Federal Home Loan Bank Board
Seal
Board overview
FormedJuly 22, 1932 (1932-07-22)
DissolvedOctober 8, 1989 (1989-10-08)
Superseding agencies

The Federal Home Loan Bank Board (FHLBB) was a board created in 1932 that governed the Federal Home Loan Banks (FHLB or FHLBanks) also created by the act, the Federal Savings and Loan Insurance Corporation (FSLIC) and nationally-chartered thrifts.[1] It was abolished and superseded by the Federal Housing Finance Board and the Office of Thrift Supervision in 1989 due to the savings and loan crisis of the 1980s, as Federal Home Loan Banks gave favorable lending to the thrifts it regulated leading to regulatory capture.[1]

Activities

Looking to create a secondary mortgage market dedicated to buying loans from their constituent thrifts, the FHLBanks and board successfully lobbied for the creation of Freddie Mac, instead of an expanded Fannie Mae (which was limited to FHA insured loans), to be owned and controlled by the FHLBanks and the Federal Home Loan Bank Board and which would buy and sell loans from thrifts only.[1]

Organizational history

The FHLBB was established as an independent agency by the Federal Home Loan Bank Act, July 22, 1932.[2] The Home Owners' Loan Corporation was established as an emergency agency under FHLBB supervision by the Home Owners' Loan Act of 1933, June 13, 1933. FHLBB and its components (Federal Home Loan Bank System, Federal Savings and Loan System, Federal Savings and Loan Insurance Corporation, and Home Owners' Loan Corporation) were made part of newly established Federal Loan Agency by Reorganization Plan No. I of 1939, effective July 1, 1939.

FHLBB was abolished and its functions and components assigned to the Federal Home Loan Bank Administration (FHLBA) in the newly established National Housing Agency, by EO 9070, February 24, 1942. FHLBA was abolished and its functions and components assigned to Home Loan Bank Board (HLBB) in the newly created Housing and Home Finance Agency, by Reorganization Plan No. 3 of 1947, effective July 27, 1947. HLBB was made an independent agency and redesignated as the FHLBB by the Housing Amendments of 1955 (69 Stat. 640), August 11, 1955.

This redesignated FHLBB was abolished effective October 8, 1989, by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA).[3] The Office of Thrift Supervision would regulate the thrift industry, while the Federal Housing Finance Board would manage the federal home loan banks.[4]

See also

References

  1. 1 2 3 Day, Kathleen (2019). Broken Bargain: Bankers, Bailouts, and the Struggle to Tame Wall Street. Yale University Press. pp. 134–142. ISBN 9780300223323. LCCN 2018943787.
  2. ↑ "Records of the Federal Home Loan Bank Board [FHLBB]". National Archives. 2016-08-15. Retrieved 2017-10-24.
  3. ↑ Financial Institutions Reform, Recovery, and Enforcement Act of 1989, §701
  4. ↑ Federal Housing Finance Board: Actions Needed to Improve Regulatory Oversight. Government Accountability Office. 18 September 1998. p. 18.
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