Fitzgerald Questions FHL Banks on MPF Program Liquidity in 2008 and 2020 Crises
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Topics in this report
Summary
The segment is a clip from the House Financial Services Committee's July 2026 oversight hearing on the Federal Home Loan Bank System. Rep. Scott Fitzgerald (R-WI) questions witnesses Mr. Lockhart and Mr. Donovan on the Mortgage Partnership Finance (MPF) program used by Wisconsin and regional community banks.
The discussion covers MPF features allowing banks to sell 30-year mortgages, transfer interest-rate risk, retain servicing, and offer targeted rate-reduction programs. Witnesses describe FHL Banks' role providing liquidity during the 2008-09 and 2020 crises, emphasizing no credit losses on advances due to over-collateralization.
Editorial Assessment
The broadcast accurately conveys MPF operations and FHL Bank crisis performance. Official FHLB materials and congressional research confirm the program mechanics and zero credit losses on advances since inception. The clip omits broader hearing context on FHLB reforms or asset-size concentration but does not misrepresent the discussed elements. Sourcing relies on named hearing participants with statements aligned to primary program descriptions.
Key Moments
MPF lets community banks sell loans to FHL Bank, retain servicing, and transfer interest-rate risk while maintaining customer relationships.
Matches official MPF program descriptions from multiple FHLBanks.
FHL Banks provided counter-cyclical liquidity during 2008-09 and 2020 crises as first responders when other funding contracted.
Supported by GAO report and Federal Reserve analyses showing advances surged in both periods.
FHL Banks have never taken a credit loss on an advance because advances are fully securitized and over-collateralized.
Stated directly on FHLBanks.com and corroborated in CBO and CRS reports.
Sources Consulted
- Mortgage Partnership Finance ® (MPF ® ) Program
- Federal Home Loan Banks: Role During Financial Stress and Liquidity Provision
- The Federal Home Loan Bank (FHLB) System and Selected Policy Issues
- Advances | Federal Home Loan Bank Liquidity Solutions
- House holds 1st oversight hearing on Federal Home Loan Banks in 15 years
- The Role of Federal Home Loan Banks in the Financial System