The Federal Home Loan Banks of Des Moines and Seattle have completed a planned merger of the institutions.
The Federal Home Loan Bank of Des Moines is the larger of the two banks, with $82.2 billion in assets and 1,170 members. The Federal Home Loan Bank of Seattle has assets of $36.5 billion with 320 members.
Federal home loan banks are a group of cooperatives that commercial and savings banks use to finance housing and economic development in local communities. About 80 percent of U.S. lending institutions rely on the home loan banks for low-cost funds.
Federal Home Loan Banks require their members to put up collateral against the advances they receive to make loans.
“As the regulator of the Federal Home Loan Bank System, FHFA views this voluntary merger as consistent with safety and soundness and with the mission of the system to support home mortgage lending and community investment,” said Mel Watt, Federal Housing Finance Agency director, in a news release.
The Federal Home Loan Bank of Seattle had struggled with bad loans and investments stemming from the recent mortgage crisis.
The surviving home loan bank, which will be called the Federal Home Loan Bank of Des Moines, has nearly $120 billion in assets. The bank, with headquarters in Des Moines, will provide funding to 1,500 members in 13 states.
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Richard Swanson, who had been president and CEO of the Federal Home Loan Bank of Des Moines, will be CEO of the merged bank. Mike Wilson, who had served as president and CEO of the Federal Home Loan Bank of Seattle, will be president of the combined institution.
The Federal Home Loan Bank of Des Moines is part of the Federal Home Loan Bank System created in 1932, which is made up of 12 banks. The Des Moines and Seattle banks first announced potential merger talks in July 2014.