CUNA Speaks Out on Virtual Impossibility of CU Getting on FHLB Board

WASHINGTON-On behalf of CUNA, Coastal Federal Credit Union Senior Vice President and Chief Financial Officer Ralph Reardon explained to the Federal Housing Finance Board that it is nearly impossible for a credit union Federal Home Loan Bank member to get on the board. The FHFB was slated to hold a hearing on the FHLB Board election process Jan. 23. According to CUNA, about 600 credit unions are members of the 12 FHLBs. Though the number of credit unions varies among the districts, approximately 10% of FHLB members overall are credit unions, 2002 data shows, yet they are not represented on the boards. That is namely because votes are based upon the institution’s FHLB assets. Under the current policy, “directors cannot be employed by or serve on the board of a FHLB member institution while they are serving on the board of the FHLB in their district.” CUNA requested that FHFB consider whether it has the authority to change this situation and, if not, if the regulator would work with Congress to fix the problem. “CUNA wants to cooperate with the FHFB to coordinate efforts to achieve this goal of assuring that credit unions and other minority groups are adequately represented on the FHLB Boards,” Reardon said. He has run for election at the Atlanta FHLB twice to no avail. He also encountered further hurdles trying to get appointed. CUNA President and CEO Dan Mica raised this issue in August 2002 when the trade group met with FHFB Chairman John Korsmo and agency staffers. CUNA argues that the FHLB System has much to gain from credit union experience and input.