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Adds a new subsection (l) to 12 U.S.C. 1430 requiring an annual report to specified congressional committees on collateral pledged to the Banks, including analysis by collateral type and by Bank district.
Amends section 7 of the Federal Home Loan Bank Act (12 U.S.C. 1427) by revising the existing subsection (l): replaces the subsection heading, replaces the text of the first subsection (l), adds a new subsection (l)(2) titled 'Setting compensation' that directs the Director to establish compensation for executive officers of a Bank (notwithstanding 12 U.S.C. 4518(d)), specifies mission-investment factors the Director shall consider, and permits paying compensation above regional Federal Reserve Bank levels tied to mission achievements; and strikes the second subsection (l).
Amends the definition provision in 12 U.S.C. 1422(10) by revising subparagraph (A) to (1) restructure clause (i) into (i)(I) and (i)(II) to (A)(i)(I) explicitly include deposits insured under the Federal Deposit Insurance Act or the Federal Credit Union Act or institutions qualifying under section 4(a)(5), and to set an asset-size threshold in (A)(i)(II); (2) add a new (A)(ii) to include institutions certified as community development financial institutions by the Secretary of the Treasury; and (3) update a cross-reference in subparagraph (B) from "(A)(ii)" to "(A)(i)(II)".
Expands and modernizes the Federal Home Loan Bank (FHLB) system’s authorities and programs to increase financing support for housing, agriculture, small business, and community development. It broadens which lenders count as community financial institutions, strengthens and retools the Banks’ affordable housing program with new minimum funding and disaster flexibilities, links executive pay to mission-related outcomes, and requires an annual report on collateral pledged to the FHLBs.
Expand the ability of the Federal Home Loan Banks to support housing (including affordable housing), small business, agricultural, and economic development activities of the banks’ members, which include credit unions, community development financial institutions, insurance companies, and housing finance agencies.
Clarify that the Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.) permits a broad range of activities that let the Federal Home Loan Banks support the housing and community development work of their members, including providing grants, subsidized financing and advances, and credit enhancement.
Simplify executive compensation and align that compensation with the achievement of the banks’ mission.
Amends Section 2(10) of the Federal Home Loan Bank Act to modify the definition of “community financial institutions.”
Includes institutions whose deposits are insured under the Federal Deposit Insurance Act or the Federal Credit Union Act, or institutions that qualify under section 4(a)(5) to be treated as an insured depository institution for membership eligibility.
Primary impacts will fall on the Federal Home Loan Banks, their member institutions (banks, community banks, credit unions, and CDFIs), and the low- and moderate-income households and developers that receive housing subsidies or grants. Expanding the definition of community financial institution increases access for credit unions and CDFIs to FHLB-supported resources, which can boost lending capacity to underserved markets. The new minimum annual aggregate contribution (at least $200M) increases predictable financing for affordable housing across Bank districts. Allowing Program rule relaxation after declared disasters speeds assistance but may reduce uniformity of program administration during emergencies.
Bank executives will see compensation tied more explicitly to mission metrics and regional pay comparators; this may change recruitment and incentive structures and could raise governance questions at individual Banks. The annual collateral reporting requirement increases transparency for Congress and market participants about the FHLBs’ secured obligations and collateral quality, potentially affecting market perceptions and oversight. Overall, community lenders, housing developers, and low/moderate-income households are likely to gain expanded access to subsidized credit and grants; Banks will face increased program obligations, reporting duties, and a stronger mission-focus in compensation policy.
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Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Introduced April 10, 2025 by Catherine Marie Cortez Masto · Last progress April 10, 2025
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Introduced in Senate