Federal Home Loan Banks

How’s your banking legislation history? Don’t worry if it’s not worthy of an A+ because Brookings provides a history lesson and accessible description of Federal Home Loan Banks in their August 8th, 2024 commentary: “How to Fix Federal Home Loan Banks.”

Our community has talked a lot about the intended and unintended consequences of the New Deal, and the Federal Home Loan Bank Act of 1932 has a role in that conversation. The good news is that there is a restructuring in progress, Brookings submitted commentary, and we all can get up to speed.

Keep in mind that this is information for policy at the federal level, but we know the effects of federal policy cascades into more local settings like ours!

Curated Podcast: Working together to create affordable housing that lasts

On July 11th, the Next City Podcast shared a case study from Richmond, Virginia that offers a possible permanent affordable housing solution that is worth considering for our community. The Maggie Walker Community Land Trust (MWCLT) is a unique non-profit that is both a land bank and a community land trust. This means that, as a land bank, MWCLT can acquire land for little to no cost from the city, and as a community land trust, the organization can develop that land and sell the home at a low cost, while keeping the land itself in their name. This creates affordable housing in Richmond that is permanent; homeowners who buy from MWCLT can keep the home for generations, or sell it, but they must sell it at a capped price to an income-eligible buyer.  

The dual role of MWCLT is especially beneficial as it limits competition between the public and private sectors. This case study emphasizes the power that collaboration can have in generating solutions, a lesson that is close to my heart. I have the privilege of working with three initiatives at the Community Foundation, one being Rochester ENergy Efficiency and Weatherization (RENEW). RENEW is another example of a unique effort to address access to housing; we work with numerous community partners in our region to braid resources to administer home repair and weatherization grants, with the mission of making homes more energy efficient, healthier, and safer. (If you’re interested in learning more about RENEW, there is a case study about the initiative in our Inclusive Recovery dashboard that I’d recommend checking out).  

What working with RENEW has emphasized to me, and what this example from Richmond only further demonstrates, is that collaboration between various partners across the community sparks creative solutions to important issues, including in the field of housing. This podcast is a quick, interesting episode, and I invite you to give it a listen, to learn more about the history of the MWCLT and to revel in their recent successes! 

Contributed by Madison Esposito, Program Administrator for RACF Initiatives and University of Rochester graduate. 

Curated Post: Next City Covers Rochester as featured case about banking efforts

On June 3rd, 2024, nonprofit resource Next City posted a story titled “Why a Rochester Credit Union Wants the Local Government to Create Its Own Bank” as a case study for lenders meeting residents’ and small business owners’ needs. The Genesee Co-op Federal Credit Union is featured as part of a push to create a Bank of Rochester, a “public bank” intended to hold only government deposits and partner with local private lenders. 

The article outlines how the idea of a public bank would work and makes the argument for the potential of such a program. This idea is also a spark for thinking about alternative lending, alternative banking options. 

As we learned in Dr. Matthew Desmond’s Poverty, by America, the banking industry is a particularly institutionalized impediment for upward mobility. Consider this alternative, or come up with your own ideas, as you engage in conversations about banking equity, and the potential of this community to encourage home ownership, small business development, and our general upward mobility efforts. 

Curated Chapters: Chapter 3 and Chapter 9 in Matthew Desmond’s Poverty, by America

One of the charges for Poverty Abolitionists in Matthew Desmond’s Poverty, by America is his argument about the inequities of the US banking system. In Chapter 3, Desmond calls out banking. If you have not read the full book yet, I recommend flagging pages 71 to 79. Desmond’s argument is that the poor are trapped in a cycle of debt. From fee structures (think overdraft fees) to overt racial discrimination in banking practices to even banking hours kept, the system is not designed for the poor. Pile on the credit system and qualifying for loans and it’s an uphill battle, to say the very least. So, how can we work toward a more equitable banking system? 

Chapter 9 highlights zoning laws as key vehicles for exclusion and a key component of structural inequality. Desmond argues for a diversity of voices in the zoning conversations, where decisions about community development are made by a group that better reflects the community. If we can move toward more inclusive zoning policy, we would move toward setting a norm of inclusivity. 

The City of Rochester is updating its zoning code, see Rochester Zoning Alignment Project to learn more.