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FHLBank System at 100

FHLBank System at 100: Focusing on the Future Report

Published: 11/7/2023

​​The Federal Home Loan Bank System (System) has served as a key component of the nation’s housing finance system since its creation over 90 years ago. The mortgage market, the broader financial system, and the Federal Home Loan Banks (FHLBanks) themselves have undergone significant changes over nine decades. These changes reflect underlying shifts in technology and structured products, land use and development, demographics, legal and regulatory frameworks, and consumer preferences.

Today, the FHLBanks connect domestic financial institutions—many of which are small, community-focused lenders—to the global capital markets. Those connections make it possible for lenders to provide more consistent and sustained support for housing finance and community development. By many metrics, the FHLBanks have achieved this objective, as the liquidity they provide has facilitated affordable homeownership and rental housing throughout the country. Despite these successes, the evolving nature of the modern mortgage market necessitates an in-depth review of the structure, operations, and oversight of the FHLBanks to ensure they are most effectively advancing their mission.

The Federal Housing Finance Agency (FHFA), established by Congress in 2008, serves as regulator of the FHLBank System. In August 2022, FHFA launched the FHLBank System at 100: Focusing on the Future initiative, the first comprehensive review of the FHLBank System in decades. Throughout this process, FHFA undertook a prospective analysis of changes that may be warranted to ensure the FHLBanks are well positioned to fulfill their mission in the years ahead. The initiative involved significant stakeholder outreach, a historical review of the role of the FHLBanks, and detailed analysis of both the strengths and areas for improvement in the System’s current structure.

FHFA’s vision for the future is to have an effectively governed System that efficiently provides stable and reliable funding to creditworthy members and delivers innovative products and services to support the housing and community development needs of the communities its members serve, all in a safe and sound manner.

In this report, FHFA presents the actions that it plans to pursue in service of this vision. This report categorizes these actions under four broad themes. The themes are:

  1. Mission of the FHLBank System
  2. Stable and reliable source of liquidity
  3. Housing and community development
  4. FHLBank System operational efficiency, structure, and governance

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