Skip to main content

  • Comment Detail

  • Date: 07/12/24
    First Name: Jason
    Last Name: Meyerhoeffer
    Email: jmeyerhoeffer@bankfirstfed.com
    Organization Type: other
    Organization: First Federal Savings Bank of Twin Falls

  • Comment

    I am Jason Meyerhoeffer, President and CEO of First Federal Savings Bank in Twin Falls, Idaho. First Federal is a 108-year old mutual savings institution and has been a member of the FHLB system for almost its entire 90-year history.

    As the FHFA considers the “mission” of the FHLBanks, I appreciate the opportunity to share some of my experiences and thoughts regarding the system. First, I would like to re-emphasize the importance of the FHLB System to the banking system―and community banks in particular―and encourage you to be very cautious and thoughtful regarding potential changes to the system.

    From my experience as a community bank CEO, our FHLB membership is a vital part of our liquidity planning. FHLB funding has played a critical role for our bank in the major financial cycles of the late 2000’s and most recently with the rapid increase in interest rates and deposit outflows. Even between those times, when there were stretches when we did not have any FHLB advances, just knowing we had access to a reliable source of liquidity allowed us to continue to lend to homeowners and business in our communities. If that source of liquidity became less reliable or accessible, our business model and lending activity would certainly be affected.

    I would also like to offer a few thoughts regarding some of the specific issues of the recent RFI on “the mission of the FHLB System.”

    To start with, I am a little confused with FHFA’s consideration of “Updating the regulatory statement of the FHLBank System’s mission to better reflect its appropriate role in the housing finance system.” It is my understanding that congress defined the mission of the FHLBanks in the FHLBank Act as “providing liquidity to member institutions to support affordable housing and community development.” This statement seems very straightforward and appropriate. It seems wholly inappropriate for the FHFA as a regulator to involve itself in redefining the mission of the system which has already been defined by Congress. Additionally, the wording of the FHFA’s request for information on the system’s mission “to better reflect its appropriate role in the housing finance system,” clearly shows its bias and objectives.

    This essential point basically invalidates the other two categories on which information was requested. Since the FHLBanks can only do what Congress has authorized and required them to do, everything a FHLBank does is in fulfillment of its mission as defined by Congress. Any “metrics, thresholds, and incentives” relative to mission achievement would be based on some alternative mission as conceived by the FHFA and not based on statute.

    For these reasons, I would argue the mission of the FHLBank System as defined by Congress is clear and appropriate, and the FHFA should not involve itself in trying to “better reflect” the system’s “appropriate role.” The FHFA should keep its focus on its vital role as a prudential regulator and the safety and soundness of the FHLBank system.