Removing Barriers Blog

Privately-Insured Credit Unions Allowed Membership to the FHLB under Proposed Rule
Posted November 28, 2016 by CUNA Advocacy

As part of the Fixing America’s Surface Transportation Act (FAST Act) recently passed by Congress, Section 4(a) of the Federal Home Loan Bank Act (Bank Act) was amended to authorize certain credit unions without Federal share insurance to become members of the Federal Home Loan Bank (FHLB).  FHLBs are a reliable, low-cost source of liquidity for financial institutions and further provide access to the secondary market for the sale of home mortgages.  CUNA filed its comment letter supporting the proposed rule implementing these changes. With a few exceptions the application and reporting requirements will generally be reasonable and in conformity with the treatment of insured credit unions.  Although there is no timeline set for adoption of a final rule, CUNA expects this rulemaking to be completed in relatively short order in 2017. A copy of the comment letter can be viewed here.