WASHINGTON—While it supports the Federal Housing Finance Agency’s (FHFA) implementation of FAST Act provisions to allow membership to the Federal Home Loan Bank program for non-federally insured credit unions, CUNA is asking the FHFA for a single change to the plan.
Credit unions, CUNA, and the leagues saw a victory when several regulatory relief provisions were included in the year-end 2015 long-term federal highway bill, including the FHLB membership change, CUNA said.
“CUNA supports the FHLBs as reliable, low-cost sources of liquidity for financial institutions, which further provide access to the secondary market for the sale of home mortgages,” the trade association said.
In its comment letter to the agency, CUNA noted its support of the application and reporting requirements in the proposal, saying they appear reasonable and in conformity with the treatment of insured credit unions.
CUNA’s one concern with the plan is that it doesn’t apply the same automatic compliance standard for privately-insured CAMEL 1 credit unions as it does for federally insured, which are deemed to be automatically in compliance with the minimum performance standard.
If the FHLB chooses to move forward maintaining the separate requirement, CUNA requested that the agency—at a minimum—revisit the requirement in three years once it has obtained a more “seasoned history” with privately insured credit unions.
The FAST Act provision extending FHLB membership to non-federally insured credit unions did not have a stated effective date, and therefore it went into effect upon the president’s signing of the bill in December 2015, CUNA explained.