Federal Home Loan Banks were handed the authority to approve system membership applications, under a rule finalized by the Federal Housing Finance Board.

The measure, approved July 3, is part of a larger effort by the finance board to farm out day-to-day management functions to the 12 district banks.

Under the rule, applicants denied membership may appeal the district bank's decision to the finance board.

The rule also makes it easier for institutions that were recently subject to scrutiny by their primary regulator to join the system. Banks and thrifts that have either just received a charter or just gotten permission to acquire another institution can take advantage of a streamlined applications process.

The rule takes effect 30 days after it appears in the Federal Register, which is expected this week.

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