Forum on the future of the Federal Home Loan Bank system

The Brookings Institution and Boston University School of Law co-hosted a forum to explore the current state and future prospects of the Federal Home Loan Bank (FHLB) system. The system, established during the Great Depression 90 years ago, is a government-sponsored enterprise (GSE) with nearly $1 trillion in assets and is one of the largest and most frequent debt issuers in the world. Its original and continued goal is to support mortgage lending and related community investment. Its role in the modern housing finance system has been questioned and its regulator, the Federal Housing Finance Agency (FHFA), has announced a strategic review of the system.

The program introduced a number of different viewpoints to help formulate the policy discussion surrounding the FHFA’s review. The opening question was, “Is the FHLB system fine just the way it is?” as has been argued by some of its proponents.

Alternatively, some speakers pressed the case that the best way forward for the FHLB system is to refocus on its core mission of providing mortgage finance to households. Additionally, the case was made for radically expanding the FHLBs’ mission – perhaps expanding into broader infrastructure, industrial (re-)development, or clean energy finance. Alternatively, some scholars have advocated for abolishing this significant GSE entirely. Overarching all of these approaches is the question of what the FHFA can do on its own as a matter of administrative law and what courses of action can only be pursued with congressional authorization.

The symposium was a landmark event in the comprehensive review process launched by FHFA on July 20, 2022. Viewers submitted questions for speakers by emailing events@brookings.edu or via Twitter by using #FHLBforum23.