We are a federally chartered corporation and one of 11 Federal Home Loan Banks
(the FHLBs) that, with the Office of Finance, comprise the Federal Home Loan
Bank System (the System). The FHLBs are government-sponsored enterprises (GSE)
of the United States of America and were organized under the Federal Home Loan
Bank Act of 1932, as amended (FHLB Act), in order to improve the availability
of funds to support home ownership.
Each FHLB operates as a separate entity with its own management, employees,
and board of directors. Each FHLB is a member-owned cooperative with members
from a specifically defined geographic district. Our defined geographic district
consists of the states of Illinois and Wisconsin. We are supervised and regulated
by the Federal Housing Finance Agency (FHFA), an independent federal agency
in the executive branch of the United States (U.S.) government.
As a cooperative, we do business with our members and, under limited circumstances,
our former members, as well as providing support for the members of other FHLBs
through our role operating the Mortgage Partnership Finance® (MPF®)
Program. All federally-insured depository institutions, insurance companies
engaged in residential housing finance, credit unions, and community development
financial institutions located in Illinois and Wisconsin are eligible to apply
for membership. All members are required to purchase our capital stock as a
condition of membership; our capital stock is not publicly traded.
Our mission-focused business is different from that of a typical financial
services firm. As a cooperative, we use our resources to support member utilization
of the cooperative, and to support the communities in which members operate.
Our strategy revolves around two goals:
Maintaining the member-focused Bank, which involves all areas of the Bank
coming together to deliver excellent products and services to our members. Being
member-focused means applying the resources of the Bank to enhance the value
of membership.
Building the MPF business, which is rapidly becoming accepted by most of the
other FHLBs as the mortgage aggregation platform for the FHLB System. We have
the opportunity and responsibility to manage the products, operations and administration
of a platform that provides community lending institutions across the U.S. with
access to the secondary mortgage market.
We provide credit to members principally in the form of secured loans called
advances (inclusive of forward starting advances), as well as through standby
letters of credit. We provide liquidity for home mortgage loans to members approved
as Participating Financial Institutions (PFIs) through the MPF Program. We also
serve as a critical source of standby liquidity for our members.
Our primary funding source is proceeds from the sale to the public of FHLB
debt instruments (consolidated obligations) which are, under the FHLB Act, the
joint and several liability of all the FHLBs. Consolidated obligations are not
obligations of the U.S. government, and the U.S. government does not guarantee
them. Additional funds are provided by deposits, other borrowings, and the issuance
of capital stock. We also provide members and non-members with correspondent
services such as safekeeping, wire transfers, and cash management.
We engage in most of our derivatives transactions with major broker-dealers
as part of our interest rate risk management and hedging strategies. We also enter into
interest rate derivatives directly with our members in order to provide them
with access to the derivatives market. We intend to enter into offsetting derivatives
transactions with non-member counterparties in cases where we are not using
the interest rate derivatives for our own hedging purposes.
We accept deposits from our members, institutions eligible to become members,
any institution for which we are providing correspondent services, other FHLBs,
and other government instrumentalities. We offer several types of deposits to
our deposit customers including demand, overnight, and term deposits.
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