Duckworth, Johnson, Scott Introduce Bipartisan Legislation to Help Hardworking Families Access Affordable Home Loans
[WASHINGTON, D.C.] – U.S. Senator Tammy Duckworth (D-IL) introduced Bipartisan legislation this week with U.S. Senators Ron Johnson (R-WI) and Tim Scott (R-SC) to help hardworking families in Illinois and across the country access affordable home loans. The Housing Opportunity Mortgage Expansion (HOME) Act would help ensure Federal Home Loan Banks (FHLBs) can continue their small business lending and funding of affordable housing initiatives, such as down payment assistance for low-income Illinoisans, by reversing a 2016 Federal Housing Finance Agency (FHFA) FHLB membership rule that threatened to drive up costs for American homeowners. The legislation would make FHLB membership more inclusive, create more liquidity for small business lending and increase resources for affordable housing.
“Every American deserves an equal chance at reaching the American Dream, including an equal chance become a homeowner,” said Duckworth. “By safeguarding lending options for low-income families, small businesses and farmers, we can protect economic opportunities for hardworking Americans across the country.”
The FHFA rule in question would gut the Chicago FHLB’s membership and funding source, which could fundamentally impair its ability to support affordable housing options and small business lending—two services vital to a strengthening local and state economies. The FHFA rule has a particularly devastating impact on FHLB-Chicago, which serves Americans in Illinois and Wisconsin, because its longstanding captive insurer members provide the bank with nearly one-third of its total borrowings. The HOME Act would retain longstanding FHLB members who joined prior to the FHFA proposed rule and reinstate newer members that joined a bank while the proposed rule was pending or who have already had their FHLB membership terminated.
As a member of the Senate Committee on Small Business and Entrepreneurship, Duckworth is working in the Senate to expand economic opportunity for hardworking families and small business owners across America. Duckworth seeks to support working families across Illinois, increase access to jobs and help invest in communities to stabilize neighborhoods struggling for a brighter future.
"The Federal Home Loan Bank of Chicago is a critical source of affordable housing funds for many Chicago and Illinois housing groups,” said President and CEO Community Investment Corporation Jack Markowski. “These funds are generated by the profits produced from the activities of its members. By grandfathering several of the FHLB's largest member borrowers, this legislation will help preserve millions of dollars of grants that will continue to assist the housing needs throughout Illinois. Senator Duckworth should be commended for her leadership on this important issue..
"The participation of larger financial institution members in the FHLBs enhances the value to members of all sizes, particularly smaller member banks and thrifts which often have limited or no direct access to the capital markets other than through their FHLB,” said Senior Vice President of Federal Government Relations of the Community Bankers Association of Illinois David Schroeder.
"The Federal Home Loan Bank of Chicago is a key liquidity source and funding partner for many of our community bank and thrift members in Illinois. However, a regulation implemented last year requires it to terminate the memberships of two of its largest borrowers. As a result, the size and scope of its activities could be reduced significantly, impacting its ability to assist its remaining members and the communities they serve,” said Illinois Bankers Association President and CEO Linda Koch.
"Funding from the Federal Home Loan Bank of Chicago is used every day by community banks and thrifts to make homeownership a reality for their Illinois customers or lower the cost of their current mortgage through refinancing,” said Illinois League of Financial Institutions President and CEO Erich Bloxdorf.
"The Federal Home Loan Bank of Chicago is a key liquidity source and funding partner for many of our credit union members in Illinois. Member banks also use FHLB Chicago funds to make small business, agriculture and agribusiness loans, which support job creation and family farming throughout our state,” said Illinois Credit Union League President and CEO Thomas Kane.
The Community Investment Corporation, Federal Home Loan Bank – Chicago, Mortgage Bankers Association, Community Bankers Association of Illinois, Illinois Bankers Association, Illinois league of financial institutions, Illinois Credit Union League, Wisconsin Bankers Association and the Wisconsin Credit Union League support the HOME Act.
The full text of S. 2361 is available here.
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