Freddie Mac-No Politics (FMCC)

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Sen. Warren Urges FHFA to Enforce Housing Obligations Upon the FHLBs

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Senate Banking Committee veteran Elizabeth Warren, D-MA, has castigated the Federal Home Loan Banks for failing to live up to their affordable housing obligations.

In a letter sent last week, Sen. Warren urged Federal Housing Finance Agency Director Sandra Thompson to reform the FHLBank system, which she described as “broken.” Pointing out that Congress established the district banks specifically to support housing and community development, she argues the institutions are failing to meet their basic mission.

The liberal Democrat highlighted a recent report by the Congressional Budget Office that estimated the system will receive roughly $7.3 billion in federal subsidies in 2024. These funds, she emphasized, were intended to address the country’s housing needs, but some of the cash is going elsewhere.

Last year, the FHLBanks contributed just $395 million to affordable housing programs. Over the same period, Warren notes, they paid $3.4 billion in dividends to their members. Maybe more remarkable, 42% of those members didn’t originate a single mortgage.