ROCIS_2017 Renewal Bank Director Forms Supporting Statement

“FEDERAL HOME LOAN BANK DIRECTORS”
OMB NUMBER 2590-0006
SUPPORTING STATEMENT

A. JUSTIFICATION
1. Circumstances necessitating the collection of information
Section 7 of the Federal Home Loan Bank Act (Bank Act) vests the management of each Federal
Home Loan Bank (Bank) in its board of directors. 1 As required by section 7, each Bank’s board
comprises two types of directors: (1) member directors, who are drawn from the officers and
directors of member institutions located in the Bank’s district and who are elected to represent
members in a particular state in that district; and (2) independent directors, who are unaffiliated
with any of the Bank’s member institutions, but who reside in the Bank’s district and are elected
on an at-large basis. 2 Both types of directors serve four-year terms, which are staggered so that
approximately one-quarter of a Bank’s total directorships are up for election every year. 3
Section 7 and the implementing regulations of the Federal Housing Finance Agency (FHFA or
the Agency), codified at 12 CFR part 1261, establish the eligibility requirements for both types
of Bank directors and the professional qualifications for independent directors, and set forth the
procedures for their election.
Part 1261 of the regulations requires that each Bank administer its own annual director election
process. As part of this process, a Bank must require each nominee for both types of
directorship, including any incumbent that may be a candidate for re-election, to complete and
return to the Bank a form that solicits information about the candidate’s statutory eligibility to
serve and, in the case of independent director candidates, about his or her professional
qualifications for the directorship being sought. 4 Specifically, member director candidates are
required to complete the Federal Home Loan Bank Member Director Eligibility Certification
Form (Member Director Eligibility Certification Form), while independent director candidates
must complete the Federal Home Loan Bank Independent Director Application Form
(Independent Director Application Form).
Each Bank must also require all of its incumbent directors to certify annually that they continue
to meet all eligibility requirements. 5 Member directors do this by completing the Member
1

See 12 U.S.C. § 1427(a)(1).
See 12 U.S.C. §§ 1427(b) and (d).
3
See 12 U.S.C. § 1427(d).
4
See 12 CFR 1261.7(c) and (f); 12 CFR 1261.14(b).
5
See 12 CFR 1261.12.
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Director Eligibility Certification Form again every year, while independent directors complete
the abbreviated Federal Home Loan Bank Independent Director Annual Certification Form
(Independent Director Annual Certification Form) to certify their ongoing eligibility.
2. Use of Data
The Banks use the information collection contained in the Independent Director Application
Form and part 1261 to determine whether individuals who wish to stand for election or reelection as independent directors satisfy the statutory eligibility requirements and possess the
professional qualifications required under the statute and regulations. Only individuals meeting
those eligibility requirements and qualifications may serve as an independent director. 6 On an
annual basis, the Banks use the information collection contained in the Independent Director
Annual Certification Form and part 1261 to determine whether their incumbent independent
directors continue to meet the statutory eligibility requirements.
The Banks use the information collection contained in the Member Director Eligibility
Certification Form and part 1261 to determine whether individuals who wish to stand for
election or re-election as member directors satisfy the statutory eligibility requirements. Only
individuals meeting these requirements may serve as a member director. 7 On an annual basis,
the Banks also use the information collection contained in the Member Director Eligibility
Certification Form and part 1261 to determine whether their incumbent member directors
continue to meet the statutory eligibility requirements.
Part 1261 requires each Bank to submit to FHFA completed Independent Director Application
Forms for all individuals that its board of directors intends to nominate as candidates for election
to independent directorships before those individuals may be officially nominated. 8 The Agency
has two weeks within which to furnish the Banks with any desired commentary relating to the
fitness of the proposed nominees to serve as independent directors of the Bank. The regulations
also require that the Banks provide FHFA with copies of all completed Independent Director
Annual Certification Forms and all Member Director Eligibility Certification Forms that have
been completed for purposes of annual certification. 9 Generally, the Agency uses the
information on all completed forms to monitor the Bank director election processes and to obtain
information on the composition of the Banks’ boards of directors and of the pool of individuals
from which the directors are drawn.
3. Use of Information Technology
Individuals have the option of completing each of the forms online in electronic form, although
there currently is no mechanism for providing an electronic signature or for electronic
submission of the form. Forms that are completed online must be printed out and submitted to
the Bank in paper form with original signatures.

6

See 12 U.S.C. § 1427(a)(3).
See 12 U.S.C. § 1427(a)(3) and (b)(1).
8
See 12 CFR 1261.7(f).
9
See 12 CFR 1261.12(a).
7

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4. Efforts to Identify Duplication
The Banks are required by statute to verify the eligibility of each candidate for a directorship and
for incumbent directors annually. The Banks must also verify that nominees for independent
directorships have the professional qualifications that independent directors are require by statute
to possess. The three forms are designed to collect the information necessary to make those
verifications, and this information is not available from any other source.
5. Impact on Small Entities
The information collection does not have a significant economic impact on a substantial number
of small entities. Respondents are individuals.
6. Consequences of Less Frequent Collection and Obstacles to Burden Reduction
If the information requested in the forms were not collected at the times specified in part 1261,
the Banks would be unable to determine, and FHFA would be unable to monitor, whether
prospective and incumbent Bank directors satisfy the statutory eligibility requirements and
whether independent director candidates possess the professional qualifications required by
statute.
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 Question 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 this information collection in the Federal Register on October 12, 2017.
See 82 FR 47510 (Oct. 12, 2017). The 60-day comment period closed on December 11, 2017.
FHFA received two comments, neither of which addressed any aspect of this information
collection or the PRA.
9. Provision of Payments to Respondents
No payment or gift will be provided to any respondent.
10. Assurance of Confidentiality
FHFA and the Banks maintain the confidentiality of information obtained from respondents as
required by applicable statute, regulation, and Agency policy.
11. Justification of Sensitive Questions
There are no questions of a sensitive nature in the information collection.
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12. Estimated Burden of Information Collection
The estimated annualized hour burden imposed upon respondents by the information collection
is 145 hours. The estimated annualized cost associated with this burden is $23,925, which
includes salaries, benefits, and overhead costs associated with review and completion of the
forms. These estimates are based on the following calculations:
Member Director Eligibility Certification Form

I.

The estimated annualized hour burden for all prospective and incumbent member directors
associated with completion of the Member Director Eligibility Certification Form is 37 hours.
The estimated annualized cost is $6,105. These estimates are based on the following
calculations:
Nominees for member directorships complete form in year of election to verify they are
eligible to serve:
•
•
•
•
•

Time per form:
Total forms:
Total hours:
Hourly rate:
Total cost:

0.25 hours
68
17
$165
$2,805

Incumbent member directors complete form annually to verify they remain eligible to serve:
•
•
•
•
•
II.

Time per form:
Total forms:
Total hours:
Hourly rate:
Total cost:

0.25 hours
80
20
$165
$3,300

Independent Director Application Form

The estimated annualized hour burden for all prospective and incumbent member directors
associated with completion of the Independent Director Application Form is 75 hours. The
estimated annualized cost is $12,375. These estimates are based on the following calculations:
Nominees for independent directorships complete form in year of election to verify they are
eligible to serve and possess the required professional qualifications:
•
•
•
•
•

Time per form:
Total forms:
Total hours:
Hourly rate:
Total cost:

3.0 hours
25
75
$165 (includes salary, benefits, and overhead)
$12,375

4

Independent Director Annual Certification Form

III.

The estimated annualized hour burden for all incumbent independent directors associated with
completion of the Independent Director Annual Certification Form is 33 hours. The estimated
annualized cost is $5,445. These estimates are based on the following calculations:
Incumbent independent directors complete form annually to verify they remain eligible to
serve:
•
•
•
•
•

Time per form:
Total forms:
Total hours:
Hourly rate:
Total cost:

0.5 hours
66
33
$165 (includes salary, benefits, and overhead)
$5,445

13. Estimated Total Annual Cost Burden to Respondents
There are no additional costs associated with completion of the forms.
14. Estimated Cost to the Federal Government
The estimated annualized hour burden imposed upon the federal government by the information
collection is 90 hours. The estimated annualized cost to the federal government associated with
this burden is $8,550, which includes salaries, benefits, and overhead costs associated with
review and completion of the forms. These estimates are based on the following calculations:
Member Director Eligibility Certification Form

I.

FHFA staff reviews each form completed for purposes of annual certification to ensure each
incumbent member director remains eligible to serve:
•
•
•
•
•
II.

Time per form:
Total forms:
Total hours:
Hourly rate:
Total cost:

0.1 hours
80
8
$95
$760

Independent Director Application Form

FHFA staff reviews each form to ensure each independent director candidate is eligible to
serve and possess the required professional qualifications:
•
•
•
•

Time per form:
Total forms:
Total hours:
Hourly rate:

3.0 hours
25
75
$95
5

•
III.

Total cost:

$7,125

Independent Director Annual Certification Form

FHFA staff reviews each form to ensure each incumbent independent director remains
eligible to serve:
•
•
•
•
•

Time per form:
Total forms:
Total hours:
Hourly rate:
Total cost:

0.1 hours
66
7
$95
$665

15. Reasons for Change in Burden
The estimated annualized hour burden on respondents is unchanged from that reflected in the
prior (2014) Supporting Statement. Despite this, the estimated annualized costs associated with
the estimate has fallen to $23,925 from $38,280 in the prior Supporting Statement. This is due to
a decrease—to $165 from $264—in the per-hour cost estimate. Historically, FHFA has
estimated hourly employment costs for PRA purposes by canvassing a small number of potential
respondents. In the past eighteen months, the Agency has transitioned to using, instead, average
per-hour employment costs from the Bureau of Labor Statistics (BLS), as OMB suggests in its
guidance materials. According to BLS’s Occupational Employment Statistics data for May 2016
(the most recent data available), the national mean hourly wage for Chief Executives in the
Finance and Insurance Sector (which would comprise a vast majority of Bank directors and
directorship nominees) was $109.17. 10 FHFA rounded this figure up to $110 and added 50
percent ($55) for benefits and overhead costs to reach a total estimated cost of $165 per hour.
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 Whey 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 Item 18.

10

See https://www.bls.gov/oes/current/naics2_52.htm#11-0000.

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

Attachments:
• Federal Home Loan Bank Member Director Eligibility Certification Form
• Federal Home Loan Bank Independent Director Application Form
• Federal Home Loan Bank Independent Director Annual Certification Form
• 2 comments (received electronically)

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