SAN FRANCISCO – The Federal Home Loan Bank here confirmed it has reduced some member credit lines.
FHLB Spokeswoman Amy Stewart said the organization has been re-evaluating member creditworthiness all year long. She referred Credit Union Times to official quarterly SEC financial filings, available on its website (www.fhlbsf.com).
"During the first nine months of 2008, the Bank adjusted the internal credit quality ratings of a large number of borrowers because of the financial deterioration of these institutions resulting from market conditions and other factors," read the bank's 3rd quarter statement, posted today.
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Western Corporate FCU's Vice President of Treasury & Funding Dietman Huesch confirmed the move, saying the devalued mortgage market affects an institution's ability to borrow against mortgages. He said WesCorp has assisted some members who had their lines reduced.
However, neither $8 billion SchoolsFirst FCU nor $922 million Orange County's Credit Union reported problems with their FHLB accounts, both with the San Francisco office. SchoolsFirst spokesman Derek Longshore said his cooperative just completed its collateral field review with the bank, and its credit line was not changed. OCCU CFO Greg Kraus said his FHLB line was reduced, but only by a slight amount, and will not impact the credit union's liquidity.
CUNA spokesman Pat Keefe said "CUNA has not received any specific reports from members whose LOCs have been reduced or dropped by FHLBs."
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