Federal Home Loan Banks Overview: The Federal Home Loan Banks are a source of low-cost funding for financial institutions (banks, thrifts and credit unions) engaged in mortgage, small business and agricultural lending in the 50 states, the District of Columbia, Puerto Rico, Guam and American Samoa. Established by Congress in 1932, the Federal Home Loan Banks are cooperative institutions owned and managed on behalf of over 8,100 member financial institutions. They are located in these 12 cities:
- Atlanta
- Boston
- Chicago
- Cincinnati
- Dallas
- Des Moines
- Indianapolis
- New York
- Pittsburgh
- San Francisco
- Seattle
- Topeka
The Federal Home Loan Bank system also includes an Office of Finance, its liaison with Wall Street, and the Federal Housing Finance Board, the regulatory body that oversees its activities.
Size: According to Moody's, the Federal Home Loan Bank system has this scope as of September 30, 2008:
- Total member institutions = over 8,100
- Advances (loans to member institutions) = $1.0 trillion
Positives: There have been no defaults so far on loans extended by the Federal Home Loan Banks.
Negatives: Advances to member institutions have grown by over 60% since 2006. Principal debtors now include troubled institutions such as Citigroup, Countrywide and Washington Mutual. The Federal Home Loan Banks also hold about $77 billion in MBS not guaranteed by Fannie Mae or Freddie Mac, another source of risk.
The Federal Home Loan Bank system website has not been updated since the end of 2006.
