FHFB To Propose "Voluntary" Registration Rule
In the latest round of his controversial battle to force the Federal Home Loan Banks to register with the Securities and Exchange Commission, Federal Housing Finance Board chairman John Korsmo announced he will propose a regulation requiring the FHLBs to "voluntarily" register a class of securities under the Securities Exchange Act of 1934. Korsmo expects the FHFB to approve the proposal, which will be open for a 120-day public comment period, at its September 10 meeting.
"It is my hope that each (FHL)Bank will use this [comment] period to initiate individual discussions with SEC staff leading to a decision to register," Korsmo said. "If so, this proposed regulation will be finalized to facilitate voluntary registration."
Chairman Korsmo said the proposal responds to requests from two FHLBs for a regulation requiring voluntary registration with the SEC. In its request, the board of the FHLB of San Francisco said the FHFB should assist the boards of directors of the FHLBs by adopting a regulation addressing the directors' fiduciary duty regarding voluntary registration and requiring registration if the FHFB deems it appropriate.
As the presidents wrestle with this tough registration issue, they are also wrestling with whether to support or oppose folding their regulator, the Federal Housing Finance Board, under the Treasury Department as legislation moving Fannie's and Freddie's regulation there is considered. We understand that some FHLB presidents favor just such a course, as do thrift powerhouses Washington Savings and Washington Mutual. The ICBA does not.