Letter to Department of Treasury Outlines a Range of Collaborative Ideas Focused on Addressing Nation’s Intractable Housing Issues
WASHINGTON, Aug. 29, 2024 (GLOBE NEWSWIRE) — The Federal Home Loan Banks (FHLBanks) today presented the U.S. Department of Treasury (Treasury) a range of housing supply recommendations where the FHLBanks, the Federal Housing Finance Agency (FHFA) and the Treasury can collaborate to help address housing issues currently facing the nation. The FHLBanks submitted a letter to Deputy Secretary Wally Adeyemo as part of the ongoing dialogue between, Adeyemo, FHFA, and the presidents of the 11 FHLBanks.
The letter outlines the depth and breadth of actions the FHLBanks have proactively taken and are taking to constructively address the nation’s housing supply shortage and affordable housing issues, and, most importantly, contains several proposals that can enhance the impact the FHLBanks have on these critical issues. The proposal address areas in which the FHLBanks, FHFA, and Treasury can collaborate, including:
- Listing steps to remove existing barriers to enhance the value the FHLBanks can deliver to community development financial institution members,
- Reforming the FHLBanks’ Affordable Housing Program (AHP),
- Listing steps to increase support for state housing finance agencies and housing associates, and
- Reforming the FHLBanks’ Community Investment Cash Advance program and Community Investment Program.
The letter closes by noting that the liquidity provided by each of the FHLBanks to members stands as the cornerstone supporting the largest source of private capital for affordable housing and community development initiatives in the country, and any action that negatively affects the ability of members to access FHLBank liquidity will have potentially serious implications for the FHLBanks’ housing finance, affordable housing, and community development efforts.
Separately, the board chairs of each of the 11 FHLBanks submitted a letter to Secretary Adeyemo responding to Treasury’s suggestion that the FHLBanks increase their AHP and voluntary program contributions to 20 percent of pre-assessment net income, noting that simply raising the contribution threshold will not address the underlying complexities of the housing crisis and that a better approach would be to work collaboratively with Treasury and FHFA on the proposals contained in the letter from the 11 FHLBank presidents. The letter from the board chairs also responds to Treasury’s suggestion that the FHLBanks tap into their retained earnings. The letter notes that retained earnings and capital reserves are the bedrock upon which the FHLBanks’ support members and affordable housing and community development efforts, and weakening the FHLBanks’ capital position would diminish the FHLBanks’ ability to fulfill their mandate and could cause safety and soundness concerns.
Click here to read the letter from the 11 FHLBank presidents.
Click here to read the letter from the 11 FHLBank board chairs.
About: The FHLBanks are 11 regionally based, wholesale suppliers of lendable funds to financial institutions of all sizes and many types, including community banks, credit unions, commercial and savings banks, insurance companies, and community development financial institutions. The FHLBanks are cooperatively owned by member financial institutions in all 50 states and U.S. territories. The steady supply of lendable funds from FHLBanks helps U.S. lenders invest in local needs including housing, jobs, and economic growth. The Council of FHLBanks represents all 11 FHLBanks.
CONTACT INFORMATION
Council of FHLBanks
Peter E. Garuccio
202-955-0002 ext. 14
pgaruccio@cfhlb.org
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