FHFA Will 'Reexamine' Role of Federal Home Loan Banks: Thompson

Source: American Banker

The director of the Federal Housing Finance Agency said the agency would “reexamine” the structure and role of the Federal Home Loan banks in the U.S. housing market, the first possible steps of long-sought reform. 

Testifying during an oversight hearing of the House Financial Services Committee, FHFA Director Sandra L. Thompson told lawmakers in her opening remarks that the agency would soon begin a formal review of the Federal Home Loan Bank System. The government sponsored enterprises, created in the 1930s, have drawn scrutiny as their core business in the housing market has declined amid historic levels of liquidity in the banking system.

“As we near the 100th anniversary" of the Home Loan banks, "now is a good time to reexamine their approach to ensure they continue to serve the needs of today and tomorrow,” Thompson said. “We plan to engage a variety of stakeholders in the coming months as we complete this review and, of course, welcome the input of members of Congress.” 

In her written testimony, Thompson said the FHFA would “conduct a 90-year lookback, as well as a forward-looking analysis of" the Home Loan Bank System. She also said the agency would hold “public listening sessions throughout the country” and “examine everything from the banks’ membership base, operational efficiency, and effectiveness, to more foundational questions about mission, purpose, and organization.”