ICBA: FHLBanks’ mission should not be changed

ICBA told the Federal Housing Finance Agency that the Federal Home Loan Banks’ mission is clear and does not need to be substantially changed or clarified.

Details: In a comment letter responding to the FHFA’s request for information on the FHLBanks' core mission activities and mission achievement, ICBA said:

• The FHFA should not create additional requirements that raise the cost of or restrict FHLBank advances to members in good standing and with eligible collateral, which would reduce the availability of mortgage credit and community development funding in local communities.

• The FHFA does not have the authority to change or redirect its statutory mission.

• The FHFA should not create an unlevel playing field with its incentive structures and should retain the FHLBanks’ current pricing and dividend structure.

• The FHLBank system has worked well for over 90 years, providing community banks with the liquidity needed to fund home mortgage lending and community development projects.

• The FHFA should not disrupt the FHLBanks' ability to remain a healthy and reliable source of funding for its member-owners.

About the RFI: The FHFA’s request for information sought input from the public on the FHLBank mission and membership incentives.

Previous ICBA Comments: Following the FHFA’s comprehensive report last fall on the FHLBanks, ICBA urged the agency to ensure any new policies affecting the system do not disrupt it as a source of liquidity for community banks. ICBA offers a high-level summary of the report outlining its views on the agency’s policy recommendations.

READ ICBA’S LETTER