Comment Detail

Comment

I am the President and CEO of a $670 Million dollar bank located in Marinette, Wisconsin. We have been using FHLB for many years to support our need for funding from time to time. We use the funds to make home loans to customers in our local markets when deposit balance do not keep pace with our loan needs. FHLB has been a trusted partner for us for this type of funding, so we use them almost on a daily basis. My understanding is that potentially, that funding source could get turned off for us if the interest rate market keeps going up and our collateral pool (Investment portfolio) sees continued mark to market unrealized losses. We normslly plan to hold our securities to maturity. For example, on October 25, 2022, we have a Bond with an early call with a Par value of $2.0 million that was showing an unrealized loss on our 9-30-22 report of $377K. In this case, we will realize Par value with no actual loss to the bank. And this sort of thing happens realatively frequently. My point is that the rule from FHFA that cuts financing options from FHLB when banks reach a certain point for Tangible net capital is antiquated and needs to be updated, especially since the funding is secured with these cash-like securities. Thank you for your consideration on modifying the rules.