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Wednesday, January 14, 2015

ABIA, ABA Urge Withdrawal of FHLB Membership Proposal

ABIA and ABIA sent a letter today to the Federal Housing Finance Agency, stating that it should withdraw its proposal to limit membership in the Federal Home Loan Bank System. ABA explained in the letter that the proposal contradicts Congress’ intent for the FHLBs and would harm the FHLBs, their member banks and the communities they serve.

“While we agree that some of the issues raised by the NPRM need to be addressed, particularly those relating to the use of captive insurance companies to access System advances, there are more targeted ways to address those concerns. We urge the FHFA to revise this proposal so that it better reflects both the congressionally defined mission of the System and the authority granted to the FHFA to ensure that the System and its members meet that mission.”

Similarly, ABIA urged the FHFA to withdraw its proposed definition of insurance company, stating that it “would be contrary to how the term is usually defined and would alter the framework the FHLB Act has established to protect Banks regarding advances made to an insurance company member of a Bank.”

Read ABIA's letter.

Read ABA's letter.