Members of the Federal Home Loan Bank of Chicago could see their dividends reduced and stock redemptions delayed or denied under a cease-and-desist order being considered by the Federal Housing Finance Board, the Chicago bank has disclosed in a securities filing.The Chicago bank said it received a draft of the C&D order on Sept. 24 and is in discussions with the Finance Board. The Chicago bank paid a 2.8% dividend in the second quarter. In a letter to members, Chicago FHLBank president Mike Thomas said the C&D order would not affect any services or products. Mr. Thomas also said the "possibility of a merger with the Dallas FHLBank continues," but that an agreement has not been reached.

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