Comment Detail

Comment

On behalf of United Bankers' Bank (UBB), I'm writing to express my concerns regarding some potential changes in how the FHLB operates within the banking system, and more specifically, within community banks.

UBB was the first bankers' bank in the nation in 1975, and we currently provide correspondent services to approximately 900 banks in the U.S. In addition, as a member of the FHLB Des Moines, UBB and many of our respondent (customer) banks periodically utilize the overnight and term funding advance options provided by the FHLB. These funding options, all fully-collateralized to remove credit risk to the FHLB, have served the community banking industry well for many years as a steady source of liquidity. I'm not aware of any losses the FHLB has had to recognize from these programs. Given all of the success with the advance programs, there appears no good reason to eliminate them at this time, and it would have huge negative consequences to liquidity in the entire banking industry, especially community banks.

The U.S. Congress created the FHLB via passage of the Federal Home Loan Bank Act of 1932. Given this fact, any material changes to current FHLB operations should also be reviewed and legislated by Congress, and not be mandated by a regulatory agency.

Thank you for the opportunity to have input on this issue.

Dwight Larsen, President/CEO
United Bankers' Bank
Bloomington, MN