In a comment letter to the Federal Housing Finance Agency (FHFA), the Council of Federal Home Loan Banks commended the critical role that Federal Home Loan Banks (FHLBanks) play in supporting the health of their members and the U.S. financial system. It noted that the FHLBanks are fulfilling their mission as laid out in the statute, reflecting the intent of Congress, and are providing significant benefits to their members, to consumers, and to the broader financial system.
“The FHLBanks have been a force for good for nearly a century—for their members, for the housing market, for consumers, for the financial system, and for the economy,” said Ryan Donovan, {resident and CEO of the Council of Federal Home Loan Banks. “The FHLBanks have successfully achieved the mission Congress has laid out for them for more than 90 years. The liquidity they provide supports housing finance and economic development and plays an irrefutably valuable role in maintaining stability in the financial services sector. Their recently published 2023 Impact Report makes this abundantly clear and also demonstrates their commitment to innovation as a means for better addressing the housing and economic development needs of local communities within each FHLBank district. The nation needs the FHLBanks.”
As established by Congress, the mission of the FHLBanks is to provide liquidity to members and support housing and community development, and the letter noted that the mission is found within the structure and requirements of the Federal Home Loan Bank Act. Congress has made significant changes to the FHLBanks’ mission in the past when considered appropriate, it noted, and the proper measurement of mission adherence is the extent to which the FHLBanks are performing the obligations Congress has prescribed to them.
Per the letter, the FHLBanks fulfill their statutory mission in three ways: by providing liquidity to their members (backed by eligible collateral), by funding their annual Affordable Housing Program contributions at a 100% level, and by initiating voluntary programs to support their members’ housing and community development activities in their communities. The letter also referred to the recently published 2023 Impact Report which described the national impact from the FHLBanks’ fulfillment of their mission. The comment letter concluded by saying that potential changes contemplated by the RFI could have a profound impact on the future of the FHLBanks and their districts.
The FHLBanks are 11 regionally based, wholesale suppliers of lendable funds to financial institutions of all sizes and many types, including community banks, credit unions, commercial and savings banks, insurance companies, and community development financial institutions, cooperatively owned by member financial institutions in all 50 states and U.S. territories.
Click here for more on the FHLBanks’ letter to the FHFA.
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