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  • Comment Detail

  • Date: 01/12/15
    First Name: Elliot
    Last Name: Spoon
    Organization: N/A
    City: N/A
    State: N/A
    Attachment: N/A
    Number: RIN-2590-AA39

  • Comment

    Professor Elliot A. Spoon
    1858 S. Bates St.
    Birmingham, MI 48009

    January 11, 2015

    Re: Comments on the Notice of Proposed Rulemaking Number RIN 2590-AA39 (Members of
    Federal Home Loan Banks 2014)

    I am a professor at Michigan State University College of Law where I teach inter alia Corporate Finance, Mortgage Banking, Securities Regulation and Contracts. I was also an independent director of the Federal Home Loan Bank of Indianapolis for seven years until December 31, 2014. While I submitted comments previously in December as part of a letter with my fellow directors of the Federal Home Loan Bank of Indianapolis, I continue to be concerned about the Home Loan Bank System and this Proposal in particular, and accordingly I am submitting this additional sole comment letter.

    This Proposal is truly a solution in search of a problem. While I am sure the Proposal was made with the best intentions, it is theoretically-driven without regard to the facts on the ground. This Proposal will not solve any particular problem but has the capacity to do great harm to a Home Loan Bank System that continues to flourish precisely because it has proven to be flexible to meet the changing liquidity needs of its members and the mortgage market. No proposal that will reduce membership, reduce liquidity access and create uncertainty should be adopted.

    Other comment letters have pointed out the many legal deficiencies of the Proposal and the likelihood that pertinent parts of the proposal may not withstand legal challenge under administrative law principles. It is also noteworthy that some of the impetus for the proposal is discriminatory in fact, as the Proposal implicitly embraces the idea that REIT ownership of insurance companies is somehow a negative development that must be stopped. The Home Loan Bank System should not be denying access to insurance companies based on their ownership, as it has not done so with banks and other financial institutions and their holding companies.

    The Proposal embraces the wrong ideas at the wrong time. It should be abandoned.

    Thank you for this opportunity to submit this comment.

    Sincerely,

    Elliot A. Spoon