FOR IMMEDIATE RELEASE
ICBA Applauds Housing Finance Board’s Action On Home Loan Bank Retained Earnings
Washington, D.C. (December 22, 2006)—The Independent Community Bankers of America (ICBA) applauds the Federal Housing Finance Board (FHFB) for adopting an ICBA-supported proposal to permit each Federal Home Loan Bank to build retained earnings based on its individual situation rather than a one-size-fits-all approach.
“In scrapping its controversial one-size-fits-all proposed rule, the Federal Housing Finance Board did the right thing for the nation’s community banks and the communities they serve,” said Camden R. Fine, ICBA president and CEO. “Instead of imposing an arbitrary requirement across the system, the Board adopted an approach ICBA has long-advocated because it permits each FHLBank to build retained earnings based on its individual situation.”
The rules as adopted will help FHLBanks to remain a safe, sound and stable source of funding for community banks to rely on for business, commercial and residential loans.
ICBA advocated that the FHLBanks need a capital structure that ensures their safety and soundness and is appropriate to their business structure, allowing for differences among the banks. All FHLBanks should hold some level of retained earnings to enhance safety and soundness, but the level should not be arbitrarily set across the FHLBank system.