The Federal Housing Finance Agency's plan to tighten membership rules for Federal Home Loan Banks has raised objections from an array of stakeholders, including state regulators, lawmakers and community financial institutions. The FHFA issued the proposal in September that would for the first time institute ongoing membership requirements. Community banks and credit unions with less than $1 billion of assets would be required to hold at least 1% of their assets in the form of mortgages in order to stay members of a Home Loan Bank. Critics say the proposal ignores the FHLB's mandate to provide liquidity to members and could cause community banks and credit unions to lose FHLB memberships, depriving them of a crucial source of funding.