Affordable housing and community development advocates say taxpayers aren’t getting enough for the government subsidy of the FHLBanks. The FHLBanks say critics misunderstand their federal support.

The Council of Federal Home Loan Banks said Treasury’s proposal that the FHLBanks use their excess retained earnings to support affordable housing is asking them to operate on minimum capital levels.

The list of challenges facing FHFA include the GSEs’ multifamily business, the Office of Inspector General said in a new report.

Newly published comment letters show that housing and community advocacy groups support FHFA’s plan to use member incentive programs to encourage more mission-oriented lending by the FHLBanks.

Trade groups representing banks are unhappy with some of the changes FHFA is making to Federal Home Loan Bank practices.

Because deposits at the Federal Reserve don’t earn interest, FHLBanks’ use of IBDAs at large banks with high credit has expanded over the last few years. FHFA wants to give those deposits a capital treatment equivalent to that given to overnight Fed funds sales.

Although a Republican victory in November might revive efforts to release the GSEs from conservatorship, this would likely be a multi-year effort, according to the former FHFA director.

A nonprofit has called on the Federal Home Loan Banks to launch a program for mortgages with terms of 40 years, arguing the products will help to address affordability issues.

The FHLBanks last year agreed to voluntarily raise their contributions to affordable housing programs from 10% of net income to 15%, but they balked at Treasury’s suggestion to increase that to 20%.