FHLB Brings Together Bankers and CUs to Inform Congressional Delegation, Discuss COVID Response

On Tuesday, March 24, WBA Chairman Mark Meloy (CEO of First Business Bank, Madison) and WBA President and CEO Rose Oswald Poels participated in a call briefing House Financial Services member Rep. Bryan Steil (R-1) and key staff from Wisconsin’s congressional delegation on how the state’s financial institutions are addressing the coronavirus pandemic and what they’re seeing from consumers. The call, organized by the Federal Home Loan Bank of Chicago (FHLB), was designed as a briefing for the delegation.

Meloy stated that, from a very high level, he has seen two types of customers at First Business Bank. The first is deposit-centric, focused on safety and soundness; the second is the borrower, who is largely focused on working capital.

Oswald Poels reiterated the need for immediate Congressional action. “We are hearing from members that their customers need certainty and stability. Congress needs to pass a stimulus measure as soon as possible.”

All financial institutions agreed on longtime requests like changes to Reg D and major items related to deferrals, modifications, exams, and TDRs that should be addressed in legislation and at the regulatory agency level.

During the 30-minute call, the group discussed retail topics (including loan demand and cash deposits and withdrawals), regional differences in the impact of the virus, and relief actions banks are currently taking (including closing branch lobbies, modifying hours, and special loan programs).

WBA and WCUL each called on Congress to take action, including authorizing certain borrower relief programs, low-interest or no-interest loans, forbearance, mortgage payment relief, and other programs. Additionally, FHLB-Chicago's David Feldhaus, senior vice president - external affairs, provided an update on FHLB relief actions, including the agency’s perspective on credit markets. The group also discussed the need for additional action, with a focus on regulatory relief, monetary policy, and fiscal policy. FHLB reported on its key findings:

  • Despite severe market volatility, FHLB Chicago has been able to fully meet all member requests for funding, exactly as the Bank is designed to do.
  • The Bank has successfully transitioned all 450 employees to remote work. FHLB-Chicago has been a leader among FHLBs in such preparations.
  • MPF Program actions are in place, including forbearance on mortgage loans and suspension of foreclosures and evictions.
  • In response to an inquiry from a Senate office from another state, FHLBs have provided a package of four legislative changes to Congressional leaders that would help the Bank and its members expand small business lending (SBA loans, increase CFI asset cap) and facilitate construction of health care and other municipal projects via Letters of Credit.

WBA will continue to facilitate idea exchanges and conversations between the public and private sectors as we all work together to help our state and nation weather this crisis.