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The Federal Home Loan Bank System

The Federal Home Loan Bank System

The FHFA recently completed a year-long study of the FHLBs, their mission and how the system is supporting that mission. The final report released in November of 2023 outlines 50 recommendations, many of which would negatively impact community bank use of the system.

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Position & Background

  • The Federal Home Loan Banks (FHLBs) must remain a strong, stable, reliable source of funding for community banks.
  • ICBA opposes unnecessary efforts to steer banks away from utilizing FHLB advances in favor of using the Fed discount window as part of their liquidity planning.
  • ICBA opposes any legislation or administrative action that would permit any new types of non-depository entities, which are not prudentially regulated, to access any FHLBank program or service, either directly or indirectly.
  • ICBA strongly opposes any ongoing mortgage asset test for member institutions to access the FHLB system.
  • The regional structure and cooperative nature of the FHLB system must be maintained, and any structural changes to the FHLB system must originate and be supported by the member owners of the system.
  • Advances should remain the FHLBanks’ primary focus and members should not be required to track or segregate advances for “mission related purposes”.
  • FHFA should align the capital requirements for member bank FHLB advances with the prudential regulators to avoid disruption and possible liquidity problems for otherwise well capitalized community banks.

The FHFA recently completed a year-long study of the FHLBs, their mission and how the system is supporting that mission. The final report released in November of 2023 outlines 50 recommendations, many of which would negatively impact community bank use of the system.

The vast majority of community banks are FHLB members. They are active advance users or rely on the availability of advances as an alternative source of liquidity and support for community development activities.

ICBA will work to ensure that as the new administration and Congress consider changes to the housing finance system, the FHLBs remain a healthy, stable, reliable source of funding, liquidity and other products to serve the needs of all member-owners.

Letters & Testimonies

ICBA Expert Contacts

tim_roy

Tim Roy

Vice President, Housing Finance Policy
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Ron Haynie

Ron Haynie

Senior Vice President, Mortgage Finance Policy
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Articles

ICBA signals support for FHFA strategic plan

ICBA said it supports U.S. Federal Housing’s plan to focus on safety and soundness of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks while emphasizing the importance of reducing regulatory burdens and maintaining the enterprises’ mission to foster a liquid, efficient, resilient, and competitive housing finance system.

11/6/25  | 

ICBA: New FHLBank lending restrictions will reduce access to home loans

A recent Federal Home Loan Bank of New York decision to impose new reporting requirements on member banks will restrict access to home loans, ICBA said.

7/17/24  |  ICBA NewsWatch Today

ICBA: FHLBanks’ mission should not be changed

ICBA told the Federal Housing Finance Agency that the Federal Home Loan Banks’ mission is clear and does not need to be substantially changed or clarified.

7/16/24  |  ICBA NewsWatch Today

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