FHFA Membership Rule Information
FHLB Cincinnati's regulator, the Federal Housing Finance Agency (FHFA), issued its final rule on FHLB membership which was published in the Federal Register January 20, which had been under consideration for more than a year. You can read the new rule on the FHFA website.
In short, the rule:
- eliminates the proposed ongoing membership asset test,
- bans captive insurance companies (with a membership termination of one to five years dependent on original membership date),
- and clarifies Principal Place of Business doctrine (PPOB).
PPOB is defined as the state of domicile charter “…and from which the institution conducts business operations.” For insurance companies and CDFIs that cannot satisfy that definition, the applicant must meet a higher standard of any two of the following three factors:
- (i) its largest office measured by the number of employees is in the home state;
- (ii) a plurality of the institution’s employees are in the home state;
- (iii) a plurality of the senior executives are in the home state. PPOB provisions will be applied prospectively and thus will not affect current members.
FHLB Cincinnati FHFA Membership Rule Communication
Upon the release of the rule, FHLB Cincinnati sent members an email NewsLine on January 14. This communication is available in Members Only, FHLB's exclusive member portal.
Membership Rule Comment Letters
Prior to the release of the membership rule, FHLB Cincinnati and a variety of other entities commented on the proposed changes.
NPR Members of FHLBanks. RIN 2590-AA39
Latest Publications About FHFA Membership Rule
- How FHLBs, Insurers May Challenge Membership Rule, National Mortgage News
- FHFA releases final rule for FHLB membership, Housing Wire
- Housing Regulator Closes Loan Loophole Used by REITs, Wall Street Journal
- FHFA Makes Major Concession in Home Loan Bank Membership Rule, American Banker