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SAN FRANCISCO — The Federal Home Loan Bank here confirmed as many were whispering during breaks at the California Credit Union League annual meeting earlier this month: it has reduced some lines of credit.Amy Stewart, vice president of corporate communications for the FHLB’s San Francisco office, said the organization isn’t singling institutions out; rather, it has been reevaluating member creditworthiness all year long. She referred Credit Union Times to official quarterly SEC financial filings, available on its Web site (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 third-quarter statement.Western Corporate FCU’s Vice President of Treasury and Funding Dietman Huesch confirmed the move, saying the FHLB is simply reacting to the devalued mortgage market. If the collateral is worth less, it affects an institution’s ability to borrow against it. He said WesCorp has assisted some members who had their lines reduced and said the corporate provides the advantage of accepting other forms of collateral, like consumer loans.Neither the $8 billion SchoolsFirst Federal Credit Union nor the $922 million Orange County Credit Union reported any problems with their Federal Home Loan Bank 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 remains unchanged. OCCU Chief Financial Officer Greg Kraus said his FHLB line was reduced but only a slight amount and will not impact the credit union’s liquidity.Huesch cautioned credit unions from making general assumptions about all Federal Home Loan Banks basedon the actions in San Francisco, saying each FHLB operates individually.CUNA spokesman Pat Keefe confirmed the problem is not widespread, saying, “CUNA has not received any specific reports from members whose [lines of credit] have been reduced or dropped by FHLBs.”–[email protected]

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