WASHINGTON (10/9/08)—The Credit Union National Association (CUNA) is seeking credit union comment by Nov. 11 on a new rule that outlines the process for nominating and conducting the election of independent directors for the Federal Home Loan Banks (FHLBs). The new Federal Housing Finance Agency (FHFA) interim final rule was effective Sept. 26, but that agency has asked for comment on specific areas of the plan. Under the Housing and Economic Recovery Act, signed into law in July, certain changes were made to the process for the election of the directors of Home Loan Banks. Until then, the board of directors of each FHLB was comprised of elected directors and those that were appointed by the board and were known as independent directors. The 2008 law now gives the members of the FHLBs the right to elect these independent directors, and the interim final rule outlines the process for nominating and conducting the election of these independent directors. As before, an independent director may not be an officer, director, or employee of any financial institution that is a member of the FHLB. CUNA seeks comment on the interim final rule in such areas as:
* Should the boards of directors of the FHLBs or should the FHFB establish the number of public interest directorships? *Do you have any comments on the requirement that directors may only serve three consecutive full terms, especially in situations in which a director does not serve a full term? * Should an FHLB board of directors be permitted to nominate more candidates for independent directors than there are positions to be filled? Also, independent directors must receive at least twenty percent of the eligible votes. Should this be a requirement? Would a different threshold be more appropriate? Should the threshold be based on the number of votes or the number of eligible votes? * Should the revised experience requirements for “public interest” directors be applied to existing directors?
The Housing and Economic Recovery Act was also responsible for creating the FHFB by combining the responsibilities formerly divided between the now-gone Federal Housing Finance Board and the Office of Federal Housing Enterprise Oversight. Use the resource link below to see the full list of questions for comment.