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<p>In response to Rose Bartolomucci’s letter of Feb. 27 (“NAFCU’s objection to reg relief for privately insured SCCUs unfounded”), I would like to clarify NAFCU’s position on whether privately insured credit unions should be allowed to participate in the Federal Home Loan Bank system. While it is true that some non-federally insured institutions (such as insurance companies) can be members of a Federal Home Loan Bank, under current law, federal insurance is a pre-condition for any bank, thrift or credit union to become an FHLB member. The proposal that has been floated on Capitol Hill to remove the federal insurance requirement for a subset of regulated depository institutions – credit unions – has proven to be quite controversial. NAFCU has been contacted by members of Congress who have long track records of support for credit unions urging us to vigorously oppose this proposal. We have also been contacted by NAFCU-member credit unions on this subject; some have urged support, others opposition. It was against this backdrop of strongly held but conflicting views that the NAFCU Board of Directors took a position that essentially says, “Let’s preserve the status quo until the proposal is fully investigated and all the pros and cons can be fleshed out.” In fact, our stated position to House Financial Services Committee Chairman Mike Oxley was that NAFCU has “reservations regarding the provision” and we “believe that this is an issue that should be further scrutinized and reviewed by the committee.” Legislative proposals such as this one are typically the subject of hearings before members of Congress are asked to vote for or against them. The NAFCU Board believes that, given the past failure of private and/or state insurance funds in Ohio, Maryland and Rhode Island, it is prudent for Congress to fully air this issue. Then all of us will be far better positioned to assess whether the best interests of credit unions and credit union members would be advanced by allowing non-federally insured credit unions to join the Federal Home Loan Banks. Jim Mills, Chair, NAFCU President/CEO, Three Rivers FCU Fort Wayne, Ind.</p>

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