OMB Number 3069-0004 Supporting Statement

"MEMBERS OF THE BANKS"
OMB NUMBER 3069-0004
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 925 – the membership regulation -- implements section 4 of
the Bank Act. See 12 CFR part 925. 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 Board (Finance Board), 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 the
Finance Board. 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 Finance Board, use the information collection to
determine whether: (i) an institution satisfies the statutory and regulatory membership
requirements; (ii) an annual adjustment to a member's minimum Bank stockholding requirement
is necessary; (iii) a member may withdraw; and (iv) a member can transfer 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. The Finance Board does not have the
authority to make adjustments to the statutory requirements to accommodate small entities.

"Members of the Banks"
OMB Number 3069-0004: Supporting Statement

6. If the information is not collected at the times specified in the regulation, the Banks and,
where appropriate, the Finance Board, could not determine whether: (i) an institution satisfies the
statutory and regulatory membership requirements; (ii) an annual adjustment to a member's
minimum Bank stockholding requirement is necessary; (iii) a member may withdraw; or (iv) a
member can transfer to a different Bank district.
7. There are no special circumstances requiring 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
February 14, 2007. See 72 Fed. Reg. 7036 (Feb. 14, 2007). The 60-day comment period closed
on April 16, 2007. The Finance Board received no comments. The Finance Board also
contacted Robert Brick of the Dallas Bank, (214) 441-8525, Dennis Haworth of the Indianapolis
Bank, (317) 465-0452, and Steve Horton of the Seattle Bank, (206) 340-8682.
9. No payment or gift will be provided to any respondent.
10. The Banks and Finance Board 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 for the 4 facets of the information
collection – membership application process, minimum 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:

Finance Board
$34,230
741

Banks
$522,664
5,051

Applicants/Members
$789,285
4,770

TOTAL
$1,346,179
10,562

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

Membership Application Process

The Finance Board based the calculations upon an annual average of 240 applications for
membership processed by the Banks and 1 appellate application processed by the Finance Board.
The aggregate total annual cost and hour burden is as follows:
Cost:
Hours:

Finance Board
$33,684
730

Banks
$502,500
4,740

Applicants/Members
$778,830
4,690

2

TOTAL
$1,315,014
10,160

"Members of the Banks"
OMB Number 3069-0004: Supporting Statement

A. Finance Board's Annualized Burden -- Membership Application Process
The estimated annualized cost to the Finance Board is $33,684. The estimated annual hour
burden is 730 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 Finance Board staff recommendations
and makes a determination on the application.
•
•
•
•
•

Review time: 4 hours
Total applications: 1
Total hours: 4
Hourly rate: $64 (includes salary, benefits, and overhead)
Total cost: $256

Financial analyst tracks applications and docket number requests and performs general clerical
functions.
•
•
•
•
•

Processing time: 3 hours
Total applications: 240
Total hours: 720
Hourly rate: $46 (includes salary, benefits and overhead)
Total cost: $33,120

3

"Members of the Banks"
OMB Number 3069-0004: Supporting Statement

B. Banks' Annualized Burden -- Membership Application Process
The estimated annualized cost to the Banks is $502,500. The estimated annualized hour burden
is 4,740 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: 240
Total hours: 2,400
Hourly rate: $48 (includes salary, benefits, and overhead)
Total cost: $115,200

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

Review time: 1.5 hours
Total applications: 240
Total hours: 360
Hourly rate: $119 (includes salary, benefits, and overhead)
Total cost: $42,840

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

Review time: 8.25 hours
Total applications: 240
Total hours: 1,980
Hourly rate: $141 (includes salary, benefits, and overhead)
Total cost: $279,180

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

Average cost per application: $72
Total applications: 240
Total cost: $17,280

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

Average cost per examination report: $100
Total reports: 480 (240 applicants x 2 reports)
Total cost: $48,000

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"Members of the Banks"
OMB Number 3069-0004: Supporting Statement

C. Applicants' Annualized Burden -- Membership Application Process
The estimated annualized cost to applicants is $778,830. The estimated annualized hour burden
is 4,690 hours. These estimates are based on the following calculations:
Staff prepares the membership application.
•
•
•
•
•

Processing time: 8.75 hours
Total applications: 240
Total hours: 2,100
Hourly rate: $24 (includes salary, benefits, and overhead)
Total cost: $50,400

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

Review time: 2 hours
Total applications: 240
Total hours: 480
Hourly rate: $125 (includes salary, benefits, and overhead)
Total cost: $60,000

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

Review time: 8.25 hours
Total applications: 240
Total hours: 1,980
Hourly rate: $132 (includes salary, benefits, and overhead)
Total cost: $261,360

Board of directors reviews and approves the membership application resolution.
•
•
•
•
•

Review time: 0.5 hours
Total applications: 240
Total hours: 120
Hourly rate: $3,388 (combined rate for all directors)
Total cost: $406,560

Prepare and submit an appellate application to the Finance Board.
•
•
•
•
•

Processing time: 10 hours
Total appellate applications: 1
Total hours: 10
Hourly rate: $51 (includes salary, benefits, and overhead)
Total cost: $510

5

"Members of the Banks"
OMB Number 3069-0004: Supporting Statement
II.

Minimum Capital Stock Calculation

The Finance Board based the calculations upon an annual average of 240 applications for
membership. The aggregate total annual cost and hour burden is as follows:
Cost:
Hours:

Finance Board
$0
0

Banks
$12,432
264

Applicants/Members
$3,168
24

TOTAL
$15,600
288

A. Finance Board's Annualized Burden -- Minimum Capital Stock Calculation
The Finance Board is not involved in calculating minimum capital stock purchase requirements.
B. Banks' Annualized Burden -- Minimum Capital Stock Calculation
The estimated annualized cost to the Banks is $12,432. The estimated annualized hour burden is
264 hours. These estimates are based on the following calculations:
Administrative assistant provides capital stock calculation worksheet to member and requests
confirmation of financial data.
•
•
•
•
•

Processing time: 0.1 hours
Total applications: 240
Total hours: 24
Hourly rate: $38 (includes salary, benefits, and overhead)
Total cost: $912

Credit/financial analyst reviews member financial data and calculates minimum capital stock
requirement.
•
•
•
•
•

Review time: 1 hour
Total applications: 240
Total hours: 240
Hourly rate: $48 (includes salary, benefits, and overhead)
Total cost: $11,520

C. Members' Annualized Burden -- Minimum Capital Stock Calculation
The estimated annualized cost to members is $3,168. The estimated annualized hour burden is
24 hours. These estimates are based on the following calculations:
Management confirms accuracy of the capital stock calculation.
•
•
•
•
•

Review time: 0.1 hours
Total members: 240
Total hours: 24
Hourly rate: $132 (includes salary, benefits, and overhead)
Total cost: $3,168

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"Members of the Banks"
OMB Number 3069-0004: Supporting Statement

III.

Withdrawals From Membership

The Finance Board based the calculations upon an annual average of 14 notices of intent to
withdraw from membership. The aggregate total annual cost and hour burden is as follows:
Cost:
Hours:

Finance Board
$546
10.5

Banks
$5,429
38.5

Applicants/Members
$6,468
49

TOTAL
$12,443
98

A. Finance Board's Annualized Burden-- Withdrawals from Membership
The estimated annualized cost to the Finance Board is $546. The estimated annual hour burden
is 10.5 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: 14
Total hours: 7
Hourly rate: $46 (includes salary, benefits, and overhead)
Total cost: $322

Management reviews analyst's summary on member's notice of intent to withdraw.
•
•
•
•
•

Review time: .25 hours
Total withdrawal requests: 14
Total hours: 3.5
Hourly rate: $64 (includes salary, benefits, and overhead)
Total cost: $224

B. Banks' Annualized Burden -- Withdrawals from Membership
The estimated annualized cost to the Banks is $5,429. The estimated annual hour burden is 38.5
hours. These estimates are based on the following calculation:
Management reviews on member's notice of intent to withdraw.
•
•
•
•
•

Review time: 2.75 hours
Total withdrawal requests: 14
Total hours: 38.5
Hourly rate: $141 (includes salary, benefits, and overhead)
Total cost: $5,429

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"Members of the Banks"
OMB Number 3069-0004: Supporting Statement

C. Members' Annualized Burden -- Withdrawals from Membership
The estimated annualized cost to Bank members is $6,468. The estimated annualized hour
burden is 49 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: 14
Total hours: 49
Hourly rate: $132 (includes salary, benefits, and overhead)
Total cost: $6,468
Transfer of Membership

The Finance Board 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:

Finance Board
$0
0

Banks
$2,303
8.5

Applicants/Members
$819
7

TOTAL
$3,122
15.5

A. Finance Board's Annualized Burden -- Transfer of Membership
The Finance Board generally is not involved in transfer of membership determinations.
B. Banks' Annualized Burden -- Transfer of Membership
The estimated annualized cost to the Banks is $2,303. The estimated annualized hour burden is
8.5 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.
•
•
•
•
•

Review time: 1 hour
Total requests: 2
Total hours: 2
Hourly rate: $119 (includes salary, benefits ,and overhead)
Total cost: $238

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"Members of the Banks"
OMB Number 3069-0004: Supporting Statement

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

Review time: 0.5 hours
Total requests: 2
Total hours: 1
Hourly rate: $141 (includes salary, benefits, and overhead)
Total cost: $141

Board of directors reviews and makes determination on transfer of membership.
•
•
•
•
•

Review time: .25 hours
Total requests: 2
Total hours: 0.5
Hourly rate: $3,388 (combined rate for all directors)
Total cost: $1,694

Administrative assistant prepares and submits notice of determination on transfer of membership
to the Finance Board.
•
•
•
•
•

Processing time: 0.5 hours
Total requests: 2
Total hours: 1
Hourly rate: $38 (includes salary, benefits, and overhead)
Total cost: $38

C. Members’ Annualized Burden -- Transfer of Membership
The estimated annualized cost to members is $819. 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: $132 (includes salary, benefits, and overhead)
Total cost: $792

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: $27 (includes salary, benefits, and overhead)
Total cost: $27

9

"Members of the Banks"
OMB Number 3069-0004: Supporting Statement

13. The Finance Board 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 $34,230. The method used to
determine these costs is discussed in detail under Question 12.
15. The Finance Board reported adjustments in Items 13 and 14 of OMB Form 83-I to reflect
better estimates, cost and hour burden updates, an increase in the number of Bank members, and
a decrease in the number of membership applications. There are no program changes to report.
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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