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H.R. 3323: Federal Home Loan Banks’ Mission Implementation Act

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The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress, and was published on May 18, 2021.

Federal Home Loan Banks' Mission Implementation Act

This bill generally expands the ability of Federal Home Loan Banks (FHLBs) to provide advances and grants for activities related to small businesses, affordable housing, and community development. The 11 regional FHLBs serve as government-sponsored enterprises to support mortgage lending and related community investment through advances to member financial institutions. These advances are secured by assets such as mortgages and other loans.

Specifically, the bill allows FHLBs to provide advances that are secured by (1) loans guaranteed by the Small Business Administration, and (2) certain loans made in response to the economic impact of the COVID-19 pandemic and guaranteed or insured by the federal government.

The bill also expands the availability of advances to certain community development financial institutions and credit unions. It also gives the Federal Housing Finance Agency discretion in setting the average asset maximum for certain community financial institutions to qualify for an advance. However, this maximum must not be more than $10 billion. Currently, a community financial institution must have less than $1 billion in average total assets to qualify.

Furthermore, the bill exempts from taxation for two years after the conclusion of the COVID-19 emergency period certain municipal bonds guaranteed by an FHLB.

The bill also increases the percentage of earnings FHLBs must annually contribute to the Affordable Housing Program and sets aside a specified percentage to benefit tribes under this program.