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​The Federal Home Loan Bank System

 

The Federal Home Loan Bank System was created by the Federal Home Loan Bank Act as a government sponsored enterprise to support mortgage lending and related community investment.

It is composed of 11 regional FHLBanks, more than 7,300 member financial institutions, and the System’s fiscal agent, the Office of Finance. Each FHLBank is a separate, government-chartered, member-owned corporation.

 

The 11 Regional Federal Home Loan Banks

There are regional FHLBanks located in: Atlanta, Boston, Chicago, Cincinnati, Dallas, Des Moines, Indianapolis, New York, Pittsburgh, San Francisco, and Topeka. See FHLBank Districts.

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​What the Federal Home Loan Bank System Does

The System provides its members (members include thrift institutions, commercial banks, credit unions, insurance companies, and certified community development financial institutions, with a source of funding for mortgages and asset-liability management; liquidity for a member's short-term needs; and additional funds for housing finance and community development.

The FHLBanks provide long- and short-term advances (loans) to their members. Advances are primarily collateralized by residential mortgage loans, and government and agency securities. Community financial institutions may pledge small business, small farm, and small agri-business loans as collateral for advances. Advances are priced at a small spread over comparable U.S. Department of the Treasury obligations.

About 80 percent of U.S. lending institutions rely on the FHLBanks. The FHLBanks have been a fundimental part of the nation's financial system for more than eight decades.

While the FHLBanks' mandate reflects a public purpose, all 11 regional FHLBanks are privately capitalized and do not receive any taxpayer assistance.  During the nation's 2008 financial crisis, the FHLBanks did not take government money, in fact, as other sources of funding dried up, they increased their lending. 

 

Consolidated Obligations

The FHLBanks fund themselves principally by issuing consolidated obligations of the System in the public capital markets through the Office of Finance, which acts as the FHLBanks' agent. Although each FHLBank is a separate corporate entity with its own management and board of directors, the FHLBanks are jointly and severally liable for all System consolidated obligation debt. Consolidated obligations consist of bonds and discount notes (original maturity of less than one year and sold at a discount). Consolidated obligations are not guaranteed or insured by the federal government. However, the FHLBanks’ status as a government-sponsored enterprise accords certain privileges and enables the FHLBanks to raise funds at rates slightly above comparable obligations issued by the U.S. Department of the Treasury.

 

Bank Membership

FHLBank members include thrift institutions, commercial banks, credit unions, insurance companies, and certified community development financial institutions. A financial institution joins the FHLBank district that serves the state where the institution's home office or principal place of business is located.  A financial institution may become a member by meeting certain statutory requirements:

    • be duly organized under the laws of any state of the United States;

    • be subject to inspection and regulation under the banking laws, or similar state or federal laws;

    • make long-term home mortgage loans;

    • have at least 10 percent of its total assets in residential mortgage loans, if it is a federally insured depository institution (community financial institutions which are exempt from this requirement);

    • have a financial condition that allows FHLBank advances (loans) to be made safely;​

    • have character of management and a home financing policy consistent with sound and economical home financing. 

Each member of the FHLBank must maintain a minimum investment in the stock of the FHLBank.  The minimum investment is established by each FHLBank, and the sum of the stock investment by all members must be sufficient for the FHLBank to meet its own minimum capital requirement.  Contact the FHLBank for more information concerning minimum stock requirement.

 

Bank Directors

The FHLBanks are governed by boards of directors ranging in size from 14 to 29 directors, all of whom are elected by member institutions. The majority of the FHLBank board members are directors or officers of member institutions, while the remaining directors (at least 40 percent) are independent. Independent directors are those who are not officers of an FHLBank or directors, officers, or employees of a member institution. 

To fill in and download an Independent Director Application form click here, to fill in and download an Independent Director Annual Certification form click here and to fill in and down load a Member Director Eligibility Certification for click here​.​ 

(Forms provided here expire 12/31/17) 

Read about Directors' Executive Compensation. 

Page last updated: June 1, 2015

© 2016 Federal Housing Finance Agency