FHFB Rejects Request for DOJ Opinion on SEC Registration
In a contentious meeting, the Federal Housing Finance Board voted 3-2 in a party line vote against a resolution requesting the Department of Justice's opinion regarding the FHFB's authority to require the FHLBanks to register their equity securities with the Securities and Exchange Commission. The resolution was offered by directors Franz Leichter and Allan Mendelowitz. The FHFB has received about 20 comment letters on the proposed regulation and a number, including ICBA's, have questioned whether the FHFB has the authority to require voluntary registration.
Director Leichter said the DOJ opinion was needed to clear up the issues of legal authority so the matter of enhanced disclosures could move forward. He complained that some months ago he had requested FHFB legal staff to prepare a memorandum on authority, and that it still was not available. Thus, he sought an outside opinion.
Chairman John Korsmo and Director Alicia Castaneda warned that going to DOJ for an opinion would reflect badly on the FHFB staff's ability and, by doing so, the FHFB would be giving away authority to another agency. Chairman Korsmo said it would corrode the FHFB's oversight authority over the Federal Home Loan Banks.