Bank and thrift executives have attacked a proposal that would require all Federal Home Loan Bank borrowers to prove they support first-time homebuyers.
In 49 comment letters filed with the Federal Housing Finance Board last week, officials complained that the plan would require banks and thrifts to file their most recent Community Reinvestment Act evaluations while credit unions only would fill out a form documenting loans to first-time homebuyers.
"I challenge you to explain to me how you possibly can allow credit unions access to the FHLB system with different requirements than those prescribed for a community bank," wrote Manaric E. Joyner, president of Roanoke Rapids Savings Bank in North Carolina.
Some suggested that the finance board bring credit unions under several CRA reporting requirements.
Credit unions should be required to document their marketing plans for low- and moderate-income households, provide the distribution of their loans by borrower income, and furnish their record of opening branches in poor areas, said Robert R. Davis, director of government relations for America's Community Bankers.
"Credit unions that want all the privileges of being members of the system should adhere to all the attendant obligations as well," Mr. Davis wrote.
Credit union officials also criticized the proposal, arguing that it could be the first step toward extending CRA coverage to their industry.
"CRA criteria ... do not take into account the uniqueness of credit unions," wrote Valerie Y. Moss, regulatory specialist at the Michigan Credit Union League. "Credit union service is not available to the general public. ... Therefore, applying CRA or CRA-like criteria would be inappropriate."
Federal law requires banks using the Home Loan Bank System to serve first-time homebuyers. Under the proposal, which the finance board is expected to complete in early spring, system members would be put on probation if they don't sufficiently support first-time homebuyers. If the institution does not improve, it would become ineligible for long-term advances or affordable-housing funds.
At the end of 1996, 4,072 commercial banks, 1,874 thrifts, and 172 credit unions belonged to the Federal Home Loan Bank System.