The government on Wednesday approved a rule that makes it easier for Federal Home Loan banks to lend to borrowers that are not members of the system.
The Federal Housing Finance Board authorized the 12 system banks to certify whether nonmember institutions are eligible to receive advances. Approval from the finance board is currently required.
"Nonmember borrowers are a vehicle for enhancing the system and a business opportunity for the (Federal Home Loan) banks," said finance board Chairman Bruce Morrison.
In order to qualify for an advance, a nonmember institution still must meet several criteria, including supervision by a governmental agency.
The rule takes effect 30 days after publication in the Federal Register, which is expected within two weeks.