Risk-Based Capital

DEPARTMENT OF HOUSING AND URBAN DVELOPMENT

Office of Federal Housing Enterprise Oversight

12 CFR Part 1750

RIN 2550-AA02

Risk-Based Capital

AGENCY: Office of Federal Housing Enterprise Oversight, HUD.

ACTION: Proposed rule; extension of public comment period for the

second notice of proposed rulemaking.

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SUMMARY: On April 13, 1999, the Office of Federal Housing Enterprise

Oversight (OFHEO) published a notice of proposed rulemaking entitled

''Risk-Based Capital'' in the Federal Register (64 FR 18083), the

second of such proposals related to the development of a regulation to

establish risk-based capital standards for the Federal National

Mortgage Association and the Federal Home Loan Mortgage Corporation. An

earlier proposal, published on June 11, 1996, (61 FR 29592) set forth a

methodology for identifying the benchmark credit loss experience

specified by the Federal Housing Enterprise Financial Safety and

Soundness Act of 1992 (1992 Act) and proposed the use of a House Price

Index developed by OFHEO in the development of the stress test required

by the 1992 Act. The second proposal (NPR 2) set forth the

specifications for the stress test, completing OFHEO's risk-based

capital proposal.

OFHEO has received several requests for an extension of the August

11, l999, deadline for comments on NPR 2 to permit adequate time for

interested parties to replicate and analyze the stress test and to

understand the test as applied to a variety of possible starting

points. In recognition of the complexity that necessarily attends this

method of setting capital standards, the importance of a careful

evaluation of the implications of this precedent-setting approach, and

the value of meaningful comment in the rulemaking process, OFHEO is

extending the comment period for NPR 2 from August 11, 1999, to

November 10, l999. This will insure that all interested parties have

ample opportunity to participate in the rulemaking process by providing

meaningful comment on the various technical and policy issues involved

in the development of the risk-based capital regulation.

DATES: The comment period is extended until November 10, l999.

ADDRESSES: Send written comments to Anne E. Dewey, General Counsel,

Office of General Counsel, Office of Federal Housing Enterprise

Oversight, 1700 G Street, NW., Fourth Floor, Washington, DC 20552.

Written comments may also be sent by electronic mail to

[email protected]

FOR FURTHER INFORMATION CONTACT: Patrick J. Lawler, Director of Policy

Analysis and Chief Economist; David J. Pearl, Director, Research,

Analysis and Capital Standards; or Gary L. Norton, Deputy General

Counsel, Office of Federal Housing Enterprise Oversight, 1700 G Street,

NW., Fourth Floor, Washington, DC 20552, telephone (202) 414-3800 (not

a toll-free number). The telephone number for the Telecommunications

Device for the Deaf is (800) 877-8339.

Dated: June 9, 1999.

Mark A. Kinsey,

Acting Director, Office of Federal Housing Enterprise Oversight.

[FR Doc. 99-15002 Filed 6-11-99; 8:45 am]

BILLING CODE 4220-01-P