The GAO’s fact-filled, even-handed review of the FHLBanks’ role in last spring’s regional banking crisis has been used to justify arguments by both critics and supporters of the banks.
FHLBanks and housing advocates square off over issues, such as the banks’ mission, how they benefit housing finance and, surprisingly, whether they receive a federal subsidy.
A regulatory interpretation released this week by FHFA involving cooperativas in Puerto Rico may begin the formal implementation of key recommendations in its review of the FHLBank system.
Small depositories warn changes at the FHLBs could increase members’ costs and reduce access to FHLB funding. Worse, these changes could take place without formal rulemaking.
Under the terms recommended in FHFA’s review of the Federal Home Loan Banks, 85 current members would fail to meet the 10% mortgage-related asset rule.
The Council of the Federal Home Loan Banks and the Federal Housing Finance Agency find themselves on opposite sides in a debate over the mission of the FHLBanks.