Plan To Put CU Rep On FHLB Board Is Quashed
CUNA and NAFCU rarely agree on anything these days, but the chief executives from the two credit union trade groups apparently joined together for one initiative this spring.
Both CUNA President Dan Mica and NAFCU Chief Executive Fred Becker were backing a bid to get a credit union representative appointed to the board of the Federal Home Loan Bank of Atlanta. Ralph Reardon, chief financial officer for Coastal FCU, which is a member of the regional bank, lost in his bid to be named to an FHLB board. Had he won, he would have been only the second credit union executive to serve on the board since the mortgage-finance system was opened to credit unions under the 1989 s&l Bailout Bill. Currently, Jack Harper, president of First Service FCU, Groveport, Ohio, who sits on the board of the Cincinnati bank, is the only credit union executive on an FHLB board.
Reardon had finished way down in the balloting for the Atlanta bank's board, eighth out of nine candidates.
But Mica and Becker, who believe the growing credit union membership in the system invites board representation, urged that Reardon be added to the board by the chairman of the Federal Housing Financing Board, the panel that oversees the 12 regional banks and which has discretion to appoint a handful of directors. The request was denied.
The growing need for credit unions to help finance mortgage operations, and the attractive return on mandatory FHLB stock-the Atlanta bank paid a 6% dividend for last year's fourth quarter-has prompted an explosion in credit union membership in the system to more than 600 institutions over the past five years. That's still only a tenth of the total membership, with the bulk of the membership dominated by s&ls, which are required to belong , and commercial banks.
With the advent of an FHLB secondary market alternative to Fannie Mae and Freddie Mac, look for increasing numbers of credit unions to join the system over the coming years and more pressure to add credit union representation to the boards of the various banks.