The Federal Housing Finance Agency issued a long-awaited final rule governing Federal Home Loan Bank membership requirements on Tuesday, giving community banks a significant victory by dropping one contentious part of the plan even while it held fast on a separate issue.

The agency scrapped a part of the 2014 proposal that would have required Home Loan Bank members to maintain a certain percentage of residential mortgage assets in order to keep their membership. But the FHFA acknowledged that 98% of members are already in compliance with the proposed requirements, and that it was too burdensome to impose a new requirement just to weed out the remaining 2%.

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