By The Star Staff
After a series of efforts at the federal level led by the Public Corporation for the Supervision and Insurance of Cooperatives (COSSEC) and the National Association of Community Development Savings and Credit Cooperatives, Inclusiv, the Federal Housing Finance Agency (FHFA) has issued a regulatory interpretation that marks an important milestone for Puerto Rico’s savings and credit cooperatives by opening the doors to apply for membership in the Federal Home Loan Bank (FHLBNY).
The milestone will make it easier for hundreds of coop members to obtain loans for housing.
Mabel Jiménez Miranda, executive president of COSSEC, thanked FHFA “for addressing this issue of great relevance for our cooperatives. The cooperative system has substantially increased its affordable housing initiatives, showing a 34.04% increase in its mortgage loan portfolio over the past five years.”
“This determination represents a significant achievement for our insured cooperatives and recognizes their fundamental role in Puerto Rico’s financial system. This interpretation provides a clear framework that establishes the guidelines for admission to the FHLBNY, allowing our cooperatives to access a wide range of financial products to expand their affordable housing initiatives throughout the Island,” she said.
The milestone was the result of an extensive process that included the collaboration of COSSEC, Inclusiv and 70 credit unions, which requested clarification on eligibility to become members of the Federal Home Loan Bank of New York as part of the Federal Home report FHFA’s Loan Bank (FHLBank) System at 100: Focusing on the Future.
“We congratulate the FHFA for issuing this transcendental regulatory interpretation that will open the doors for savings and credit cooperatives in Puerto Rico to request admission to the FHLB, allowing them to access the offers of said institution to enhance their affordable housing initiatives on the Island. This collaboration between COSSEC, Inclusiv, and our affiliated CDFI cooperatives in Puerto Rico exemplifies how we can work together to effect change to benefit our communities. We anticipate continuing to work alongside COSSEC and our partners on the Island to identify and eliminate existing barriers for cooperatives to access financing opportunities, programs, and tools similar to those available to financial institutions on the mainland,” said Cathie Mahon, president and CEO of Inclusiv.
The regulatory interpretation clarifies the eligibility parameters for obtaining membership, providing two alternatives: be a cooperative certified as a Community Development Financial Institution (CDFI) by the CDFI Fund of the United States Department of the Treasury, or be a financial institution that, even if it is not certified as a CDFI, is a federally uninsured credit union, and is still eligible.
In both cases, a cooperative applying for membership must meet the same standards of financial conditions that apply to other institutions under FHFA regulations. Importantly, this membership will allow cooperatives to access a wide range of financial products and services. to promote affordable housing, including low-cost financing, community development programs and financial education resources.
“Together with the cooperative sector, the state government, and the federal government, we have been joining forces to expand our efforts to benefit the population we serve, recognizing cooperatives’ fundamental role in the local financial landscape, promoting growth and the economy of the Island,” said the executive president of COSSEC.
On the other hand, Miguel Colón, executive president of the Cristóbal Rodríguez Hidalgo Cooperative, expressed that “this is a great achievement that benefits almost 33% of the population of Puerto Rico who are members of savings and credit cooperatives. With this new interpretation, we can impact the lives of thousands of Puerto Ricans in disadvantaged communities by having access to decent and affordable housing.”