Federal Home Loan Banks Are Fulfilling the Mission Established by Congress
July 15 2024 - 10:47AM
The Council of Federal Home Loan Banks, in a comment letter to the
Federal Housing Finance Agency (FHFA) reinforced the crucial role
the Federal Home Loan Banks (FHLBanks) play in supporting the
health of their members and the U.S. financial system.
The comment letter makes clear that the FHLBanks are fulfilling
the mission laid out in statute, reflecting the intent of Congress,
that the FHLBanks are providing significant benefit to their
members, to consumers, and to the broader financial system, and
that any changes to the FHLBanks’ mission are necessarily under the
proper purview of Congress.
“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,
president 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.”
The comment letter maintains that mission of the FHLBanks, as
established by Congress, is to provide liquidity to members and
support housing and community development, and that the mission is
found within the structure and requirements of the Federal Home
Loan Bank Act (Bank Act). It further notes that Congress has made
significant changes to the FHLBanks’ mission in the past when it
considered it appropriate, and the proper measurement of mission
adherence is the extent to which the FHLBanks are performing the
obligations Congress has prescribed to them in the Bank Act.
The comment letter further notes that the FHLBanks fulfill their
statutory mission by providing liquidity to their members backed by
eligible collateral, by fully funding their annual Affordable
Housing Program contributions, and by initiating voluntary programs
to further support their members’ housing and community development
activities in their communities. It also refers to the recently
published 2023 Impact Report which describes the national impact
that emanates from the FHLBanks’ fulfilling their statutory
mission, including more than 50 examples of programs and
initiatives the FHLBanks support through their members across the
country.
The comment letter concludes by noting that the potential
changes contemplated by the RFI could have a profound impact on the
future of the FHLBanks, their districts, and, particularly, on
their members who rely on the FHLBanks to provide liquidity through
all economic cycles.
Click here to read the letter.
About: 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. The FHLBanks are cooperatively
owned by member financial institutions in all 50 states and U.S.
territories. The steady supply of lendable funds from FHLBanks
helps U.S. lenders invest in local needs including housing, jobs,
and economic growth. The Council of FHLBanks represents all 11
FHLBanks.
CONTACT INFORMATIONCouncil of FHLBanksPeter E.
Garuccio202-955-0002 ext. 14pgaruccio@cfhlb.org