Comment Detail

Comment

I am a retired community banker, and now a College of Business dean. When I was a community banker, in Montana, we were a member of the FHLB system and at different times used all of their services. We occasionally took out short term advances to protect and boost our liquidity. Prior to becoming a public company, we used their letter of credit service frequently, we always used our established line of credit as a major part of our liquidity formula, and we frequently participated in their affordable housing programs. To give some examples, we were able to provide the financing for three new rural hospitals and letters of credit from the FHLB to the Farmers Home Agency were instrumental in our ability to finance the construction loans. In regard to affordable housing, Montana is home to twelve American Indian tribes located on seven reservations. We have been involved in several affordable housing projects on those reservations thanks to the FHLB.
My main point is that I think things are working just fine under current laws and rules and don't see any benefit of major changes. The FHLB system has been very safe and opening membership eligibility could be dangerous. Also, in my opinion, the FHLB of Des Moines has always done more than the minimum requirement for affordable housing, whether it involved down payment assistance to low-income areas, multifamily projects on reservations, or just being another outlet for us community banks to sell our home loans to.
As near as I can tell, the FHLB critics are a very small group of people who have greatly exaggerated some of the facts about the system. I urge you to check the critics numbers closely for accuracy. Thank you for giving me the opportunity to comment. Ed Garding. (In the interest of transparency, I am an independent director on the FHLB Des Moines board.)