Comment Detail

Comment

BankIn Minnesota is a trade association that represents the interests of community banks in Minnesota and we affiliate with the Independent Community Bankers of America on a national level. I write today on behalf of community banks in Minnesota.

Minnesota has a long and proud history of community banking and we currently have the third largest population of community banks in the country with nearly 270 charters. Just over 220 commercial banks in our state are members of the FHLB Des Moines and most of those banks are community banks.

The FHLB system of banks is extremely important to Minnesota's community banks. The primary benefit is the role played in providing liquidity and balance sheet funding. The FHLB offers tools to help community banks fund their balance sheets via short and long-term advances. This allows community banks to compete more effectively with larger financial institutions when it comes to loan terms and maturities while also managing interest rate risk.

Our members are key players in the building of strong communities and many of them play important roles in the financing and support of affordable housing in their communities. The collective work of many has led to nearly 18,000 homes and $120 million in grants in MN since the inception of the affordable housing program. Affordable housing and other FHLB mortgage programs allow community banks to compete effectively and be active participants in providing mortgage loans in their communities.

For these reasons and many more, I respectfully ask that any changes to the FHLBank System do no harm to community banks. This request would include the preservation of the regional structure of the system and current membership requirements. The risk in the system has been very well-managed and any reforms should look to enhance the value and importance of the Federal Home Loan Banks.