WASHINGTON (2/13/12)—A Federal Housing Finance Agency (FHFA) plan to delegate responsibility to the Federal Home Loan Banks (FHL Banks) for determining their members' compliance with the FHFA's community support requirements would inappropriately force the FHL Banks to act both as lenders to their members and regulators of them.
That is the opinion of the Credit Union National Association (CUNA) as expressed in a Feb. 8 comment letter to the FHFA.
Under its current community support rules, the FHFA must conduct biennial reviews of the performance of selected FHL Bank member institutions, including credit unions, to evaluate their compliance with community support standards. Compliance determines member institution eligibility for access to long-term FHL Bank advances.
"While credit unions are not subject to the (Community Reinvestment Act) or its associated reporting requirements, credit unions that are members of an FHL Bank must nonetheless submit to FHFA a Community Support Statement, which evidences each member credit union's record of lending to first-time homebuyers as part of this evaluation process," the CUNA letter noted.
Determination of compliance, CUNA maintained, is "inherently a regulatory function" and the FHFA is "best suited to determine compliance with its own regulations."
"The FHL Banks should be allowed to continue doing what they do best--fulfilling their mission by offering advances
and community investment products to their members," CUNA wrote.
Use the resource link to access the complete letter.