America’s Credit Unions President and CEO Jim Nussle wrote the Senate Banking Committee ahead of its annual oversight hearing of federal housing regulators, flagging that credit unions are an essential partner to the Federal Housing Finance Agency (FHFA).
“During 2023, credit unions originated $105 billion in first-lien mortgages, and they sold more than 25% of those mortgage loans into the secondary market,” he wrote. “Therefore, credit unions have a considerable interest in ensuring that the FHFA-regulated entities, which include the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation (collectively, the Enterprises) and the Federal Home Loan Bank System (FHLBanks), operate effectively and efficiently and satisfy their core missions to benefit low- and moderate-income borrowers and communities.”
Nussle expressed the organization’s support for the FHFA’s decision to rescind changes to its guarantee fees, adding that “any change to the single-family pricing framework, including any change to guarantee fees, requires transparency and industry engagement.” He also noted that access to FHLBanks is key for credit unions as critical sources of liquidity.
In addition, he stressed credit unions’ work to close gaps in housing access.
“Credit unions have long had a history of rent-to-own programs; first time homeowner programs; financial literacy and wealth building programs to assist millions of Americans on their path to financial well-being,” wrote Nussle. “Data consistently shows that credit unions are at par or exceed our for-profit counterparts in the financial services marketplace.”
Nussle concluded by urging the committee to modernize field of membership restrictions to allow credit unions to serve more Americans and improve access to housing.
FHFA to Implement ‘FHLBank System at 100’ Recommendations
The Federal Housing Finance Agency (FHFA) has provided an update on its implementation of the recommendations of the Federal Home Loan Bank (FHLBank) System at 100: Focusing on the Future report, which was published in November 2023 and followed the first comprehensive evaluation of the FHLBank System in decades.
A significant finding of the report is that the FHLBanks must appropriately support housing and community development in their districts, in addition to providing liquidity to members.
FHFA is publishing a regulatory interpretation that clarifies how cooperativas in Puerto Rico can pursue membership in the FHLBank System. Cooperativas are a critical part of the financial system in Puerto Rico, and many are Treasury-certified Community Development Financial Institutions (CDFIs). To date, no cooperativa has become a member of the FHLBank System.
This action implements one of the many recommendations in the report. Following publication of the report, FHFA also published an Advisory Bulletin communicating its expectation that each FHLBank establish a framework for pilot and voluntary programs by March 29, 2024.
Looking forward, key priorities in 2024 include:
FHFA is committed to transparency and will continue to provide public updates as implementation of the recommendations in the report proceeds. The Agency is also dedicated to continuing a robust stakeholder engagement process. Please visit the System at 100 web page for more information about FHFA’s implementation priorities and progress, along with announcements of public input opportunities.
Upcoming announcements will include opportunities to provide input on topics including how FHFA should measure the FHLBanks’ mission achievement and how the FHLBanks should assess their members’ connection to housing and community development.
FHFA to Host FHLBank and CDFI Symposium
The Federal Housing Finance Agency (FHFA) has announced that it will host a Federal Home Loan Bank (FHLBank) and Community Development Financial Institution (CDFI) Symposium in Washington, D.C., on Thursday, June 20, 2024.
“CDFIs have a relationship-focused approach that enables them to reach individuals who have limited housing options, in a safe and sound manner,” said FHFA Director Sandra L. Thompson. “The Symposium will provide a platform for the FHLBanks and CDFIs to share knowledge and strategies to address affordable housing and community development needs in rural and tribal areas, urban centers, and other underserved communities throughout the country.”
The Symposium follows a recommendation in FHFA’s FHLBank System at 100: Focusing on the Future report that calls for increased FHLBank engagement with mission-oriented members, and will feature representatives from both CDFIs and the FHLBanks discussing topics that include:
