Blog post shows positive effects of community banks and FHLBs partnering

A new blog post from ICBA says that with policymakers reexamining housing-finance policy and exploring ways to improve housing affordability, building on the success of the Federal Home Loan Banks should be a top priority.

FHLB Success: The blog post from ICBA Senior Vice President of Mortgage Finance Policy Ron Haynie spotlights how the FHLBs have been an integral part of helping community banks serve the needs of Main Street for over 90 years, supporting community development projects and access to liquidity.

New Research: The post also cites recent Urban Institute research that shows:

• FHLB advances are strongly associated with higher lending across local financial institutions, expanding total lending by up to $97.3 billion per year.

• FHLBs generate up to $21.4 billion in annual economic value by reducing the risk of systemic crises.

ICBA Support of FHLBs:

• ICBA in 2024 outlined for the Federal Reserve the critical importance of the FHLBs as reliable and efficient sources of liquidity for community banks, adding that it strongly opposes any efforts to undermine or devalue FHLBs or to steer banks away from FHLB advances.

• An Independent Banker article urges the agencies not to fix what isn’t broken with the FHLBs, saying that any attempts to block community banks’ access to funding will cause more harm than good.

• In an American Banker op-ed (subscription required), ICBA President and CEO Rebeca Romero Rainey said any regulatory crackdown on the FHLBs threatens the housing finance system at a time of high prices and limited supply.

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