FHFA Proposes Rule to Expand Access to Liquidity for the Federal Home Loan Banks
The Federal Housing Finance Agency (FHFA) has announced a proposed rule aimed at enhancing the liquidity capabilities of the Federal Home Loan Banks (FHLBanks) through updated regulations on unsecured credit limits. By aligning the treatment of interest-bearing deposit accounts (IBDAs) and authorized overnight investments with Federal Funds sales, this initiative seeks to enable FHLBanks to more effectively meet the intraday liquidity needs of their members. This modernization is essential for improving liquidity management, particularly during times of market stress, as highlighted by FHFA Director Sandra L. Thompson, who emphasized the pivotal role of FHLBanks in supporting affordable housing for over 90 years.
The proposal stems from extensive engagement with stakeholders following the FHFA’s recent report, “FHLBank System at 100: Focusing on the Future,” released in November 2023. The FHFA is inviting public comments on the proposed rule for 60 days after its publication in the Federal Register. For professionals in the homebuilding and developing industries, this rule could enhance access to critical financial resources, ultimately contributing to a more robust and sustainable housing market.
