An Easy Way to Turn Home Loan Banks into Equality Banks

Next week, FHFA will kick off its important new full-scope review of the Home Loan Bank System with a belated assessment of a $1 trillion-plus GSE that has quietly basked in the long shadow cast by its even larger siblings, Fannie Mae and Freddie Mac.  Their history tells the sorry tale of GSEs allowed too long to evade careful scrutiny and a tightly-confined mission.  Another once-upon-a-time GSE, Sallie Mae, tells a different tale, this time of ill-designed privatization.  These are hard lessons but doing nothing is even worse.  If FHFA avoids the pitfalls of letting too much pass it by or rushing to ill-conceived reform, then modernizing the Home Loan Bank System could be a boon to economic equality – a meaningful mission and then some.