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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 40 December 2025 F E A T U R E S T O R Y F or nearly a century, the Federal Home Loan Banks have been a crucial, stabilizing force behind the strength of America's finan- cial system. They exist to ensure that their members—banks, credit unions, insurance companies, and community development financial institutions— have reliable liquidity and funding in every economic environment so they can meet the needs of the people and places they serve. The Federal Home Loan Banks are a system of 11 regional, member-owned cooperatives that are privately capital- ized and mission-driven. That mission has always been clear: provide stable, fully collateralized funding that trans- lates into homes built, small businesses launched, and communities strength- ened. For more than 90 years, they have transformed financial stability into tangible economic growth nationwide. Now, a study from the Urban Insti- tute—the first in an expected three-part series quantifying the holistic value of the FHLBank System—quantifies the economic benefit the 11 Federal Home Loan Banks deliver by reducing systemic stress and lowering the likelihood of bank failures. The study estimates that the Federal Home Loan Bank System generates between $13.2 billion and $21.4 billion in annual economic value by re- ducing bank-failure risk and mitigating financial stress in the banking system. Put plainly: the liquidity the FHLBanks provide strengthens financial institu- tions, mitigates systemic risk, and helps keep periods of stress from becoming something worse—protecting commu- nities and taxpayers in the process. Urban's findings confirm what those closest to the FHLBank System long have understood: • When liquidity pressures rise, mem- ber institutions turn to the FHL- Banks—not as a sign of distress, but as a risk-management tool purpose- fully built into the system. • Membership in the FHLBank Sys- tem is associated with a nearly 10% reduction in the likelihood of bank failure, saving the federal deposit-in- surance system roughly $950 million per year. In practical terms, these findings provide evidence that the FHLBanks keep credit flowing to neighborhoods, workers, and families rather than freez- ing up when conditions tighten. This is not theoretical. We saw it in March 2023, when volatility hit the banking sector. Institutions with access to the FHLBanks had a reliable countercyclical source of funding. They could meet withdrawals, manage balance-sheet pressure, and continue serving customers. Nearly every bank that accessed FHLBank liquidity during that period remained stable and con- tinued operating to serve their custom- ers—exactly as Congress intended when it created the system in 1932. This first study from Urban Institute does more than validate the system's economic value for banks and the R Y A N D O N O V A N currently serves as President and CEO for the Council of Federal Home Loan Banks. Prior to joining the Council in 2022, Donovan served as EVP and Chief Advocacy Officer at the Credit Union National Association, where he led a team of more than 100 advocates at CUNA and its state credit union leagues and associations. He has been an advo- cate focused on financial services policy for almost two decades, having worked for the California and Nevada Credit Union Leagues prior to his nearly 15-year run at CUNA. Donovan began his career working for former House Democratic Leader Richard A. Gephardt (D-MO) and Representative Brad Sherman (D-CA). Op-Ed NEW RESEARCH QUANTIFIES BILLIONS IN ECONOMIC VALUE DELIVERED BY FEDERAL HOME LOAN BANKS B y R Y A N D O N O VA N