WASHINGTON–The Independent Community Bankers of America has issued a statement critical of the Federal Home Loan Bank of New York’s announcement it will be restricting lending by its member banks.
“ICBA and the nation’s community banks have repeatedly advised the Federal Housing Finance Agency not to disrupt the Federal Home Loan Bank System as an important source of liquidity for community banks,” ICBA said in its statement. “Unfortunately, a recent Federal Home Loan Bank of New York message to its member banks that it will impose additional qualitative and quantitative information reporting requirements to align with the FHFA’s more restrictive approach to lending threatens to restrict access to home loans in local communities nationwide.
Unnecessary Requirements
“As ICBA said in a new comment letter on the FHFA’s review of the FHLBank System, the agency should not create additional requirements that restrict FHLBank advances to members in good standing and with eligible collateral,” the organization continued. “This will only reduce the availability of mortgage credit and community development funding in local communities when it is needed most.”
System Has Worked for 90 Years
The ICBA said the FHLBank system has worked well for over 90 years, providing community banks with the liquidity needed to fund home mortgage lending and community development projects.
“The FHFA should ensure it does not disrupt the FHLBanks’ ability to remain a healthy and reliable source of funding for its member-owners” it added.