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GOVERNMENT-SPONSORED ENTERPRISES This chapter contains descriptions of and data on the Government-sponsored enterprises listed below. These enterprises were established and chartered by the Federal Government. They are not included in the Federal budget because they are classified as being private. However, because of their relationship to the Government, detailed statements of financial operations and condition are presented, to the extent such information is available, on a basis that is as consistent as practicable with the basis for the budget data of Government agencies. These statements are not reviewed by the President; they are presented as submitted by the enterprises. —The Student Loan Marketing Association is a for-profit financial corporation chartered by Congress in 1972 under the Higher Education Act (HEA) to help increase the availability of student loans. Sallie Mae carries out secondary market and other functions. —The College Construction Loan Insurance Association is organized as a private, for-profit insurance corporation to guarantee and insure bonds and loans made for construction and renovation of college and university facilities. The Corporation was established by, but was not chartered by, the Federal Government. —The Federal National Mortgage Association provides supplementary assistance to the secondary market for home mortgages. The Federal Home Loan Mortgage Corporation provides a secondary market for mortgage lenders. Both are supervised by the Department of Housing and Urban Development for their roles in helping to finance low- and moderate-income housing; both are regulated for financial safety and soundness by the newly established Office of Federal Housing Enterprise Oversight. —The Banks for Cooperatives, Agricultural Credit Bank, and Farm Credit Banks provide financial assistance to agriculture. They are supervised by the Farm Credit Administration. —The Federal Agricultural Mortgage Corporation, under the supervision of the Farm Credit Administration, provides a secondary mortgage market for agricultural real estate and certain rural housing loans as well as for farm and business loans guaranteed by the U.S. Department of Agriculture. —The Federal Home Loan Banks assist thrift institutions, banks, and credit unions and are supervised by the Federal Housing Finance Board. —The Financing Corporation functions as a financing vehicle for the FSLIC Resolution Fund. It operates under the supervision and control of the Federal Housing Finance Board. —The Resolution Funding Corporation provides financing for the Resolution Trust Corporation (RTC) and is subject to the general oversight and direction of the Thrift Depositor Protection Oversight Board. The Board of Governors of the Federal Reserve System is not a Government-sponsored enterprise, but its transactions also are not included in the budget because of its unique status in the conduct of monetary policy. The Board provides data on its administrative budget on a calendar year basis, which is included here for information. Its budget schedules and statements are not subject to review by the President. DEPARTMENT OF EDUCATION STUDENT LOAN MARKETING ASSOCIATION Program and Financing (in millions of dollars) Identification code 99–1500–0–3–502 1995 actual 1996 est. 1997 est. Obligations by program activity: Operating expenses: 00.01 Interest expense ........................................................ 00.02 Administrative expenses and taxes .......................... 2,973 507 2,825 496 2,966 536 00.91 3,480 3,321 3,502 01.01 01.02 Total operating expenses ...................................... Capital investment: Loans, etc .................................................................. Investments, dividends, and other assets ................ 11,021 888 10,553 700 10,441 750 01.91 Total capital investment ....................................... 11,909 11,253 11,191 10.00 Total obligations ........................................................ 15,389 14,574 14,693 22.00 23.95 Budgetary resources available for obligation: New budget authority (gross) ........................................ New obligations ............................................................. 15,389 –15,389 14,573 –14,574 14,693 –14,693 New budget authority (gross), detail: Authority to borrow (indefinite) ..................................... Spending authority from offsetting collections: Offsetting collections (cash) .............................................. –466 –6,982 –2,492 15,855 21,555 17,185 Total new budget authority (gross) .......................... 15,389 14,573 14,693 Change in unpaid obligations: Unpaid obligations, start of year: 72.91 Obligated balance: U.S. Securities: Par value .......... 1,240 1,201 1,167 Total unpaid obligations, start of year ................ New obligations ............................................................. Total outlays (gross) ...................................................... Unpaid obligations, end of year: Obligated balance: Fund balance: U.S. Securities: Par value ............................................................... 1,240 15,389 –15,428 1,201 14,574 –14,608 1,167 14,693 –14,636 1,201 1,167 1,224 74.99 Total unpaid obligations, end of year .................. 1,201 1,167 1,224 86.97 86.98 Outlays (gross), detail: Outlays from new permanent authority ......................... Outlays from permanent balances ................................ 87.00 Total outlays (gross) ................................................. 15,428 14,608 14,636 Offsets: Against gross budget authority and outlays: 88.40 Offsetting collections (cash) from: Non-Federal sources .................................................................. –15,855 –21,555 –17,185 Net budget authority and outlays: Budget authority ............................................................ Outlays ........................................................................... –466 –427 –6,982 –6,947 –2,492 –2,549 67.15 68.00 70.00 72.99 73.10 73.20 74.91 89.00 90.00 15,419 14,608 14,636 9 ................... ................... Status of Direct Loans (in millions of dollars) Identification code 99–1500–0–3–502 1995 actual 1996 est. 1997 est. Position with respect to appropriations act limitation on obligations: 1111 Limitation on direct loans ............................................. ................... ................... ................... 1131 Direct loan obligations exempt from limitation ............ 11,021 10,553 10,441 1150 Total direct loan obligations ..................................... 11,021 10,553 10,441 1210 Cumulative balance of direct loans outstanding: Outstanding, start of year ............................................. 38,071 41,636 38,202 1129 1130 THE BUDGET FOR FISCAL YEAR 1997 DEPARTMENT OF EDUCATION—Continued STUDENT LOAN MARKETING ASSOCIATION—Continued Status of Direct Loans (in millions of dollars)—Continued 1995 actual Identification code 99–1500–0–3–502 1231 1251 1252 1264 1290 Disbursements: Direct loan disbursements ................... 11,021 Repayments: Repayments and prepayments .................................. –7,723 Proceeds from loan asset sales to the public or discounted ............................................................. ................... Write-offs for default: Other adjustments, net ............. 267 Outstanding, end of year .......................................... 41,636 1996 est. 1997 est. 10,553 10,441 –9,034 –6,359 –5,000 47 –6,000 52 38,202 36,336 The Student Loan Marketing Association (Sallie Mae), a shareholder-owned corporation, was created by the Education Amendments of 1972 to expand funds available for student loans by providing liquidity to lenders engaged in the Federal Family Education Loan Program (FFELP), formerly the guaranteed student loan program (GSLP). Sallie Mae provides liquidity through direct purchase of insured student loans from eligible lenders and through warehousing advances, which are loans to lenders secured by insured student loans, Government or agency securities, or other acceptable collateral. In capital shortage areas, Sallie Mae is authorized, at the request of Federal officials, to make insured loans directly to students. Sallie Mae is authorized to advance funds to State agencies that will provide loans to students. Sallie Mae is also authorized to provide a secondary market for noninsured loans; to serve as a guarantee agency in support of loan availability at the request of the Secretary of Education; to purchase and underwrite student loan revenue bonds; to provide certain additional services as determined by its board of directors to be supportive of the credit needs of students generally; and to provide financing for academic facilities and equipment. Sallie Mae is authorized by the Health Professions Educational Assistance Act of 1976 to provide a secondary market for federally insured loans to graduate health professions students. Operations.—The forecast data with respect to operations are based on certain general economic and specific FFELP loan volume assumptions and should not be relied upon as an official forecast of the corporation’s future business. ANNUAL LOAN ACTIVITY [In millions of dollars] Guaranteed student loans: Stafford (formerly ‘‘regular’’): Purchased ........................................................................... Warehoused ........................................................................ PLUS/SLS: Purchased .............................................................. 1995 actual 1996 est. 6,441 2,358 998 6,700 1,500 830 6,750 1,285 865 Subtotal, Guaranteed student loans ............................. Health professions loans: Purchased .......................................... Other ............................................................................................ 9,797 291 933 9,030 303 1,220 8,900 305 1,236 Total ............................................................................... 11,021 10,553 10,441 Management.—At its annual meeting in May 1995, the shareholders of Sallie Mae elected 14 members to its board of directors to serve until May 1996. The shareholders of Sallie Mae are entitled to elect 14 members to the board. Pursuant to the Education Amendments of 1972, seven public directors are appointed by the President, who also names the chairman from among the 21 members. Restructuring.—Because of the transition from the guaranteed student loan program to the program of Federal Direct Student Loans and other reasons, the Administration has proposed legislation to restructure Sallie Mae into a fully private company. In any such restructuring, currently outstanding Sallie Mae debt would retain the characteristics of government sponsored enterprise debt, and customers having agreements with the GSE would be fully protected. Any new debt issued by a private company successor to Sallie Mae would not possess the characteristics of government sponsored enterprise debt. Statement of Operations (in millions of dollars) Identification code 99–1500–0–3–502 1994 actual 1995 actual 1996 est. 1997 est. 0101 0102 Revenue ................................................... Expense .................................................... 2,827 –2,399 3,959 –3,481 .................. .................. .................. .................. 0109 Net income .............................................. 428 478 .................. .................. Note.—The Sallie Mae Board of Directors does not consider it appropriate to forecast corporate revenue in a public document since such forecasts could be used for speculative purposes. Balance Sheet (in millions of dollars) Identification code 99–1500–0–3–502 ASSETS: Federal assets: Investments in US securities: 1102 Treasury securities, par .................. 1104 Agency securities, par .................... 1106 Receivables, net ............................. Non-Federal assets: 1201 Investments in non-Federal securities, net .................................................. 1206 Receivables, net .................................. 1207 Advances and prepayments ................ Net value of assets related to direct loans receivable and acquired defaulted guaranteed loans receivable: 1601 Direct loans, gross .............................. 1603 Allowance for estimated uncollectible loans and interest (–) .................... 1994 actual 1995 actual 1996 est. 1997 est. 1,192 48 592 1,173 29 855 1,138 29 897 1,195 29 942 11,720 240 22 9,907 326 13 7,517 342 13 7,824 359 14 38,172 41,739 38,297 36,426 –100 –103 –95 –90 38,072 41,636 38,202 36,336 101 149 38 37 179 144 39 188 151 41 197 159 1997 est. 1699 Financing.—Between 1974 and early 1982, Sallie Mae borrowed through the Federal Financing Bank. The Secretary of Education was authorized by the Education Amendments of 1980 to guarantee principal and interest on such obligations issued prior to October 1, 1985. Under an agreement with the Department of the Treasury reached in early 1981, Sallie Mae began borrowing directly in the private capital markets. Its last borrowing through the FFB and its last issuance of federally guaranteed obligations occurred in January 1982. During the first quarter of 1994, Sallie Mae prepaid all of the outstanding FFB debt. Its obligations today have certain characteristics, provided by charter, which give them ‘‘agency’’ status, but they are not federally insured or guaranteed. 1801 1803 1901 Value of assets related to direct loans .......................................... Other Federal assets: Cash and other monetary assets ....... Property, plant and equipment, net Other assets ........................................ 1999 Total assets ........................................ LIABILITIES: Non-Federal liabilities: 2202 Interest payable .................................. 2203 Debt ..................................................... 2206 Pension and other actuarial liabilities 2207 Other ................................................... 52,174 54,299 48,516 47,096 401 49,692 9 560 582 51,672 14 746 611 45,757 15 784 642 44,199 16 823 2999 50,662 53,014 47,167 45,680 1,511 1,284 1,349 1,416 Total liabilities .................................... NET POSITION: 3200 Invested capital ....................................... 3999 Total net position ................................ 1,511 1,284 1,349 1,416 4999 Total liabilities and net position ............ 52,173 54,298 48,516 47,096 Object Classification (in millions of dollars) Identification code 99–1500–0–3–502 11.1 12.1 21.0 Personnel compensation: Full-time permanent ............. Civilian personnel benefits ............................................ Travel and transportation of persons ............................ 1995 actual 60 16 6 1996 est. 53 17 6 1997 est. 56 18 6 GOVERNMENT-SPONSORED ENTERPRISES 1131 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 23.3 25.1 25.2 31.0 33.0 43.0 Communications, utilities, and miscellaneous charges Advisory and assistance services .................................. Other services ................................................................ Equipment ...................................................................... Loans .............................................................................. Interest, dividends, and taxes ....................................... 6 33 260 2 11,022 3,984 6 15 268 2 10,553 3,654 6 16 281 2 10,441 3,867 99.9 Total obligations ........................................................ 15,389 14,574 14,693 COLLEGE CONSTRUCTION LOAN INSURANCE ASSOCIATION The College Construction Loan Insurance Association (Connie Lee) was authorized by Public Law 99–498 on October 17, 1986. The Corporation was created to insure and reinsure bonds and loans of educational institutions which borrow funds to finance the acquisition, construction, or renovation of their facilities. The Association was incorporated in February 1987, under the District of Columbia Business Corporation Act. Connie Lee’s authorizing statute states that ‘‘no obligation which is insured, guaranteed, or otherwise backed by the corporation, shall be deemed to be an obligation which is guaranteed by the full faith and credit of the United States.’’ Operations.—Connie Lee is structured to operate as a private corporation, subject to the same state laws and regulations as any other insurance company. Accordingly, Connie Lee secures insurance licenses in each of the various states in which it expects to conduct its insurance activities. The Board of Directors authorized management to begin activities as a reinsuror of educational facilities bonds in 1988. Connie Lee reinsured its first bonds in December 1988. In fiscal year 1995, Connie Lee insured $913 million of debt service on bonds benefitting colleges, universities and teaching hospitals. Connie Lee also provided reinsurance on bonds representing $43 million of debt service. The forecast data contained in this material are based on certain general economic assumptions and should not be construed as an official forecast of the Corporation’s position. by the Secretary of the Treasury; two directors appointed by the Secretary of Education; three directors appointed by the Student Loan Marketing Association; and four directors elected by the corporation’s shareholders, one of whom must be an administrator of a college or university. The Administration has submitted legislation to the Congress which would fully privatize Connie Lee by divesting the Secretary of Education’s stock ownership in the Corporation and repealing the Corporation’s enabling legislation. Similar legislation has passed both the House and Senate and a compromise version is expected to be enacted this year. Balance Sheet (in millions of dollars) 1994 actual Identification code 99–9931–0–3–502 ASSETS: Federal assets: Investments in US securities: 1102 Treasury securities, par .................. 1104 Agency securities, par .................... Non-Federal assets: 1201 Investments in non-Federal securities, net .................................................. 1206 Receivables, net .................................. 1207 Advances and prepayments ................ Other Federal assets: 1801 Cash and other monetary assets ....... 1803 Property, plant and equipment, net 1999 Total assets ........................................ LIABILITIES: 2104 Federal liabilities: Resources payable to Treasury ............................................... 2201 Non-Federal liabilities: Accounts payable 2999 1995 actual 1996 est. 1997 est. 21 25 21 22 25 22 25 22 134 9 25 154 8 34 171 8 37 189 9 42 3 1 5 1 5 1 6 1 218 245 269 293 4 70 8 80 11 87 13 96 Total liabilities .................................... NET POSITION: 3200 Invested capital ....................................... 74 88 98 109 144 157 171 184 3999 Total net position ................................ 144 157 171 184 4999 Total liabilities and net position ............ 218 245 269 293 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT INSURANCE AND REINSURANCE ACTIVITY [In thousands of dollars] Debt service insured: Direct insurance ................................................................................................................. Reinsurance ....................................................................................................................... Total .......................................................................................................................... FEDERAL NATIONAL MORTGAGE ASSOCIATION 1995 actual 956,141 912,662 43,479 Financing.—In order to provide capitalization, the Secretary of Education, the Student Loan Marketing Association (Sallie Mae), and other investors are authorized to purchase stock in the corporation. Sallie Mae made an initial investment of $2 million in Connie Lee stock in fiscal year 1987. The Secretary of Education purchased $19.1 million in Connie Lee stock with funds appropriated for this purpose in fiscal year 1988. Subsequently, the corporation sold an additional $50.9 million of equity securities to Sallie Mae, increasing total capital of the corporation to $72.0 million. At the end of 1991, Connie Lee placed equity securities with private investors, providing sufficient incremental capital to obtain a triple-A credit rating necessary to engage in the financial guaranty business as a direct writer of insurance. Statement of Operations (in millions of dollars) 1994 actual 1995 actual 0101 0102 Revenue ................................................... Expense .................................................... 19 –11 19 –11 22 –11 25 –12 0109 Net income .............................................. 8 8 11 1997 est. Program and Financing (in millions of dollars) Identification code 99–2500–0–3–371 Management.—Connie Lee is governed by an eleven-member board of directors comprised of two directors appointed 1995 actual 1996 est. 1997 est. Obligations by program activity: Operating expenses: 00.01 Interest on borrowings from the public .................... 00.02 Other costs ................................................................ 17,309 2,528 19,274 2,650 21,336 2,966 00.91 19,837 21,924 24,302 01.01 01.02 Total operating expenses ...................................... Capital investment: Mortgage purchases and loans ................................ Lease-Purchase Discounts ........................................ 01.91 Total capital investment ....................................... 48,329 64,644 68,737 10.00 Total obligations ........................................................ 68,166 86,568 93,039 Budgetary resources available for obligation: Unobligated balance available, start of year: Authority to borrow ................................................................... 22.00 New budget authority (gross) ........................................ 339,930 134,406 406,170 165,178 484,780 177,664 474,336 –68,166 571,348 –86,568 662,444 –93,039 406,170 484,780 569,405 96,335 144,115 153,791 –2,950 –3,000 –3,000 48,715 64,644 68,737 –386 ................... ................... 21.47 23.90 23.95 24.47 13 Identification code 99–9931–0–3–502 1996 est. PORTFOLIO PROGRAMS 67.10 67.15 Total budgetary resources available for obligation New obligations ............................................................. Unobligated balance available, end of year: Authority to borrow ................................................................... New budget authority (gross), detail: Authority to borrow ........................................................ Net increase or decrease in unlimited borrowing authorities ..................................................................... 1132 THE BUDGET FOR FISCAL YEAR 1997 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT—Continued FEDERAL NATIONAL MORTGAGE ASSOCIATION—Continued PORTFOLIO PROGRAMS—Continued Program and Financing (in millions of dollars)—Continued Identification code 99–2500–0–3–371 67.90 68.00 1995 actual 1996 est. 1997 est. Authority to borrow (total) ......................................... Spending authority from offsetting collections: Offsetting collections (cash) .............................................. 93,385 141,115 150,791 41,021 24,063 26,873 Total new budget authority (gross) .......................... 134,406 165,178 177,664 Change in unpaid obligations: Unpaid obligations, start of year: Obligated balance: 72.47 Corporate borrowing authority .............................. 72.90 Fund balance ........................................................ 28,031 35,687 39,959 24,215 46,572 13,431 63,718 68,166 –67,710 64,174 86,568 –90,739 60,003 93,039 –91,470 74.47 74.90 Total unpaid obligations, start of year ................ New obligations ............................................................. Total outlays (gross) ...................................................... Unpaid obligations, end of year: Obligated balance: Corporate borrowing authority .............................. Fund balance: Uninvested balance ...................... 39,959 24,215 46,572 13,431 49,527 12,045 74.99 Total unpaid obligations, end of year .................. 64,174 60,003 61,572 86.97 86.98 Outlays (gross), detail: Outlays from new permanent authority ......................... Outlays from permanent balances ................................ 41,021 26,689 24,063 66,676 26,813 64,657 87.00 Total outlays (gross) ................................................. 67,710 90,739 91,470 Offsets: Against gross budget authority and outlays: Offsetting collections (cash) from: 88.00 Federal sources ..................................................... 88.40 Non-Federal sources ............................................. –130 –40,897 –130 –23,806 –130 –26,616 88.90 Total, offsetting collections (cash) .................. –41,027 –23,936 –26,746 89.00 90.00 Net budget authority and outlays: Budget authority ............................................................ Outlays ........................................................................... 93,379 26,683 141,242 66,803 150,918 64,724 70.00 72.99 73.10 73.20 Status of Direct Loans (in millions of dollars) Identification code 99–2500–0–3–371 1995 actual 1996 est. 1997 est. Position with respect to appropriations act limitation on obligations: 1111 Limitation on direct loans ............................................. ................... ................... ................... 1131 Direct loan obligations exempt from limitation ............ 44,501 64,526 69,773 1150 Total direct loan obligations ..................................... 44,501 64,526 69,773 221,766 250,374 282,065 Cumulative balance of direct loans outstanding: Outstanding, start of year ............................................. Disbursements: 1231 Direct loan disbursements ........................................ 1232 Purchase of loans assets from the public ............... 1251 Repayments: Repayments and prepayments ................. 1264 Write-offs for default: Other adjustments, net ............. 44,574 63,686 67,815 4,141 957 923 –18,418 –32,952 –35,536 –1,689 ................... ................... 1290 250,374 1210 Outstanding, end of year .......................................... 282,065 315,267 The Federal National Mortgage Association, (Fannie Mae) is a federally-chartered, privately-owned company with a public mission to play a leadership role in mortgage finance, to improve the liquidity of the residential mortgage market and increase the availability of mortgage credit to low-and moderate income families and areas underserved by private lending institutions. In carrying out its mission, Fannie Mae engages primarily in two forms of business: investing in portfolios of residential mortgages and guaranteeing residential mortgage securities. At the end of 1995, Fannie Mae held a net mortgage portfolio totaling over $250 billion and had outstanding guaranteed mortgage-backed securities of over $580 billion. Fannie Mae’s portfolio purchases and MBS finance about one of every five mortgages in the country. Through a federal charter, Congress has equipped Fannie Mae with certain attributes to help it carry out its public mission and help lower the cost of homeownership for lowand moderate-income homebuyers. These include an exemption from state and local taxes (except real property taxes), an exemption of its debt and mortgage securities from Securities and Exchange Commission registration requirements, and potential access to U.S. Treasury funds. Fannie Mae’s charter also prohibits the imposition of user fees. Fannie Mae pays federal income tax, however, over $1 billion in 1994. Securities guaranteed by Fannie Mae and debt issued by the company are solely the corporation’s obligations and are not backed by the full faith and credit of the U.S. Government. The common stock of the corporation is owned by the public, if fully transferable, and trades on the New York, Midwest, and Pacific stock exchanges. Fannie Mae was established in 1938 to assist private markets in providing a steady supply of funds for housing. Fannie Mae was originally a subsidiary of the Reconstruction Finance Corporation and was permitted to purchase only loans insured by the Federal Housing Administration (FHA). In 1954, Fannie Mae was restructured as a mixed ownership (part government, part private) corporation. Congress sold the government’s remaining interest in Fannie Mae in 1968 and completed the transformation to private shareholder ownership in 1970. Using the proceeds from the sale of subordinated debentures, Fannie Mae paid the Treasury $216 million for the government’s preferred stock, which was retired, and for the Treasury’s interest in the corporation’s earned surplus. As a result, the corporation was taken off the federal budget. In 1992, Congress reaffirmed and clarified Fannie Mae’s role in the housing finance system through charter act amendments included in the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (‘‘The Act’’). Fannie Mae’s charter purposes, as amended by the Act, are: ‘‘to provide stability in the secondary market for residential mortgages; respond appropriately to the private capital market; provide ongoing assistance to the secondary market for residential mortgages (including activities relating to mortgages on housing for low- and moderate-income families involving a reasonable economic return that may be less than the return earned on other activities); and promote access to mortgage credit throughout the Nation (including central cities, rural areas, and underserved areas) by increasing the liquidity of mortgage investments and improving the distribution of investment capital for residential mortgage financing.’’ Overall, Fannie Mae’s primary customers are low-, moderate-, or middle-income families. In 1995, over 26 percent of the one- to four-unit mortgages purchased had balances of $60,000 or less and the average mortgage purchased was about $95,000. Also, about 40 percent of the single-family mortgages and close to 97 percent of the multifamily mortgages purchased by Fannie Mae served families with incomes below the area median income. Over the last five years, Fannie Mae has directed almost $23 billion to local housing markets for financing multi-family housing. Nevertheless, the Act subjected Fannie Mae to specific affordable housing goals designed to improve the flow of mortgage funds to low- and moderate-income families in central cities, rural areas, and other underserved areas. On December 1, 1995, the U.S. Department of Housing and Urban Development (HUD) issued a final rule that sets the levels of the goals for 1996–2000 and establishes the requirements for counting mortgage purchases for meeting these goals. During the transition period prior to the issuance of the final regulation, Fannie Mae was subject to interim affordable housing goals. These interim goals required Fannie Mae to have 30 percent of the units it finances serve low-and moderate-income families and 30 percent of the units it finances in central cities. In 1995, Fannie Mae exceeded these goals with GOVERNMENT-SPONSORED ENTERPRISES 1133 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT—Continued about 45 percent of its financings made to low-and moderateincome families and 30.5 percent of its business located in central cities. Under the interim goals, Fannie Mae also was required to dedicate $4.6 billion in financings for households with very low incomes or with low incomes living in lowincome areas. Fannie Mae surpassed this goal with $8.2 billion of such loans in 1995. To help achieve these affordable housing goals, in 1994 Fannie Mae established its ‘‘Showing America A New Way Home’’ initiative designed to provide $1 trillion through the end of the decade to support affordable housing for families and communities most in need. In addition, the company selected 21 of the planned 25 Fannie Mae partnership offices around the country, which are working with lenders, local governments, nonprofit organizations, and neighborhood leaders to tailor affordable housing programs to each community’s needs. The Act also established the Office of Federal Housing Enterprise Oversight (OFHEO), an independent office within HUD, headed by a Director who reports directly to the Congress. OFHEO is responsible for ensuring that Fannie Mae is adequately capitalized and operating in a safe and sound manner. Included among the express statutory authorities of the Director is the authority to conduct examinations of the financial health of the company and to issue minimum and risk-based capital standards. The minimum capital requirements are computed from statutorily established ratios that are applied to the assets and off-balance sheet risks of Fannie Mae. The risk-based capital standard determines the amount of capital that Fannie Mae must hold to withstand the impact of simultaneous adverse credit and interest rate stresses over a 10-year period, plus an additional amount to cover management and operations risk. Total capital (shareholder’s equity plus allowance for loan losses) at the end of December 1995 was $11.8 billion. The company has continued to remain in compliance with applicable capital standards and has been deemed adequately capitalized by OFHEO since its first classification in June 1993. Fannie Mae has pursued its housing mission vigorously and productively while continuing to maintain its financial strength. It provides liquidity and stability to the mortgage market. It also passes on reduced mortgage interest rates to homebuyers—according to some studies between 25 and 50 basis points. Meanwhile, Fannie Mae has remained profitable. It earned net income of $2.14 billion in 1995, up slightly from the $2.13 billion earned a year earlier. Also, Fannie Mae’s earnings included a special one-time charge for a financial restructuring plan that included stock repurchase plans totaling $1 billion and a $350 million contribution to the Fannie Mae foundation for expanding homeownership. Absent this restructuring package, Fannie Mae’s 1995 earnings would have been just under $2.4 billion, with most of the increase coming from a $224 million increase net interest income on the Enterprise’s retained portfolio. The forecast data contained in this material has been developed based on certain general economic assumptions prevalent in the fourth quarter of 1995 and should not be construed as an official forecast for Fannie Mae. Income and retained earnings for the years ended September 30, 1994 and 1995 follow (in thousands of dollars): Balance Sheet (in millions of dollars) 1996 est. 1997 est. 221 .................. .................. 25 35,043 22 47,828 .................. 50,469 .................. 54,990 206,555 7,728 231,960 8,545 265,119 7,404 298,730 7,052 –280 –287 –274 –277 214,003 240,218 272,249 305,505 4,943 172 5,763 177 7,124 .................. 7,821 .................. Total assets ........................................ LIABILITIES: Federal liabilities: 2101 Accounts payable ................................ 2102 Accrued interest payable .................... 2105 Other ................................................... Non-Federal liabilities: 2203 Debt ..................................................... 2204 Estimated Federal liability for loan guarantees, credit reform .............. 2206 Pension and other actuarial liabilities 2207 Subtotal, Federal taxes payable ......... 254,806 294,229 329,842 368,316 602 3,214 5 349 3,712 5 .................. 3,833 .................. .................. 4,221 .................. 239,320 277,192 309,896 345,761 2,304 199 –24 2,028 157 65 3,342 .................. .................. 3,607 .................. .................. 2999 245,620 283,508 317,071 353,589 9,186 10,721 12,771 14,727 Identification code 99–2500–0–3–371 ASSETS: Federal assets: 1101 Fund balances with Treasury ............. Investments in US securities: 1102 Treasury securities, par .................. 1104 Other ............................................... Net value of assets related to direct loans receivable and acquired defaulted guaranteed loans receivable: 1601 Public: direct loans (net of discount) 1602 Federal Agencies ................................. 1603 Allowance for estimated uncollectible loans and interest (–) .................... 1699 1801 1803 Value of assets related to direct loans .......................................... Other Federal assets: Cash and other monetary assets ....... Property, plant and equipment, net 1999 Total liabilities .................................... NET POSITION: 3300 Cumulative results of operations ............ 1994 actual 1995 actual 620 3999 Total net position ................................ 9,186 10,721 12,771 14,727 4999 Total liabilities and net position ............ 254,806 294,229 329,842 368,316 Object Classification (in millions of dollars) Identification code 99–2500–0–3–371 11.1 12.1 21.0 23.3 24.0 25.1 25.2 26.0 31.0 33.0 43.0 Personnel compensation: Full-time permanent ............. Civilian personnel benefits ............................................ Travel and transportation of persons ............................ Communications, utilities, and miscellaneous charges Printing and reproduction .............................................. Advisory and assistance services .................................. Other services ................................................................ Supplies and materials ................................................. Equipment ...................................................................... Investments and loans .................................................. Interest and dividends ................................................... 99.9 Total obligations ........................................................ 1995 actual 1996 est. 1997 est. 198 335 354 92 ................... ................... 12 10 11 11 12 12 6 ................... ................... 99 104 110 1,320 1,295 1,472 3 ................... ................... 67 70 74 48,329 64,644 68,737 18,029 20,098 22,269 68,166 86,568 93,039 MORTGAGE-BACKED SECURITIES Program and Financing (in millions of dollars) Identification code 99–2501–0–3–371 1995 actual 1996 est. 1997 est. 00.01 Obligations by program activity: Capital investment: Commitments to issue MBS ......... –51,497 129,045 129,247 10.00 Total obligations ........................................................ –51,497 129,045 129,247 22.00 23.95 Budgetary resources available for obligation: New budget authority (gross) ........................................ New obligations ............................................................. –51,497 51,497 129,045 –129,045 129,247 –129,247 –104,554 58,802 54,203 53,057 70,243 75,043 –51,497 129,045 129,247 1994 actual 1995 actual Gross revenue ................................................................................................ Gross expenses .............................................................................................. 17,756,900 14,660,800 21,408,700 18,190,200 Income before Federal income tax ....................................................... Federal income tax ........................................................................................ 3,096,100 1,023,400 3,218,500 930,100 Net income ............................................................................................ Retained earnings, beginning of year ........................................................... Dividends on common stock .......................................................................... 2,072,700 6,117,800 (645,500) 2,288,400 7,545,000 (710,400) 67.15 68.00 Retained earnings, end of year ............................................................ 7,545,000 9,123,000 70.00 New budget authority (gross), detail: Corporate borrowing authority ....................................... Spending authority from offsetting collections: Offsetting collections (cash) .............................................. Total new budget authority (gross) .......................... 1134 THE BUDGET FOR FISCAL YEAR 1997 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT—Continued 1603 FEDERAL NATIONAL MORTGAGE ASSOCIATION—Continued MORTGAGE-BACKED SECURITIES—Continued 1699 Program and Financing (in millions of dollars)—Continued 1995 actual Allowance for estimated uncollectible loans and interest (–) .................... Value of assets related to direct loans .......................................... –540 523,512 559,585 618,387 672,590 559,585 618,387 672,590 523,512 559,585 618,387 672,590 2999 523,512 559,585 618,387 672,590 255,245 –51,497 –89,130 114,618 129,045 –129,045 114,618 129,247 –129,247 114,618 114,618 114,618 Outlays (gross), detail: 86.97 Outlays from new permanent authority ......................... 86.98 Outlays from permanent balances ................................ 53,057 36,073 70,243 58,802 75,043 54,203 87.00 89,130 129,045 129,247 Identification code 99–4420–0–3–371 Obligations by program activity: Operating expenses: 00.01 Interest expense and provision for loan loss ........... 00.02 Administration ........................................................... Change in unpaid obligations: Unpaid obligations, start of year: Obligated balance: Corporate borrowing authority ................................... 73.10 New obligations ............................................................. 73.20 Total outlays (gross) ...................................................... 74.47 Unpaid obligations, end of year: Obligated balance: Corporate borrowing authority ................................... Total outlays (gross) ................................................. Total liabilities .................................... FEDERAL HOME LOAN MORTGAGE CORPORATION PORTFOLIO PROGRAMS Offsets: Against gross budget authority and outlays: 88.40 Offsetting collections (cash) from: Non-Federal sources .................................................................. –53,057 –70,243 –75,043 Net budget authority and outlays: Budget authority ............................................................ Outlays ........................................................................... –104,554 36,073 58,802 58,802 54,204 54,204 89.00 90.00 –502 523,512 1997 est. 72.47 –500 Total assets ........................................ LIABILITIES: 2104 Federal liabilities: Resources payable to Treasury ............................................... 1999 1996 est. Identification code 99–2501–0–3–371 –522 Status of Direct Loans (in millions of dollars) Program and Financing (in millions of dollars) 1995 actual 1996 est. 1997 est. 6,702 390 7,698 424 9,755 461 00.91 01.01 Total operating expenses ...................................... Capital investment: Mortgage purchases for portfolio 7,092 37,389 8,122 48,876 10,216 41,615 10.00 Total obligations ........................................................ 44,481 56,998 51,831 Budgetary resources available for obligation: Unobligated balance available, start of year: Authority to borrow ................................................................... 22.00 New budget authority (gross) ........................................ 22.60 Redemption of debt ....................................................... 21,957 48,607 –4,094 21,989 65,547 –11,896 18,642 72,335 –12,162 66,470 –44,481 75,640 –56,998 78,815 –51,831 21,989 18,642 26,984 30,740 33,143 41,254 17,867 32,404 31,081 Total new budget authority (gross) .......................... 48,607 65,547 72,335 Change in unpaid obligations: Unpaid obligations, start of year: Obligated balance: Authority to borrow .................................................... 73.10 New obligations ............................................................. 73.20 Total outlays (gross) ...................................................... 74.47 Unpaid obligations, end of year: Obligated balance: Authority to borrow .................................................... 5,281 44,481 –42,865 6,897 56,998 –61,290 2,605 51,831 –52,327 6,897 2,605 2,109 21.47 1995 actual Identification code 99–2501–0–3–371 1996 est. 1997 est. Position with respect to appropriations act limitation on obligations: 1111 Limitation on direct loans ............................................. ................... ................... ................... 1131 Direct loan obligations exempt from limitation ............ –51,497 129,045 129,247 1150 23.90 23.95 24.47 Total direct loan obligations ..................................... –51,497 129,045 129,247 Cumulative balance of direct loans outstanding: 1210 Outstanding, start of year ............................................. 1231 Disbursements: Direct loan disbursements ................... 1251 Repayments: Repayments and prepayments ................. 523,512 89,130 –53,057 559,585 129,045 –70,243 618,387 129,247 –75,043 67.15 68.00 1290 559,585 618,387 672,591 70.00 Outstanding, end of year .......................................... According to accounting practices for private corporations, the mortgages in the pools of loans supporting the mortgagebacked securities are considered to be owned by the holders of these securities. Consequently, on the books of the Federal National Mortgage Association (Fannie Mae), these mortgages are not considered assets and the securities outstanding are not considered liabilities. However, the concepts of the budget of the U.S. Government consider these mortgages and mortgage-backed securities to be assets and liabilities, respectively, of Fannie Mae. For the purposes of this document, therefore, they are presented as assets and liabilities in the accompanying schedules. On the schedule of Status of direct loans for mortgage-backed securities, the items labeled ‘‘New loans’’ and ‘‘Recoveries: Repayments and prepayments’’ are budgetary terms. However, from the Corporation’s perspective, these items are ‘‘Amounts issued’’ and ‘‘Amounts passed through to the holders of securities’’, respectively. The forecast data contained in this material has been developed based on certain general economic assumptions prevalent in November 1993 and should not be construed as an official forecast of the Corporation’s position. Total budgetary resources available for obligation New obligations ............................................................. Unobligated balance available, end of year: Authority to borrow ................................................................... New budget authority (gross), detail: Net change in borrowing authorities ............................. Spending authority from offsetting collections: Offsetting collections (cash) .............................................. 72.47 86.97 86.98 Outlays (gross), detail: Outlays from new permanent authority ......................... Outlays from permanent balances ................................ 17,867 24,998 32,404 28,886 31,081 21,247 87.00 Total outlays (gross) ................................................. 42,865 61,290 52,327 Offsets: Against gross budget authority and outlays: 88.40 Offsetting collections (cash) from: Non-Federal sources .................................................................. –17,867 –26,421 –29,007 Net budget authority and outlays: Budget authority ............................................................ Outlays ........................................................................... 30,740 24,998 39,126 34,869 43,328 23,320 89.00 90.00 Status of Direct Loans (in millions of dollars) Identification code 99–4420–0–3–371 Balance Sheet (in millions of dollars) Identification code 99–2501–0–3–371 ASSETS: Net value of assets related to direct loans receivable and acquired defaulted guaranteed loans receivable: 1601 Direct loans, gross .............................. 1994 actual 1995 actual 1996 est. 1997 est. 1995 actual 1996 est. 1997 est. Position with respect to appropriations act limitation on obligations: 1111 Limitation on direct loans ............................................. ................... ................... ................... 1131 Direct loan obligations exempt from limitation ............ 37,389 48,876 41,615 1150 524,052 560,107 618,887 673,092 Total direct loan obligations ..................................... 37,389 48,876 41,615 1210 Cumulative balance of direct loans outstanding: Outstanding, start of year ............................................. 66,679 95,052 127,554 GOVERNMENT-SPONSORED ENTERPRISES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT—Continued 1231 1251 Disbursements: Direct loan disbursements ................... Repayments: Repayments and prepayments ................. 37,389 –9,016 48,876 –16,374 41,615 –16,761 1290 Outstanding, end of year .......................................... 95,052 127,554 152,408 Federal Home Loan Mortgage Corporation, (Freddie Mac) is a federally-charted, private shareholder-owned company with a public mission to improve the liquidity of the residential mortgage market and increase the availability of mortgage credit to low- and moderate-income families and areas underserved by private lending institutions. In carrying out its mission, Freddie Mac engages primarily in two forms of business: investing in portfolios of residential mortgages and guaranteeing residential mortgage securities. At the end of 1995, Freddie Mac held a net mortgage portfolio totaling over $107 billion and had outstanding guaranteed mortgagebacked securities of just under $460 billion. Through a federal charter, Congress has equipped Freddie Mac with certain advantages over wholly private firms in carrying out these activities. These advantages include an exemption from state and local taxes (except real property taxes), an exemption for their debt and mortgage securities from SEC filing registration requirements, and a potential access to U.S. Treasury funds. Freddie Mac does pay federal income tax, however, and securities guaranteed by Freddie Mac and debt issued by the company are not backed by the full faith and credit of the U.S. Government. The common stock of the corporation is owned by the public, is fully transferable, and trades on the New York and Pacific stock exchanges. Freddie Mac was established in 1970 under the Emergency Home Finance Act. Congress chartered Freddie Mac to provide mortgage lenders with an organized national secondary market enabling them to manage their conventional mortgage portfolio more effectively and gain indirect access to a ready source of additional funds to meet new demands for mortgages. Freddie Mac served as a conduit facilitating the flow of investment dollars from the capital markets to mortgage lenders, and ultimately, to homebuyers increasing the amount of mortgage credit available and making it more affordable. The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) significantly changed the corporate governance of Freddie Mac. The company’s three member Board of Directors, which had corresponded with the Federal Home Loan Bank Board, was replaced with an eighteen member Board of Directors. Thirteen board members are elected annually by shareholders and five are annually appointed by the President of the United States. In addition, FIRREA converted Freddie Mac’s 60 million shares of nonvoting, senior participating preferred stock into voting common stock. As a result, the corporation was taken off the federal budget. FIRREA also clarified Freddie Mac’s role in the housing finance delivery system through amendments to its charter act. Specifically, FIRREA established Freddie Mac’s public mission: ‘‘to provide stability in the secondary market for residential mortgages; respond appropriately to the private capital market; provide ongoing assistance to the secondary market for residential mortgages (including activities relating to mortgages on housing for low- and moderate-income families involving a reasonable economic return that may be less than the return earned on other activities); and promote access to mortgage credit throughout the Nation (including central cities, rural areas, and underserved areas) by increasing the liquidity of mortgage investments and improving the distribution of investment capital for residential mortgage financing.’’ The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (‘‘The Act’’) added to Freddie Mac’s public mission by introducing new affordable housing goals that are designed to improve the flow of mortgage funds to 1135 low- and moderate-income families in central cities, rural areas, and other underserved areas. On December 1, 1995, the U.S. Department of Housing and Urban Development (HUD) issued a final rule that sets the levels of the goals for 1996–1999 and establishes the requirements for counting mortgage purchases for meeting these goals. During the transition period prior to the issuance of the final regulation, Freddie Mac was subject to interim affordable housing goals. These interim goals required Freddie Mac to have 30 percent of the units it finances serve low- and moderate-income families and 30 percent of the units it finances in central cities. In 1995, Freddie Mac purchased about 39 percent of its financings from low- and moderate-income families and 23 percent of its business was located in central cities. Under the interim goals, Freddie Mae also was required to dedicate $3.357 billion in financings for households with very low incomes or with low incomes living in low-income areas. Freddie Mac achieved this goal with $5.426 billion of such loans in 1995. The Act also enhanced the regulatory oversight of Freddie Mac by establishing the Office of Federal Housing Enterprise Oversight (OFHEO), an independent office within HUD, headed by a Director who reports directly to the Congress. OFHEO is responsible for ensuring that Freddie Mac is adequately capitalized and operating in a safe and sound manner. Included among the express statutory authorities of the Director is the authority to conduct examinations of the financial health of the company and to issue minimum and risk-based capital standards. The minimum capital requirements are computed from statutorily established ratios that are applied to the assets and off-balance sheet risks of Freddie Mac. The risk-based capital standard determines the amount of capital that Freddie Mac must hold to withstand the impact of simultaneous adverse credit and interest rate stresses over a 10year period, plus an additional amount to cover management and operations risk. Meanwhile, Freddie Mac has remained profitable. Freddie Mac recorded net income of $1.09 billion in 1995, an 11 percent increase over 1994 earnings of $983 million. Most of Freddie’s increased earnings in 1995 came from a $284 million increase in net interest income as Freddie’s retained portfolio surged by almost 50 percent during the year to pass the $100 billion mark in the fourth quarter. While accepting and managing higher interest rate risk, Freddie Mac has expanded its investments in retained mortgages from only $34 billion in 1992 to $107 billion at the end of 1995 in an effort to generate higher overall returns. The forecast data contained in this material represent estimates and should not be construed as an official forecast of the corporation’s future position. The data have been developed on the basis of certain economic assumptions that are reviewed and revised periodically. Consequently, the estimates are subject to forecast error and will normally differ from actual data when these become available. According to generally accepted accounting principles utilized by private corporations, the mortgages in the pools of loans supporting PCs are considered to be owned by the holder of these securities. Therefore, Freddie Mac does not show these mortgages as assets. However, the budget philosophy of the United States Government includes these mortgages and mortgages pass-through securities as assets and liabilities, respectively, of Freddie Mac. For the purpose of this document, therefore, they are presented as assets and liabilities in the accompanying schedules. On the Status of Direct Loans schedule for mortgage pass-through securities, the items labeled ‘‘Disbursements’’ and ‘‘Repayments’’ are budgetary terms. However, from Freddie Mac’s perspective, these amounts represent ‘‘Sales of PCs’’ and ‘‘Amounts passed through to PC holders,’’ respectively. 1136 THE BUDGET FOR FISCAL YEAR 1997 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT—Continued 73.10 73.20 Change in unpaid obligations: New obligations ............................................................. Total outlays (gross) ...................................................... 70,071 –70,071 110,877 –110,877 108,540 –108,540 86.97 Outlays (gross), detail: Outlays from new permanent authority ......................... 70,071 110,877 108,540 87.00 Total outlays (gross) ................................................. 70,071 110,877 108,540 Offsets: Against gross budget authority and outlays: 88.40 Offsetting collections (cash) from: Non-Federal sources .................................................................. –76,697 –89,860 –78,047 Net budget authority and outlays: Budget authority ............................................................ Outlays ........................................................................... –6,626 –6,626 21,017 21,017 30,493 30,493 FEDERAL HOME LOAN MORTGAGE CORPORATION—Continued PORTFOLIO PROGRAMS—Continued Statement of Operations (in millions of dollars) Identification code 99–4420–0–3–371 1994 actual 1995 actual 1996 est. 1997 est. 0101 0102 Revenue ................................................... Expense .................................................... 6,439 –5,504 8,623 –7,571 .................. .................. .................. .................. 0109 Net income .............................................. 935 1,052 .................. .................. Balance Sheet (in millions of dollars) Identification code 99–4420–0–3–371 ASSETS: Federal assets: Fund balances with Treasury ............................................... Non-Federal assets: 1201 Investments in non-Federal securities, net .................................................. 1206 Receivables, net .................................. Other Federal assets: 1801 Cash and other monetary assets ....... 1802 Inventories and related properties ..... 1803 Property, plant and equipment, net 1994 actual 1995 actual 1996 est. 1997 est. 89.00 90.00 1101 11,688 2,820 4,001 2,983 Status of Direct Loans (in millions of dollars) 2,443 2,720 2,150 3,680 2,630 6,986 2,700 7,420 13,095 66,393 1,368 23,916 94,875 1,212 14,616 126,718 1,174 23,409 151,297 1,181 Position with respect to appropriations act limitation on obligations: 1111 Limitation on direct loans ............................................. ................... ................... ................... 1131 Direct loan obligations exempt from limitation ............ 70,071 110,877 108,540 Total assets ........................................ LIABILITIES: 2101 Federal liabilities: Accounts payable ...... Non-Federal liabilities: 2201 Accounts payable ................................ 2202 Interest payable .................................. 2203 Debt ..................................................... 2207 Other ................................................... 97,707 128,653 156,125 188,990 1150 Total direct loan obligations ..................................... 70,071 110,877 108,540 95 73 .................. .................. 437 734 83,946 7,516 452 1,090 111,610 9,725 .................. .................. 141,129 8,547 .................. .................. 173,085 8,484 1210 1231 1251 Cumulative balance of direct loans outstanding: Outstanding, start of year ............................................. Disbursements: Direct loan disbursements ................... Repayments: Repayments and prepayments ................. 463,672 70,071 –76,697 457,046 110,877 –89,860 478,063 108,540 –78,047 1290 Outstanding, end of year .......................................... 457,046 478,063 508,556 2999 92,728 122,950 149,676 181,569 4,979 5,703 6,448 7,420 1999 Total liabilities .................................... NET POSITION: 3200 Invested capital ....................................... 3999 Total net position ................................ 4,979 5,703 6,448 7,420 4999 Total liabilities and net position ............ 97,707 128,653 156,124 Identification code 99–4440–0–3–371 1901 Identification code 99–4420–0–3–371 1995 actual 1996 est. 1997 est. Personnel compensation: Full-time permanent ............. Civilian personnel benefits ............................................ Travel and transportation of persons ............................ Communications, utilities, and other rent .................... Printing and reproduction .............................................. Other services ................................................................ Supplies and materials ................................................. Mortgage purchases for portfolio .................................. Interest and provision for loan losses .......................... 184 59 9 32 3 91 12 37,389 6,702 200 64 10 35 3 99 13 48,876 7,698 219 70 11 38 4 105 14 41,615 9,755 99.9 Total obligations ........................................................ 44,481 56,998 51,831 MORTGAGE-BACKED SECURITIES Program and Financing (in millions of dollars) Identification code 99–4440–0–3–371 1995 actual 1996 est. 1997 est. Obligations by program activity: Capital investment: Issue (sales) of participation certification .................................................................... 70,071 110,877 108,540 10.00 Total obligations ........................................................ 70,071 110,877 108,540 22.00 23.95 Budgetary resources available for obligation: New budget authority (gross) ........................................ New obligations ............................................................. 70,071 –70,071 110,877 –110,877 108,540 –108,540 –6,626 21,017 30,493 76,697 89,860 78,047 70,071 110,877 108,540 00.01 67.15 68.00 70.00 New budget authority (gross), detail: Corporate borrowing authority (net PC pool change) Spending authority from offsetting collections: Offsetting collections (cash) .............................................. Total new budget authority (gross) .......................... ASSETS: Other Federal assets: Other assets ........ 1997 est. 1994 actual 1995 actual 1996 est. 1997 est. 463,672 457,046 478,063 508,556 Total assets ........................................ LIABILITIES: 2104 Federal liabilities: Resources payable to Treasury ............................................... 463,672 457,046 478,063 508,556 463,672 457,046 478,063 508,556 2999 463,672 457,046 478,063 508,556 1999 11.1 12.1 21.0 23.3 24.0 25.2 26.0 33.0 43.0 1996 est. Balance Sheet (in millions of dollars) 188,989 Object Classification (in millions of dollars) 1995 actual Identification code 99–4440–0–3–371 Total liabilities .................................... FARM CREDIT SYSTEM The Farm Credit System is a government sponsored enterprise that provides privately financed credit to agricultural and rural communities. The major functional entities of the system are: (1) Banks for Cooperatives (BC), (2) Agricultural Credit Bank (ACB), (3) Farm Credit Banks (FCB), and (4) direct lender associations. The history and specific functions of the bank entities are discussed after the presentation of financial schedules for each bank entity. As part of the Farm Credit System (FCS), these entities are regulated and examined by the Farm Credit Administration (FCA), an independent Federal agency. The administrative costs of FCA are currently financed by assessments of system institutions. System banks finance loans primarily from sales of bonds to the public and their own capital funds. The system bonds issued by the banks are not guaranteed by the U.S. Government either as to principal or interest. The bonds are backed by an insurance fund, administered by the Farm Credit System Insurance Corporation (FCSIC), an independent Federal agency that collects insurance premiums from member banks to pay its administrative expenses and fund insurance reserves. All of the banks’ current operating expenses are paid from their own income and do not require budgetary resources from the Federal Government. Limited Federal assistance is provided to support interest payments on special FCS Finan- GOVERNMENT-SPONSORED ENTERPRISES cial Assistance Corporation (FAC) debt obligations (see discussion of FAC elsewhere in this document). BANKS FOR COOPERATIVES Program and Financing (in millions of dollars) Identification code 99–4120–0–3–351 1995 actual Obligations by program activity: Operating expenses: 00.01 Administrative expenses ............................................ 00.02 Interest on borrowings .............................................. 00.03 Insurance premiums .................................................. 00.04 Provision for loan losses ........................................... 00.06 Income tax expense ................................................... 00.07 Other expenses .......................................................... 1996 est. 1997 est. 5 126 3 3 4 7 6 148 3 3 4 8 7 141 3 3 5 9 148 8,690 172 9,976 168 10,076 10.00 Total obligations ........................................................ 8,838 10,148 10,244 2,309 9,983 –44 2,100 10,082 –32 11,147 –8,838 12,248 –10,148 2,100 1,906 1994 actual 1995 actual 0101 0102 Total interest income .............................. Total interest expense ............................. 120 –80 177 –127 205 –148 201 –141 0109 0111 0112 Net interest income ................................. Other income ........................................... Other expenses ........................................ 40 8 –19 50 10 –21 57 8 –24 60 13 –27 Net income .............................................. –11 –11 –16 –14 Total revenues ......................................... 128 187 213 214 0192 Total expenses ......................................... –99 –148 –172 –168 0199 Net income or loss .................................. 29 39 41 46 Identification code 99–4120–0–3–351 12,150 –10,244 2,309 Total budgetary resources available for obligation New obligations ............................................................. Unobligated balance available, end of year: Authority to borrow ................................................................... Statement of Operations (in millions of dollars) 0191 Total operating expenses ...................................... Capital investment: Direct loans ................................... Budgetary resources available for obligation: 21.47 Unobligated balance available, start of year: Authority to borrow ................................................................... 2,130 22.00 New budget authority (gross) ........................................ 9,017 22.60 Redemption of debt ....................................................... ................... first Agricultural Credit Bank. The remaining Cooperative entity, the St. Paul Bank for Cooperatives, is independently chartered to provide credit and related services, nationwide, to eligible cooperatives primarily engaged in farm supply, grain, marketing and processing (including sugar and dairy.) Loans are also made to rural utilities, including telecommunications companies. The financial schedules below reflect the operations of the St. Paul Bank for Cooperatives. Loans are made for both seasonal and long-term needs. 0119 00.91 01.01 23.90 23.95 24.47 New budget authority (gross), detail: Net borrowing ................................................................. Spending authority from offsetting collections: Offsetting collections (cash) .............................................. 8,258 9,983 10,082 70.00 Total new budget authority (gross) .......................... 9,017 9,983 10,082 73.10 73.20 Change in unpaid obligations: New obligations ............................................................. Total outlays (gross) ...................................................... 8,838 –8,838 10,148 –10,148 10,244 –10,244 Outlays (gross), detail: 86.97 Outlays from new permanent authority ......................... 8,838 86.98 Outlays from permanent balances ................................ ................... 9,983 165 10,082 162 10,148 87.00 759 ................... ................... Total outlays (gross) ................................................. 8,838 Identification code 99–4120–0–3–351 ASSETS: Non-Federal assets: 1201 Cash and investment securities ......... 1206 Accrued interest receivable on loans Net value of assets related to direct loans receivable and acquired defaulted guaranteed loans receivable: 1601 Direct loans, gross .............................. 1603 Allowance for estimated uncollectible loans and interest (–) .................... 1699 1803 Value of assets related to direct loans .......................................... Other Federal assets: Property, plant and equipment, net ............................ 1999 Offsets: Against gross budget authority and outlays: 88.40 Offsetting collections (cash) from: Non-Federal sources .................................................................. 89.00 90.00 –8,258 Net budget authority and outlays: Budget authority ............................................................ Outlays ........................................................................... –9,983 –10,082 759 ................... ................... 580 165 162 Status of Direct Loans (in millions of dollars) Identification code 99–4120–0–3–351 1995 actual 1996 est. 1997 est. Position with respect to appropriations act limitation on obligations: 1111 Limitation on direct loans ............................................. ................... ................... ................... 1131 Direct loan obligations exempt from limitation ............ 8,690 9,976 10,076 1150 Total direct loan obligations ..................................... 8,690 9,976 10,076 Cumulative balance of direct loans outstanding: 1210 Outstanding, start of year ............................................. 1231 Disbursements: Direct loan disbursements ................... 1251 Repayments: Repayments and prepayments ................. 1,654 8,690 –8,071 2,273 9,976 –9,771 2,478 10,076 –9,868 2,273 2,478 2,686 1290 Outstanding, end of year .......................................... Note.—Direct loan balances exclude nonaccrual loans and sales contracts. Pursuant to the Agricultural Credit Act of 1987, stockholders in 11 of 13 Banks for Cooperatives voted in 1988 to merge into a single National Bank for Cooperatives. On January 1, 1995, the Springfield Bank for Cooperatives also merged with other entities, as discussed below, to form the 1996 est. 1997 est. Balance Sheet (in millions of dollars) 10,244 67.15 68.00 1137 FARM CREDIT SYSTEM—Continued Total assets ........................................ LIABILITIES: 2104 Federal liabilities: Resources payable to Treasury ............................................... Non-Federal liabilities: Accounts payable: 2201 Consolidated systemwide and other bank bonds ................................ 2201 Consolidated systemwide notes ..... 2201 Notes payable and other interestbearing liabilities ....................... 2202 Accrued interest payable .................... 2999 Total liabilities .................................... NET POSITION: 3300 Cumulative results of operations ............ 1994 actual 1995 actual 1996 est. 1997 est. 236 27 394 40 397 44 428 49 1,687 2,305 2,320 2,271 –21 –24 –25 –29 1,666 2,281 2,295 2,242 68 71 70 79 1,997 2,786 2,806 2,798 26 28 49 36 1,093 643 1,329 1,166 1,194 1,257 1,175 1,244 .................. 12 .................. 17 .................. 31 .................. 31 1,774 2,540 2,531 2,486 223 246 275 312 3999 Total net position ................................ 223 246 275 312 4999 Total liabilities and net position ............ 1,997 2,786 2,806 2,798 Note.—Loans to cooperatives include nonaccrual loans and sales contracts. Statement of Changes in Net Worth (in millions of dollars) 1994 actual 1995 actual Beginning balance of net worth ......................... 208 224 246 275 Capital stock and participations issued ......... Capital stock and participations retired ......... Surplus retired .................................................. Net income ....................................................... Cash/Dividends/Patronage Distributions .......... Other, net ......................................................... 8 –14 .................. 30 –7 –1 4 –11 .................. 39 –10 .................. 9 –11 .................. 40 –9 .................. 10 –8 .................. 46 –10 .................. Ending balance of net worth .............................. 224 246 275 313 Identification code 99–4120–0–3–351 1996 est. 1997 est. 1138 THE BUDGET FOR FISCAL YEAR 1997 FARM CREDIT SYSTEM—Continued BANKS FOR Offsets: Against gross budget authority and outlays: 88.40 Offsetting collections (cash) from: Non-Federal sources .................................................................. COOPERATIVES—Continued Financing Activities (in millions of dollars) Identification code 99–4120–0–3–351 Beginning balance of outstanding system obligation ........................ 1994 actual 1995 actual 1996 est. 1,573 1,699 2,458 2,451 Consolidated systemwide and other bank bonds issued ....................... Consolidated systemwide and other bank bonds retired ....................... Consolidated systemwide notes, net 1,186 1,524 2,213 2,206 –1,141 81 –1,287 523 –2,312 92 –2,226 –14 Ending balance of outstanding system obligations ................................... 1,699 2,458 2,451 2,419 Object Classification (in millions of dollars) Identification code 99–4120–0–3–351 1995 actual –42,474 –44,805 –45,647 Net budget authority and outlays: Budget authority ............................................................ Outlays ........................................................................... 1,584 1,241 464 441 884 656 1997 est. 1996 est. 1997 est. 11.1 Personnel compensation: Personnel compensation and benefits ...................... 4 5 6 11.9 23.2 25.2 33.0 43.0 92.0 Total personnel compensation .............................. Cost of space occupied and equipment ....................... Other services ................................................................ Investments and loans .................................................. Interest and dividends ................................................... Undistributed expenses .................................................. 4 1 3 8,690 127 13 5 1 3 9,976 148 15 6 1 3 10,075 142 17 99.9 Total obligations ........................................................ 8,838 10,148 10,244 AGRICULTURAL CREDIT BANKS 89.00 90.00 On January 1, 1995, the National Bank for Cooperatives, the Springfield Bank for Cooperatives, and the Farm Credit Bank of Springfield consolidated to form on Agricultural Credit Bank (ACB), known as CoBank ACB. This bank is headquartered in Denver, Colorado and serves eligible cooperatives nationwide, and provides funding to Agricultural Credit Associations (ACAs) in one of its regions. An ACB operates under statutory authority that combines the authorities of a FCB and a BC. In exercising its FCB authority, CoBank ACB’s charter limits its lending to ACAs located in the region previously served by the Farm Credit Bank of Springfield. As an entity lending to Cooperatives, CoBank engages in the same business activities as the St. Paul Bank and it provides international loans for the financing of agricultural exports. Status of Direct Loans (in millions of dollars) Obligations by program activity: Operating expenses: 00.01 Administrative expenses ............................................ 00.02 Interest on borrowings .............................................. 00.03 Insurance premiums .................................................. 00.04 Provision for loan losses ........................................... 00.06 Income tax expense ................................................... 00.07 Other expenses .......................................................... 1995 actual 1150 1996 est. 1997 est. 1996 est. 1997 est. Position with respect to appropriations act limitation on obligations: 1111 Limitation on direct loans ............................................. ................... ................... ................... 1131 Direct loan obligations exempt from limitation ............ 42,644 44,000 45,000 Program and Financing (in millions of dollars) Identification code 99–4130–0–3–351 1995 actual Identification code 99–4130–0–3–351 1210 1231 1251 1263 Total direct loan obligations ..................................... 42,644 44,000 45,000 Cumulative balance of direct loans outstanding: Outstanding, start of year ............................................. 12,874 Disbursements: Direct loan disbursements ................... 42,638 Repayments: Repayments and prepayments ................. –41,281 Write-offs for default: Direct loans ............................... ................... 14,231 44,000 –43,427 –4 14,800 45,000 –44,196 –4 14,800 15,600 49 902 14 14 9 89 37 1,097 14 11 24 63 39 1,148 15 10 25 66 1290 Identification code 99–4130–0–3–351 1994 actual 1995 actual 0101 0102 Total interest income .............................. Total interest expense ............................. .................. .................. 1,171 –902 1,368 –1,097 1,441 –1,148 0109 0111 0112 Net interest income ................................. Other income ........................................... Other expense .......................................... .................. .................. .................. 269 23 –175 271 10 –148 293 9 –155 0119 Net income .............................................. .................. –152 –138 –146 0191 Total revenues ......................................... .................. 1,194 1,378 1,450 0192 Total expenses ......................................... .................. –1,077 –1,245 –1,303 0199 Net income or loss .................................. .................. 117 133 147 00.91 01.01 Total operating expenses ...................................... Capital investment: direct loans ................................... 1,077 42,644 1,246 44,000 1,303 45,000 10.00 Total obligations ........................................................ 43,721 45,246 46,303 Budgetary resources available for obligation: Unobligated balance available, start of year: Authority to borrow ................................................................... 22.00 New budget authority (gross) ........................................ 2,211 44,058 2,548 45,269 2,571 46,531 46,269 –43,721 47,817 –45,246 49,102 –46,303 2,548 2,571 Outstanding, end of year .......................................... 14,231 Statement of Operations (in millions of dollars) 1996 est. 1997 est. 2,799 21.47 23.90 23.95 24.47 Total budgetary resources available for obligation New obligations ............................................................. Unobligated balance available, end of year: Authority to borrow ................................................................... Balance Sheet (in millions of dollars) New budget authority (gross), detail: 67.15 Net borrowing ................................................................. 68.00 Spending authority from offsetting collections: Offsetting collections (cash) .............................................. 42,474 44,805 45,647 70.00 Total new budget authority (gross) .......................... 44,058 45,269 46,531 Change in unpaid obligations: Unpaid obligations, start of year: Obligated balance: Fund balance ............................................................. 73.10 New obligations ............................................................. 73.20 Total outlays (gross) ...................................................... 74.90 Unpaid obligations, end of year: Obligated balance: Fund balance: Uninvested balance ........................... 326 43,721 –43,715 332 45,246 –45,246 332 46,303 –46,303 332 332 332 1,584 464 884 72.90 Identification code 99–4130–0–3–351 ASSETS: Non-Federal assets: 1201 Cash and investment securities ......... 1206 Accrued interest receivable on loans Net value of assets related to direct loans receivable and acquired defaulted guaranteed loans receivable: 1601 Direct loans, gross .............................. 1603 Allowance for estimated uncollectible loans and interest (–) .................... 1699 Outlays (gross), detail: 86.97 Outlays from new permanent authority ......................... 43,715 45,245 46,303 87.00 43,715 45,246 Value of assets related to direct loans .......................................... Other Federal assets: Property, plant and equipment, net ............................ 1994 actual 1995 actual 1996 est. 1997 est. 2,301 139 2,652 165 2,600 172 2,750 181 12,878 14,237 14,800 15,600 –154 –170 –175 –181 12,724 14,067 14,625 15,419 46,303 Total outlays (gross) ................................................. 1803 1999 Total assets ........................................ 244 131 159 159 15,408 17,015 17,556 18,509 GOVERNMENT-SPONSORED ENTERPRISES LIABILITIES: Federal liabilities: Resources payable to Treasury ............................................... Non-Federal liabilities: Accounts payable: 2201 Consolidated systemwide and other bank bonds ................................ 2201 Consolidated systemwide notes ..... 2201 Notes payable and other interestbearing liabilities ....................... 2202 Accrued interest payable .................... 1139 FARM CREDIT SYSTEM—Continued Budgetary resources available for obligation: Unobligated balance available, start of year: Authority to borrow ................................................................... 22.00 New budget authority (gross) ........................................ 22.60 Redemption of debt ....................................................... 21.47 2104 128 145 10,805 4,717 10,882 5,110 11,045 5,837 24 77 12 126 20 126 20 127 14,197 15,802 16,283 17,174 1,211 Total liabilities .................................... NET POSITION: 3200 Invested capital ....................................... 145 8,567 5,401 2999 142 1,213 1,273 1,335 3999 Total net position ................................ 1,211 1,213 1,273 1,335 4999 Total liabilities and net position ............ 15,408 17,015 17,556 18,509 Statement of Changes in Net Worth (in millions of dollars) 68.00 Total budgetary resources available for obligation New obligations ............................................................. Unobligated balance available, end of year: Authority to borrow ................................................................... New budget authority (gross), detail: Spending authority from offsetting collections (gross): Offsetting collections (cash) ..................................... Change in unpaid obligations: Unpaid obligations, start of year: Obligated balance: Fund balance ............................................................. 73.10 New obligations ............................................................. 73.20 Total outlays (gross) ...................................................... 74.90 Unpaid obligations, end of year: Obligated balance: Fund balance: Uninvested balance ........................... 6,161 24,986 –260 6,083 25,482 –562 30,860 –24,699 30,887 –24,804 31,003 –25,216 6,161 6,083 5,787 24,744 24,986 25,482 382 24,699 –24,310 771 24,804 –24,750 825 25,216 –25,091 771 825 950 72.90 1994 actual 1995 actual Beginning balance of net worth ......................... 1,174 1,210 1,213 1,273 86.97 Outlays (gross), detail: Outlays from new permanent authority ......................... 24,310 24,750 25,091 Capital stock and participations issued ......... Capital stock and participations retired ......... Surplus retired .................................................. Net income ....................................................... Cash/Dividends/Patronage Distributions .......... Other, net ......................................................... 28 –62 .................. 119 –25 –23 7 –52 .................. 117 –32 –36 25 –65 .................. 132 –33 .................. 25 –75 .................. 148 –35 .................. 87.00 Total outlays (gross) ................................................. 24,310 24,750 25,091 Offsets: Against gross budget authority and outlays: 88.40 Offsetting collections (cash) from: Non-Federal sources .................................................................. –24,744 –24,986 –25,482 Ending balance of net worth .............................. 1,210 1,213 1,273 1,336 Identification code 99–4130–0–3–351 1996 est. 23.90 23.95 24.47 6,660 24,744 –544 1997 est. 89.00 90.00 Financing Activities (in millions of dollars) 1994 actual Identification code 99–4130–0–3–351 Beginning balance of outstanding system obligations ...................... 1995 actual 13,567 1996 est. 13,736 15,319 1997 est. 15,784 Consolidated systemwide and other bank bonds issued ....................... Consolidated systemwide and other bank bonds retired ....................... Consolidated systemwide notes, net 6,945 7,768 7,700 7,900 –6,562 –214 –5,505 –679 –7,626 390 –7,741 725 Ending balance of outstanding system obligations ................................... 13,736 15,319 15,784 16,668 Object Classification (in millions of dollars) 1995 actual Identification code 99–4130–0–3–351 1996 est. 1997 est. 12.1 23.2 25.2 33.0 43.0 92.0 Personnel compensation and benefits .......................... Cost of space occupied and equipment ....................... Other services ................................................................ Investments and loans .................................................. Interest and dividends ................................................... Undistributed expenses .................................................. 42 7 14 42,644 902 112 31 6 14 44,000 1,098 97 33 6 15 45,000 1,148 101 99.9 Total obligations ........................................................ 43,721 45,246 46,303 FARM CREDIT BANKS Program and Financing (in millions of dollars) Identification code 99–4160–0–3–371 Obligations by program activity: Operating expenses: 00.01 Administrative expenses ............................................ 00.02 Interest on borrowings .............................................. 00.03 Insurance premiums .................................................. 00.04 Provision for loan losses ........................................... 00.05 Losses/gains on property .......................................... 00.06 Other expenses .......................................................... 1995 actual 107 2,302 13 –25 –7 273 1996 est. 1997 est. 105 105 2,387 2,490 12 11 4 4 –2 ................... 195 169 00.91 01.01 Total operating expenses ...................................... Capital investment: Direct loans ................................... 2,663 22,036 2,701 22,103 2,779 22,437 10.00 Total obligations ........................................................ 24,699 24,804 25,216 Net budget authority and outlays: Budget authority ............................................................ ................... ................... ................... Outlays ........................................................................... –434 –236 –391 Status of Direct Loans (in millions of dollars) Identification code 99–4160–0–3–371 1995 actual 1996 est. 1997 est. Position with respect to appropriations act limitation on obligations: 1111 Limitation on direct loans ............................................. ................... ................... ................... 1131 Direct loan obligations exempt from limitation ............ 22,036 22,103 22,436 1150 Total direct loan obligations ..................................... 22,036 22,103 22,436 1210 1231 1251 1263 Cumulative balance of direct loans outstanding: Outstanding, start of year ............................................. Disbursements: Direct loan disbursements ................... Repayments: Repayments and prepayments ................. Write-offs for default: Direct loans ............................... 36,190 22,036 –21,689 –2 36,535 22,492 –21,930 6 37,103 22,880 –22,340 2 1290 Outstanding, end of year .......................................... 36,535 37,103 37,645 Note.—Loans outstanding at end of year do not include nonaccrual loans and sales contracts. The Agricultural Credit Act of 1987 (1987 Act) required the Federal Land Banks (FLBs) and Federal Intermediate Credit Banks (FICBs) to merge into a Farm Credit Bank (FCB) in each of the 12 Farm Credit districts. The FCBs operate under statutory authority that combines the prior authorities of the FLB and the FICB. No merger occurred in the Jackson district in 1988 because the FLB was in receivership. Pursuant to section 410(e) of the 1987 Act, as amended by the Farm Credit Banks Safety and Soundness Act of 1992, the FICB of Jackson merged with the FCB of Columbia on October 1, 1993. Mergers and consolidations of FCBs across district lines, that began in 1992 continued through mid-1995. As a result of this restructuring activity, 6 FCBs headquartered in the following cities, remain: AgFirst FCB, Columbia, South Carolina; AgAmerica FCB, Spokane, Washington; AgriBank FCB, St. Paul, Minnesota; FCB of Wichita, Wichita, Kansas; FCB of Texas, Austin, Texas; and Western FCB, Sacramento, California. The FCBs serve as discount banks and as of January 1, 1996 provided funds to 32 Federal Land Credit Associations (FLCA), 66 Production Credit Associations (PCAs), and 60 Agricultural Credit Associations (ACAs). These direct lender associations, in turn, make short-term production loans (PCAs 1140 THE BUDGET FOR FISCAL YEAR 1997 FARM CREDIT SYSTEM—Continued FARM CREDIT BANKS—Continued and ACAs) and long-term real estate loans (FLCAs and ACAs) to eligible farmers and ranchers. Also, as of January 1, 1996, 70 Federal Land Bank Associations originated and serviced long-term real estate loans for 2 of the 6 FCBs that have no affiliated FLCAs. FCBs can also lend to local financing institutions, including commercial banks, as authorized by the Farm Credit Act of 1971, as amended. All the capital stock of the FICB’s, from organization in 1923 to December 31, 1956, was held by the U.S. Government. The 1956 Act provided a long-range plan for the eventual ownership of the credit banks by the production credit associations and the gradual retirement of the Government’s investment in the banks. This retirement was accomplished in full on December 31, 1968. The last of the Government capital that had been invested in the FLB’s was repaid in 1947. 1994 actual 1995 actual 128 409 .................. 336 –65 –33 37 121 .................. 392 –146 3 295 104 .................. 356 –463 .................. 64 48 .................. 362 –235 .................. Ending balance of net worth .............................. 3,964 4,129 4,212 4,356 Financing Activities (in millions of dollars) Identification code 99–4160–0–3–371 Beginning balance of outstanding system obligations ...................... 1994 actual 1995 actual 1996 est. 1997 est. 37,377 38,119 39,041 39,775 1996 est. Consolidated systemwide and other bank bonds issued ....................... Consolidated systemwide and other bank bonds retired ....................... Consolidated systemwide notes, net 29,655 53,468 36,089 36,435 –28,861 –93 –52,831 143 –33,634 –1,721 –34,696 –655 Ending balance of outstanding system obligations ................................... Statement of Operations (in millions of dollars) Identification code 99–4160–0–3–371 Capital stock and participations issued ......... Capital stock and participations retired ......... Surplus retired .................................................. Net income ....................................................... Cash/Dividends/Patronage Distributions .......... Other, net ......................................................... 38,119 39,041 39,775 40,858 1997 est. 0101 0102 Total interest income .............................. Total interest expense ............................. 2,547 –1,731 3,011 –2,302 3,041 –2,387 3,126 –2,490 0109 0111 0112 Net interest income ................................. Other income ........................................... Other expenses ........................................ 816 50 –531 709 44 –361 654 15 –313 636 16 –289 0119 Net income .............................................. –481 –317 –298 –273 0191 Total revenues ......................................... 2,597 3,055 3,056 3,142 0192 Total expenses ......................................... –2,262 –2,663 –2,700 –2,779 0199 Net income or loss .................................. 335 392 356 363 Object Classification (in millions of dollars) Identification code 99–4160–0–3–371 11.1 23.2 25.2 33.0 43.0 92.0 99.5 99.9 1995 actual Personnel compensation: Full-time permanent ............. 85 Cost of space occupied and equipment ....................... 22 Other services ................................................................ 13 Investments and loans .................................................. 22,036 Interest and dividends ................................................... 2,302 Undistributed expenses .................................................. 241 Below reporting threshold .............................................. ................... Total obligations ........................................................ 24,699 1996 est. 1997 est. 83 22 12 22,103 2,387 196 1 84 21 11 22,437 2,490 172 1 24,804 25,216 Balance Sheet (in millions of dollars) Identification code 99–4160–0–3–371 ASSETS: Non-Federal assets: 1201 Cash and investment securities ......... 1206 Accrued Interest Receivable ............... Net value of assets related to direct loans receivable and acquired defaulted guaranteed loans receivable: 1601 Direct loans, gross .............................. 1603 Allowance for estimated uncollectible loans and interest (–) .................... 1994 actual 1995 actual 1996 est. FEDERAL AGRICULTURAL MORTGAGE CORPORATION 1997 est. Program and Financing (in millions of dollars) 6,300 731 6,708 810 6,804 685 7,080 707 Identification code 99–4180–0–3–351 1995 actual 1996 est. 1997 est. 00.01 36,659 37,080 –548 –477 –477 35,739 36,111 36,603 37,125 464 402 384 406 Total assets ........................................ LIABILITIES: 2104 Federal liabilities: Resources payable to Treasury ............................................... Non-Federal liabilities: Accounts payable: 2201 Consolidated systemwide and other bank bonds ................................ 2201 Consolidated systemwide notes ..... 2201 Notes payable and other interestbearing liabilities ....................... 2202 Accrued interest payable .................... 43,234 44,031 44,476 45,318 273 276 243 258 2999 5 6 Total obligations ........................................................ 3 5 6 Budgetary resources available for obligation: Unobligated balance available, start of year: Authority to borrow ................................................................... 22.00 New budget authority (gross) ........................................ 12 3 11 4 10 7 15 –3 15 –5 17 –6 11 10 11 New budget authority (gross), detail: Spending authority from offsetting collections (gross): Offsetting collections (cash) ..................................... 3 4 7 73.10 73.20 Change in unpaid obligations: New obligations ............................................................. Total outlays (gross) ...................................................... 3 –3 5 –5 6 –6 86.97 86.98 Outlays (gross), detail: Outlays from new permanent authority ......................... 3 Outlays from permanent balances ................................ ................... 37,602 –627 3 10.00 36,366 Obligations by program activity: Administrative expenses and taxes ............................... 1699 1803 Value of assets related to direct loans .......................................... Other Federal assets: Property, plant and equipment, net ............................ 1999 Total liabilities .................................... NET POSITION: 3200 Invested capital ....................................... 27,706 10,342 28,532 10,060 28,702 10,150 29,851 9,563 567 382 597 437 704 465 39,902 40,264 40,962 23.90 23.95 24.47 68.00 811 479 39,270 21.47 3,964 4,129 4,212 4,356 3999 Total net position ................................ 3,964 4,129 4,212 Total liabilities and net position ............ 43,234 44,031 44,476 45,318 4 6 1 ................... 4,356 4999 Total budgetary resources available for obligation New obligations ............................................................. Unobligated balance available, end of year: Authority to borrow ................................................................... Statement of Changes in Net Worth (in millions of dollars) Identification code 99–4160–0–3–371 Beginning balance of net worth ......................... 1994 actual 4,007 1995 actual 3,964 1996 est. 4,129 87.00 Total outlays (gross) ................................................. 3 5 6 Offsets: Against gross budget authority and outlays: 88.40 Offsetting collections (cash) from: Non-Federal sources .................................................................. –3 –4 –7 1997 est. 4,212 89.00 90.00 Net budget authority and outlays: Budget authority ............................................................ ................... ................... ................... Outlays ........................................................................... ................... 1 –1 GOVERNMENT-SPONSORED ENTERPRISES Farmer Mac was established by the Agricultural Credit Act of 1987 (the Act) to facilitate creation of a secondary market for farm and rural housing mortgage loans that meet minimum credit standards. As authorized by the Act, Farmer Mac guarantees securities formed by certified loan pooling institutions. In addition, the Farmer Mac title of the Act was amended by the 1990 farm bill to authorize Farmer Mac to purchase, pool, and securitize the guaranteed portions of Farmers Home Administration (FmHA) guaranteed farmer program loans. These two areas of secondary market authority have been organized by Farmer Mac into two distinct programs designated as ‘‘Farmer Mac I’’ and ‘‘Farmer Mac II,’’ respectively. The Farmer Mac title was further amended in 1991 to clarify Farmer Mac’s authority to issue debt obligations, to provide for the establishment of minimum capital standards for Farmer Mac, and to expand rulemaking authority for the Farm Credit Administration. The Farm Credit System Reform Act of 1996 significantly expanded the activities of Farmer Mac by allowing it to directly purchase mortgages and to form loan pools. In general, the agricultural secondary market is intended to attract new capital for financing agricultural real estate, including rural housing, foster increased long-term fixed-rate lending, and provide greater liquidity to agricultural lenders. Increased competition among agricultural lenders, stimulated by access to the secondary market, should result in more favorable rates and terms for agricultural borrowers. Farmer Mac is governed by a 15 member Board of Directors. Ten Board members are elected by stockholders, including five by the Farm Credit System, and five are appointed by the President subject to Senate confirmation. risk-based capital. The 1991 amendments also clarified FCA’s regulatory authority, including enforcement of Farmer Mac’s regulatory capital standards. Status of Guaranteed Loans (in millions of dollars) 1995 actual Identification code 99–4180–0–3–351 1996 est. 1997 est. Position with respect to appropriations act limitation on commitments: 2131 Guaranteed loan commitments exempt from limitation 155 392 715 2150 Total guaranteed loan commitments ........................ 155 392 715 2210 2231 2251 Cumulative balance of guaranteed loans outstanding: Outstanding, start of year ............................................. Disbursements of new guaranteed loans ...................... Repayments and prepayments ...................................... 463 155 –112 506 392 –103 795 715 –167 2290 Outstanding, end of year .......................................... 506 795 1,343 2299 Memorandum: Guaranteed amount of guaranteed loans outstanding, end of year ................................................................ 506 795 1,343 Statement of Operations (in millions of dollars) 1994 actual 1995 actual 0101 0102 Revenue ................................................... Expense .................................................... 3 –4 3 –3 4 –5 7 –6 0109 Net loss ................................................... –1 .................. –1 1 Identification code 99–4180–0–3–351 1996 est. 1997 est. Balance Sheet (in millions of dollars) Identification code 99–4180–0–3–351 FINANCING Funding for Farmer Mac comes from four sources: common and preferred stock; debt obligations; guarantee fees and a $1.5 billion line of credit with the U.S. Treasury. The actuarial soundness of the guarantee fee is reviewed annually by the Comptroller General in a report to Congress. The soundness of Farmer Mac I pools will be determined through a multi-stage process. First, loans must comply with the credit underwriting and appraisal standards. Second, pools of eligible loans must meet Farmer Mac’s standards for geographic and commodity diversification and be subjected to economic stress analysis to determine pool performance characteristics. In the case of Farmer Mac II, only the FmHA guaranteed portions of the loans will be pooled by Farmer Mac. Available funds of Farmer Mac are invested in U.S. agency securities or other high-grade commercial paper. No stock dividends are allowed under the Act until the Board determines that an adequate loss reserve has been funded to back Farmer Mac guarantees. 1141 FEDERAL HOME LOAN BANK SYSTEM 1201 ASSETS: Non-Federal assets: Investment in securities .................................................... 1994 actual 1995 actual 1996 est. 1997 est. 474 619 592 915 Total assets ........................................ LIABILITIES: 2203 Non-Federal liabilities: Debt ................... 474 619 592 915 461 607 581 898 2999 461 607 581 898 1999 Total liabilities .................................... NET POSITION: 3200 Invested capital ....................................... 12 12 11 17 3999 Total net position ................................ 12 12 11 17 4999 Total liabilities and net position ............ 473 619 592 915 Object Classification (in millions of dollars) Identification code 99–4180–0–3–351 11.1 1995 actual 1996 est. 1997 est. 25.2 Personnel compensation: Personnel compensation and benefits ...................................................................... Other services ................................................................ 2 1 2 3 3 3 99.9 Total obligations ........................................................ 3 5 6 GUARANTEES Farmer Mac provides a guarantee of timely payment of principal and interest on securities backed by pools of eligible loans. These securities are not guaranteed by the United States, and are not ‘‘government securities’’. In 1996 Congress removed requirements that loan originators or poolers maintain cash reserves or subordinated securities. Farmer Mac guaranteed mortgage-backed securities are subject to registration requirements established by the Securities and Exchange Commission under the 1933 and 1934 Securities Acts. REGULATION Farmer Mac is federally regulated by the Farm Credit Administration (FCA). Under 1991 amendments to the Act, regulation is performed by the FCA’s Office of Secondary Market Oversight. The Office is responsible for examination of and rulemaking for Farmer Mac (after a transition period), including the determination of the stress test for Farmer Mac’s FEDERAL HOME LOAN BANK SYSTEM FEDERAL HOME LOAN BANKS Program and Financing (in millions of dollars) Identification code 99–4200–0–3–371 Obligations by program activity: Operating expenses: 00.01 Administrative expenses including FHFB assessments .................................................................... 00.02 Affordable Housing program ..................................... 00.03 Interest on consolidated obligations and loss on debt retirement ..................................................... 00.04 Interest on members’ deposits and other borrowings ....................................................................... 00.05 Payment to REFCORP ................................................ 00.06 Cash dividends on capital stock .............................. 1995 actual 1996 est. 1997 est. 234 102 243 100 243 100 11,941 10,000 10,000 1,093 300 547 1,000 300 500 1,000 300 500 1142 THE BUDGET FOR FISCAL YEAR 1997 FEDERAL HOME LOAN BANK SYSTEM—Continued 1210 1231 1251 Cumulative balance of direct loans outstanding: Outstanding, start of year ............................................. Disbursements: Direct loan disbursements ................... Repayments: Repayments and prepayments ................. 116,567 724,349 –718,788 122,128 725,000 –726,628 120,500 725,000 –725,000 1290 Outstanding, end of year .......................................... 122,128 120,500 120,500 FEDERAL HOME LOAN BANKS—Continued Program and Financing (in millions of dollars)—Continued Identification code 99–4200–0–3–371 00.91 01.01 01.04 01.05 Total operating expenses ...................................... Capital investment: Investment in bank premises ................................... Net increase in advances and non-Treasury securities ........................................................................ Repurchase of capital stock ..................................... 1995 actual 1996 est. 1997 est. 14,217 12,143 12,143 11 12 9 55,757 ................... ................... 4,005 5,074 5,400 01.91 Total capital investment ....................................... 59,773 5,086 5,409 10.00 Total obligations ........................................................ 73,990 17,229 17,552 Budgetary resources available for obligation: Unobligated balance available, start of year: 21.41 U.S. Securities: Par value ......................................... 21.90 Fund balance ............................................................. 910 148 1,248 448 ................... ................... 21.99 22.00 22.60 Total unobligated balance, start of year ............. 1,358 New budget authority (gross) ........................................ 72,780 Redemption of debt ....................................................... ................... 148 1,248 31,173 17,552 –12,843 ................... 23.90 23.95 24.41 Total budgetary resources available for obligation New obligations ............................................................. Unobligated balance available, end of year: U.S. Securities: Par value ..................................................... 74,138 –73,990 18,478 –17,229 18,800 –17,552 148 1,248 1,248 67.15 68.00 New budget authority (gross), detail: Authority to borrow (indefinite) ..................................... Spending authority from offsetting collections: Offsetting collections (cash) .............................................. 19,982 31,173 17,552 70.00 Total new budget authority (gross) .......................... 72,780 31,173 17,552 Change in unpaid obligations: Unpaid obligations, start of year: Obligated balance: 72.41 U.S. Securities: Par value ..................................... 3,329 72.47 Authority to borrow (obligated balance net of U.S. Treasury and agency securities held) ...... ................... 72.90 Fund balance ........................................................ ................... 2,482 2,752 2,379 449 1,048 400 72.99 73.10 73.20 52,798 ................... ................... 3,329 73,990 –72,009 5,310 17,229 –18,340 4,200 17,552 –17,552 74.41 74.47 74.90 Total unpaid obligations, start of year ................ New obligations ............................................................. Total outlays (gross) ...................................................... Unpaid obligations, end of year: Obligated balance: U.S. Securities: Par value ..................................... Authority to borrow ............................................... Fund balance: Uninvested balance ...................... 2,482 2,379 449 2,752 1,048 400 2,752 1,048 400 74.99 Total unpaid obligations, end of year .................. 5,310 4,200 4,200 86.97 Outlays (gross), detail: Outlays from new permanent authority ......................... 72,009 18,340 17,552 87.00 Total outlays (gross) ................................................. 72,009 18,340 17,552 Offsets: Against gross budget authority and outlays: Offsetting collections (cash) from: Non-Federal sources: 88.40 Net decrease in advances and non-Treasury investments .................................................. ................... 88.40 Other collections from non-Federal sources .... –19,982 –13,618 ................... –17,555 –17,552 88.90 Total, offsetting collections (cash) .................. –31,173 89.00 90.00 Net budget authority and outlays: Budget authority ............................................................ Outlays ........................................................................... –19,982 –17,552 52,798 ................... ................... 52,027 –12,833 ................... Status of Direct Loans (in millions of dollars) Identification code 99–4200–0–3–371 1995 actual 1996 est. 1997 est. Position with respect to appropriations act limitation on obligations: 1111 Limitation on direct loans ............................................. ................... ................... ................... 1131 Direct loan obligations exempt from limitation ............ 724,349 725,000 725,000 1150 Total direct loan obligations ..................................... 724,349 725,000 725,000 The 12 Federal Home Loan Banks were chartered by the Federal Home Loan Bank Board under the authority of the Federal Home Loan Bank Act of 1932. Subsequent to the passage of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) of 1989, the FHLBanks are under the supervision of the Federal Housing Finance Board. The common mission of the FHLBanks is to facilitate the extension of credit through their members in order to provide access to housing for all Americans and to improve the quality of their communities. To accomplish this mission, the FHLBanks make loans, called advances, and provide other credit products such as letters of credit to member institutions. Advances and letters of credit must be fully secured by eligible collateral and long-term advances may be made only for the purpose of providing funds for residential housing finance. Additionally, specialized community-related advance programs provide funds for community reinvestment and affordable housing programs. All regulated financial depositories and insurance companies engaged in residential housing finance are eligible for membership. Each FHLBank operates in a geographic district designated by the Board and together the FHLBanks cover all of the United States as well as Puerto Rico, the Virgin Islands, and Guam. Advances outstanding on September 30, 1995 totaled approximately $122.1 billion, a net increase of approximately $5.9 billion from the September 30, 1994 level of $116.2 billion. The principal source of funds for the lending operation is the sale of consolidated obligations to the public. On September 30, 1995, $226.4 billion of these obligations were outstanding. The consolidated obligations are not guaranteed by the U.S. Government as to principal or interest. Other sources of lendable funds include a portion of members’ deposits as determined by Board policy. Deposits totaled $16.9 billion and total capital amounted to $14.7 billion as of September 30, 1995. Funds not immediately used for advances to members are invested until such times as needed. The capital stock of the Federal Home Loan Banks is owned entirely by the members. Initially the U.S. Government purchased stock of the banks in the amount of $125 million. The banks had repurchased the Government’s investment in full by mid-1951. The entire operating expenses of the FHLBanks are paid from their own income and are not included in the budget of the United States. Included in these expenses is the assessment by the Federal Housing Finance Board to cover the Board’s administrative and other costs. FIRREA contains provisions for the establishment of an Affordable Housing Program (AHP) by each FHLBank. Each FHLBank has developed its AHP to enhance the availability of housing for very low-, low- and moderate-income families by providing direct subsidies or subsidized advances for members who use the funds for qualifying housing projects. The FHLBank system sets aside for its AHPs a total of $100 million annually. The forecast data for 1996 and 1997 contained in this material represents estimates and should not be construed as an official forecast of the FHLBanks System’s future position. Statement of Operations (in millions of dollars) Identification code 99–4200–0–3–371 0101 0102 Revenue ................................................... Expense (excludes payments to REFCORP) ............................................ 1994 actual 1995 actual 8,985 14,568 1996 est. 12,543 1997 est. 12,543 –8,051 –13,370 –11,343 –11,343 GOVERNMENT-SPONSORED ENTERPRISES 0109 Net income .............................................. 934 1,198 1,200 1,200 Balance Sheet (in millions of dollars) Identification code 99–4200–0–3–371 ASSETS: Investments in US securities: 1102 Federal assets: Treasury securities, net .................................................. Non-Federal assets: 1201 Investments in non-Federal securities, net .................................................. 1206 Accounts receivable ............................ 1401 Net value of assets related to direct loans receivable: Direct loans receivable, gross .......................................... Other Federal assets: 1801 Cash and other monetary assets ....... 1803 Property, plant and equipment, net 1901 Other assets ........................................ 1999 Total assets ........................................ LIABILITIES: 2101 Federal liabilities: REFCORP and AHP .... Non-Federal liabilities: 2201 Accounts payable ................................ 2202 Interest payable .................................. 2203 Debt ..................................................... Other: 2207 Deposit funds and other borrowings ............................................ 2207 Other ............................................... 2999 Total liabilities .................................... NET POSITION: 3200 Invested capital ....................................... 1994 actual 1995 actual 1996 est. 1997 est. 4,239 2,630 4,000 4,000 84,794 2,053 134,990 3,532 123,000 3,000 123,000 3,000 116,567 122,128 120,500 120,500 448 156 43 449 157 941 400 140 100 400 140 100 208,300 264,828 251,140 251,140 308 347 380 380 196 2,522 168,379 185 3,946 226,406 100 3,000 217,000 100 3,000 217,000 23,666 302 18,437 832 15,000 720 15,000 720 The Act provided formulas pursuant to which the Federal Home Loan Banks made capital contributions to FICO at the direction of the Finance Board for the purchase of FICO capital stock. FICO used the proceeds received from the sales of such capital stock to purchase non-interest bearing securities for deposit in a segregated account as required by the Act. The non-interest bearing securities held in the segregated account will be the primary source of repayment of the principal of the FICO obligations. Securities in the segregated account are kept separate from other FICO accounts and funds but are not specifically pledged as collateral for the payment of obligations. The primary source of payment of interest on the obligations will be the receipt of assessments imposed on and collected from institutions’ accounts which are insured by the Savings Association Insurance Fund (the ‘‘SAIF’’). Statement of Operations (in millions of dollars) Identification code 99–4033–0–3–373 1994 actual 1995 actual 1996 est. 1997 est. 0101 0102 Revenue ................................................... Expense .................................................... 888 –795 897 –795 906 –795 916 –795 0109 Net income .............................................. 93 102 111 121 Balance Sheet (in millions of dollars) 195,374 250,154 236,200 236,200 12,926 14,674 14,940 14,940 3999 Total net position ................................ 12,926 14,674 14,940 14,940 4999 Total liabilities and net position ............ 208,300 264,828 251,140 251,140 Object Classification (in millions of dollars) Identification code 99–4200–0–3–371 11.1 12.1 21.0 23.3 24.0 25.2 31.0 32.0 33.0 41.0 1143 FEDERAL HOME LOAN BANK SYSTEM—Continued 1995 actual 1994 actual 1995 actual 1,143 1,244 1,354 1,475 344 13 279 13 279 12 279 12 Total assets ........................................ LIABILITIES: Non-Federal liabilities: 2202 Interest payable .................................. 2203 Debt ..................................................... 2207 Other ................................................... 1,500 1,536 1,645 1,766 236 8,140 152 236 8,141 85 236 8,142 83 236 8,144 81 2999 8,528 8,462 8,461 8,461 Identification code 99–4033–0–3–373 ASSETS: Investments in US securities: 1102 Federal assets: Segregated accounts investment, net .............................. Other Federal assets: 1801 Cash, cash equivalents, and interest receivable ....................................... 1901 Other assets ........................................ 1999 1996 est. 1997 est. 43.0 43.0 92.0 Personnel compensation: Full-time permanent ............. Civilian personnel benefits ............................................ Travel and transportation of persons ............................ Communications, utilities, and other rent .................... Printing and reproduction .............................................. Other services ................................................................ Equipment ...................................................................... Land and structures ...................................................... Net increase in advances and securities ...................... Subsidies (Affordable Housing Program) ...................... Interest and dividends: Interest and changes in other assets ...................... REFCORP interest ...................................................... Repurchase of capital stock (gross) ............................. 92 95 95 26 26 26 6 8 8 22 22 22 7 9 9 73 75 75 7 8 8 11 12 9 55,757 ................... ................... 102 100 100 13,581 300 4,005 11,500 300 5,074 11,500 300 5,400 99.9 Total obligations ........................................................ 73,990 17,229 1996 est. 1997 est. 17,552 Total liabilities .................................... NET POSITION: 3100 FICO capital stock purchased by FHLBanks ............................................ 3300 Cumulative results of operations ............ Other: 3600 Other ................................................... 3600 Other ................................................... 680 463 680 565 680 675 680 796 –7,568 –603 –7,568 –603 –7,568 –603 –7,568 –603 3999 Total net position ................................ –7,028 –6,926 –6,816 –6,695 4999 Total liabilities and net position ............ 1,500 1,536 1,645 1,766 RESOLUTION FUNDING CORPORATION FINANCING CORPORATION The Financing Corporation (FICO) is a mixed-ownership government corporation, chartered by the Federal Home Loan Bank Board pursuant to the Federal Savings and Loan Insurance Corporation Recapitalization Act of 1987, as amended (the ‘‘Act’’). FICO’s sole purpose was to function as a financing vehicle for the FSLIC Resolution Fund, formerly the Federal Savings and Loan Insurance Corporation (FSLIC). FICO operates under the supervision and control of the Federal Housing Finance Board (the ‘‘Finance Board’’). Pursuant to the Act, FICO was authorized to issue debentures, bonds and other obligations subject to limitations contained in the Act, the net proceeds of which were to be used solely to purchase capital certificates issued by the FSLIC Resolution Fund, or to refund any previously issued obligations. The Resolution Trust Corporation Refinancing, Restructuring, and Improvement Act of 1991 terminated the FICO’s borrowing authority. The Resolution Funding Corporation (the ‘‘REFCORP’’) is a mixed-ownership government corporation established by Title V of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). The sole purpose of REFCORP was to provide financing for the Resolution Trust Corporation (the ‘‘RTC’’). Pursuant to FIRREA, REFCORP was authorized to issue debentures, bonds, and other obligations, subject to limitations contained in the Act and regulations established by the Thrift Depositor Protection Oversight Board. The proceeds of the debt (less any discount, plus any premium, net of issuance cost) were used solely to purchase nonredeemable capital certificates of the RTC or to refund any previously issued obligations. REFCORP is subject to the general oversight and direction of the Thrift Depositor Protection Oversight Board. The dayto-day operations of REFCORP are under the management of a three-member Directorate comprised of the Director of 1144 THE BUDGET FOR FISCAL YEAR 1997 FEDERAL HOME LOAN BANK SYSTEM—Continued RESOLUTION FUNDING CORPORATION—Continued Budgetary resources available for obligation: Unobligated balance available, start of year: Uninvested balance ................................................... 22.00 New budget authority (gross) ........................................ 21.40 the Office of Finance of the Federal Home Loan Banks and two members selected by the Oversight Board from among the presidents of the twelve Federal Home Loan Banks (‘‘the FHLBanks’’). Members of the Directorate serve without compensation, and REFCORP is not permitted to have any paid employees. REFCORP and its Directorate are subject to regulations, orders and directions of the Thrift Depositor Protection Oversight Board. FIRREA and the regulations adopted by the Thrift Depositor Protection Oversight Board provide formulas pursuant to which the Federal Home Loan Banks made capital contributions to REFCORP’s Principal Fund and continue to make interest payments on outstanding REFCORP obligations. FIRREA also provides that the U.S. Treasury cover any interest shortfall. Funds designated for the Principal Funds were used to purchase zero-coupon bonds. The zero-coupon bonds will be held in the Principal Fund and are the primary source of repayment of the principal of the obligations at maturity. Statement of Operations (in millions of dollars) 1994 actual 1995 actual 0101 0102 Revenue ................................................... Expense .................................................... 2,875 –2,626 2,895 –2,626 2,920 –2,626 2,942 –2,626 0109 Net income .............................................. 249 269 294 316 Identification code 99–4029–0–3–373 1996 est. 1997 est. Balance Sheet (in millions of dollars) Identification code 99–4029–0–3–373 1994 actual 1995 actual 1996 est. 23.90 23.95 24.40 68.00 Change in unpaid obligations: Unpaid obligations, start of year: Obligated balance: Appropriation ............................................................. 73.10 New obligations ............................................................. 73.20 Total outlays (gross) ...................................................... 74.40 Unpaid obligations, end of year: Obligated balance: Appropriation ............................................................. 3,567 3,856 4,169 881 1 881 1 881 1 881 .................. 1999 Total assets ........................................ LIABILITIES: Non-Federal liabilities: 2202 Accrued interest payable on longterm obligations ............................. 2203 Debt ..................................................... 4,183 4,449 4,738 5,050 881 30,079 881 30,076 881 30,074 881 30,072 2999 Total liabilities .................................... NET POSITION: 3100 Nonvoting capital stock issued to FHLBanks ............................................ 3200 RTC nonredeemable capital certificates 3300 Cumulative results of operations ............ 3600 Other ........................................................ 30,960 30,957 30,955 30,953 2,513 –31,286 939 1,057 2,513 –31,286 1,208 1,057 2,513 –31,286 1,499 1,057 2,513 –31,286 1,813 1,057 3999 Total net position ................................ –26,777 –26,508 –26,217 –25,903 4999 Total liabilities and net position ............ 4,183 4,449 4,738 5,050 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Program and Financing (in millions of dollars) Identification code 99–4450–0–3–803 Obligations by program activity: Board operating expenses: 00.01 Monetary and economic policy .................................. 00.02 Services to financial institutions and the public 00.03 Supervision and regulation of financial institutions 00.04 System policy direction and oversight ...................... 1994 actual 1995 est. 1996 est. 65 3 57 28 73 3 64 31 74 3 65 32 –6 177 153 –156 168 –174 171 –177 –3 –6 –7 154 171 177 13 156 –152 18 174 –171 21 177 –175 18 21 23 86.97 86.98 Outlays (gross), detail: Outlays from new permanent authority ......................... Outlays from permanent balances ................................ 140 12 157 14 161 14 87.00 Total outlays (gross) ................................................. 152 171 175 Offsets: Against gross budget authority and outlays: 88.40 Offsetting collections (cash) from: Non-Federal sources .................................................................. –154 –171 –177 89.00 90.00 3,301 New budget authority (gross), detail: Spending authority from offsetting collections (gross): Offsetting collections (cash) ..................................... –3 171 72.40 1997 est. ASSETS: Investments in US securities: 1102 Federal assets: Principal fund account investment, net .................... 1206 Non-Federal assets: Assessments receivable for interest expense .................... 1901 Other Federal assets: Other assets ........ Total budgetary resources available for obligation New obligations ............................................................. Unobligated balance available, end of year: Uninvested balance ................................................... –1 154 Net budget authority and outlays: Budget authority ............................................................ ................... ................... ................... Outlays ........................................................................... –3 ................... –2 The figures presented may differ from other Board financial material because they are prepared in accordance with OMB guidelines which vary from the Board’s budget and accounting procedures. The Federal Reserve System operates under the provisions of the Federal Reserve Act of 1913, as amended, and other acts of Congress. Program.—To carry out its responsibilities under the Act, the Board determines general monetary, credit, and operating policies for the System as a whole and formulates the rules and regulations necessary to carry out the purposes of the Federal Reserve Act. The Board’s principal duties consist of exerting an influence over credit conditions and supervising the Federal Reserve banks and member banks. Financing.—Under the provisions of section 10 of the Federal Reserve Act, the Board of Governors levies upon the Federal Reserve banks, in proportion to their capital and surplus, an assessment sufficient to pay its estimated expenses. The Board, under the Act, determines and prescribes the manner in which its obligations are incurred and its expenses paid. Funds derived from assessments are deposited in the Federal Reserve Bank of Richmond, and the Act provides that such funds ‘‘shall not be construed to be Government funds or appropriated moneys.’’ No Government appropriation is required to support operations of the Board. The information presented pertains to Board operations only. Expenditures made on behalf of the Federal Reserve banks for production, issuance, retirement, and shipment of Federal Reserve notes are not included, since they are reimbursed in full by the Federal Reserve banks. Statement of Operations (in millions of dollars) Identification code 99–4450–0–3–803 1994 actual 00.91 01.01 Subtotal: Board operating expenses ..................... Office of Inspector General operating expenses ........... 153 3 171 3 174 3 0101 0102 Revenue .......................................................................... Expense .......................................................................... 154 –156 10.00 Total obligations ........................................................ 156 174 177 0109 Net income or loss (–) .................................................. –2 1995 est. 171 –174 1996 est. 177 –177 –3 ................... GOVERNMENT-SPONSORED ENTERPRISES 1145 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM—Continued 11.3 11.5 Identification code 99–4450–0–3–803 1994 actual 1995 est. Other than full-time permanent ........................... Other personnel compensation ............................. 11.9 12.1 13.0 21.0 23.3 24.0 25.1 25.2 26.0 31.0 Total personnel compensation ......................... Civilian personnel benefits ....................................... Benefits for former personnel ................................... Travel and transportation of persons ....................... Communications, utilities, and other rent ................ Printing and reproduction ......................................... Advisory and assistance services ............................. Other services ............................................................ Supplies and materials ............................................. Equipment ................................................................. 92 98 103 16 16 16 1 ................... ................... 4 5 5 9 9 10 3 3 3 1 2 3 13 18 16 5 6 7 10 14 11 99.0 25.2 99.5 Subtotal, direct obligations .................................. Allocation Account—Direct Obligations: Other services Below reporting threshold .............................................. 154 171 174 3 3 3 –1 ................... ................... 99.9 Balance Sheet (in millions of dollars) 1 2 1 2 1 2 Total obligations ........................................................ 1996 est. ASSETS: 1206 Non-Federal assets: Receivables, net ........................... Other Federal assets: 1801 Cash in bank ............................................................. 1803 Property, plant and equipment, net .......................... 4 3 2 15 112 15 125 17 135 1999 Total assets ............................................................... LIABILITIES: Non-Federal liabilities: Accounts payable and accrued liabilities .................................................................... 131 143 154 22 24 25 Total liabilities .......................................................... NET POSITION: 3100 Appropriated capital ...................................................... 3200 Invested capital ............................................................. 22 24 25 –3 112 –6 125 –7 136 3999 Total net position ...................................................... 109 119 129 4999 Total liabilities and net position ................................... 131 143 154 2201 2999 Identification code 99–4450–0–3–803 11.1 Direct obligations: Personnel compensation: Full-time permanent ............................................. 1994 actual 89 1995 est. 95 1996 est. 100 174 177 Personnel Summary Identification code 99–4450–0–3–803 Object Classification (in millions of dollars) 156 1005 1011 Total compensable workyears: Full-time equivalent of overtime and holiday hours Exempt Full-time equivalent employment ..................... 1 Includes 1994 actual 38 1,650 32, 32, and 31 positions respectively for the Office of Inspector General. 1995 est. 38 1,659 1996 est. 38 1,665
@FedFRASER