NAIC Primer on Federal Home Loan Banks

by Jennifer Johnson of the NAIC

"The FHLB system is comprised of 11 regional banks that are privately owned as cooperatives by their members;only financial institutions may belong to an FHLB. Instead of making loans directly to individuals, the FHLB regional banks provide low-cost financing to the financial institutions that extend loans to homeowners, resulting in the availability of affordable mortgages. About 80% of U.S. lending institutions rely on FHLB regional banks for financing, and they have been an essential part of the country’s financial system for more than eight decades."

"U.S. insurers interact with the FHLB system via borrowing, investing in FHLB debt and owning stock in FHLB regional banks."

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NAIC Primer on Federal Home Loan Banks

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