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  • Comment Detail

  • Date: 01/07/15
    First Name: James
    Last Name: Wayman
    Organization: ESB Financial
    City: N/A
    State: N/A
    Attachment: N/A
    Number: RIN-2590-AA39

  • Comment

    Thank you for allowing me to comment on this proposed rule. Our bank is a small community bank serving the needs of two communities in the Flint Hills of eastern Kansas. We have a well-rounded loan portfolio consisting of business loans, residential mortgage loans and consumer loans. The bulk of our mortgage loans are originated by us and sold in the secondary market. We choose to service our loans that we originate and sell to best serve our clients and our community.

    Banks like ours depend on our membership in our local Federal Home Loan Bank in Topeka in order to provide the necessary liquidity to survive. However, your proposed rule requiring a Community Financial Institution (CFI) like ours to have at least 1% of its assets in home mortgage loans, and would be required to maintain those levels at all times. Our bank currently would pass this test, but it is my understanding that some CFI's that currently are FHLB members would not. We have a high commitment to housing finance as we actively help to build our community and serve our clients. Even though we would currently pass this 1% test, we strongly feel we need the flexibility to manage our assets in order best serve our clients and our community. It is my understand that even though we actively originate residential mortgage loans for our own loan asset portfolio as well as for sale in the mortgage market (while continuing to service those loans to the extent possible), this test could limit the amount of loans that we would have available to sell and force us to keep a certain amount of loans in our loan asset portfolio or our MBS investment portfolio in order to have access to advances provided by the FHLB in Topeka for the liquidity necessary to carry on our business in our community. Our first choice is making local loans within our community, not buying mortgage-back investments from elsewhere. This rule could negatively affect the loans made locally within our communities by community banks like ours.
    I strongly urge you to reconsider this rule, and the negative affect that it would have on community banks that are working to serve their clients and their communities.