The Senate's GSE bill directs the Securities and Exchange Commission to recognize the unique structure of the Federal Home Loan Banks as a way to facilitate voluntary registration of FHLBank stock.The GSE regulatory bill, proposed by Senate Banking Committee Chairman Richard Shelby, R-Ala., does not mandate SEC registration, according to America's Community Bankers managing director Robert Davis. However, the bill removes a "huge stumbling block" to voluntary registration, he said. The bill directs the SEC to address the unique nature of the FHLBanks' Refcorp payments, redeemable capital stock, and the joint-and-several liability of the banks' issuances of consolidated debt. Over the past 18 months, the FHLBank members have resisted Bush administration efforts to get the FHLBanks to register because of concerns that the SEC could not adapt its rules to deal with institutions that are cooperatives with a form of stock that is not publicly traded. "We are very happy with the bill," Mr. Davis said. The Shelby bill would also convert the Office of Finance, which manages FHLBank issuances of consolidated debt, into a jointly owned subsidiary of the 12 FHLBanks.

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