WASHINGTON — The Federal Housing Finance Board conceded to public commenters and removed a provision from its final capital rule that could have made it less likely for Federal Home Loan Bank members to receive dividends. The final rule prohibits a FHLB from issuing new excess stock to members if the amount of member excess stock exceeds 1% of the FHLB's assets, but removed the proposed retained earnings minimum. CUNA and NAFCU had submitted a joint comment letter on the proposal, stating, "Although modifications to the FHLB System may certainly be necessary as a means to enhance the safety and soundness of the FHLBs, the changes outlined in the proposal are so significant, and possibly detrimental to the FHLB members." Financial institutions and the FHLBs had opposed the proposal.

After the final rule came out, NAFCU Senior Counsel and Director of Regulatory Affairs Carrie Hunt commented, "When this rule was initially proposed there was a proposal, which had a retained earnings minimum as well as a limit on member excess stock, which NAFCU did not support. We were pleased that the final rule did not contain this retained earnings minimum." She noted that about 10% of FHLB members are credit unions.

The American Bankers Association and the Independent Community Bankers of America were also supportive of the change.