Banking and Finance Law Daily Wrap Up, GOVERNMENT SPONSORED ENTERPRISES—FHLBank collateral report released, (Sep 30, 2013)
Organizations Mentioned:Federal Housing Finance Agency | National Credit Union Administration
By John M. Pachkowski, J.D.
The Federal Housing Finance Agency has issued its annual report to Congress on the collateral pledged to the Federal Home Loan Banks (FHLBanks). The report, required by section 1212 of the Housing and Economic Recovery Act of 2008, is based on data collected through an annual survey, known as the “Collateral Data Survey,” conducted by FHFA’s Division of Federal Home Loan Bank Regulation.
The report provides data on the levels of collateral pledged to the FHLBanks securing advances and other products offered by FHLBanks to their members and housing associates. The types of eligible collateral pledged to the FHLBanks are: 1-4 family residential mortgages; U.S. government agency mortgage-backed securities and collateralized mortgage obligations; private label mortgage backed securities and collateralized mortgage obligations; U.S. Treasury and other U.S. Agency securities (excluding agency mortgage backed securities) and cash deposits in FHLBanks (combined as securities/deposits); other real estate related collateral; and Community Financial Institution collateral.
The Collateral Data Survey also collects collateral data by member type and size. Members of the FHLBanks include: commercial banks, thrift institutions, credit unions insured by the National Credit Union Administration, insurance companies, and community development financial institutions. The Collateral Data Survey also collects data from “housing associates” and from previous members acquired by non-members or members in another FHLBank district (combined as other) that hold advances outstanding. A housing associate is a non-member entity to which an FHLBank may make advances if it meets specific requirements in the FHFA’s regulations. Housing associates are often state housing finance agencies.
As of Dec. 31, 2012, FHLBank advances totaled approximately $414 billion. As of that date, the “adjusted minimum” level of collateral securing advances was $523 billion and the total collateral pledged to the FHLBanks was $1.7 trillion. The “adjusted minimum” level of collateral is defined as the minimum amount of collateral an FHLBank determines would be necessary to liquidate a member’s outstanding advances. Total collateral includes the adjusted minimum level of collateral, plus collateral pledged by borrowers and non-borrowers to support non-advance products, plus any collateral pledged in excess of these amounts.
RegulatoryActivity: BankingOperations GovernmentSponsoredEnterprises Loans Mortgages