Comment Detail

Comment

I am writing on behalf of my community bank, New Market Bank, to express my concerns about the Federal Home Loan Bank Mission RFI. We are a small community bank with only about $190MM in assets in the South metro of the Twin Cities area. We are active in lending to small businesses as well as providing 2nd market mortgages through the FHLB MPF program. As a community bank, we rely heavily on the FHLB system to provide liquidity to our bank as well as being an outlet to provide 2nd market mortgages to our customers. The current mission of the FHLBs to provide liquidity to the banking system and supporting affordable housing which was established by Congress in the Federal Home Loan Bank Act remains to this day a vitally important mission for the community banking industry and the customers we serve.

The FHLB has been a reliable source of funds for us both in thriving and more challenging economic times. During the Great Recession, having the partnership with the FHLB was imperative to us as it allowed us the flexibility to continue lending in our communities even when deposit funds were scarce. This is only one reason that I want to write and ask the FHFA to consider the following:

• As stated above, the mission of the FHLB System was established by Congress and is outlined in the Federal Home Loan Bank Act. This Act also includes the types of institutions eligible for membership and the requirements that must be met for those institutions to have access to liquidity and products/services. Any changes made to that mission or member eligibility should be directed by Congress and not a governmental agency.
• The FHLB System provides reliable and stable funding which supports us and other institutions and allows us to provide funding to support housing, small business and community development. Without having a reliable, easily accessible and on-demand liquidity source, many banks will have a severe impact on their ability to continue making home or small business loans due to the loss of a trusted source of liquidity.
• All current members of the FHLB (both large and small) must continue to have the same access to the FHLB as they do today in order to maintain the stability of liquidity through all economic cycles.

For nearly 100 years, the Federal Home Loan Bank System has served as a reliable and critical source of funding. The system has been proven to work well through all economic cycles. Please consider maintaining the current mission of the FHLB System as it is vitally important to our community banking industry.

Sincerely,
Anita Drentlaw, CPA
CEO/President/CFO of New Market Bank