Washington, D.C. – U.S. Senators Catherine Cortez Masto (D-Nev.), Elizabeth Warren (D-Mass.), Ron Wyden (D-Ore.), Tina Smith (D-Minn.), Tammy Baldwin (D-Wis.), Bernie Sanders (I-Vt.) and John Fetterman (D-Pa.) sent letters to each of the 11 Federal Home Loan Banks (FHLBanks) urging them to contribute at least 20% of their net income to affordable housing and other critical community grant programs. The letters follow calls by both the Biden-Harris Administration and the Federal Housing Finance Agency for the FHLBanks to do more to meet their mission and support working families.
“We write to ask that the Federal Home Loan Bank[s] voluntarily contribute at least 20 percent of its net income to grants that support affordable housing and community economic development investments by increasing support for your Affordable Housing Program (AHP) and creating new voluntary programs. In doing so, we echo the calls of the Federal Housing Finance Agency, the White House, and the Treasury Department,” wrote the senators.
“Unfortunately, the FHLBanks have failed to adequately respond to [the housing] crisis,” they continued. “…Last year the FHLBanks spent only $395 million on affordable housing payments. In the past five years, 42% of the more than 6,500 FHLBank members have not originated a single mortgage, a stunning indication of the extent to which the FHLBanks have strayed from their housing mission.”
The letters stress that not all of the FHLBank have fulfilled their voluntary pledge to increase their combined affordable housing and community development payments to 15%, and not a single bank has met the 20% threshold. But, all the FHLBanks have paid millions to executives and board members over the past year.
The letters conclude with a concrete call for each FHLBank to allocate at least 20% of net income affordable housing and community development, saying “the FHLBs must do more to fulfill their mission and meet the…needs of the communities they serve.”
Senator Cortez Masto has been the leading voice drawing attention to the FHLBanks’ failure to provide adequate support for affordable housing and economic development. It was thanks to repeated requests from Cortez Masto that the Federal Housing Finance Agency (FHFA) released their comprehensive report calling for mission-focused reform of the FHLBanks, which helped spur current action.
The full text of all 11 letters, with specific information on each FHLBanks current housing investments, can be found HERE.
###