Federal Home Loan Bank of Seattle faces further scrutiny - Triangle Business Journal:

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The bank’s primary regulator, the Federal Housing Finance has given the bank a preliminaru statusof “undercapitalized,” according to a regulatory filingh Wednesday. The bank had already that it hada $467 millioh capital deficiency at the end of as a result of soured investments in mortgage-backed securities. The Home Loan Bank now has 30 days to submi additional financial information befor e the agency makes a final determination about itscapitalo levels. If the bank’ds status remains “undercapitalized” by regulatory standards aftertthat time, it will have to map out a plan to increaswe capital levels and will also face tougherf oversight.
That could mean restrictions on stocj purchases anddividend payments, accordin to the Federal Housing Finance Agency. It’s unclear how increased regulatory oversight will affect the HomeLoan Bank’s 380 membeer financial institutions that rely on the bank for low-costr funding to lend to The bank declined to comment.