Housing Opportunity Mortgage Expansion Act

Floor Speech

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Mr. SCOTT. Mr. President, as chairman of the Senate Banking Subcommittee on Housing, Transportation, and Community Development, today I wish to engage in a colloquy to discuss legislation that I introduced, the Housing Opportunity Mortgage Expansion, HOME, Act, with several of my colleagues to address an issue involving the Federal Home Loan Bank, FHLB, system. The FHLB system is a cooperative organization of 11 banks that support a mission of ``helping American families realize the dream of home ownership, stimulate the creation of affordable housing, and improve the local business environment.'' FHLBs are privately capitalized by their 7,300 members and are subject to strict oversight by the Federal Housing Finance Agency, FHFA. The HOME Act is designed to correct the FHFA's perceived statutory limitation in the FHL Bank Act that does not permit captive insurers to be considered a class of the eligible insurance companies for membership in FHLBs.

In 2016, the FHFA determined that captive insurance firms were not insurance firms for purposes of the FHLB Act. In making this determination, the FHFA abruptly terminated the membership of approximately four dozen captive insurance entities, including mortgage real estate investment trusts, REITs, that were active and responsible members of the FHLB system. These insurance captives greatly contributed to the affordable housing mission of FHLBs through the use of private capital versus taxpayer dollars, something that we should always encourage. I thank Senators Duckworth, Johnson, and Baldwin for their support of this legislation, which I am hopeful will receive favorable consideration by this body in the future.

I yield to my friend from Illinois.

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