WASHINGTON (1/13/16)--Credit unions and the Credit Union National Association (CUNA) saw a big win Tuesday with the Federal Housing Finance Agency’s (FHFA) final Federal Home Loan Bank (FHLB) program membership rule.
“Today’s actions by the FHFA will ensure continued access to the liquidity and flexibility the FHLB system provides, tools which help many credit unions manage their mortgage portfolios more effectively,” said CUNA President/CEO Jim Nussle. “Credit unions understand the needs of their members, and removing the unnecessary ongoing burden of demonstrating sufficient mortgage assets for FHLB affiliation is a big win for member-owned financial institutions.”
The final rule eliminates a previously proposed requirement that FHLB members must continually prove they are meeting minimum investment levels in the mortgage market.
In its comment letter filed in January 2015, CUNA called the minimum levels unnecessary, as the FHFA’s own data shows that approximately 98% of members already comply with those requirements.
In its final rule, the FHFA agreed with that assessment, saying any benefit of forcing the remaining 2% into compliance would be outweighed by the burden imposed by the rule.
The rule will become effective 30 days after publication in the Federal Register, which is expected to be in the coming days.
Credit unions saw another FHLB-related victory at the end of 2015, as a CUNA-supported measure to allow privately insured credit unions to join the program was signed into law as part of the Fixing America’s Surface Transportation Act.
CUNA continues to advocate in support of the Preserving Capital Access and Mortgage Liquidity Act (H.R. 2473), which would amend the FHLB Act to redefined “community financial institution” to include a federal or state credit union, granting credit unions parity with similar sized banks.