FHLB Advances to Depository Institutions
Federal Home Loan Banks (FHLBs) were established to lend to federally chartered thrift institutions and member banks having at least 10% of their assets in mortgages. FHLB advances had to be collateralized by borrowing institutions’ mortgage portfolios. The Financial Modernization Act of 1999 enabled FHLBs to depart from their traditional role of providing housing finance. They now can lend outside the housing sector to community banks, accepting banks’ loans to small businesses, small farms, and small agribusinesses as collateral.
Suggested citation: "FHLB Advances to Depository Institutions," Federal Reserve Bank of Cleveland, Economic Trends, no. 01-05, pp. 17, 05.01.2001.