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FHFA releases RFI on FHLB membership
In a request for information (RFI) released Monday, the Federal Housing Finance Agency (FHFA) is reviewing whether the agency's existing regulations ensures the Federal Home Loan Bank (FHLB) system remains "safe and sound" as part of a review of FHLB membership. The RFI also seeks to gather information on liquidity for housing finance through the housing and business cycles.
“We look forward to hearing from all interested parties about how FHFA's membership regulations affect the safety and soundness and mission of the FHLBanks," said FHFA Director Dr. Mark Calabria in a statement. “There is no predetermined outcome for this RFI, other than to ensure that membership rules are clear, consistently applied to all applicants, and that access to the Banks' low cost advances do not jeopardize the System's role as a key source of liquidity to support housing finance."
During a House Financial Services Committee hearing last year, Calabria indicated that the agency would issue an RFI on the FHLBs' membership requirements.
Through the RFI, the FHFA specifically addresses a number of topics, including:
- general eligibility;
- affiliate issues;
- safety and soundness;
- mission requirements; and
- the application of the regulation.
Additionally, the FHFA asks a series of questions regarding conduit arrangements and limiting "conduit activity," which are actions made by entities acting on behalf of a parent company that is currently ineligible to be a FHLB member (in the context of real estate investment funds, these subsidiary entities are known as captive insurers). A reevaluation of the agency's rule on captive insurance companies was a recommendation made in the U.S. Department of Treasury's Housing Reform Plan released last Fall.
Comments are due to the agency by June 23. NAFCU will review the RFI and seek member credit unions' feedback. NAFCU has previously recommended that the FHFA include credit unions in its FHLB goals proposal, specifically for small member participation and affordable housing loans.