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  • Comment Detail

  • Date: 07/15/24
    First Name: David
    Last Name: Lorence
    Email: dave@lowrystate.com
    Organization Type: organization
    Organization: Lowry State Bank

  • Comment

    I am writing this comment letter on behalf of Lowry State Bank to express our concerns with potential changes to the FHLB system as a result of the recent FHFA report. We are a member of the Federal Home Loan Bank of Des Moines and rely on the FHLB to provide both short term and long term liquidity as well as affordable loans to the small communities we support.

    We would like the FHFA to take into consideration the following points:

    • The FHLB System is a reliable and stable funding source for our bank. It has allowed us to support our communities through lending for housing, small businesses, and community development. Any changes to adversely affect this funding resource would have a direct negative impact to our customers and communities.

    • The mission of the FHLB System was established by Congress and is outlined in the Federal Home Loan Bank Act. Therefore, any changes to the mission should be directed by Congress.

    • We support any efforts to streamline the Affordable Housing Program and make it even easier for us to access as a member.

    • Presently, all members are subject to a one-time 10% “mortgage-related assets” test prior to being approved for membership. The FHLB monitors the health of the financial institution on an ongoing basis. More testing of members in a system that has been successful for nearly 100 years would place undue burden on community banks.

    • The definition of long-term advances being 5 years or longer has served its purpose well. Changing the definition to 1 year or longer would not make sense, as it does not match up with what is considered a long-term liability on community bank financial statements.

    The FHLB has been successfully providing liquidity and funding to community banks for almost 100 years. It has become a part of our normal liquidity strategy and is essential to our viability and that of many, if not all, community banks. We urge you to do no harm to community banks as you consider any changes to the mission of the FHLB System.

    Respectfully,
    David Lorence, President