Privately insured credit unions will be eligible to join the Federal Home Loan Bank (FHLB) starting July 5, as long as they meet certain requirements. The final rule, published in the Federal Register this week, was part of several CUNA-backed regulatory relief items signed into law in December 2015 by then-President Barack Obama.
The Federal Home Loan Bank program serves as a low-cost source of liquidity for financial institutions. 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.
CUNA strongly supported allowing privately insured credit unions the ability to access this additional source of liquidity.
CUNA also saw a victory during the rulemaking stage with the elimination of a CUNA-opposed provision that would have required FHLB members to continually prove they are meeting minimum investment levels in the mortgage market. This provision was included in the proposed rule, and eliminated from the final rule.
Additional information can be found on CUNA’s CompBlog.