PART 1271—MISCELLANEOUS FEDERAL HOME LOAN BANK OPERATIONS AND AUTHORITIES Authority: 12 U.S.C. 1430, 1431, 1432, 1441(b)(8), (c), (j), 1442, 4511(b), 4513(a), 4526. Source: 78 FR 2324, Jan. 11, 2013, unless otherwise noted. Subpart A—Collection, Settlement, and Processing of Payment Instruments § 1271.1 Definitions. Unless otherwise defined in this subpart, the terms used in this subpart shall conform, in the following order, to: Regulations of FHFA, the Uniform Commercial Code, regulations of the Federal Reserve System, and general banking usage. As used in this subpart: Account processing Assets Data communication Data processing Eligible institution Issuance of forms Presentment Statement packaging Storage services Transportation of items § 1271.2 Authority and scope. (a) Pursuant to section 11(e)(2) of the Bank Act (12 U.S.C. 1431(e)(2)), FHFA has promulgated this subpart governing the collection, processing, and settlement, and services incidental thereto, of drafts, checks, and other negotiable and nonnegotiable items and instruments by Banks. Settlement, collection, and processing include the following activities as defined in this subpart: Account processing, data processing, data communication, issuance of forms, transportation of items, and storage services. (b) Any activity authorized by section 11(e)(2) of the Bank Act (12 U.S.C. 1431(e)(2)) shall be governed by the provisions of this subpart. § 1271.3 General provisions. The Banks are authorized to: (a) Engage in, be agents or intermediaries for, or otherwise participate or assist in, the processing, collection, and settlement of checks, drafts, or any other negotiable or nonnegotiable items and instruments of payment drawn on eligible institutions or Bank members; and (b) Be drawees of checks, drafts, and other negotiable and nonnegotiable items and instruments issued by eligible institutions or Bank members. § 1271.4 Incidental powers. In connection with the collection, processing, and settlement of items and instruments drawn on or issued by eligible institutions or Bank members, a Bank may also perform the following services: (a) Statement packaging; and (b) Any other activity that FHFA shall, from time to time, after notice and comment, find necessary for the exercise of the authority of this subpart. § 1271.5 Operations. A Bank may utilize the services of a Federal Reserve Bank and may become a member or use the services of a clearinghouse, public or private financial institution, or agency in the exercise of any powers or functions under this subpart. § 1271.6 Pricing of services. (a) General. (b) Payment instrument account services. (2) Prices must reflect the imputed rate of return that would have been earned and the taxes that would have been paid if the Bank were a private corporation, by using a cost of capital adjustment factor applied to those assets used in providing services authorized under this subpart. (c) Review and publication. (1) FHFA shall from time to time and at least annually review the cost of capital adjustment factor and review prices for services authorized in this subpart for compliance with the principles set forth in paragraphs (a) and (b) of this section, and (2) FHFA shall annually publish in the Federal Register § 1271.7 Rights, powers, responsibilities, duties, and liabilities. To the extent it is not inconsistent with other provisions of this subpart, the Uniform Commercial Code governs the rights, powers, responsibilities, duties, and liabilities of Banks in the exercise of their authority under this subpart. For purposes of this paragraph, the term “bank,” as used in the Uniform Commercial Code and clearinghouse rules, includes Banks and their members and eligible institutions. Subpart B—Miscellaneous Bank Authorities § 1271.10 Transfer of funds between Banks. Inter-Bank borrowing shall be through unsecured deposits bearing interest at rates negotiated between Banks. § 1271.11 Trustee powers. A Bank may act, and make reasonable charges for doing so, as trustee of any trust affecting the business of any member or any institution or group applying for membership, if: (a) Such trust is created or arises for the benefit of the institution or its depositors, investors, or borrowers, or for the promotion of sound and economical home financing; and (b) In the case of applicants, the Bank ceases to act as trustee if the application is withdrawn or rejected. Subpart C—Bank Requests for Information § 1271.15 Definitions. As used in this subpart: Confidential regulatory information Financial regulatory agency (1) The Department of the Treasury, including the Comptroller of the Currency; (2) The Board of Governors of the Federal Reserve System; (3) The National Credit Union Administration; or (4) The Federal Deposit Insurance Corporation. Third party (1) A Bank in possession of any particular confidential regulatory information; or (2) The financial regulatory agency that supplied the particular confidential regulatory information to such Bank. § 1271.16 Scope. This subpart governs the procedure by which a Bank will request and receive confidential regulatory information pursuant to section 22 of the Bank Act (12 U.S.C. 1442). § 1271.17 Request for confidential regulatory information. A Bank shall make all requests for confidential regulatory information to a financial regulatory agency, or to a regional office of such agency if mutually agreeable, in accordance with the procedures contained in this subpart as well as any procedures of general applicability for requesting information promulgated by such financial regulatory agency. This subpart and its procedures may be supplemented by a confidentiality agreement between a Bank and a financial regulatory agency. § 1271.18 Form of request. A request by a Bank to a financial regulatory agency for confidential regulatory information shall be made in writing or by such other means as may be agreed upon between the Bank and the financial regulatory agency. The request shall reference section 22 of the Bank Act (12 U.S.C. 1442), as amended, and this regulation, and shall describe the confidential regulatory information requested and identify its intended use pursuant to the Bank Act. The request shall be signed or otherwise made by any duly authorized Bank officer or employee. § 1271.19 Storage of confidential regulatory information. Each Bank shall: (a) Store all identified confidential regulatory information in secure storage areas or filing cabinets or other secured facilities generally used by such Bank and limit access thereto in the same manner as it maintains the confidentiality of its own members' privileged or non-public information; (b) Have in place a written set of procedures and policies designed to ensure the confidentiality of confidential regulatory information in its possession; and (c) Establish an internal review of its procedures for storing confidential regulatory information and maintaining its confidentiality, as a part of its internal audit process. § 1271.20 Access to confidential regulatory information. Each Bank shall ensure that access to the confidential regulatory information stored at its facility is limited to those with a need to know such information and that employees with access maintain the confidentiality of the confidential regulatory information in accordance with the Bank's own procedures for maintaining the confidentiality of its members' privileged or non-public information. § 1271.21 Third party requests for confidential regulatory information. (a) General. (b) Subpoena. (1) The financial regulatory agency gives written approval to the disclosure; or (2) A binding order to produce the confidential regulatory information has become final with all rights of appeal either exhausted or lapsed. (c) Nondisclosure to third parties. (d) Disclosure to FHFA. (2) FHFA shall keep all confidential regulatory information received under this paragraph (d) in strict confidence. § 1271.22 Computer data. Nothing in this subpart shall preclude a Bank from arranging with any financial regulatory agency to transmit or allow access to confidential regulatory information with the consent of such agency by means of an electronic computer system. Any such arrangement shall ensure the security of the computerized data stored in a Bank's computer and restrict access to such data in order to preserve confidentiality in a manner agreed upon by the Bank and the financial regulatory agency. Subpart D—Financing Corporation Operations § 1271.30 Definitions. As used in this subpart: Administrative expenses. (2) Do not include any form of employee compensation, custodian fees, issuance costs, or any interest on (and any redemption premium with respect to) any Financing Corporation obligations. Custodian fees Directorate Insured depository institution Issuance costs Non-administrative expenses Obligations Receivership proceeds § 1271.31 General authority. Subject to the limitations and interpretations in this subpart and such orders and directions as FHFA may prescribe, the Financing Corporation shall have authority to exercise all powers and authorities granted to it by the Bank Act and by its charter and bylaws regardless of whether the powers and authorities are specifically implemented in regulation. § 1271.32 Authority to establish investment policies and procedures. The Directorate shall have authority to establish investment policies and procedures with respect to Financing Corporation funds provided that the investment policies and procedures are consistent with the requirements of section 21(g) of the Bank Act (12 U.S.C. 1441(g)). The Directorate shall promptly notify FHFA in writing of any changes to the investment policies and procedures. § 1271.33 Book-entry procedure for Financing Corporation obligations. (a) Authority. (b) Procedure. § 1271.34 Bank and Office of Finance employees. Without further approval of FHFA, the Financing Corporation shall have authority to utilize the officers, employees, or agents of any Bank or the Office of Finance in such manner as may be necessary to carry out its functions. § 1271.35 Budget and expenses. (a) Directorate approval. (b) FHFA approval. (c) Spending limitation. (d) Amended budgets. § 1271.36 Administrative expenses. (a) Payment by Banks. (b) Amount. (c) Adjustments. § 1271.37 Non-administrative expenses; assessments. (a) Interest expenses. (b) Assessments on insured depository institutions Authority. (2) Assessment rate Determination. (ii) Notice. (3) Collecting assessments Collection agent. (ii) Accounts. (c) Receivership proceeds Authority. (2) Procedure. (d)(1) Final assessments. (2) Amendments to call reports. (3) June 2019 assessment. [78 FR 2324, Jan. 11, 2013, as amended at 83 FR 63058, Dec. 7, 2018] § 1271.38 Reports to FHFA. The Financing Corporation shall file such reports as FHFA shall direct. § 1271.39 Review of books and records. FHFA shall examine the Financing Corporation at least annually to determine whether the Financing Corporation is performing its functions in accordance with the requirements of section 21 of the Bank Act (12 U.S.C. 1441) and this subpart. Subpart E—Authority for Bank Assistance of the Resolution Funding Corporation § 1271.41 Bank employees. Upon the request of the Directorate of the Resolution Funding Corporation, established pursuant to section 21B(b) of the Bank Act (12 U.S.C. 1441b(b)), officers, employees, or agents of the Banks are authorized to act for and on behalf of the Resolution Funding Corporation in such manner as may be necessary to carry out the functions of the Resolution Funding Corporation as provided in section 21B(c)(6)(B) of the Bank Act (12 U.S.C. 1441b(c)(6)(B)).