Membership

Membership in the FHLBank System is available to insured depository institutions and certain other financial institutions. From a low of 2,855 in the early 1990's, the number of FHLBank members has risen considerably since that time. At June 30, 2008, total membership had reached 8,125, comprised of 5,848 commercial banks, 1,191 savings institutions, 922 credit unions, and 164 insurance companies, with collective assets exceeding $12 trillion. Each member is a shareholder in one of the 12 regional FHLBanks, which are privately capitalized, separate corporate entities operating in a cooperative structure.

FHLBank loan products and services are highly valued, particularly by the 75% - 80% of current membership that can be described as community financial institutions (under $625 million in assets effective 1/01/08). For these institutions, there is often no other source of funds that is both cost-effective and reliable. At any given time, a substantial majority of the membership is using FHLBank loans to make a difference in their communities.

"...The FHLB system was organized under the Federal Home Loan Bank Act of 1932. Each FHLB is a cooperative, the members of which consist of commercial banks, thrifts, credit unions, and insurance companies. The System has the public policy mission of supporting its members' housing and community investment activities by serving as a reliable source of liquidity through secured financing. The FHLBs also directly support affordable housing and community investment programs delivered through members...The consolidated obligations are commonly viewed as "agency" obligations and are priced at a narrow spread over U.S. Treasuries, affording the FHLBs and the members the benefit of low funding costs...The System continues to attract new members, especially from the ranks of commercial banks, ensuring its important role in the U.S. home-finance market...Apart from their direct return on investment in the form of dividends, members benefit from low funding costs on advances. While the System's cost of funds is very favorable, reflecting its GSE status and hence its ability to raise funds at a small spread on Treasury rates, this benefit is substantially passed through to members in the pricing on advances..."
Standard & Poor's, June 2008

"..The System, comprised of 12 regional FHLBanks, was created by the U.S. Congress in 1932 to provide member institutions with a stable source of funding to support the domestic residential housing market...The 12 regional FHLBanks are each cooperatively owned by their respective members or former members in certain cases. Membership in the system is voluntary and consists of commercial banks, thrifts, insurance companies and credit unions. A member's designated home office determines which regional FHLBanks it will join...High dependence and support levels for the FHLBank System reflects the importance of the System to its member institutions and their ability to support housing finance and community development. The FHLBanks are an important and relatively inexpensive source of credit to its member institutions. Housing remains a key political issue in the USA, and the FHLBanks' successful role in facilitating housing finance is therefore an important rating factor..."
Moody's Investors Service, December 2007