The Consumer Federation of America’s recent blog post (“A Government-Sponsored Banking System that Spends More on Salaries than on Housing?”) is misleading, and fundamentally and purposefully misrepresents the role and operations of the Federal Home Loan Bank (FHLBank) System. It is unfortunate that the CFA continues to offer up a false version of facts to suit their pre-determined narrative which in the end, is harmful to CFA members and the public at large.
Let’s be clear: the FHLBank System’s mission is to provide reliable liquidity to member institutions – banks, credit unions, insurance companies, and CDFIs – that, in turn, finance homeownership, affordable rental housing, and local development. That’s how the System was designed 93 years ago, and that’s how it continues to deliver impact at scale today.
Here are just a few of the facts that need to be corrected:
- Our liquidity is backed by eligible collateral – primarily single-family mortgages, multifamily loans, and other real estate assets that anchor communities. As of year-end 2024, 96.7% of our $3.7 trillion in collateral was real estate backed. These aren’t abstract numbers; they represent real homes, real families, and real neighborhoods across America.
- Contrary to CFA’s claims, the FHLBanks remain deeply committed to affordable housing. In 2024 alone, the System committed over $1.2 billion to housing and community development programs – 19.6% of net income, far surpassing the statutory requirement. CFA deliberately ignores nearly $400 million in voluntary grant programs – targeted initiatives supporting veterans, seniors, tribal communities, and more. That omission undermines the credibility of their critique.
- The CFA’s criticism of executive compensation overlooks the facts and disregards the scale and complexity of the FHLBank System. Each of the 11 FHLBanks manages, on average, more than $100 billion in assets and operates mission-critical liquidity programs that serve thousands of members in all 50 states. These Banks are essential to increasing housing access and strengthening communities. Strong, experienced leadership isn’t a luxury in financial services – it’s a necessity – one that requires competitive, market-based compensation.
- Executive compensation at the FHLBanks is set independently by each Bank’s board of directors, with fiduciary oversight and a focus on attracting and retaining top talent. Compensation levels are aligned with those at the other housing GSEs and are generally lower than at similarly sized financial institutions based on total assets. The System’s long-standing safety and soundness – nearly 100 years strong – is a direct result of the leadership, stewardship, and stability provided by its executive teams.
- CFA also misses the mark by comparing our affordable housing contributions to member dividends. The FHLBanks aren’t charities – they’re cooperatives designed to transform illiquid mortgage collateral into lendable funds. Dividends don’t enrich shareholders – they compensate members for tying up capital in non-tradable stock that will never appreciate by a single penny. No dividends are paid unless capital requirements are fully met, including reserves that protect against systemic risk. And since more than 90% of FHLBank members are community lenders with assets under $10 billion, dividends represent an important source of income to support lending in their communities.
Here’s what CFA’s blog fails to acknowledge: the FHLBank System is a foundational part of America’s housing finance infrastructure. We don’t just support homeownership – we enable it. We don’t just fund affordable housing – we make it possible at scale. And we do so by remaining laser-focused on our core mission: keeping money flowing where it’s needed most. The Federal Home Loan Banks empower local lenders to support businesses, create jobs, and open doors to housing opportunities.
The CFA can keep chasing headlines. We’ll keep building communities.
