On July 30, senators from several states sent
letters to multiple FHLBs urging them to require their respective banks to allocate at least 20 percent of their net income to affordable housing and community economic development grants through the Affordable Housing Program and creating new voluntary programs. Despite substantial government subsidies, the senators criticized FHLB for their inadequate response to a crisis in affordable housing, and claimed that the FHLBs have spent only a small fraction of their net income on affordable housing. The letters point out that while the FHLBs pledged to increase their contributions to 15 percent, they have yet to fulfill this promise and should aim for at least 20 percent. The senators argue that FHLBs have the financial capacity to contribute more, citing historical precedents and the current high levels of retained earnings.
The following day, Deputy Secretary of the Treasury Wally Adeyemo met with leaders of the 11 FHLBs and FHFA Director Sandra Thompson to discuss enhancing support for affordable housing development. Adeyemo urged the FHLBs to allocate at least 20 percent of their net income to affordable housing and to use part of their unrestricted retained earnings to create a capital pool aimed at reducing the cost of new housing production nationwide. The Treasury noted that this meeting is part of the Biden administration's broader effort to lower costs for Americans and follows months of Treasury engagement with FHLB leadership.
