April 10, 2025
Ms. Cortez Masto introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs
To reaffirm and improve the participation of members of the Federal Home Loan Bank System to meet the short- and long-term housing, including affordable housing, agricultural and small business lending, and community economic development financing needs of the communities they serve, including rural, urban, low-income, and Tribal communities, improve the ability of community development financial institutions and credit unions to meet community economic development financing needs for their communities, and aligning executive compensation to mission achievements, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
Section 1. Short title
This Act may be cited as the Federal Home Loan Banks' Mission Activities Act
.
Sec. 2. Purpose
The purpose of this Act is to reaffirm and improve the participation of members of the Federal Home Loan Bank System in financing that meets the short- and long-term housing, including affordable housing, agricultural, and small business lending and community economic development financing needs of the communities they serve, including rural, urban, low-income and Tribal communities, by—
(1)
expanding the ability of the Federal Home Loan Banks to support the housing, including affordable housing, small business, agricultural and economic development activities of the members of the Federal Home Loan Banks, including credit unions, community development financial institutions, insurance companies, and housing finance agencies;
(2)
clarifying that the Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.) permits a broad range of activities that enable the Federal Home Loan Banks to support the housing and community development activities of their members, including providing grants, subsidized financing and advances, and credit enhancement; and
(3)
simplifying executive compensation and aligning it with mission achievements.
Sec. 3. Adding credit unions and community development financial institutions to the definition of community financial institutions
Section 2(10) of the Federal Home Loan Bank Act (12 U.S.C. 1422(10)) is amended—
(1)
in subparagraph (A), by striking clauses (i) and (ii) and inserting the following:
(i)
(I)
the deposits of which are insured under the Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) or the Federal Credit Union Act (12 U.S.C. 1751 et seq.), or that qualifies under section 4(a)(5) to be treated as an insured depository institution for purposes of determining eligibility for membership; and
(II)
that has, as of the date of the transaction at issue, less than $1,000,000,000 in average total assets, based on an average of total assets over the 3 years preceding that date; or
(ii)
that has been certified as a community development financial institution (as defined in section 103 of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4702)) by the Secretary of the Treasury.; and
(2)
in subparagraph (B), by striking (A)(ii)
and inserting (A)(i)(II)
.
Sec. 4. Affordable housing program
Section 10 of the Federal Home Loan Bank Act (12 U.S.C. 1430) is amended—
(1)
in the section heading, by inserting and grants
after Advances
; and
(2)
in subsection (j)—
(A)
by striking paragraph (1) and inserting the following:
(1) In general
Pursuant to regulations promulgated by the Director, each Bank shall establish an affordable housing program (in this subsection referred to as the Program) to finance long-term, low- or moderate-income, owner-occupied and affordable rental housing by subsidizing the interest rate on advances, or providing grants, to members, provided that the interest rate on any loan issued by a member and funded by a subsidized Bank advance shall also be subsidized.;
(B)
in paragraph (2), in the matter preceding subparagraph (A)—
(i)
by striking Board's
and inserting Director's
; and
(ii)
by inserting and provide grants
after advances
;
(C)
in paragraph (3)—
(i)
in the paragraph heading, by inserting or grants
after advances
;
(ii)
in the matter preceding subparagraph (A)—
(I)
by inserting or grants
after advances
; and
(II)
by striking as the following:
and inserting as—
;
(iii)
in subparagraph (A)—
(I)
by inserting the
before purchase
; and
(II)
by striking area,
and inserting area; and
;
(iv)
by striking subparagraph (B);
(v)
by redesignating subparagraph (C) as subparagraph (B); and
(vi)
in subparagraph (B), as so redesignated, by inserting the
before purchase
;
(D)
in paragraph (4)—
(i)
by inserting or grants
after receiving advances
;
(ii)
by inserting or grants
after such advances
;
(iii)
by inserting or grants
after of advances
; and
(iv)
by striking this program
and inserting the Program
;
(E)
in paragraph (5)—
(i)
in the matter preceding subparagraph (A)—
(I)
by inserting or grants
after advances
; and
(II)
by striking Affordable Housing
;
(ii)
in subparagraph (C), by striking 1995, and subsequent years
and inserting 1995 and years subsequent through 2025
; and
(iii)
by adding at the end the following:
(D)
In 2025, and subsequent years, 30 percent of the preceding year's net income, or such prorated sums as may be required to assure that the aggregate contribution of the Banks shall not be less than $200,000,000 for each such year, except that a Bank may, after consultation with its Advisory Council, allocate up to 15 percent of that preceding year’s net income to be used for non-competitive grants, subsidized loans, or investments that would generate below market rates of return for affordable housing or community economic needs of low- or moderate-income households or neighborhoods, including in low-income, Tribal, or rural communities, under programs other than the Program, as follows:
(i)
Any community investment cash advance or grant program established by the Bank.
(ii)
Another affordable housing or community development program established by the Bank that provides the funds directly or indirectly to organizations meeting the requirements and limitations necessary to qualify as a charitable contribution for which an income tax deduction is allowable under section 170 of the Internal Revenue Code of 1986 or otherwise approved by the Director in regulation, and that benefits persons who are residents of the States of the district in which the Bank is headquartered.;
(F)
in paragraph (6)—
(i)
in subparagraph (A), by striking this paragraph
and inserting paragraph (5)
;
(ii)
in subparagraph (C), by striking Board's
and inserting Director's
;
(iii)
in subparagraph (E), by striking Affordable Housing
; and
(iv)
in subparagraph (F), by inserting Notification.—
before The Director
;
(G)
in paragraph (9)—
(i)
by striking this program
each place it appears and inserting the Program
; and
(ii)
by inserting and grants
after advances
each place it appears;
(H)
in paragraph (10), by inserting and grant
after advance
;
(I)
in paragraph (11), in second sentence, by inserting and grants
after advances
;
(J)
by amending paragraph (12) to read as follows:
(12) Temporary suspension of requirements following disasters
Following a declaration of a disaster declared by the President or a Federal agency or under State or Tribal law, the Director may—
(A)
allow vacant rental project units assisted under the Program of a Bank to be leased temporarily to households displaced by that declared disaster regardless of income, notwithstanding the income targeting requirements of paragraphs (2)(B) and (13) under conditions established by the Director; and
(B)
temporarily suspend any other requirements of this subsection and its implementing regulations to further recovery from declared disasters, including recovery for displaced households, subject to conditions appropriate to facilitate eligible uses of Program funds to assist recovery.; and
(K)
in paragraph (13), in the matter preceding subparagraph (A), by striking subsection—
and inserting subsection:
.
Sec. 5. Compensation of executive officers
Section 7 of the Federal Home Loan Bank Act (12 U.S.C. 1427) is amended—
(1)
in the first subsection (l) (relating to withholding of compensation)—
(A)
in the subsection heading, by striking Withholding of Compensation
and inserting Compensation of Executive Officers
;
(B)
by striking Notwithstanding
and inserting the following:
(1) Withholding of compensation
Notwithstanding; and
(C)
by adding at the end the following:
(2) Setting compensation
(A) In general
Notwithstanding section 1318(d) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4518(d)), the Director shall, in accordance with regulations issued by the Director, establish compensation for any executive officer of a Bank that is reasonable and comparable to compensation for employment at a regional Federal Reserve Bank or other similar publicly-subsidized financial institutions or financial services companies involving similar duties and responsibilities.
(B) Mission investments
In determining the compensation for an executive officer of a Bank under subparagraph (A), the Director—
(i)
shall consider the level of mission investments, including—
(I)
the percentage of member institutions that provided community investment program advances, community investment cash advances, and letters of credit;
(II)
the percentage of member institutions that sponsored affordable housing programs under section 10(j) and other grant programs created voluntarily or by regulation;
(III)
the share of all advances provided to community financial institutions;
(IV)
investments in municipal and housing finance agency bonds; and
(V)
other mission investments that are reasonable in accordance with regulations promulgated by the Director; and
(ii)
may pay compensation at a level that is higher than the compensation for a regional Federal Reserve Bank with achievement of goals aligned with mission achievements as established by the Director.; and
(2)
by striking the second subsection (l).
Sec. 6. Reporting on collateral
Section 10 of the Federal Home Loan Bank Act (12 U.S.C. 1430) is amended by adding at the end the following:
(l) Report to Congress
The Director shall annually report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives on the collateral pledged to the Banks, including an analysis of collateral by type and by Bank district.