ICBA Opposes Merger of FHFB with OFHEO
ICBA's Executive Committee has decided that ICBA will strongly oppose any attempts to include the Federal Home Loan Banks in legislation affecting the Office of Housing Enterprise Oversight (OFHEO), the safety and soundness regulator of Fannie Mae and Freddie Mac. Rep. Ed Royce (R-CA) plans to introduce a bill that would merge the FHLBs' regulator, the Federal Housing Finance Board (FHFB), with that of Fannie Mae and Freddie Mac, creating a new agency in the Department of Treasury. Rep. Royce has stated that he lacks confidence in the ability of OFHEO and the FHFB.
While FHFB chairman John Korsmo has come under sharp criticism for proposals such as requiring SEC oversight of the FHLBs' securities disclosures, he has appropriately beefed up his agency's examination and supervision staff as operations of the FHLBs have become more complex. ICBA believes the FHLBs should continue to be regulated and examined by an independent FHFB, which is in the best position to understand and monitor their unique operations and structure.
Rep. Richard Baker (R-LA) has introduced legislation that would eliminate OFHEO, folding it and the Office of Thrift Supervision into a newly named Office of Housing Finance Supervision. ICBA has not at this time taken a position on the Baker bill (H.R. 2575).