The Federal Housing Finance Board has shot down a resolution to seek an outside legal opinion on the board's legal authority to compel the Federal Home Loan Banks to register their stock.Finance Board members Franz Leichter and Allan Mendelowitz argued that a legal opinion by the U.S. Department of Justice would ensure that the board is moving in the right direction if it proceeds with a rule that requires FHLBank registration with the Securities and Exchange Commission. By seeking such an opinion "we can avoid a mistake," Mr. Mendelowitz said at the board meeting. The two Democratic board members noted that several commenters have questioned the board's authority to issue an SEC registration rule, and the pair said a lawsuit is likely. But the board rejected the resolution by a 3-2 vote. Finance Board Chairman John Korsmo said adoption of the resolution would "needlessly and perhaps irreversibly corrode the independence of the Finance Board and the authority and stature of highly skilled and committed staff."

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