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CHLA backs easing FHLBank rules while expanding access for IMBs
CHLA said IMBs account for about 84% of mortgage originations and urged FHFA to link any continued Federal Home Loan Bank membership to ongoing mortgage lending activity.
HousingWire reports that the Community Home Lenders of America, CHLA, urged the Federal Housing Finance Agency to repeal 12 CFR Part 1272, which governs new Federal Home Loan Bank System activities. In an Aug. 12 letter to FHFA general counsel Clinton Jones, CHLA argued the regulation is overly prescriptive and duplicative, limiting operational flexibility.
CHLA said any change should keep “guardrails” to prevent expansion into activities that could create unnecessary risk or blur the distinction between the Federal Home Loan Banks and Fannie Mae and Freddie Mac. The trade group laid out three priorities for FHFA, including maintaining safeguards for significant new activities and expanding membership and liquidity access to independent mortgage banks.
CHLA also warned that repealing Part 1272 could make it easier for FHLBanks to expand residential mortgage purchase activities through their Acquired Member Assets programs, potentially without the same level of review for new or material risks. The group renewed its request to make independent mortgage banks eligible for FHLBank membership, saying the current exclusion no longer reflects the structure of the mortgage market, and noted IMBs represent about 84% of mortgage originations.
According to HousingWire, CHLA further asked that ongoing FHLBank membership remain tied to continued mortgage lending activity and said it has previously opposed proposals that would move FHLBanks closer to direct loan purchasing functions associated with the government-sponsored enterprises.