Washington, DC – The U.S. Senate Committee on Banking, Housing and Urban Affairs conducted a hearing entitled “Oversight of Federal Housing Regulators” this morning. The discussion focused on how Federal Housing Regulators can improve housing access as the nation experiences a critical shortage of affordable housing. The Coalition for Federal Home Loan Bank Reform (CFR) applauds Director Sandra Thompson of the Federal Housing Finance Agency (FHFA) for providing her thoughtful testimony and for highlighting the agency’s efforts to make sure its regulated entities meet their housing missions.
Several members of the committee raised important questions related to FHLBanks. Senator Warren raised concerns that FHLbanks were “missing in action” on their affordable housing mission, despite receiving a whopping $7.3 billion dollars in public subsidies. She noted that in 2023 FHLBanks spent 8.5 times as much on dividends to their members (3.4 billion dollars) than on affordable housing programs (390 million dollars). She also stressed the importance of reviewing “who lines up for these federal subsidies,” as many members do not even originate mortgages anymore. She strongly urged FHFA to issue its proposed rulemaking to clarify the FHLBanks’ mission and review membership as soon as possible.
Senator Cortez-Masto asked questions related to the access that CDFIs (Community Development Financial Institutions) have to the benefits of FHLBank membership. Currently, there is no true parity across membership and FHFA is working on regulations to ensure that CDFIs can pledge a wider range of collateral to access affordable advances. The Senator also urged her colleagues to join her on legislation regarding Federal Home Loan Banks that can help expand their impacts on affordable housing and community development.
In her written testimony, Director Thompson recommended that Congress amend the Bank Act to increase the FHLBanks’ required minimum AHP contributions from 10 percent to 20 percent of their net income from the previous year. She emphasized that “FHLBanks have demonstrated the financial capacity to make a larger AHP funding contribution without adversely affecting their safety and soundness.”
For further information or media inquiries, please contact Katie McCann kmccann@consumerfed.org.
About the Coalition for Federal Home Loan Bank Reform:
The Coalition for Federal Home Loan Bank Reform is a non-partisan coalition of organizations dedicated to bringing together a wide variety of stakeholders to discuss, educate and shape reforms aimed at enhancing the ability of the FHLB system to address the nation’s unmet affordable housing and community development needs.