Magazine article American Banker

No Turning Back on SEC Rule, Castaneda Says

Magazine article American Banker

No Turning Back on SEC Rule, Castaneda Says

Article excerpt

Federal Housing Finance Board Chairwoman Alicia Castaneda strongly defended its decision to require Home Loan banks to register with the Securities and Exchange Commission; she argued that the legal, accounting, and policy questions have been addressed.

Responding to the industry trade groups that have continued to challenge the June 23 decision, Ms. Castaneda said Tuesday that the time has come to move forward.

"There is no turning back," she told a conference sponsored by those trade groups. "SEC registration will help support the reputations of the Federal Home Loan banks as solid, capable, respected financial institutions."

America's Community Bankers, the American Bankers Association, the Financial Services Roundtable, and the Independent Community Bankers of America sent a joint letter Aug. 25 asking Ms. Castaneda whether the system's setup as a cooperative will be preserved under SEC registration.

The groups raised several specific concerns, including asking whether the SEC would treat the 12 Home Loan banks differently, what exemptions the banks would be granted to the Sarbanes-Oxley Act, and how the SEC and the Finance Board would resolve issues involving both agencies' turf.

In a Sept. 9 reply that she repeated Tuesday, Ms. Castaneda said her agency's examiners, accountants, and lawyers are working with the SEC and the Home Loan banks to resolve any remaining concerns.

"I and my colleagues believe those necessary accommodations have, in the case of the Finance Board, already been made, and, in the case of the SEC, the intention to make them has been clearly and publicly stated," she told the industry forum.

Ms. Castaneda warned against claiming to support enhanced disclosure while trying to qualify it.

"There is a clear reputation risk in being perceived as saying, as some may characterize it, 'We are for enhanced disclosures, but only sometimes, and only on our own terms,' " she said. …

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