Seattle FHLB Plan To Expand Members'Borrowing Ability
SEATTLE - (06/23/05) -- The financially ailing Federal HomeLoan Bank of Seattle said Wednesday it has received regulatoryapproval for a plan that will give members new borrowing capacity.Under the plan, member banks and credit unions can use mandatorystock to collateralize new advances from the bank. Under thecurrent rules, the mandatory membership stock can not be usedtoward securing advances. Instead, advances had to be collaterlizedby either excess Class B (1) or Class B (2) stock. The Seattle banksought approval of the plan from the Federal Housing Finance Boardwhich has the FHLB under a strict supervisory plan requiring abuild-up of capital and barring it form paying dividends for threeyears. The Seattle bank is owned by its 375 financial institutionmembers, including 79 credit unions.