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  • Comment Detail

  • Date: 07/12/24
    First Name: Rachelle
    Last Name: Nelson
    Email: rachelle.nelson@fnbmilaca.com
    Organization Type: organization
    Organization: First National Bank of Milaca

  • Comment

    On behalf of the First National Bank of Milaca, 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.

    The First National Bank of Milaca has been a family-owned, community bank for 127 years and been a FHLB member for several of those years. As FHLB members, we have periodically utilized 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. Furthermore, 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, which would certainly affect our ability to keep credit more available for consumers and businesses alike.

    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.