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Membership: Frequently Asked Questions
What is the Federal Home Loan Bank of San Francisco (Bank)? The Bank is a federally chartered corporation and one of 12 Federal Home Loan Banks (FHLBanks) in the Federal Home Loan Bank System (FHLBank System). The Bank’s members—its shareholders and customers—are headquartered in Arizona, California, and Nevada, the three states that compose the FHLBank System’s 11th District. The Bank’s members may include commercial banks, federally insured credit unions, savings institutions, thrift & loan companies, and insurance companies, as well as community development loan funds, venture capital funds, and privately insured, state-chartered credit unions that are certified as Community Development Financial Institutions (CDFIs) by the CDFI Fund of the U.S. Department of the Treasury. Within FHLBank System guidelines, each FHLBank’s policies are based on its Board of Directors’ and management’s determination of the needs of the individual FHLBank. As a result, the policies of the Bank may differ from those of other FHLBanks. The Bank’s mission is to enable families and individuals of all income levels to obtain quality housing and become homeowners by providing wholesale products and services that help member financial institutions expand the availability of mortgage credit, compete more effectively in their markets, and foster strong and vibrant communities through community and economic development. Top
What is the Federal Home Loan Bank System (FHLBank System)? The FHLBank System was created by Congress in 1932 to promote housing finance nationwide and is made up of the 12 FHLBanks, the Office of Finance, and the financial institutions that are members of the FHLBanks. The FHLBanks are regulated by the Federal Housing Finance Agency. Top
Where are the 12 FHLBanks located and what geographic areas do they serve?
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Who manages the individual FHLBanks? Each FHLBank has a board of directors made up of member and independent directors who are all elected by the members of the Bank. Top
What is the Federal Housing Finance Agency (Finance Agency)? The Finance Agency, an independent federal agency in the executive branch of the U.S. government, regulates and supervises the 12 FHLBanks, the Office of Finance, the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac). The Finance Agency was created on July 30, 2008, when the President signed into law the Housing and Economic Recovery Act of 2008. Previously, the FHLBanks were regulated by the Federal Housing Finance Board. With respect to the FHLBanks, the Finance Agency’s role is to ensure that the FHLBanks carry out their housing finance mission, remain adequately capitalized, are able to raise funds in the capital markets, and operate in a safe and sound manner. Top
What is the Office of Finance? The FHLBanks have delegated to the Office of Finance, a joint office of the FHLBanks, responsibility for facilitating and executing the issuance of the consolidated obligations of the FHLBanks. The Office of Finance coordinates the issuance of consolidated obligations in the capital markets, services all outstanding debt, and serves as a source of information for the FHLBanks on capital market developments. Top
What types of institutions can become members of the System? Regulated financial depository institutions and insurance companies, as well as community development loan funds, venture capital funds, and privately insured, state-chartered credit unions that are certified as CDFIs by the CDFI Fund may become members of the FHLBank System. Regulated depository institutions include commercial banks, federally insured credit unions, savings institutions, and thrift & loan companies. For a list of the Bank’s members please see our Member Directory. Top
What is a Community Financial Institution (CFI)? A CFI is an FDIC-insured depository institution with average total assets for the preceding three yearends of less than $1,029,000,000 (as of 1/1/10). Top
Is the Bank subject to taxation? The Bank is exempt from all federal, state, and local taxation except for real property taxes. However, the Bank pays the following assessments, which affect the Bank’s net income and the amount the Bank pays in dividends to members:
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Does the value of Bank stock change? All of the Bank’s capital stock is purchased and redeemed at $100 par value. There is no public market for the Bank’s stock. Top
Does the Bank pay dividends on stock? The Bank normally pays a quarterly dividend, prorated for the period of time during the quarter that the stock was owned. The Bank has typically paid quarterly dividends in the form of stock, but paid a cash dividend for the second quarter of 2009. Top
What dividend rates has the Bank paid recently? Dividends tend to fluctuate with interest rates because the Bank manages equity to minimize interest rate risk. View our recent dividend rates. As announced in Bulletin No. 1314, dated January 8, 2009, Bulletin No. 1321, dated April 10, 2009, and Bulletin No. 1338, dated October 30, 2009, all found in the Bulletins section of the Membership binder and also available on the SEC website, the Bank did not pay a dividend for the fourth quarter of 2008 and the first and third quarters of 2009. It should be noted that historical dividends paid by the Bank do not indicate whether the Bank will pay dividends in the future, nor are the historical dividend rates an indication of what dividend rates the Bank will pay in the future, if any. Top
Where does the Bank obtain funds? The Bank raises most of its funds in the public debt markets. The FHLBanks’ consolidated bonds and discount notes are sold through the Office of Finance. These obligations are the joint and several obligations of the 12 FHLBanks. These consolidated obligations are rated Aaa by Moody’s Investors Service and AAA by Standard & Poor’s. As a result, the Bank is able to raise funds at rates that are close to rates on U.S. Treasury securities. The Bank’s modest administrative costs, among the lowest of any financial institution, allow us to pass these low rates on to our customers. The Bank also accepts deposits from members. Moody’s Investors Service has given a Aaa rating to the long-term deposit obligations of the Bank. An additional source of funds is the proceeds of the capital stock purchased by members. Top
What does an institution have to do to borrow from the Bank? To access Bank credit, a member must first:
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How can a member obtain pricing information on advances? Daily price indications for many of the Bank’s standard credit products and the Securities-Backed Credit Program are provided via e-mail and on the password-protected section of the Bank’s member website. The e-mail is sent to all members at approximately 7 a.m. each business day. Prices are subject to change during the day depending on market conditions, the Bank’s cost of funds, and other factors. Members can get a current quote on a specific advance transaction by calling the Bank’s Mortgage Finance Desk at (800) 444-3452 or by using eTransact between 7 a.m. and 2 p.m. California time on any business day. Same-day pricing and/or funding for advances with maturities up to 10 years are available according to your institution’s financing availability, subject to market conditions. For advances with maturities greater than 10 years, same-day pricing and/or funding are subject to market execution. For more information, please see the sample price indications found in the Price Indications section of the Membership binder or the Price Indications available on the Bank’s member website. Top
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