#2023-8, April 21, 2023

Sherrod Brown (D – OH) Pens Letter to Federal Housing Finance Agency

On Thursday April 20^th, Chairman to the Senate Banking Committee Sherrod Brown penned an open letter to the Director of the Federal Housing Finance Agency (FHFA), Sandra Thompson, that requested the agency study the role of the Federal Home Loan Bank (FHLB or FHLBBank) considering recent bank failures.  Chairman Brown stressed concerns that the FHLBs are not structured to be a lender of last resort for financial institutions and requested that an upcoming report from FHFA include analysis on the provision of liquidity to Silvergate, Silicon Valley Bank, and Signature Bank and whether these actions were consistent with FHFA and FHLBBank policies, and the FHLBBank system’s mission.  Director Sandra Thompson testified in summer 2022 that an FHLB System review and analysis would be done, so this process has been underway for some time.

To read Senator Brown’s letter, please click here.

Federal Deposit Insurance Corporation (FDIC) Board Meeting Highlights

The FDIC’s Board of Directors met on April 18^th in open session to discuss the Semiannual update of the Deposit Insurance Fund (DIF) Restoration Plan.  The DIF replenishment may conclude as early as 2024 as agency staff recommend no changes to the Restoration Plan, but a special assessment will be required to recover losses resulting from the recent bank closures.  The favorable conditions needed to see DIF replenishment conclude ahead of schedule in 2024 are, most notably, stable interest rates.  Even if these conditions don’t materialize, the fund is on track to reach the minimum by the statutorily required 2028 deadline.

The FDIC is required by law to recover the estimated $19.2B in losses to the DIF through special assessments, and the Association along with its state and national trade association partners will be monitoring this process closely.  FDIC staff indicated that the special assessment would occur through notice-and-comment rulemaking sometime in May 2023.

To read full details on the FDIC Board Meeting, please click here.
To read the Restoration Plan Semiannual Update, please click here.