FHFA Reviewing Federal Home Loan Bank System

September 19, 2022

The Federal Housing Finance Agency (FHFA) announced it is conducting a comprehensive review of the Federal Home Loan Bank (FHLB) system.

Broadly, FHLBs are charges with supporting:

  • 1.Housing market liquidity,
  • Low-income housing, and
  • Community investment.

The 11 FHLBs cover different geographic areas, are government-chartered, member owned, and provide various housing-related financing to their members, which are banks and insurance companies.

Why it matters: In 2016, FHFA issued a rule preventing “captive insurance companies” from accessing FHLB memberships. This action served to limit nonbank lenders from accessing the FHLBs.

FHFA solicited additional comments on the captive membership issue in 2020. CREFC submitted comments supporting expanding FHLB membership eligibility to allow more capital providers to access funds, so long as they met the prudential safety and soundness criteria. Click here for CREFC’s 2020 letter.

The big picture: FHFA’s wholistic review is divided among six key areas:

  • 1.The FHLBs’ general mission and purpose in a changing marketplace;
  • FHLB organization, operational efficiency, and effectiveness;
  • FHLBs’ role in promoting affordable, sustainable, equitable, and resilient housing and community investment
  • FHLBs addressing the unique needs of rural and financially vulnerable communities; 
  • Member products, services, and collateral requirements; and
  • Membership eligibility and requirements.

What's next: Comments are due October 21. FHFA will hold an in-person and virtual listening session on September 29 from 12:30 – 4:00 PM. Click here to register. Please contact Sairah Burk (sburki@crefc.org) and David McCarthy (dmccarthy@crefc.org) with additional questions. 


David McCarthy
Managing Director, Head of Policy
Illustration of a house being inspected by a hand holding a magnifying glass and another hand holding measuring tape
The Fannie and Freddie regulator also oversees the FHLB system.

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