Comment Detail

Comment

Dear Director Thompson,

I'm writing on behalf of Misson Federal Credit Union in response to the FHFA's Request for Input on the FHLBs' Core Mission Activities and Mission Achievement. We are an active member of the FHLB-San Francisco, and our members derive great benefit from the liquidity, affordable housing and community development functions of the FHLB.

The role that the FHLB plays in serving as a backup liquidity source for Mission Fed is absolutely critical in helping us serve the needs of our members and the San Diego community. Much of the lending that we do seeks to improve the housing opportunities of our members, and leads to a stronger San Diego community. While we are judicious in the use of FHLB borrowings, they help us manage our liquidity and interest rate risk positions so that we can effectively lend to our members. Any effort to revise the core mission away from these activities would damage Mission Fed and the industry as a whole, leading to reduced lending and negatively impacting community development.

We also participate in various FHLB community development programs, including AHEAD grants and down payment assistance programs. These programs help us work with other local non-profit partners to provide economic assistance and training programs to individuals, thereby improving financial outcomes. They also provide affordable housing to members, allowing more San Diegans to realize the dream and economic benefits of homeownership. We've consistently advocated for increased funding for these activities on behalf of our members and community.

We are concerned, however, about programs that would provide incentive programs to active participants, particularly if these are volume or percentage volume based. As a credit union, our volumes pale in comparison to the large institutions, and incentives based on volume would put us at a greater disadvantage.

In addition, and perhaps more importantly, the FHLB system was founded and has grown successfully based on an impartial, equal access and benefit structure that provides a level-playing field for all participants. The current collateral-based advance system already helps ensure that institutions' lending and investment activities are aligned with the FHLB's core mission. Making changes to this system would add complexity, further disadvantage small lenders like Mission Fed, and likely reduce service to underserved areas.

Ultimately, we hope that the FHFA will recognize the significant benefits derived from the current mission, avoid making changes that would impact the critical liquidity backstop provided by the FHLB to Mission Fed and the credit union industry, and continue to support the affordable and community development activities already in place. We also hope that any incentive programs considered will not disadvantage smaller institutions based on the inherently smaller volumes or activity they can generate.

Thank you for your consideration.

Sincerely,

Doug Wright