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Backlash Brews as Banks and REITs Oppose FHLB Rule Change

Banks and insurers are joining mortgage-investment firms in pushing back against rules that are poised to kick dozens or even hundreds of them out of an $808 billion pillar of the U.S. financial system.

Representatives of three major trade groups objected yesterday in a Senate Banking Committee hearing to regulations proposed this month that would rein in regional cooperatives called Federal Home Loan Banks, which have about 7,500 members.