Economy

Rising interest rates could force some community banks to fall below a critical capital threshold that the Federal Housing Finance Agency uses to determine eligibility for Home Loan bank advances.

Dozens of community bankers and housing experts offered their opinions on the Federal Home Loan Bank System, the first review in nearly 100 years. But the insurers, nonbanks and megabanks that use the system the most were largely absent from the debate.

The Federal Housing Finance Agency got an earful from housing experts at a listening session intended to aid a comprehensive review of the financing system.

The former head of the agency said a decision last year to suspend caps on investor loans has further induced demand in an already hot market. Other experts say a supply-demand imbalance is the true driving force.

A couple squatted in their foreclosed home since 2009 and are only now being evicted, highlighting stubborn problems in the foreclosure process.

In an exclusive interview, the moderate Virginia Democrat and co-chair of the Community Development Financial Institution Caucus touched on the future of community development, cybersecurity and nonbank regulation. 

The move comes amid dwindling advances and a growing concern that the Home Loan banks are participating in riskier investments.

Data as of Mar. 31, 2022. Dollars in thousands.

Data as of Mar. 31, 2022. Dollars in thousands.

Data as of Mar. 31, 2022. Dollars in thousands.

Native communities want to launch or expand their own community development financial institutions but are running up against regulatory challenges and a lack of support from mainstream banks.

Data as of Mar. 31, 2022. Dollars in thousands.

Data as of Mar. 31, 2022. Dollars in thousands.

Data as of Mar. 31, 2022. Dollars in thousands.

The day after the Federal Open Market Committee's next meeting we will analyze the increase and the signals about what rate hikes may be coming.

The effort, spearheaded by Democratic Sen. Mark Warner and Republican Sen. Mike Crapo, is the latest sign of the community development industry’s rising political prominence in Washington.