FHLBs On Agenda for House Hearing

The House Financial Services Committee will meet on March 2 to debate the future of the GSEs and the housing market more broadly. The conclusions lawmakers reach about Fannie Mae and Freddie Mac will have major implications for the 12 Federal Home Loan Banks, including how they sell their debt and who regulates them. "So much of what will happen to them depends on what Congress is going to do with Fannie and Freddie," said Bert Ely, an independent consultant in Alexandria, Va. "This gets back to the core problem of what do you do with Fannie and Freddie?" Though Fannie and Freddie have become symbols of the financial crisis, the FHLBs have not gone unscathed. The state of the system will be clearer in the coming weeks when they release their 2009 annual reports. But the Home Loan banks have grappled with big losses related to their investments in private-label mortgage-backed securities.