WASHINGTON – In a joint letter to the Federal Housing Finance Board, CUNA and NAFCU asked the board to reconsider a notice of proposed rulemaking that could make it less likely for Federal Home Loan Bank members to receive dividends.
The proposed rule would prescribe a minimum amount of retained earnings and cap the excess stock a Federal Home Loan Bank can have outstanding. It would also bar a FHLB from selling excess stock to members or paying stock dividends, and restrict the bank's ability to pay dividends when retained earnings fall below the minimum.
The groups said they supported efforts to enhance the safety and soundness of the FHLB System. However, the letter read, "The FHLB dividends are an important issue, and we support the ability of the FHLBs to pay dividends, to the extent such action is consistent with maintaining the safety and soundness of the FHLB system.
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