Sen. Catherine Cortez Masto (D-NV), the ranking member of the Senate Financial Institutions and Consumer Protection Subcommittee, has put forth the “Federal Home Loan Banks’ Mission Activities Act” with the goal of refocusing the mission of the 11 Federal Home Loan Banks (FHLBanks) “to support housing finance and community development.”
The legislation would require the FHLBank system to contribute 30% or a minimum of $200 million of its net earnings to its Affordable Home Program and other voluntary programs that meet community needs. It would also enable small credit unions and community development financial institutions to pledge non-housing loans as collateral and join a Federal Home Loan Bank if they only provide small business, agricultural or community economic development loans.
The legislation would also link the compensation for the presidents of the FHLBanks to how well the institutions meet their mission of supporting affordable housing and community development.
“When Congress created the Federal Home Loan Banks in 1932, the mission was simple: help families across the United States afford a home,” said Cortez Masto. “However, in the more than ninety years since, the Federal Home Loan Banks have strayed from their mission. I’ve spent years pushing them to do more to support affordable housing in our communities, and I’m proud to present this next step to make them work for every American.”
