Member Products Policy Revisions – Effective May 1, 2022

last updated on Friday, April 29, 2022 in Business News

A brief summary of the revisions to the Member Products Policy (effective May 1, 2022) is below:

Expanded and revised Section V. Membership Approval.

  • Determination for Appropriate Bank District for Membership (expanded section to include alternative principal place of business requirements specific to CDFI’s and insurance companies if they are unable to meet the primary principal place of business requirements)
  • Addition of Rebuttable Presumption section as requirements for rebuttable presumptions are noted in the regulations
  • Removal of the Termination of Membership section as this information is already addressed in Section VI. Credit Standards. 

Clarified and adjusted Section VII. Collateral Standards

  • Clarified the definition of collateral, and the extent of the Bank’s lien on ineligible collateral
  • Detailed the other real estate related collateral categories subject to a 300% of member capital limit
  • Removed Federal Family Education Loan Program (FFELP) guaranteed student loans as eligible collateral

Additional definitions to Section XII. Member Products Policy Glossary

  • Community Reinvestment Act (CRA)
  • De Novo Insured Depository Institution
  • Home Financing Policy (HFP)
  • Mortgage-Related Assets
  • Long-Term Home Mortgage Loan
  • Non-Federally Insured Credit Unions
  • Total Assets

Addition of two new appendices, Membership Eligibility Standards and Financial Condition Standards were also added as Section XIII and Section XIV respectively. Each appendix states specific membership eligibility or financial condition requirements for depository and non-depository applicants.

  • Section XIII Appendix A - Membership Eligibility Standards:
    • Duly Organized
    • Subject to Inspect and Regulation
    • Makes Long-Term Home Mortgage Loans
    • Mortgage-Related Asset Percent Requirement
    • Character of Management
    • Home Financing Policy
  • Section IV Appendix B – Financial Condition Standards
    • Safety & Soundness Rating
    • Capital
    • Earnings
    • Asset Quality
    • Liquidity Reserves
    • Leverage
    • Reinsurance