On September 2, the Federal Housing Finance Agency (FHFA) issued a proposed rule that would revise the requirements for financial institutions to apply for and retain membership in the Federal Home Loan Banks (FHLB). The proposed rule would change existing membership requirements primarily to: (i) require each applicant and member institution to hold one percent of its assets in “home mortgage loans” in order to satisfy the statutory requirement that an institution make long-term home mortgage loans; (ii) require each member to comply with the foregoing requirement on an ongoing basis, and where applicable, with the requirement that it have at least 10 percent of its assets in “residential mortgage loans”; (iii) define the term “insurance company” to mean a company that underwrites insurance for nonaffiliated persons as its primary business, effectively excluding from Bank membership captive insurers, but permit existing captive members to remain members for five years with certain restrictions on their ability to obtain advances; (iv) require a Bank to obtain and review an insurance company’s audited financial statements when considering it for membership; and (v) clarify the standards by which an insurance company’s “principal place of business” is to be identified in determining the appropriate Bank district for membership. The comment period will be open for 60 days following publication of the proposed rule in the Federal Register.