980.3—New business activity notice requirement.

At least sixty days prior to undertaking a new business activity, except as provided in § 980.4(b), a Bank shall submit to the Finance Board a written notice containing the following information:
(a) General requirements. Except as provided in paragraph (b) of this section, a Bank's notice of new business activity shall include:
(1) An opinion of counsel citing the statutory, regulatory, or other legal authority for the new business activity;
(2) A good faith estimate of the anticipated dollar volume of the activity over the short-and long-term;
(3) A full description of:
(i) The purpose and operation of the proposed activity;
(ii) The market targeted by the activity;
(iii) The delivery system for the activity; and
(iv) The effect of the activity on the housing, or relevant community lending, market;
(4) A demonstration of the Bank's capacity, through staff, or contractors employed by the Bank, sufficiency of experience and expertise, to safely administer and manage the risks associated with the new activity;
(5) An assessment of the risks associated with the activity, including the Bank's ability to manage these risks and the Bank's ability to manage the risks associated with increasing volumes of the new activity; and
(6) The criteria that the Bank will use to determine the eligibility of its members or housing associates to participate in the new activity.
(b) New collateral activities. If a proposed new business activity relates to the acceptance of collateral under § 950.7 of this chapter, a Bank's notice of new business activity shall include:
(1) A description of the classes or amounts of collateral proposed to be accepted by the Bank;
(2) A copy of the Bank's member products policy, adopted pursuant to § 917.4 of this chapter ;
(3) A copy of the Bank's procedures for determining the value of the collateral in question, established pursuant to § 950.10 of this chapter; and
(4) A demonstration of the Bank's capacity, personnel, technology, experience and expertise to value, discount and manage the risks associated with the collateral in question.

Code of Federal Regulations

[65 FR 44431, July 18, 2000, as amended at 67 FR 12854, Mar. 20, 2002]