https://thehill.com/opinion/finance/3750121-the-great-american-homewashing-is-happening-under-our-noses/ Refresh (2700 sec) Skip to content Toggle Menu TheHill.com * [ ] [Search] Close search form * News + Senate + House + Administration + Campaign + Regulation + Business + Media + Briefing Room + Latino + Morning Report + 12:30 Report + State Watch + In The Know + Sunday Talk Shows + People in the News + Print Edition * Policy + Defense + Energy & Environment + Finance + Healthcare + Technology + Transportation + International + Cybersecurity + National Security + Sustainability * Opinion + Columnists + Congress Blog + All Contributors o Campaign o Civil Rights o Criminal Justice o Cybersecurity o Education o Energy and Environment o Finance o Healthcare o Immigration o International o Judiciary o National Security o Technology o White House + Submit Opinion Content * Events + Upcoming Events + About * Jobs + The Hill Jobs + National Jobs * Newsletters * THE HILL TV * Changing America + Respect + Sustainability + Enrichment + Resilience + Well-Being * Sign up to our latest Newsletter Sign Up * Search trending: * Midterm elections * Nancy Pelosi * Donald Trump sponsored: * New Members Guide 2023 Just In... * Thousands of post-Thanksgiving flights delayed amid messy weather Transportation - 1m 20s ago * Maricopa County releases data on Election Day issues Campaign - 42m 11s ago * GOP prepares for House takeover: Five things to watch House - 55m 1s ago * Americans will soon get to vote in Eurovision Song Contest In The Know - 59m 32s ago * Trump blasts special counsel Jack Smith as 'political hit man' Blog Briefing Room - 1h 4m ago * GOP, Trump's potential 2024 rivals criticize Nick Fuentes dinner Blog Briefing Room - 1h 37m ago * Astronaut Scott Kelly arrives in Ukraine, visits Bucha mass graves International - 2h 12m ago * A popular Grand Canyon campground has been renamed: Here's why, and what's next Nexstar Media Wire News - 2h 55m ago View all Load more Opinion>Finance The views expressed by contributors are their own and not the view of The Hill The great American 'homewashing' is happening under our noses by Cornelius Hurley, opinion contributor - 11/25/22 2:00 PM ET Share Tweet ... [ ] More by Cornelius Hurley, opinion contributor - 11/25/22 2:00 PM ET Share Tweet ... [ ] More Share Twitter Facebook LinkedIn Whatsapp Email This is about a $1 trillion government-sponsored enterprise built upon a myth -- the myth of the American home. It is also about reform on the way. We have become familiar with the term "greenwashing," defined by Investopedia as: "The act of providing the public or investors with misleading or outright false information about the environmental impact of a company's products and operations." "Homewashing" is the same concept, except the object of the deception is housing rather than the environment. The most prominent purveyor of homewashing is the massive government-sponsored enterprise known as the Federal Home Loan Banks. There are 11 regional FHLBs from Boston to San Francisco and points in between. They and their 6,500 member institutions follow a simple business model. --------------------------------------------------------------------- Black Friday and Cyber Monday deals from BestReviews: * Start your Cyber Monday shopping now with these early deals * These discounted stocking stuffers are worth buying now * Best Black Friday deals that are half-priced or better [Post-022] --------------------------------------------------------------------- The FHLBs borrow at a deep discount due to their government status. They then pass part of the government subsidized discount on to their members in the form of low-cost advances. As of Sept. 30, the FHLBs had over $1 trillion in taxpayer-subsidized debt outstanding. Subsidized advances to members stood at $655 billion, an 86 percent increase over year-end levels. It is all based on a myth. The first part of the myth is that the subsidized advances to members are used for housing. This was the original purpose of the FHLBs when they were created by Congress in 1932. In truth, the FHLBs' subsidized advances can be and are used for anything the members wish to use the funds for. This was confirmed by the Government Accountability Office many years ago when it found: "Another challenge facing the system is that there is limited empirical information on the extent to which FHLBank advances and other services benefit housing and community finance." Yet, the myth persists, presumably because the words "Home" and "Loan" are misleadingly embedded in the names of all 11 FHLBs. The second part of the myth has to do with affordable housing and community development. By statute, the FHLBs are required to set aside a small portion of their earnings for this purpose. However, when one contrasts the taxpayers' estimated $6.3 billion taxpayer subsidy of the FHLBs with their paltry contributions to affordable housing and community development, the payout looks like this: [F_hGzHwVWO]Source: The combination of taxpayer-subsidized borrowing costs and their exemption from federal, state and local taxes. This disconnect would embarrass the most egregious greenwashers in the market today. What it says is that for every $20 of taxpayer support for the FHLBs, only $1 is set aside for affordable housing. The other $19 goes directly to the FHLBs and indirectly to the FHLBs' members. It is worth noting here that each of the CEOs of the 11 FHLBs receives million-dollar pay packages. This is for distributing a government benefit to their members. Homewashing is even more pervasive than greenwashing. Greenwashing scammers only target investors. Every taxpayer is the victim of the FHLBs' homewashing. Every taxpayer contributes to the FHLBs' estimated $6.3 billion subsidy. But it gets worse. Banks that take advances from their FHLBs, that is most banks, do so in lieu of paying higher interest rates to their own customers. You've probably asked, "How can banks get away with paying on average 0.19 percent on savings accounts when the yield on 1-year treasuries is 4.75 percent?" The answer lies largely with the FHLBs. In sum, taxpayers' dollars support the FHLBs in exchange for which the taxpayers receive little to no benefit. Meanwhile, the FHLBs suppress the taxpayers' returns on their bank accounts thus enhancing bank profits. Bankers think this is a fine arrangement and it should be left alone. "Don't mess with success," the American Bankers Association has warned the public. The case against medical abortion rejects science and embraces falsehoods Reports of the death of election denialism may be greatly exaggerated Luckily, the scales are falling from the eyes of taxpayers, banks, savers, housing advocates and, most importantly, the FHLBs' regulator, the Federal Housing Finance Agency. Its launch of a centennial review of the FHLBs, dubbed "FHLBanks at 100: Focusing on the Future," sends a clear message that the housing myth can no longer be used as a cover for this elaborate corporate welfare scheme. The stakes are extremely high, and the result is uncertain. One thing is certain, however. Stripped of their homewashing mythology, the FHLBs presents a unique opportunity for addressing some of the nation's real financial challenges. Cornelius Hurley was an independent director of the Federal Home Loan Bank of Boston from 2007 to 2021. He teaches financial services law at Boston University School of Law. Tags Affordable housing affordable housing crisis Federal Home Loan Banks Federal Housing Finance Agency Interest rates Politics of the United States Share Tweet ... [ ] More Share Twitter Facebook LinkedIn Whatsapp Email More Finance News See All [8d71631ae4] Finance Will the strong dollar trigger a global recession? by Steven Kamin, Opinion Contributor 1 day ago Finance / 1 day ago [bankmanfri] Finance FTX: The Enron case on steroids, fueled by woke capitalism by Richard J. Shinder, Opinion Contributor 1 day ago Finance / 1 day ago [GettyImage] Finance Black Friday sales started in October. Will they extend into February? by Willy C. Shih, opinion contributor 2 days ago Finance / 2 days ago [social_sec] Finance Raising the retirement age to 70 could save Social Security for us all by Joseph Chamie, opinion contributor 5 days ago Finance / 5 days ago See All Video/Hill.TV See all Hill.TV See all Video [The-Debrie] The Debrief The Debrief: President Biden EXTENDS student loan moratorium, lawsuit filed over Arizona 2022 midterm election by TheHill.com 11/25/22 12:00 PM ET The Debrief / 2 days ago [article_im] Rising Best of Rising Nov 21-24 by TheHill.com 11/25/22 11:00 AM ET Rising / 2 days ago [What-Ameri] What America's Thinking PRESIDENTIAL POLL: 39% Approve Of Biden As President, Warnock Leads Walker By Four Ahead Of Runoff by TheHill.com 11/24/22 12:00 PM ET What America's Thinking / 3 days ago See all Hill.TV See all Video Top Stories See All [dome_capit] House GOP prepares for House takeover: Five things to watch by Mike Lillis 55 mins ago House / 55 mins ago [manchinjoe] Senate Manchin's side deal on brink as GOP seeks his 2024 ouster by Alexander Bolton 7 hours ago Senate / 7 hours ago [trumpdonal] News Trump blames Kanye West for bringing Nick Fuentes as dinner guest by Brad Dress 4 hours ago News / 4 hours ago [robertmuel] Court Battles After Mueller, legal experts hope for a more vocal special counsel by Rebecca Beitsch 12 hours ago Court Battles / 12 hours ago See All Most Popular 1. Trump blames Kanye West for bringing Nick Fuentes as dinner guest 2. Manchin's side deal on brink as GOP seeks his 2024 ouster 3. Schiff knocks McCarthy's threat of removal from Intelligence Committee 4. No joke: Supreme Court case could take a big bite out of the First Amendment 5. Maricopa County releases data on Election Day issues 6. The Memo: Democrats pine for Trump as GOP nominee 7. Republican establishment to conservative and faith-based voters: 'Drop dead' 8. Congress should end the war in Ukraine by withdrawing from NATO 9. House Republican says Congress doesn't need to pass 'Democrat bills' that ... 10. GOP prepares for House takeover: Five things to watch 11. Hutchinson calls Trump meeting with Nick Fuentes 'very troubling' 12. Schiff on complying with GOP subpoenas: 'We will have to consider the ... 13. Fauci pushes back on Pence remarks: 'I don't align myself with anybody' 14. Hutchinson: GOP needs more voices of 'reality' to 'move beyond the Trump ... 15. That new chestnut? USDA plans to allow the release of GE trees into wild forests 16. GOP, Trump's potential 2024 rivals criticize Nick Fuentes dinner 17. Top GOP Oversight member says panel will investigate '40 or 50 different ... 18. After Mueller, legal experts hope for a more vocal special counsel Load more Video * [7696394543] Watch live: White House monkeypox response team holds briefing News See all Video DON'T MISS A BRIEF. SIGN UP FOR OUR DAILY EMAIL. [ ] [Send] TheHill.com News * Senate * House * Campaign * Administration * Regulation * Media * Briefing Room * Latino * 12:30 Report * Coronavirus Report * Floor Action * In The Know * Sunday Talk Shows * More Policy * Defense * Energy & Environment * Finance * Healthcare * Technology * International * Transportation * Cybersecurity * National Security * Sustainability * More Video * Latest * Defense * Energy & Environment * Finance * Healthcare * Technology * Transportation * International * Cybersecurity * National Security * Sunday Shows * Events * More Opinion * Contributors to The Hill * Columnists * Congress Blog * More Resources * The Hill Apps * People * RSS Other Areas * Galleries * The Hill Jobs * National Jobs Contributors * Submit Opinion Content Follow Us On Get the App Get the Android app from Google Play Get the Android app from Google Play Get the iOS app from App Store Get the iOS app from App Store * Do not sell my personal information * SUBSCRIPTIONS * PRIVACY POLICY * TERMS & CONDITIONS * CONTACT * ADVERTISE * * NewsNation * BestReviews * Nexstar Digital * Journalistic Integrity THE HILL 1625 K STREET, NW SUITE 900 WASHINGTON DC 20006 | 202-628-8500 TEL | 202-628-8503 FAX (c) 1998 - 2022 Nexstar Media Inc. | All Rights Reserved. x Close Ad