Statement of Director Sandra L. Thompson on the Advisory Bulletin to the Federal Home Loan Bank System on Climate Risk
October 1, 2024 / Source: FHFA
The Federal Housing Finance Agency (FHFA) issued today an Advisory Bulletin to the Federal Home Loan Bank (FHLBank) System, AB 2024-04: FHLBank System Climate-Related Risk Management, following extensive outreach to the System’s members and other relevant stakeholders through the FHLBank System at 100: Focusing on the Future initiative.
In recognition of the serious threat that climate risk and the resulting climate-related disasters pose to the U.S. housing finance system, this Advisory Bulletin provides guidance to the FHLBanks on incorporating climate-related risks into their existing risk management frameworks.
Climate-related risks may negatively affect the value of housing collateral that supports the FHLBanks’ lending activities, and associated physical risks have the potential to disrupt the FHLBanks’ operations and ability to carry out their mission. Accordingly, the Advisory Bulletin provides the FHLBanks with guidance on addressing the effects of these risks on their business and operational resiliency. Adherence to the guidance will help ensure the FHLBanks are able to continue serving as an ongoing, reliable source of liquidity and support to their members’ housing finance and community development activities.
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