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STATEMENT BY DIANE M. CASEY, PRESIDENT, AMERICA’S COMMUNITY BANKERS, ON THE MISSION-ACHIEVEMENT PROPOSAL ISSUED TODAY BY THE FEDERAL HOUSING FINANCE BOARD:
America’s Community Bankers will carefully analyze the Federal Housing Finance Board’s proposed new mission achievement policy. As proposed, this policy could pose problems to the FHLBanks’ membership and programs, and their ability to assume the self-governance role that Congress specifically authorized last year. ACB believes that the Bank System should have the opportunity to implement the provisions of the new law and assess the results before a regulatory mission achievement policy is considered. There is no public policy reason to rush to develop a new approach that could fundamentally alter the System before the FHFB, the FHLBank System and system members cooperatively implement an improved capital structure for the Bank System. The FHLBanks’ investments will be such an integral part of the new capital regime that any re-direction of investments by regulation should not be undertaken without consideration of capital structure issues. Any changes in the structure of the FHLBanks’ balance sheets should be market-driven and the new open-ended mortgage participation programs should be driven by the community-based needs of the system’s members. ACB welcomes the opportunity to comment on the proposal and will work with the FHFB to assure that any final rule does not adversely impact the financial health of the Bank System. Any new rules should provide FHLBank members with a safe, attractive investment and a stable source of liquidity to serve the housing and community development credit needs of their communities.
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