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CUNA Regulatory Comment Call

March 8, 2005

EXECUTIVE SUMMARY

• The Federal Housing Finance Board (Finance Board) is proposing to reorganize the way it imposes reporting requirements on the Federal Home Loan Banks (FHLBs) by issuing certain requirements in a reporting manual titled Data Reporting Manual (DRM).
• The proposal will also address the FHLB’s obligation regarding reporting requirements and making its books and records available to the Finance Board. The proposal will also impose on each FHLB’s board of directors the obligation to establish policies and procedures regarding regulatory reporting.
• Comments on the proposal are due by April 29, 2005. Please submit your comments to CUNA by April 19, 2005. If you provide comments directly to the Finance Board, please refer to “Federal Housing Finance Board – Proposed Rule: Data Reporting Requirements for the Federal Home Loan Banks – RIN Number 3069 – AB28 - Docket Number 2005-04” on the subject line of the submission.

Please feel free to fax your responses to CUNA at 202-638-7052; e-mail them to Senior Vice President and Associate General Counsel Mary Dunn at mdunn@cuna.coop and to Senior Assistant General Counsel Jeff Bloch at jbloch@cuna.coop; or mail them to Mary and Jeff in c/o CUNA’s Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, Suite 600, Washington, DC 20004-2601. You may also contact us at 800-356-9655, ext. 6732, if you would like a copy of the proposal, or you may access it here.

BACKGROUND

The Federal Home Loan Bank System consists of twelve FHLBs operating under the supervision of the Finance Board. The FHLBs are government-sponsored entities (GSEs) that are federally chartered but privately owned entities created by Congress to support the financing of housing and community lending by their members. The members are primarily financial institutions, such as credit unions. Because of their GSE status, the FHLBs are able to borrow in the capital markets at favorable rates, which are then passed on to their members and then to consumers in the form of secured loans, advances, and other financial services at rates that members generally cannot obtain elsewhere. The Federal Home Loan Bank Act provides the Finance Board with the authority to require examinations and reports of condition from the FHLBs in the form that the Finance Board prescribes.

DESCRIPTION OF THE PROPOSAL

The Finance Board proposes to issue many of its existing reporting requirements in the newly created DRM, including certain reporting requirements that are currently located in the Finance Board rules. The DRM will include instructions addressing data definitions, as well as requirements concerning data elements, reporting format, reporting method (such as paper or electronic), record retention, timeliness, reporting frequency, and certification. The DRM will be an enforceable order issued pursuant to the Finance Board’s investigatory powers, and future changes to these requirements will be made by amending the DRM. The reporting requirements concerning capital stock for voting purposes, director elections, and capital requirements will not be affected by this proposal.

In addition to creating the DRM, the proposal will also amend the Finance Board rules regarding the FHLBs’ reporting obligations to require each FHLB to:

• File regulatory reports with the Finance Board pursuant to the Finance Board’s forms and instructions for these reports, which must be filed by the deadlines established by the Finance Board.
• Make its books and records available upon request by the Finance Board within a reasonable time at a location acceptable to the Finance Board. The reasonable time will be presumed to be one day for requests made as part of an ongoing examination and three days for other requests.
• Have in place at all times policies and procedures issued by the FHLB board of directors to ensure that the FHLB complies with the reporting requirements.

• Do you believe that the creation of the DRM will be easier for interested parties to locate the FHLB reporting requirements and easier to amend these requirements in the future?
  
  

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• In addition to the DRM, the proposal also addresses the FHLBs’ obligations regarding reporting requirements, making books and records available to the Finance Board, and establishing policies and procedures for regulatory reporting. Do you believe that the DRM and these reporting requirements will facilitate timeliness, accuracy, and completeness of data reporting by the FHLBs?
  
  

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• Other comments?
  
  

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