The proposed rule would:
* Establish a new quantitative test requiring all members to hold one percent of their assets in home mortgage loans (HML) and to do so on an ongoing basis. Currently, applicants for membership need only demonstrate a nominal amount of HML on their balance sheet at the time of their application, but not thereafter.
* Require certain members that are subject to the 10 percent residential mortgage loans (RML) requirement to adhere to this requirement on an ongoing basis. Currently, these members are subject to the 10 percent RML requirement only when they initially apply for membership in a Bank, but not thereafter.
* Define "insurance company" to mean a company that has as its primary business the underwriting of insurance for nonaffiliated persons. This would continue to include traditional insurance companies but would effectively exclude captive insurers from membership and prevent entities not eligible for membership from gaining access to Bank advances through a captive insurer. Membership of existing captive insurers would be "sunset" over five years with defined limits on advances.
* Clarify the standards by which an insurance company's "principal place of business" is to be identified in determining the appropriate Bank district for membership.
Interested parties are invited to submit comments on this proposed rule within 60 days after the rule is published in the
Link to proposed rule (http://www.fhfa.gov/SupervisionRegulation/Rules/Pages/Members-of-Federal-Home-Loan-Banks-2014.aspx) [Note: the proposed rule will also be published in the
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