On December 29, the Federal Housing Finance Agency, which regulates Freddie-Mac, Fannie-Mae and the 12 Federal Home Loan Banks, issued a final rule implementing portions of the Housing and Economic Recovery Act of 2008, which authorizes community development financial institutions (CDFIs) that have been certified by the U.S. Treasury Department’s CDFI Fund to become members of Federal Home Loan Banks (FHLBs). The final rule sets forth eligibility and procedural requirements for CDFIs to become members of FHLBs.
Eligible CDFIs include: (1) federally regulated insured depository institutions and their holding companies; (2) credit unions, whether federally or state-chartered; (3) community development loan funds, which are unregulated institutions specializing in financing of housing, businesses or community facilities that provide health care, child care, educational, cultural or social services; and (4) community development venture capital funds, which are unregulated institutions that provide equity and debt-with-equity features to small and medium-sized businesses in distressed communities. CDFIs can be either for-profit or nonprofit entities.
The rule is effective February 4.