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Comment

Dear Sirs:

I am writing in a dual role. First , I am a CEO of a $500 million state chartered commercial bank that is an active user of the products and services of the FHLB of Indianapolis, (FHLBI). Secondly, it is my honor to be a member elected director of the FHLBI. I serve both entities with a zeal and passion. That inertia is driven from the co-dependency and mutually beneficial relationship that exists between the industry and the FHLBanks.

I can be a cynic. And at times and it seems that government's role is to create conflict and to unnecessary complicate life. The beauty of the FHLBanks are that they have preformed exactly as envision in 1932. What I see coming out of this proposed rule making is exactly what and why individuals and businesses grow weary of government. There is little benefit; it appears to be driven by an illogical agenda; and it leads to unintended consequences. Please allow me to put some substance behind by philosophical statement.

The FHLBanks have been there to provide the liquidity and ability to allow the financial services industry to expand and contract at the exact time the country needs it. It has been proven time and time again, economic down turn and revival. It has worked for its members as envisioned at the time of chartering by Congress and continues to today. It makes little sense to me that a regulatory agency can change the field of membership, and the tests to determine that membership, without legislation and required Congressional oversight. It seems that the changes are arbitrary and quite frankly, unnecessary, as the FHLBanks do an outstanding job of self-reinforcing and creating incentives for supporting mortgage financing, community and economic development. They understand and appreciate the mission and do not necessarily need to be driven by membership rules that only complicate and confuse.

The FHLBanks will be impacted by the proposed changes in their ability to provide that liquidity the system relies on. These changes will impact the profitability and ultimately their ability to deliver these services in a cost effective manner. And, that will impact the 20% of profitability devoted to the Affordable Housing Program. The FHLBI was able to provide $25 million in AHP funds in 2014 (from 2013 earnings) because of the earnings capability of the Bank. Once you start placing restrictions and artificial constraints that ability to provide funding for higher social goals will be greatly diminished. I would be dismayed to think Congress would welcome a "less is more" mentality on serving those social and economic goals.

From my own personal observations, the FHLB system "gets it". I think these proposed changes are more about "wrestling" with things not witnessed nor threatened. The system understands the risks and has appropriately anticipated, and cautiously steps into any new products or services. As witnessed by my involvement with the FHLBI, the due diligence and risk management process is outstanding. Every and anything is vetted. What gives me the most concern about these proposed rule changes, is the unanticipated. I think there is a lack of appreciation of the complexities of the rule making as proposed and hence the unforeseen is more formable than any perceived current drivers for the change. My apprehension is driven by the "what ifs", not by the witnessed.

I truly hope that this proposed rule making is more about putting focus on the industry and its ability to lead than about redefining and limiting. There are enough other diversions in the complexities of business rather than manufacturing new ones. The system works, and very effectively. Let us not make the same mistakes, and face some of the same consequences of other well intentioned initiatives.

Respectfully submitted,

Matthew P. Forrester