ICBA - News - News Release - ICBA Calls for Fair Share Consideration for ‘In-District’ Community Banks Under AHP
ICBA News Release Header


ICBA Calls for Fair Share Consideration for ‘In-District’ Community Banks Under AHP

Washington, D.C. (April 28, 2006)—The Independent Community Bankers of America encouraged the Federal Housing Finance Board (FHFB) to ensure that community banks operating only within their Federal Home Loan Bank (FHLB) district get their fair share of their district's popular Affordable Housing Program (AHP) funds as restrictions on out-of-district lending are lifted.

"ICBA does not object to the removal of the restrictions on use of AHP funds out-of-district, but the rule should continue to permit the FHLB to provide some scoring points for in-district projects for at least a portion of their AHP funds to ensure that those members that do not operate out-of-district can receive their fair share of funds," ICBA said in a comment letter to FHFB on its proposal to allow out-of-district lending in the AHP. Many community banks use the AHP and find that it is a beneficial tool in helping them meet the affordable housing needs of their communities, particularly for first-time homebuyers.

In its letter, ICBA further urged the FHFB to closely monitor the flow of AHP funds after the removal of geographic restrictions to ensure that the majority of funds do not flow out-of-district once restrictions are removed. Nearly all FHLBs currently permit the use of AHP funds for out-of-district lending to some extent, but the proposal under consideration would encourage the flow of AHP funds across district borders.

ICBA supports the FHFB's proposal to give greater consideration to AHP projects that provide housing for low- or moderate-income households displaced by a natural disaster, to projects in rural areas and to first-time homebuyers. "While ICBA supports some level of uniformity among FHLBs in the system for scoring projects, sufficient flexibility should be maintained in order to address the unique needs of each district," ICBA wrote in its comment letter.

To read the entire comment letter, please to go www.icba.org.