WASHINGTON—As it approaches its centennial, NAFCU has written to the Federal Housing Financial Agency (FHFA) in response to the agency’s comprehensive review of the Federal Home Loan Bank (FHLB) System, urging it not to disrupt the FHLB System as a result of this review.
NAFCU Senior Regulatory Affairs Counsel Aminah Moore recommended any expansion of FHLB membership should exclude non-depository institutions, such as underregulated fintechs, because they are not subject to capital requirements or regulated by a prudential regulator.
In addition, Moore called on the FHFA to waive the prohibition in its tangible capital rule in the short term and align its tangible capital rule with the capital definition of federal financial regulators in the longer term.
Relying on System
“Many of NAFCU’s member credit unions rely on the FHLBs for liquidity purposes to fully serve their membership’s mortgage and community development needs,” wrote Moore. “As of the end of 2022’s second quarter, the System had 1,574 credit union members, an increase of more than 30 percent over the past 10 years.”
She went on to note that credit unions now account for nearly 25 percent of the System’s total membership base.
Moore further requested that the FHFA support NAFCU in its efforts to correct the exclusion of credit unions from the statutory definition of community financial institutions.
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