The Federal Housing Finance Agency (FHFA) has terminated all remaining provisions of the consent cease and desist order applicable to the Federal Home Loan Bank (FHLBank) of Chicago. The order was terminated because of what the FHFA describes as ‘improvements in the FHLBank's financial condition and capital position, resolution of risk management concerns, and consideration of specific commitments and assurances made by the FHLBank's board of directors to FHFA.’
The order was put in place on Oct. 10, 2007, by the Federal Housing Finance Board, a predecessor agency to the FHFA. Among other things, the order required improvements to risk management policies and practices at the FHLBank of Chicago and prohibited the FHLBank from buying back stock of its members and former members or paying dividends without the FHFA's approval.
The FHLBank previously satisfied certain provisions of the order by submitting new market risk management policies and successfully completing the capital stock conversion mandated by the Gramm-Leach-Bliley Act on Jan. 1.
‘The Chicago FHLBank's improvements in earnings, capitalization, and risk management coupled with its conversion to a new capital structure represent significant achievements in the bank's recovery,’ says FHFA Acting Director Edward J. DeMarco. ‘The bank has satisfied the requirements of the order and has committed to focus its business activities on advances to members.’