Membership Eligibility Requirements
A financial institution or insurance company may be eligible to hold stock in FHLB Dallas if it meets the following criteria.
The institution is duly organized under federal or state laws.
Subject to Inspection and Regulation
The institution is subject to inspection and regulation under banking or similar laws of a state or federal regulatory agency, or, in the case of a CDFI, is certified by the CDFI Fund.
Makes Long-Term Home Mortgage Loans
The institution either purchases or originates long-term home mortgage loans. Long-term mortgage loans are defined as home mortgage loans with a maturity of five years or more. (An institution may also qualify through a mortgage banking operation or by purchasing and holding mortgage-backed securities.)
The institution has at least 10 percent of its total assets in residential mortgage loans (if applicable).
Exception to 10-Percent Rule
Community Financial Institutions (defined as FDIC-insured depository institutions with average total assets over the preceding three-year period of less than $1.108 billion, adjusted annually) are exempt from the 10-percent rule.
The institution's financial condition is such that advances may be safely made.
Management History and Home Financing Policy
The institution's management history and its home financing policy are consistent with sound and economical home financing.
Application Review Standards Used to Evaluate Insured Depository Institutions
The institution meets or exceeds all current regulatory capital requirements.
The institution has been profitable in at least four of the last six quarters.
The institution has not experienced significant deterioration in its financial condition since its last regulatory examination.
The institution has received an unqualified opinion from its external auditor relating to the most recent audit of its financial statements.
The institution has received a composite CAMELS rating of 1, 2 or 3 within the last two years.
Neither the institution nor its management is subject to any enforcement action. (If an enforcement action exists, the institution should call to discuss the status of the action and the progress made to date in complying with the terms of action. Enforcement actions do not necessarily prevent an institution from becoming a member.)
Neither the institution nor any of its directors or senior officers have been the subject of any relevant criminal, civil or administrative proceedings reflecting on creditworthiness, business judgment or moral turpitude since the last regulatory examination. In addition, there are no known potential monetary liabilities, material pending lawsuits or unsatisfied judgments against the institution.
Community Reinvestment Act Performance Evaluation
The institution's most recent CRA rating was outstanding or satisfactory.
De novo institutions and institutions that recently merged or are about to merge are subject to additional review criteria.
Additionally, if certain of the foregoing criteria with respect to an applicant vary from these requirements, FHLB Dallas may review additional information to determine whether the financial condition of the applicant is such that advances may be safely made to it, notwithstanding the variance.