Comment Detail

Comment

In response to question #5 (page 15 of the FHFA's Federal Home Loan Bank Membership Request for Input-Febaruary 2020)...
I do not believe that the current membership regulation is sufficient to ensure that activities of FHLB members have sufficient nexus to the public policy mission. Specifically, the 10% rule should, in my opinion, be applied on an ongoing basis rather than only once at the time of application. Failure to ensure that member institutions are investing in housing poses two risks to the public policy mission First, if advances are used to support lending in segments other than housing (with the exception of community investment) then by definition the FHLB system is not providing liquidity and stable, low cost funding to the very market it was chartered to strengthen. Second, and perhaps more threatening over the long term, since the ownership percentage of each member institution is determined in part by their borrowing levels from the FHLB, those who engage in non-housing activities funded by advances gain voting influence that could be exercised to promote activities, or agendas, that are not consistent with the core public mission.
Our bank finds tremendous value in FHLB (Atlanta) membership. This valuable partnership enables us to provide support to the local housing market with much greater consistency and flexibility than would otherwise be possible. I want to contribute toward a discussion of how the FHLB system can maximize inclusion and fulfillment of their public mission.
Please do not hesitate to contact me if there is an opportunity to participate in a work session, public or private forum, or hearing.
Thank you for your consideration.
Keith Epstein
Chief Executive Officer
Roxboro Savings Bank, SSB
member of the FDIC Advisory Committee on Community Banking