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Encyclopedia > Federal Home Loan Banks

The Federal Home Loan Banks provide stable, on-demand, low-cost funding to American financial institutions for home mortgage loans, small business, rural, agricultural, and economic development lending. With their members, the FHLBank System represents the largest collective source of home mortgage and community credit in the country. A financial institution acts as an agent that provides financial services for its clients. ... This article does not cite any references or sources. ...

Contents

Ownership

The 12 banks of the FHLBank System are owned by over 8,100 financial institutions from all 50 states, U.S. possessions, and territories. Equity in the FHLBanks is held by these owner/members and is not publicly traded. Institutions must purchase stock in order to become a member. In return, members obtain access to low-cost funding, and also receive dividends based on their stock ownership. FHLBanks are exempt from state and local income taxes, but are subject to property taxes. The mission of the FHLBanks reflects a public purpose (increase access to housing and aid communities by extending credit to member financial institutions), but all 12 are privately capitalized and do not receive taxpayer assistance.


Financials

On February 26, 2007, the FHLBanks Office of Finance published preliminary combined operating highlights for 2006. As of year-end, the combined assets of the 12 Federal Home Loan Banks were approximately $1.02 trillion. Of this total, secured loans (known within the Bank System as advances) equaled $641 billion, or about 63% of assets. Investments were the second largest component at $271 billion, or 26.6% of assets. Member mortgage assets were $98 billion, or 9.6% of assets. Combined net income in 2006 was $2.6 billion, and capital equaled $45 billion. The FHLBanks made affordable housing contributions of $295 million in 2006. Compared to year-end 2005, secured loans, investments, net income, capital and affordable housing contributions increased, while member mortgage assets decreased.


The principal investments of the FHLBanks are Federal funds sold, commercial paper, mortgage-backed securities, and GSE securities. As of August 2006, all 12 Banks were registered with the United States Securities and Exchange Commission and all financial statements and other filings are available to the public at the SEC web site. (See external links) A mortgage-backed security (MBS) is an asset-backed security whose cash flows are backed by the principal and interest payments of a set of mortgage loans. ... “Securities and Exchange Commission” redirects here. ...


History

Congress passed the Federal Home Loan Bank Act, which established the FHLBank System, in 1932, during the Great Depression. This was in order to provide funds to savings and loan (thrift) institutions to make mortgages more affordable. The Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) abolished the Federal Home Loan Bank Board and transferred responsibility for oversight of the Federal Home Loan Banks to the Federal Housing Finance Board. At that time the Bank Board’s previous supervisory and regulatory responsibilities with respect to thrift institutions and their holding companies were transferred to the newly created Office of Thrift Supervision, under the U.S. Department of the Treasury. FIRREA also allowed all federally insured depository institutions to join the FHLBank System, including commercial banks and credit unions. The Federal Home Loan Bank Act is a United States federal law passed in 1932 under President Herbert Hoover in order to lower the cost of home ownership. ... Year 1932 (MCMXXXII) was a leap year starting on Friday (the link will display full 1932 calendar) of the Gregorian calendar. ... The Great Depression was a dramatic, worldwide economic downturn beginning in some countries as early as 1928. ... A savings and loan association is a financial institution which specializes in accepting savings deposits and making mortgage loans. ... The Financial Institutions Reform Recovery and Enforcement Act of 1989 (FIRREA) is a United States federal law enacted in the wake of the savings and loan crisis of the 1980s. ... The Financial Institutions Reform Recovery and Enforcement Act of 1989 (FIRREA) is a United States federal law enacted in the wake of the savings and loan crisis of the 1980s. ... The Federal Housing Finance Board, also known by the abbreviation FHFB, is an independent agency of the U.S. Government. ... The Office of Thrift Supervision (OTS), an agency in the U.S. Treasury Department, is the primary regulator of federal savings associations (sometimes referred to as federal thrifts). ... A commercial bank is a type of financial intermediary and a type of bank. ... A credit union is a co-operative financial institution that is owned, controlled and administered by its members. ...


See also

The government sponsored enterprises (GSEs) are a group of financial services corporations created by the United States Congress. ...

External links

  • FHLBanks home
  • FHLBanks Office of Finance
  • Federal Housing Finance Board
  • SEC filings from the FHLB's

Banks

  • Federal Home Loan Bank of Atlanta
  • Federal Home Loan Bank of Boston
  • Federal Home Loan Bank of Chicago
  • Federal Home Loan Bank of Cincinnati
  • Federal Home Loan Bank of Dallas
  • Federal Home Loan Bank of Des Moines
  • Federal Home Loan Bank of Indianapolis
  • Federal Home Loan Bank of New York
  • Federal Home Loan Bank of Pittsburgh
  • Federal Home Loan Bank of San Francisco
  • Federal Home Loan Bank of Seattle
  • Federal Home Loan Bank of Topeka

  Results from FactBites:
 
Federal Home Loan Banks - Wikipedia, the free encyclopedia (362 words)
The 12 banks of the FHLB system are owned by over 8,100 financial institutions from all 50 states.
The Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) abolished the Federal Home Loan Bank Board and transferred responsibility for oversight of the Federal Home Loan Banks to the Federal Housing Finance Board.
At that time the Bank Board’s previous supervisory and regulatory responsibilities with respect to thrift institutions and their holding companies were transferred to the newly created Office of Thrift Supervision, under the U.S. Department of the Treasury.
Realty Times: Federal Home Loan Banks' Mortgage Partnership Finance Program Dodges a Bullet (718 words)
Also, by providing commercial banks and savings institutions with another outlet for their mortgages, the amount of capital available for more loans is increased, and that leads to better rates and terms for borrowers.
Since then, nine of the 12 regional banks -- and soon to be 10 which buy fixed-rate loans from their member institutions have passed the $13 billion mark in MPF purchases along with $93 billion in master commitments.
Christian, who was chairman of the Federal Home Loan Bank of Pittsburgh before moving to Atlanta a year ago, questioned whether Fannie Mae and Freddie Mac are truly interested in competition or are simply trying to hold on to their share of the mortgage pie.
  More results at FactBites »

 
 

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