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MCUA Opposes FHFA Proposal on FHLB Membership Eligibility

The Missouri Credit Union Association (MCUA) filed a letter on January 12, 2015, with the Federal Housing Finance Agency (FHFA) regarding its proposal on membership requirements for Federal Home Loan Banks (FHLBs). The proposal would require the initial tests financial institutions must meet to become members of the FHLBs—including a requirement that 10 percent of assets must be directed to housing—to be met at all times.

MCUA is adamantly opposed to the proposed regulation and urges FHFA to withdraw it.

MCUA does not believe the proposed changes are warranted or required to meet statutory requirements and does not believe the agency has provided sufficient analysis as to why the proposed membership requirements are needed. Most important, MCUA is concerned the proposal would require FHLB-member credit unions to make business decisions that may not be in their members' overall best interests. If this proposal does move forward, at a minimum, MCUA urged FHFA to correct the disparate treatment between banks and credit unions. MCUA recognizes FHFA has an interest in ensuring that FHLB members maintain a commitment to housing finance, however, does not believe that this proposal is necessary to achieve that objective, especially since the agency has not demonstrated that the proposed changes are warranted in light of the results the current system has produced.