The FHLBank System was created by the Federal Home Loan Bank Act of 1932 as a government sponsored enterprise to support mortgage lending and community investment. The System is composed of 11 regional banks which are privately capitalized and owned as cooperatives by their members. Their regional distribution enables each bank to focus on the distinct needs of their individual communities.
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While only financial institutions may belong to a FHLBank, people everywhere benefit from them. Each year, the FHLBanks provide access to billions of dollars in low-cost funding to approximately 6,600 of America’s banks, credit unions, insurance companies and community development financial institutions. Without access to FHLBank advances, most members would find it difficult to support lending within their community.
FHLBanks carry out their core mission of providing liquidity by raising funds in the global financial markets, then lending that money in the form of “advances” (loans) to members and local communities.
Each FHLBank is operated independently and receives no taxpayer assistance. Each bank is registered with the SEC and is supervised and regulated by the Federal Housing Finance Agency (FHFA). The Office of Finance serves as the fiscal agent for the FHLBanks.