Sen. Catherine Cortez Masto of Nevada has sent a letter to Federal Housing Finance Agency (FHFA) Director Bill Pulte urging him to publicly commit to ensuring that the Federal Home Loan Bank (FHLB) System delivers on its promises to help build new homes, lower housing costs, and invest in communities across the country.
“In your role as FHFA Director, you have expansive authority to ensure our nation’s government sponsored enterprises [including the FHLB system] provide financing to developers building and managing homes and apartments, people buying and renovating homes, and local governments providing the infrastructure for housing and community economic development,” said Sen. Cortez Masto in the letter.
The FHLBank System was created by the Federal Home Loan Bank Act of 1932 as a government-sponsored enterprise (GSE) to support mortgage lending and community investment. The System consists of 11 regional FHLBanks, the Office of Finance, and the Council of Federal Home Loan Banks. Each FHLBank is a privately capitalized cooperative owned by its members. The FHLBanks are located in Atlanta, Boston, Chicago, Cincinnati, Dallas, Des Moines, Indianapolis, New York, Pittsburgh, San Francisco, and Topeka. Their regional distribution enables each FHLBank to focus on the distinct needs of their individual communities.
Each FHLBank is operated independently, and is supervised and regulated by the FHFA. Each FHLBank is a Securities & Exchange Commission (SEC) registrant, filing quarterly and annual financial statements. The FHLBanks are not supported by Congressional appropriations and taxpayers do not pay out-of-pocket expenses to keep the FHLBank System operating. Membership in an FHLBank is open to commercial banks, credit unions, savings banks, insurance companies, and community development financial institutions (CDFIs). The FHLBanks’ collective membership consists of roughly 6,500 financial institutions.
Following a 2022 letter Senator Cortez Masto sent to then-FHFA Director Sandra Thompson, the FHFA announced a review of the Federal Home Loan Bank system. Following that review, the FHFA released a comprehensive report in 2023 titled “FHLBank System at 100: Focusing on the Future,” calling for mission-focused reform of the FHLBanks. In her letter to FHFA Director Pulte, Cortez Masto asked the FHFA to provide updates on a number of initiatives identified in the 2023 report, including:
- The FHLB System’s progress on improving credit risk management;
- The FHFA’s discussions with the FHLBs regarding the need for executive compensation to reflect mission achievement;
- The status of work between the FHFA, FHLBs, and relevant federal regulators to improve the timely exchange of information; and
- How the FHLB System is working to better achieve its mission of providing affordable housing and community development financing across the country.
“In your role as FHFA Director, you have expansive authority to ensure our nation’s government sponsored enterprises (GSEs) provide financing to developers building and managing homes and apartments, people buying and renovating homes and local governments providing the infrastructure for housing and community economic development,” said Sen. Cortez Masto in the letter. “FHFA can enable our country to respond to a persistent and painful housing supply shortage of at least four million homes, especially homes affordable to low- and moderate-income families.”
She concluded by reiterating that Director Pulte must stand up to his end of the bargain and deliver on reforms to make sure the FHLB system truly works for the American people, saying, “in your role as Director of the FHFA you must ensure that the FHLB System helps build new homes, lowers housing costs, and invests in communities across the country.”
Click here for more on Sen. Cortez Masto’s letter to FHFA Director Pulte.
