September 03, 2014

FHFA proposes changes in FHLB membership eligibility

Sept. 3, 2014 – The Federal Housing Finance Agency proposed a rule Tuesday that would change the eligibility requirements for financial institutions, including credit unions, to apply for and become members of Federal Home Loan Banks.
Among the changes proposed for FHLB membership is that all applicants and members must hold 1 percent of their assets in home mortgage loans and continue to do so – as opposed to the current rule, which only requires a "nominal" amount of home mortgage loans at the time of application. The proposal would also require certain members subject to the 10 percent residential mortgage loans requirement to continue to adhere to the requirement beyond the point of application.
The rule would also change the definition of "insurance company" for the purposes of FHLB membership and clarify the standards by which such companies' "principal place of business" is identified.
NAFCU is reviewing the proposal for its impact on credit unions and will submit comments.