Treasury, HUD, FHFB Urge SEC Registration for FHLBanks
"We call on each FHLBank to now act without delay to engage with the SEC in the process of voluntary registration of a class of equity securities under the Securities Exchange Act of 1934 to bring your Bank's quarterly and annual reports into compliance with the standard for public issuers of securities," wrote Treasury secretary John Snow, HUD secretary Mel Martinez and Federal Housing Finance Board chairman John Korsmo in a joint letter to each FHLBank.
The letter referenced the work done by the FHLBanks, the FHFB, the SEC and the administration over the last year to work through the issue of SEC disclosures for FHLBs. "With these critical issues resolved, it has been determined that compliance with the Exchange Act, as interpreted and enforced by the SEC, will not have an undue effect on the operations, structure, or services and products offered by the (Federal Home Loan) Banks," wrote Snow, Martinez and Korsmo.
Indirectly referencing the recent reporting and disclosure problems of another GSE, Freddie Mac, to underscore the importance of providing periodic financial and governance reports on terms "familiar to investors," the letter stated, "We now ask that you accept Exchange Act compliance and SEC jurisdiction as part of the responsibility flowing from your public endowment and ready access to agency debt markets."
ICBA has supported enhanced disclosures for the FHLBanks but has strongly opposed subjecting the FHLBanks to SEC jurisdiction. ICBA believes oversight of FHLBank disclosures should remain at the Federal Housing Finance Board due to the unique characteristics of the system. FHLBank boards are now discussing how to respond to the letter and whether they share the views of Snow, Martinez and Korsmo that all issues have been resolved.