WASHINGTON—The Federal Housing Finance Agency (FHFA) has agreed to extend its comment period to Jan. 12, 2015 on a proposal that would change the eligibility requirements for institutions, including credit unions, to join and maintain membership in Federal Home Loan Bank (FHLBs).
The proposal would change several things, including: requiring FHLB members and applicants to keep 1% of assets in “home mortgage loans; requiring FHLB members to have at least 10% of assets in “residential mortgage loans” on an ongoing basis; and requiring FHLBs to determine member compliance on an annual basis, and terminate the membership of any credit union that has been noncompliant for two consecutive years.
NAFCU, which was among those that had requested the extended comment period, said it estimates the current level of credit union involvement with FHLBs is relatively low (around 19% of all federally insured credit unions), but the FHLBs “do provide an important avenue for liquidity to which an increasing number of credit unions may look to as lending becomes tighter in the future and interest rates rise.