Comment Detail

Comment

Hello,

I work for a community bank that reinvests in the communities was serve. We utilize the FHLB system to help us meet loan demand and expand housing and community development needs in our markets. Some of the potential changes to the FHLB system being considered by the FHFA concern me greatly and could have significant consequences on our viability and our ability to continue to serve the communities we invest in. I am open to some of the changes being considered. Below, I have detailed my thoughts on the issues being addressed:

1. Requiring tracking of Advance Proceeds - This process is impractical and would be cost-prohibitive.

2. New Membership Categories - If new member categories are established, a system will need to be in place to ensure these new member categories have prudent regulations and risk monitoring procedures so as not to cause instability and excessive risk-taking. Community banks are already subject to significant regulation to help ensure financial stability.

3. Changes in Acceptable Collateral and Use of E-signatures - I am in favor of considering other potential collateral options and making e-signatures acceptable on collateral documentation.

4. Large Member Eligibility - While I can understand the consideration of removing the large members from FHLB access, their inclusion helps to stabilize FHLB earnings and provide operating scale. They also help maintain a global investor base for the purchase of FHLB fixed-income securities.

Please take my comments into consideration as you consider modifying the FHLB system that serves as the primary contingency funding source for many community banks. Community banks are the lifeblood of many rural communities, and some proposed changes could have severally negative consequences for these communities.