fbpx

American Banker: Federal Home Loan banks’ purpose called into question as advances drop

American Banker, April 4, 2022, Federal Home Loan banks’ purpose called into question as advances drop

As banks rack up record levels of deposits, the Federal Home Loan banks’ core business of providing liquidity to member institutions is drying up, leading some critics to question the institutions’ long-term viability.

The lifeblood of the Home Loan banks — advances to banks, credit unions and insurance companies — plummeted 20% last year to $350 billion, its lowest level in 15 years. The Home Loan banks say the decline is part of the normal ebb and flow of the market.

But the dramatic drop in advances over many years has renewed calls by critics and a handful of insiders for the creation of an independent advisory committee to scrutinize the 11 Home Loan banks’ purpose and relevance.

Print Friendly, PDF & Email

Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

Complete the form to download the full report: