Federal Deposit
Insurance Corporation

From: Patrick A. Bond
Sent: Tuesday, November 04, 2008 12:53 PM
To: Comments
Subject: RIN 3064-AD35

Mr. Robert E. Feldman
Executive Secretary
Federal Deposit Insurance Corporation

Dear Mr. Feldman,

As a former member of the Federal Home Loan Bank of Pittsburgh's Affordable Housing Council, I am writing today on behalf of the communities and the organizations in West Virginia that encourage, support and develop affordable housing in our State.

Any regulation that discourages the use of FHLBank advances, or has the effect of increasing the cost of FHLBank advances, will decrease the volume of advances and effect the profitability of the FHLBanks.  This, in turn, will have a harmful effect on the Affordable Housing Programs (“AHP”).  By law, the FHLBanks contribute ten percent of their net income to the AHP.  Reducing the FHLBanks profitability will also reduce their AHP contributions.

The AHP is one of the largest private sources of grant funds for affordable housing in the country.  In the first six months of 2008, a combined total of approximately $176 million was made available for regional housing projects nationally.  This is an increase of 24.8 percent over the same period of time last year.  Since the program’s inception in 1989, over $3 billion in AHP funds have been committed by the FHLBanks to help finance 600,000 housing units.  The Pittsburgh Bank has contributed approximately $140,000,000 in supported of over 750 projects in the district.  These projects have provided nearly 23,000 affordable housing units.  Of this total nearly 1,000 units are in West Virginia.  The FHLBank Pittsburgh's contributions of approximately $8,000,000 make it the largest supporter of affordable housing in our State. 

In an era when it is difficult for any entity to find reliable sources of financing, it is vitally important to preserve the funding that the FHLBanks provide to communities across the nation.  In considering a final rule concerning deposit insurance assessments, I strongly urge the FDIC not to adopt a policy that would penalize institutions or the communities they serve based on the use of FHLBank advances.

Thank you for your consideration.

Patrick A. Bond
General Partner
Mountaineer Capital, LP