a
nominating certificate to the Bank.
♦
♦
♦
♦
♦

Review/processing time: .25 hours
Total announcements/nominating certificates: 300
Total hours: 75
Hourly rate: $238 (includes salary, benefits, and overhead)
Total cost: $17,850

Member reviews, executes, and returns the election ballot to the Bank.
♦
♦
♦
♦
♦
D.

Review/processing time: .25 hours
Total notices/ballots: 4,000
Total hours: 1,000
Hourly rate: $238 (includes salary, benefits, and overhead)
Total cost: $238,000
Incumbent and Prospective Directors’ Annualized Burden –
Elections and Elective Directors

The estimated annualized cost for all prospective and incumbent elective directors is $16,660.
The estimated annualized hour burden is 70 hours. These estimates are based on the following
calculations:
Elective director nominee reviews the nomination notice and completes and submits the Elective
Director Form to the Bank.
♦
♦
♦
♦
♦

Review/processing time: .5 hours
Total notices/Forms: 100
Total hours: 50
Hourly rate: $238 (includes salary, benefits, and overhead)
Total cost: $11,900

Each incumbent elective director completes and submits to the Bank an annual update to the
Elective Director Form.
♦
♦
♦
♦
♦

Processing time: .25 hours
Total Forms: 80
Total hours: 20
Hourly rate: $238 (includes salary, benefits and overhead)
Total cost: $4,760

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FEDERAL HOME LOAN BANK DIRECTORS: OMB NUMBER 3069-0002
SUPPORTING STATEMENT

II.

Appointive Directors

The Finance Board based the calculations upon an annual average of 84 prospective appointive
directors and 55 incumbent appointive directors. The aggregate total annual cost and hour
burden is as follows:

Cost:
Hours:
A.

Finance Board

Banks

Members

Prospective/
Incumbents

TOTAL

$9,090
101

$79,968
336

$0
0

$66,521
279.5

$155,579
716.5

Finance Board's Annualized Burden – Appointive Directors

The estimated annualized cost to the Finance Board to complete the Bank director appointment
process is $9,090. The estimated annualized hour burden is 101 hours. These estimates are
based on the following calculations:
Staff reviews each Application Form to ensure compliance with statutory and regulatory
eligibility requirements and implements process for filling open appointive directorships.
♦
♦
♦
♦
♦

Review/Processing time: 1.5 hours
Total Forms: 49
Total hours: 73.5
Hourly rate: $90 (includes salary, benefits, and overhead)
Total cost: $3,780

Staff reviews each Annual Form submitted by an incumbent appointive director to ensure
compliance with statutory and regulatory eligibility and reporting requirements.
♦
♦
♦
♦
♦

Review time: .5 hours
Total Forms: 55
Total hours: 27.5
Hourly rate: $90 (includes salary, benefits, and overhead)
Total cost: $2,475

B.

Banks’ Annualized Burden – Appointive Directors

The estimated annualized costs for the Banks to recruit, review, and recommend individuals to
be appointed as Bank directors is $79,968. The estimate for the average hour burden for all
Banks is 336 hours (12 Banks x 28 hours). These estimates are based on the following
calculations:

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FEDERAL HOME LOAN BANK DIRECTORS: OMB NUMBER 3069-0002
SUPPORTING STATEMENT

The Bank’s board of directors recruits individuals, reviews their qualifications, and submits
recommendations to the Finance Board.
♦
♦
♦
♦
♦
C.

Review/Processing time: 4 hours
Total Candidates: 84
Total hours: 336
Hourly rate: $238 (includes salary, benefits, and overhead)
Total cost: $79,968
Members Annualized Burden -- Appointive Directors

Bank members incur no costs because the Banks nominate appointive director candidates and the
Finance Board runs the director appointment process.
D.

Incumbent and Prospective Directors’ Annualized Burden -- Appointive Directors

The estimated annualized cost for all prospective and incumbent appointive directors is $66,521.
The estimated annualized hour burden is 279.5 hours. These estimates are based on the
following calculations:
Appointive director candidate completes the Application Form and submits it to the Bank or
Finance Board.
♦
♦
♦
♦
♦

Processing time: 3 hours
Total Forms: 84
Total hours: 252
Hourly rate: $238 (includes salary, benefits, and overhead)
Total cost: $59,976

Each incumbent appointive director completes and submits the Annual Form to the Bank.
♦
♦
♦
♦
♦

Processing time: .5 hours
Total Forms: 55
Total hours: 27.5
Hourly rate: $238 (includes salary, benefits, and overhead)
Total cost: $6,545

13. There are no start-up costs for the director election program because all of the Banks have
completed implementation. The estimated annual cost to the Banks for maintenance and support
of the computer software to run the director election program is $96,000.
14. The estimated annual cost burden to the Federal government is $9,090. The method used to
determine these costs is discussed in detail under Question 12.
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FEDERAL HOME LOAN BANK DIRECTORS: OMB NUMBER 3069-0002
SUPPORTING STATEMENT

15. The hourly rates have been adjusted to reflect a 3% annual cost-of-living increase since
2004.
16. The Finance Board will not publish the results of this information collection.
17. The Finance Board plans to display the expiration date for OMB approval.
18. There are no exceptions to the certification statement identified in Item 19.
B.

Collection of Information Employing Statistical Methods

The information collection does not employ statistical methods.
Attachments

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