Our Position

Housing and Mortgage Finance

Letters to Congress

Title Recipient Date
Senate Banking Committee, House Financial Services Committee 03/11/24
U.S. Senate 12/15/23
Reps. Madeleine Dean and Kelly Armstrong 06/11/21
116th Congress 03/26/20
Congress 03/09/20

Letters to Regulators

Title Recipient Date
Department of Veterans Affairs 02/09/24
FDIC, Fed, OCC, CFPB 09/20/23
Federal Housing Finance Agency 09/18/23
CFPB, FDIC, Fed, FHFA, OCC 08/21/23
Federal Housing Finance Agency 08/14/23

Title Committee Presenter Date

Related News

ICBA Supports Congressional Letter Urging FHFA to Align Capital Standards with Banking Regulators

Dec. 01, 2022

ICBA Press Release Banner 2020

Washington, D.C. (Dec. 1, 2022) — The Independent Community Bankers of America (ICBA) expressed support for a new bipartisan letter from members of Congress urging the Federal Housing Finance Agency to align its capital rules with those of federal banking regulators to avoid penalizing community banks for supporting local communities during the COVID-19 pandemic. The letter from Reps. David Scott (D-Ga.), Blaine Luetkemeyer (R-Mo.), French Hill (R-Ark.), Ann McLane Kuster (D-N.H.), and Sean Casten (D-Ill.) urges the FHFA to avert an unnecessary liquidity crunch that would be wholly attributable to outdated FHFA capital rules.

“ICBA and the nation’s community banks support today’s House letter calling on the FHFA to address its capital restrictions on accessing Federal Home Loan Bank advances, which threaten to transform the recent rapid market decline in bond prices into a longer-term problem if they are not aligned with federal banking regulators’ policies,” ICBA President and CEO Rebeca Romero Rainey said. “Without federal regulators collaborating to immediately align their capital rules, community banks may soon be forced to realize what are now only unrealized losses — an unfortunate outcome that could needlessly undermine access to liquidity amid a period of economic volatility and uncertainty.”

In a recent letter to the agencies, ICBA offered several approaches to resolve the impact of their inconsistent regulations. Federal banking regulators may provide written authorization to each affected bank’s Federal Home Loan Bank to ensure continued access to advances. Alternatively, the FHFA could issue an interim final rule aligning its regulations on tangible capital with those of the banking agencies, avoiding unintended consequences for banks and the financial markets.

The change is needed given the impact of sudden changes to bond market values. Due to low interest rates and emergency stimulus payments to Americans during the COVID-19 pandemic, many banks conservatively invested excess liquidity in low-risk U.S. Treasuries, agency mortgage-backed securities, and municipal securities. The Fed’s rapid rate hikes are now shrinking bond prices, causing “paper” losses for some bank balance sheets that would have minimal impact if not for the FHFA’s unique capital rules that limit access to FHLB advances for banks under certain capital levels.

ICBA continues urging the FHFA and the federal banking regulators to work together to quickly resolve this issue.

About ICBA

The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. ICBA is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education, and high-quality products and services.

With nearly 50,000 locations nationwide, community banks constitute roughly 99 percent of all banks, employ nearly 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding more than $5.8 trillion in assets, over $4.8 trillion in deposits, and more than $3.5 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.

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