Federal Home Loan Bank of Chicago

Summary: The Federal Home Loan Banks (FHLBanks) support the proposed rule to align capital requirements with actual risk exposures, specifically praising the removal of mortgage servicing asset deductions and the reduction of risk weights for residential mortgages. They argue that the current framework creates a disproportionate capital burden on community banks and request further specific adjustments to the risk weight for FHLB credit enhancement obligations to 100 percent.