AMA-CMA Supporting Statement 2012 Renewal FINAL

"Federal Home Loan Bank Acquired Member Assets,
Core Mission Activities, Investments and Advances"
OMB CONTROL NUMBER 2590-0008
SUPPORTING STATEMENT

A. JUSTIFICATION

1. Circumstances Necessitating the Collection of Information
The Federal Home Loan Banks (Banks) are authorized under 12 CFR part 955 to acquire
from their member financial institutions and non-member housing associates certain
home mortgage loans and related assets, which are referred to as “Acquired Member
Assets” or “AMA.” 1 In conjunction with this authority, each Bank that acquires AMA is
required by regulation to report to the Federal Housing Finance Agency (FHFA) certain
data regarding each loan acquired, as specified in FHFA’s Data Reporting Manual
(DRM). 2 The DRM specifies 87 data elements that must be reported semi-annually for
each new loan acquired, as well as 22 additional data elements that must be reported
semi-annually for existing AMA loans or loan participations held in the Bank’s portfolio.
The DRM also requires that the Banks report aggregated AMA loan data on a quarterly
basis. FHFA uses the collected loan-level and aggregated AMA data to monitor the
safety and soundness of the Banks and the extent to which the Banks are fulfilling their
statutory housing finance mission through their AMA programs. 3
Since 2010, FHFA has published the previous calendar year’s loan-level AMA data in an
online public use database. The agency maintains this public use database in order to
fulfill its duties under section 10(k) of the Federal Home Loan Bank Act (Bank Act),
which requires that the Banks report to FHFA specified census tract-level data relating to
purchased mortgages and that the agency make this data available to the public in a
useful form. 4 At the time that Congress enacted section 10(k) in 2008, the Banks were
already reporting most of the data referenced in that provision pursuant to the existing
requirements of part 955 and the DRM. In order to implement fully the new statutory
requirements, FHFA amended the DRM in September 2009 to require the Banks to report
to FHFA six additional data elements relating to newly-acquired AMA loans (in addition
to then-existing 81 data elements) beginning in February 2010.
1

See 12 CFR part 955. A “housing associate” is an entity that is not a member of a Bank, but which is
permitted by law to engage in business with the Bank under certain circumstances.
2
See 12 CFR § 955.4. The DRM is a compilation of FHFA reporting requirements that includes
instructions, data definitions, and requirements concerning data elements, reporting format, reporting
method (e.g., electronic or paper), record retention, timeliness, reporting frequency, and certification. See
71 FR 35495 (June 21, 2006).
3
See 12 U.S.C. § 4513(a)(1).
4
See 12 U.S.C. § 1430(k).

FEDERAL HOME LOAN BANK ACQUIRED MEMBER ASSETS, CORE MISSION
ACTIVITIES, INVESTMENTS AND ADVANCES: OMB NUMBER 2590-0008
SUPPORTING STATEMENT

While each Bank that acquires or holds AMA loans must report both loan-level and
aggregated AMA data directly to FHFA, the Bank initially must collect some of the
underlying loan-level data from the member institution or housing associate from which
the Bank acquires the loan (this is usually, but not always, the originator of the loan).
The Bank typically collects the data for a particular AMA loan from the seller at the time
the Bank agrees to acquire the loan. The Bank then uses this loan-level data to derive
many of the other data elements that it is required to report to FHFA. For example, from
the address of the property that secures the loan, a Bank is able to determine from
publicly-available information the census tract code (and other similar geographic codes)
for the property, as well as the median family income, and other data regarding the
census tract or other defined geographic area. With this additional information, the Bank
is also able to calculate various ratios, such as the ratio of the borrower’s income to the
area median family income, which it is required to report under the DRM. Finally, some
of the loan-level data originates with the Bank itself, such as the name of the acquiring
Bank, the unique loan number assigned to the acquired loan, and the AMA program
under which the loan was acquired.
All but 8 to 10 of the data elements provided by the seller to the acquiring Bank are
information that any purchaser of mortgage loans would require a seller to furnish in the
ordinary course of business, even in the absence of any statutory or regulatory
requirements. For example, the Bank must report, and the seller must therefore initially
provide, data on: the location and type of the residential property securing the loan; the
annual income and the debt-to-income ratio of the borrower and any co-borrowers; and
the unpaid principal balance, term-to-maturity, interest rate, and type (i.e., fixed- or
adjustable-rate) of the loan. The remaining data that would not normally be exchanged in
the ordinary course of business comprises information identifying the race, ethnicity, and
gender of the borrower and any co-borrowers, which are items that the Banks are
required to aggregate and report by census-tract to FHFA under section 10(k) of the Bank
Act. It is these few items that comprise the actual information collection requirement to
which Bank members and housing associates may be required to respond.
2. Use of Data
FHFA uses this information collection to create a database and reporting infrastructure to
monitor the safety of the Banks’ investments and the extent to which the Banks are
fulfilling their statutory housing finance mission through their AMA programs. This is
part of FHFA’s overall responsibility as the safety and soundness and mission supervisor
of the Banks. 5 In addition, FHFA uses the information collection to create and maintain
the public use database it is required to make available under section 10(k) of the Bank
Act. 6
5
6

See 12 U.S.C. § 4513(a)(1).
This public use database is accessible at http://www.fhfa.gov/Default.aspx?Page=304.

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FEDERAL HOME LOAN BANK ACQUIRED MEMBER ASSETS, CORE MISSION
ACTIVITIES, INVESTMENTS AND ADVANCES: OMB NUMBER 2590-0008
SUPPORTING STATEMENT

3. Use of Information Technology
In general, Bank members and housing associates initially gather the information
manually as part of the mortgage loan origination process and enter it into an automated
system. These institutions then provide the information to their district Bank in an
electronic format when the loans are sold or transferred to the Bank, and the Bank
provides it to FHFA through a secure electronic portal. By allowing the use of
information technology, the reporting burden is greatly reduced.
4. Efforts to Identify Duplication
The loan-level data that respondents are required to provide to the acquiring Bank as part
of this information collection cannot be obtained from any other source because it is
information that is specific to the individual loans that are acquired by the Bank.
However, the categories of loan-level information that the sellers of AMA loans are
required to provide to the Banks under this information collection are similar to those that
many depository institutions are required to report to their primary financial regulator
under the Home Mortgage Loan Disclosure Act (HMDA). 7 The categories are also
similar to those that institutions selling residential mortgage loans to Fannie Mae and
Freddie Mac must provide to those entities. Accordingly, to the extent that Bank
members and housing associates that sell AMA to a Bank also sell residential mortgage
loans to Fannie Mae and Freddie Mac, or are depository institutions that must collect loan
data under HMDA, these institutions can utilize substantially the same systems and
processes for each collection.
5. Impact on Small Entities
The information collection does not have a significant economic impact on a substantial
number of small entities.
6. Consequences of Less Frequent Collection and Obstacles to Burden Reduction
The Banks need to collect the underlying loan-level data from their members and housing
associates in sufficient time to prepare their quarterly and semi-annual reports as required
by the DRM. As discussed in Item #1, a Bank typically collects this information for each
loan at the time it agrees to acquire the loan, along with the other data that the Bank
requires in order to consummate the transaction. If the Banks did not report their
aggregated data quarterly and their loan-level data semi-annually as specified in the
DRM, FHFA would be unable to monitor effectively the extent to which the Banks are
acquiring the mortgage loans in a safe and sound manner, and are fulfilling their statutory
housing finance mission through their AMA programs.
7

12 U.S.C. §§ 2801-2810.

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FEDERAL HOME LOAN BANK ACQUIRED MEMBER ASSETS, CORE MISSION
ACTIVITIES, INVESTMENTS AND ADVANCES: OMB NUMBER 2590-0008
SUPPORTING STATEMENT

7. Circumstances Requiring Special Information Collection
There are no special circumstances that would require FHFA to conduct the information
collection in a manner inconsistent with the guidelines provided in Item 7.

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 proposed changes to the AMA database and the burden
estimates for this information collection in the Federal Register on August 7, 2012. See
77 FR 47069 (Aug. 7, 2012). The 60-day comment period closed on October 9, 2012.
FHFA received no comments.
9. Provision of Payments or Gifts to Respondents
No payment or gift is provided to any respondent.
10. Assurance of Confidentiality
Section 10(k) of the Bank Act provides that FHFA may not provide public access to, or
disclose to the public, any non-public proprietary or personally identifiable information
required to be submitted to FHFA thereunder, unless the Director of FHFA determines
that it is in the public interest to provide such information. 8 In order to comply with this
provision and with the Privacy Act, 9 FHFA does not include in the public use database
any information that would allow a person to identify the borrowers or property
associated with a mortgage loan.
11. Questions of a Sensitive Nature
Information regarding the race, ethnicity and gender of borrowers and co-borrowers may
be considered sensitive in nature. However, section 10(k) of the Bank Act requires that
the Banks provide this information to FHFA to the extent that it is available.
12. Estimates of the Hour Burden of the Information Collection
The estimated annualized hour burden to Bank member and housing associate
respondents is 4,000 hours. The estimated annualized cost to respondents is $168,000.
The burden calculations assume that an annual average of 48,000 AMA loans will be
acquired by the Banks collectively for each of the next three years from a total of 640
selling institutions. These figures are consistent with the average number of AMA loans
8
9

See 12 U.S.C. § 1430(k)(2)(B).
5 U.S.C. § 552a.

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FEDERAL HOME LOAN BANK ACQUIRED MEMBER ASSETS, CORE MISSION
ACTIVITIES, INVESTMENTS AND ADVANCES: OMB NUMBER 2590-0008
SUPPORTING STATEMENT

acquired annually and the average number of selling institutions during the period 20092011. The burden estimates are based on the following calculations:
Analyst for respondent enters data into loan report and submits report to the acquiring
Bank:
♦
♦
♦
♦
♦

Data entry/submission time: 5 minutes per loan
Total loans:
48,000 (640 respondents x 75 loans per respondent)
Total hours:
4,000
Hourly rate:
$42 (includes salary, benefits and overhead)
Total cost:
$168,000

Total respondent burden:

Hours: 4,000

Cost: $168,000

13. Estimated Total Annualized Cost Burden to Respondents
FHFA has not identified any costs to respondents other than the costs discussed in detail
under Item 12 above.
14. Estimated Cost to the Federal Government
The estimated annualized cost to FHFA is $41,280. The estimated annual hour burden is
544 hours. These estimates are based on the following calculations:
Staff Analyst/Economist reviews each data submission in detail to ensure compliance
with the DRM and regulatory requirements and prepares reports.
♦
♦
♦
♦
♦

Review time:
Total submissions:
Total hours:
Hourly rate:
Total cost:

15 hours per data submission
32 (8 Banks x 4 quarterly submissions)
480 hours
$70 (includes salary, benefits and overhead)
$33,600

Senior management reviews reports.
♦
♦
♦
♦
♦

Review time:
Total submissions:
Total hours:
Hourly rate:
Total cost:

Total FHFA Burden:

2 hours per data submission
32 (8 Banks x 4 quarterly submissions)
64 hours
$120 (includes salary, benefits and overhead)
$7,680
Hours: 544

Cost: $41,280

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FEDERAL HOME LOAN BANK ACQUIRED MEMBER ASSETS, CORE MISSION
ACTIVITIES, INVESTMENTS AND ADVANCES: OMB NUMBER 2590-0008
SUPPORTING STATEMENT

15. Reasons for Change in Burden
For this cycle, FHFA has altered the approach to the burden calculations from that used
for the 2009 approval to one that more accurately reflects the manner in which the
information is collected from Bank members and housing associates. This has resulted in
a reduction in the estimated hour burden imposed upon these respondents by this
information collection from 36,000 hours in 2009 to the 4,000 hours that is reflected
under Item #12 of this statement. The prior calculations were set up as though the Bank
members and housing associates initially compile quarterly reports containing loan-level
data and provide these reports to the Banks. As described under Item #1, the selling
member or housing associate actually supplies the loan-level data to the acquiring Bank
at the time that the Bank agrees to acquire the loan (usually done on a pool basis rather
than on an individual loan basis), which may be at any point during a year. From this
information, the Banks compile the semi-annual and quarterly reports required under the
DRM. Thus, the burden calculation is based on an annual average total of 48,000 loans
per year expected to be acquired by Banks having an AMA program.
In addition, FHFA has now excluded from the burden calculations the time necessary to
record and transmit the loan-level data elements that any loan purchaser would require a
seller to provide in the ordinary course of business because, while the DRM does require
that this data be provided to FHFA, an acquiring Bank would still receive this data from
the selling member or housing associate as part of the loan purchase transaction,
regardless of any regulatory requirement to do so. Thus, for each loan, the calculations
show a time burden of only 5 minutes per loan as necessary to record and transmit the
additional HMDA-related that would not otherwise be collected in the ordinary course of
business.
The total burden reported does not include burden on the Banks because they are
instrumentalities of the United States. 10
16. Plans for Tabulation, Statistical Analysis and Publication
As discussed under Items #1, 2 and 10, the loan-level data provided to FHFA by the
Banks is made available to the public in unaltered form, except for the redaction of
personally identifiable information, through FHFA’s online public use database.
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.
10

See 44 U.S.C. 3502(3)(A)(i).

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FEDERAL HOME LOAN BANK ACQUIRED MEMBER ASSETS, CORE MISSION
ACTIVITIES, INVESTMENTS AND ADVANCES: OMB NUMBER 2590-0008
SUPPORTING STATEMENT

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 Item 18.

B. COLLECTION OF INFORMATION EMPLOYING STATISTICAL
METHODS
This information collection does not employ statistical methods.

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