WASHINGTON - The Federal Housing Finance Board has put aside a controversial plan to lift retained earnings at the Federal Home Loan Banks, which could have forced as many as half of the 12 regional banks to trim the lucrative quarterly dividends they pay their bank and credit union members.
The capital plan has been shelved indefinitely because of a lack of consensus on the five-member FHFB, the regulator for the 12 FHLBs, sources told The Credit Union Journal. The plan came under withering opposition from the thrifts that continue to make up the vast majority of the 8,000 members of the FHLBs, as well as the commercial banks and credit unions, which make up most of the rest.
The Finance Board was expected at its meeting last week to begin filling almost 60 vacancies among public interest directorships on each of the boards of each of the 12 banks, something that congressional critics have urged it to do.
Credit union lobbyists, who have been working for several years to get credit union representatives on the FHLB board, hope that some of those positions will be filled by CU representatives. They argue that as credit unions become a larger part of the system-almost 1,000 credit unions are members of one of the FHLBs - they should have a greater role in setting policy.
However, they face an uphill battle, as most of the boards are still dominated by thrifts, who see themselves as main competitors to the credit unions and the FHLBs as their own turf.
Even though the Congress opened the system to credit unions and commercial banks in 1989 as part of the S&L Bailout.
Earlier this month the FHLB Atlanta named Thomas Webber, CFO at IDB-IIC FCU in Washington, D.C., to its board. He is the only credit union executive on any of the FHLB boards.
Ed Roberts can be reached at robertscuj
