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The Federal Home Loan Bank System, “A Unique GSE”
The FHLBank System and its cooperative form of ownership is very unique.
- No other housing GSE:
- operates under a decentralized, regional structure as do the FHLBanks.
- is structured as a cooperative, owned and controlled by its member community banks to reflect the needs of their communities.
- The FHLBank System:
- is and has been an effective public/private partnership created by Congress to provide housing finance and community credit to America for more than 70 years.
- The FHLBanks are cooperatives and the owners of the System are also its members and sole users of its services. As a cooperative:
- the FHLBanks issue no publicly traded equity stock.
- the FHLBanks’ member contributed capital can only be redeemed at par value and thus does not fluctuate in value.
- no FHLBank officer or director receives any stock options or any stock related compensation; thus there is no incentive to manage or manipulate earnings in order to reap the benefit of options.
The System and its assets are divided into 12 Banks that are regionally owned and controlled. The FHLBanks respond to particular issues and business needs based on the composition of membership and regional lending and housing demands.
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