The Federal Housing Finance Board does not have the legal authority to repeal the Federal Home Loan Banks' long-recognized exemption from Securities and Exchange Commission registration, according to a legal opinion obtained by America's Community Bankers. The opinion by the law firm, based in Washington, casts doubt on the legality of the Finance Board's proposal that would mandate the registration of FHLBank stock with the SEC. It also challenges a legal opinion by FHFB's general counsel, claiming it is "demonstrably erroneous." The Finance Board's opinion "ignores a long line of decisions by the Supreme Court and lower federal courts, which establish that the Finance Board cannot, without an explicit grant of authority, overturn Congress' decision that securities issued by the FHLBanks are exempt from SEC registration," the opinion noted. ACB sent copies of the opinion to the five members of the Finance Board.

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