At this year's Federal Home Loan Banks  (FHLBanks) directors' conference, speaker FHFA Director Melvin L. Watt, delivered a speech  regarding the past year of positive developments that occurred in these 12 banks.
“FHFA understands the importance of developing new ways for the FHLBanks to support the housing finance needs of members,” Watt said. “FHFA has now approved several mortgage programs that provide participating members alternative means to sell mortgage loans, thereby transferring risk and freeing up capital that members can use to expand credit availability in local communities.”
In his speech, Watt highlighted that the FHLBanks are an important part of home financing, in that they provide a source of funding and access to the secondary mortgage market and other services to member institutions, especially smaller institutions that have little access these services.
According to the data presented at the conference, every FHLBank had a positive net income for the past 13 quarters, and they also earned $2.3 billion in 2014 and $2.5 billion in 2013 collectively. The top 10 borrowers led the increase of $73 billion in 2014 of advance volume, while the other members revealed signs of increasing advance demand. By the end of 2014, regulatory capital was $49.5 billion, or 5.4 percent of total system assets, consisting of $13.2 billion in retained earnings, $33.7 billion in capital stock, and $2.6 billion in mandatorily redeemable capital stock. The Affordable Housing Program also helped FHLBanks award $238.5 million worth of grants that would provide assistance to nearly 25,000 single-family and multifamily units.
The FHLBanks were set up by Congress to aid in the home financing process, and the FHFA has a statutory responsibility ensure that this purpose is being met within the constructs of the FHLBank Act.
“Since becoming the Director of FHFA, I have continued to gain an even greater understanding and appreciation for what you [FHLBanks] do,” Watt said. “I look forward to working with you [Directors] in our joint effort to ensure that the FHLBanks continue their operations in a manner that is both safe and sound and consistent with their mission.”
Click here  to read Watt's full speech.