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WASHINGTON, D.C. — America’s Community Bankers has registered its strong opposition to the Federal Housing Finance Board’s mission-related assets proposal and has urged the agency to either withdraw the measure or defer action until the Federal Home Loan Banks have submitted their capital plans.

“The proposed rule establishes a precedent for future FHFB action that we believe is not consistent with congressional intent and that is not in the best interests of the FHLBank System and its member-stockholders in this cooperative structure,” ACB said in a comment letter.

“Because the Gramm-Leach-Bliley Act also mandated a change in the capital structure of the system, it is vital that significant mission changes or limitations on FHLBank decisionmaking not be considered until the system has had a chance to transition into and adjust to the new capital structure,” ACB said.

While the G-L-B Act directs the FHFB to ensure that the FHLBanks carry out their housing finance mission, the new law “does not charge the FHFB to define the manner in which the FHLBanks are to achieve their housing finance mission,” ACB said.

ACB said the proposal, by creating a new category of investments, and by limiting investments in mortgage backed securities and government-insured loans, is dictating the FHLBanks’ programs and activities. These decisions, ACB said, “should be left to the FHLBanks.” ACB said it “strongly opposes any direct or indirect investment restrictions that limit the tools available to the FHLBanks in meeting the needs of their members and ultimately the mission of the system.”

The comment letter is linked.