Arguing that the proposal runs against congressional intent and sound public policy, ABA today called on Congress to pass legislation requiring the Federal Housing Finance Agency to withdraw its proposal on Federal Home Loan Bank membership.
The proposal “will create regulatory burden and drive up costs of membership in the system and ultimately the costs of those communities and individuals served by FHLB members,” ABA said. “It will also lead to far less stability in the system, making membership and access to liquidity less certain.”
The FHFA’s proposed changes would require FHLB members to hold 1 percent of assets in home mortgage loans and require those subject to a 10 percent residential mortgage asset base to maintain that ratio on an ongoing basis. They would also revise insurer eligibility to exclude captive insurers. ABA, its American Bankers Insurance Association affiliate and the state bankers associations have strongly opposed the proposal.
