Should Nonbank Mortgage Companies Be Permitted to Become Federal Home Loan Bank Members?

Urban Institute, June 16, 2020–Karan Kaul, Laurie Goodman
This brief articulates the benefits of expanding FHLB membership to nonbanks. It shows there is strong alignment between the nonbank business model and the mission of the FHLBs to provide liquidity to support housing finance and community development. However, nonbanks do pose some additional risk to the safety and soundness of the FHLB system.