Proposed FHFA Rule Pushes REITs Out Of FHLB System

A new rule proposed by the Federal Housing Finance Agency (FHFA) would force some REITs to look for a new source of funding by redefining ‘insurance company’ to exclude the kind of captive insurance firms that some had been using to access secure, low-cost debt from Federal Home Loan Banks (h/t Jody Shenn at Bloomberg). If the rule is put into effect as written following the 60 day public comment period it would sunset captive insurance involvement over the next five years. “The proposed rule would revise FHFA’s existing Bank membership regulation to ensure that members maintain a commitment to…