While that may be true, we believe a centralized system will harm some of the other stated goals of the system, such as better addressing affordable housing. There has been some discussion during the listening tour about reducing the number of regional banks in the system to achieve efficiencies. Inviting unregulated entities who are subject to none of these same standards into the FHLB system under the auspices of increasing access to credit would undermine those inherent safeguards and risk, repeating the mistakes which led us to the last financial crisis and the conservatorship of other government sponsored entities. We believe until those lenders have similar capital and regulatory requirements, their entrance into the system will make the system less safe. Non-bank entities have long advocated for membership to the FHLB system. Any proposed changes to membership will upset the safety and soundness of the current structure. The nature of the system is premised on the fact that all current members of the system are highly regulated, examined institutions. Crucial to the banking industry is the stability of the home loan bank system. The OBL urged extreme caution in considering any changes that would introduce unnecessary risk to the health of the system. This system has been tested many times over FHLB’s 90-year history and it has proven time and again to work under unprecedented economic conditions. Consumers are protected from the harshest impacts of economic volatility due to the liquidity backstop provided by FHLB. The cooperative structure of regulated institutions allows the system to operate in a safe and sound manner. The, OBL, on behalf of our members testified we believe the FHLB system is working as intended, designed to provide critical liquidity to banks of all sizes in all market conditions, with advances growing in times of low deposits and shrinking when banks have increased deposits. The OBL appreciated the opportunity to provide public comment on the Federal Housing Finance Agency (FHFA) listening tour review of the Federal Home Loan Bank (FHLB) system. As part of the review process, FHFA hosted many public listening sessions and a series of regional roundtable discussions to consider and evaluate the mission, membership eligibility requirements, and operational efficiencies of the FHLBanks. FHFA has conducted a year-long comprehensive review to ensure the FHLB system remains positioned to meet the needs of today and tomorrow. OBL’s President and CEO Michael Adelman today testified before the Federal Housing Finance Agency (FHFA) in one of their final hearings before they wrap up their FHLB listening tour.
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