Because deposits at the Federal Reserve don’t earn interest, FHLBanks’ use of IBDAs at large banks with high credit has expanded over the last few years. FHFA wants to give those deposits a capital treatment equivalent to that given to overnight Fed funds sales.

Although a Republican victory in November might revive efforts to release the GSEs from conservatorship, this would likely be a multi-year effort, according to the former FHFA director.

A nonprofit has called on the Federal Home Loan Banks to launch a program for mortgages with terms of 40 years, arguing the products will help to address affordability issues.

The FHLBanks last year agreed to voluntarily raise their contributions to affordable housing programs from 10% of net income to 15%, but they balked at Treasury’s suggestion to increase that to 20%.

All but one of the regional banks experienced a sequential decline in net income, but most reported an increase in voluntary contributions to mission-related activities. (Includes data table.)

Although outstanding advances increased slightly in the second quarter, most large banks and thrifts cut FHLBank borrowing from first-quarter levels. (Includes two data tables.)

The FHFA watchdog said the Division of Home Loan Bank Regulation should provide more explicit guidance on how the FHLBanks coordinate with other regulators.

Senate Democrats note that FHLBank Boston CEO Timothy Barrett received $3.1 million in compensation last year while the bank contributed just $2 million to its affordable housing program.

The Federal Home Loan Banks as well as credit unions argue the FHLBanks’ mission was established by Congress, so only Congress can change it. Consumer advocates, meanwhile, are happy with the Federal Housing Finance Agency’s effort to redefine the mission.