CUNA overall backs the Federal Housing Finance Agency’s (FHFA) implementation of FAST Act provisions to allow membership to the Federal Home Loan Bank program for non-federally insured credit unions. CUNA requests a single change to the plan.
Credit unions, CUNA, and the Leagues saw a victory when several regulatory relief provisions were included in the year-end 2015 long-term federal highway bill, including the FHLB membership change.
CUNA supports the FHLBs as reliable, low-cost sources of liquidity for financial institutions, which further provide access to the secondary market for the sale of home mortgages.
In its comment letter, CUNA noted its support of the application and reporting requirements in the proposal, saying they appear reasonable and in conformity with the treatment of insured credit unions.
CUNA’s one concern with the plan is that it doesn’t apply the same automatic compliance standard for privately-insured CAMEL 1 credit unions as it does for federally insured, which are deemed to be automatically in compliance with the minimum performance standard.
If the FHLB chooses to move forward maintaining the separate requirement, CUNA requested that the agency--at a minimum--revisit the requirement in 3 years once it has obtained a more seasoned history with privately-insured credit unions.
The FAST Act provision extending FHLB membership to non-federally insured credit unions did not have a stated effective date, and therefore it went into effect upon the president’s signing of the bill in December 2015.
Federally insured depository institutions, including state- and federally chartered credit unions whose member accounts are insured by the National Credit Union Share Insurance Fund, have been eligible for FHLB membership since 1989.