Shelby Weighs in on FHLB Registration
This week Senate Banking Committee Chairman Richard Shelby indicated that he may not share the views of FHFB Chairman John Korsmo and Treasury Under Secretary Peter Fisher that the Federal Home Loan Banks should register with the SEC.
In a written statement to the American Banker, Chairman Shelby said that "full disclosure of pertinent financial information regarding the [FHLB] system is extremely important. Transparency serves the public interest, and that is the most critical issue in the debate" over whether the FHLBs should fall under the jurisdiction and registration requirements of the SEC. He went on to state, "I don't feel it is appropriate to presume that a particular method that provides such protection under one set of circumstances necessarily provides it in another." Ultimately, he said, the Banking Committee's responsibility is to "ensure that disclosure is both meaningful and designed to protect the taxpayer."
ICBA, along with the majority of FHLBs, strongly supports full, accurate, transparent and enhanced securities disclosure for the FHLBs, but believes that disclosure should be appropriate for the unique cooperative structure of the system. Forcing the privately owned FHLBs to follow a registration and disclosure format designed for public companies is likely to result in a view of the FHLBs' financial condition more cloudy than clear. We have urged Chairman Korsmo not to relinquish the FHFB's authority over the FHLB securities disclosures and turn them over to the SEC.