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Robert E. Feldman
Ref: Notice of Proposal Rulemaking Deposit Insurance Assessments-RIN 3064-AD35 FHL Banks
Dear Mr. Feldman,
On behalf of BPD Bank, I am submitting the following comments regarding the Federal Deposit Insurance Corporations proposed rule concerning deposit insurance assessments. I appreciate the opportunity to address this important issue.
The FHLBanks provide advances in a consistent, reliable and safe manner for their members. The availability of FHLBank advances as a means of wholesale funding is especially important to the community banks that represent the vast majority of the FHLBank Systems 8,100 members. The FHLBanks are playing a vital role in alleviating the current shortage of liquidity in the mortgage markets.
Penalizing the use of FHLBank funding is contrary to the current efforts by the Administration, Congress, and the Federal Reserve to restore liquidity and bolster confidence in the financial system. Because the markets are extremely volatile and uncertain, a rule like this could result in unintended negative consequences.
Under this proposal, financial institutions that use FHLB advances will be faced with several undesirable outcomes:
At a minimum, it would make sense to delay the rules implementation as it relates to Home Loan Advances until markets settle down. A period of 12 months, until December 31, 2009, which is the expiration date of the Emergency Economic Stabilization Act, seems appropriate.
FHLBank membership has long been viewed as protection for deposit insured funds because FHLBank members have access to reliable and consistently available source of liquidity. If the FDIC decides to proceed to a final rule concerning deposit insurance assessments, I strongly urge you not to adopt a policy that would penalize institutions based on their use of FHLBank advances.
|Last Updated 11/12/2008||Regs@fdic.gov|