The Federal Home Loan Banks (FHLBanks) were chartered by Congress to help support essential liquidity in our housing markets – not to enrich their executives. Yet in 2024 alone, no less than 31 FHLBank executives earned over $1 million, while the 11 FHLBank Presidents took home a staggering average compensation of $2.3 million each. CFA analyzed public SEC 10k filings and found that FHLBanks have paid out more than half a billion dollars in executive compensation over the last five years.

Excessive Executive Compensation Across the FHLBank System

Source: CFA Analysis of FHLBanks’ 10Ks, SEC filings. Full data available on request.

Over the last few weeks, FHFA Director William Pulte and Senate Banking Chairman Tim Scott have raised serious questions about the compensation package of one Federal Home Loan Bank of San Francisco executive. But CFA’s analysis shows that her multimillion-dollar payment is far from exceptional. Indeed, excessive executive pay has been a long-standing, systemic issue across the government-sponsored FHLBank system. CFA urges Members of Congress and FHFA Director Pulte to address this broader issue: starting by setting strict, reasonable limits on FHLBank executive pay and looking into System consolidation options.

You can read our full letter here.

About the FHLBanks:

The FHLBanks are a system of 11 regional banks created back in 1932 to help support liquidity for mortgage lending and community development. They do not lend directly to consumers – instead, they provide low-cost loans (so-called “advances”) to their member institutions of banks, insurance companies, and credit unions. As a government-sponsored enterprise (GSE), they enjoy unique tax and regulatory exemptions. Most valuable of these GSE privileges is their implied government backing, which allows them to borrow at more favorable rates than fully private institutions and to pass on that discount to members. The Congressional Budget Office estimated that the FHLBank system received a total indirect government subsidy of $7.3 billion in 2024.

While the FHLBanks claim their pay practices are aligned with market standards, that doesn’t hold up under scrutiny. Most FHLBanks operate just one office and oversee a relatively simple business model of advance lending and managing an investment portfolio – unlike complexities found at large, global banking institutions, for example.

The numbers are clear: this executive pay is not just excessive — it’s inefficient and wasteful and has been a systemic issue across the entire FHLBank System.