In 1999, the Gramm-Leach-Bliley Act dropped the 10 percent residential mortgage requirement for banks with less than $500 million in total assets, allowing even more of them to become
FHLB members.
When it comes to dealing a winning hand, the Federal Home Loan Bank network is betting on increased success through its proposed merger of the
FHLB of Seattle with the much larger
FHLB of Des Moines, Iowa.
Advances are historically the primary activity conducted by the
FHLBs. These loans are generally collateralized by residential mortgage-related assets (whole loans and mortgage-backed securities) and U.S.
(11.) The FDIC's proposal asks whether it should treat Federal Home Loan Bank (
FHLB) advances as "volatile liabilities," which would tend to raise a bank's insurance premium.
The reduced franchise value for Fannie Mae and Freddie Mac that will follow from the heightened competition from the
FHLBs and the Basel II banks will thus erode their effective capital and increase their incentives for risk--taking perhaps through less-than-complete hedging of interest-rate risks, less resources devoted to vetting credit risks, entry into riskier lines of residential mortgage finance, or perhaps even through newly created methods of risk-taking that we cannot imagine today.
The
FHLB Mortgage Partnership Finance and Mortgage Purchase programs represent a small but growing part of the secondary conforming mortgage market, which has traditionally been dominated by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).
With re-evaluation of both their purposes and structure on active legislative and regulatory agendas, the
FHLBs virtually demand empirical attention from scholars of public administration.
As a result, it is cheaper for all but the most efficient thrifts to raise loanable funds from the
FHLBs than it is from retail deposits or other sources.
The Federal Home Loan Bank of Atlanta (
FHLB) has said that it has joined a programme that allows its banks, credit unions and other members to sell fixed-rate, conforming mortgages on the secondary market, Reuters reported.
term loan warehousing provided to banks by the
FHLBs,
The bulk of all GSE assets are in the housing GSEs--Fannie Mae, Freddie Mac, and the 12 Federal Home Loan Banks (
FHLBs).
Although the CUNA leader said he supports using the
FHLBs as aggregators, some credit unions find it difficult to becoming home loan bank members.
