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  • Comment Detail

  • Date: 01/12/15
    First Name: Donya
    Last Name: Parrish
    Organization: Montana Credit Union Network
    City: N/A
    State: N/A
    Attachment: N/A
    Number: RIN-2590-AA39

  • Comment

    RE: RIN 2590-AA39- Notice of Proposed Rulemaking on Members of Federal Home Loan Banks

    Dear Director Watt:

    As the trade association for Montana’s 55 credit unions, MCUN appreciates the opportunity to comment on the proposed rule for membership requirements at Federal Home Loan Banks (FHLBs). We feel that the new requirements are burdensome and unnecessary, and have the potential to discourage participation in the FHLB system by Montana credit unions.

    The membership requirements that are proposed include a 1% test to require a participating member institution to hold at least 1% of their portfolio of assets in “home mortgage loans”. The distribution of assets in a loan portfolio is a decision that must be maintained at the institution level to best meet the risk and objectives of that institution. Requiring a set level, which may increase in the future, to be maintained just to qualify for FHLB membership, makes the option of the FHLB as a liquidity option much less desirable. We have fought as an industry to keep the FHLB system as a source of liquidity, but this requirement does nothing to increase access to credit for borrowers, or make the institutions more safe and sound.

    Another of our primary concerns with this rule change is that we believe credit unions deserve parity with community banks and FDIC insured institutions. They are community financial institutions and should be treated to the CFI exemption that community banks under $1 billion in assets are allowed. FHFA is not under any obligation in the statutes to impose new membership regulations, so if this rule is not withdrawn, at a minimum, we would like to see credit unions treated to this exemption.

    Thank you for the opportunity to provide input. We appreciate your willingness to consider the impact these changes could have on the lending environment in Montana.

    Sincerely,

    Donya Parrish
    VP- Dues Supported Services
    Montana's Credit Unions