Federal Housing Finance Agency issues final rule easing unsecured credit limits to expand Federal Home Loan Bank liquidity

The Federal Housing Finance Agency published a final rule intended to improve access to liquidity for the Federal Home Loan Bank (FHLBank) System by modifying how certain short-term FHLBank investments and unsecured credit exposures are treated under existing limits. Under the rule, deposits held in member-provided interest-bearing deposit accounts (IBDAs), which previously counted toward a more restrictive unsecured credit limit in FHFA’s capital regulation, will instead count toward a more flexible limit aligned with the treatment of federal funds sales. The rule also clarifies how FHLBanks should determine unsecured credit limits to counterparties, establishes an exception for certain amounts in operations and custodial accounts that the proposal would have included in the intra-day unsecured credit limit, and clarifies that the limits are focused on liquidity activities.