Steve Rosenbaum, President and CEO of CBAI member Prospect Federal Savings in Worth, and Chairman of the Federal Home Loan Bank of Chicago and its’ Council of FHLBanks, thoughtfully responded to a call for consolidation in the FHLB System by the ABA-affiliated North Carolina Bankers Association. Read BankThink article.
Rosenbaum countered Woodward’s proposed halving the number of FHLBanks by highlighting that each of the 12 Banks have diverse memberships and a cooperative structure that reflects their regional nature and a focus on serving the needs of their members and local communities.
He noted that the current FHLB System has worked well for more than eight decades. Throughout the most recent financial crisis the FHLBanks remained a critical source of liquidity for members and the entire financial system. Unlike the too-big-to-fail banks and financial firms FHLBanks did not require taxpayer-funded bailouts.
For many years the individual FHLBanks have had the ability to voluntarily consolidate if their Boards of Directors felt that it was in the best interests of their members and communities. Rosenbaum said, “[T]he power of doing so voluntarily rests in the hands of the institutions that own and make up the national network of regional cooperatives.”
CBAI supports Rosenbaum’s position on System consolidation and his important service on the FHLB-Chicago and Council Board which benefit Illinois community banks.