SUMMARY:  In 2016, FHFA along with the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Association, and the U.S. Securities and Exchange Commission jointly developed and issued a proposed rule on incentive-based compensation arrangements that would implement Section 956 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  Section 956 generally requires the six agencies to jointly issue regulations or guidelines: (1) prohibiting incentive-based payment arrangements that the agencies determine encourage inappropriate risks by certain financial institutions by providing excessive compensation or that could lead to material financial loss; and (2) requiring those financial institutions to disclose information concerning incentive-based compensation arrangements to the appropriate Federal regulator.  

FHFA is seeking comments on the regulatory text from the 2016 proposed rule without change, as well as on certain questions and alternatives presented in the preamble.  Comments received on this proposal will further inform the agencies' efforts to implement Section 956's mandate.  However, the preamble and re-proposal of the 2016 regulatory text will not be published in the Federal Register until all six agencies jointly adopt the proposal.  If finalized, FHFA's proposed rule would apply to Fannie Mae, Freddie Mac, and the Federal Home Loan Banks.