The United Food and Commercial Workers International Union (UFCW) is calling on regulators to reform the Federal Home Loan Bank System (FHLB) to better address the housing crisis faced by retail workers. In a comment letter regarding the FHLB’s mission, UFCW asserts that the substantial resources of these government-subsidized banks should be directed towards urgent affordable housing needs, rather than benefiting large insurance firms like Apollo’s Athene Annuity & Life.
“Apollo is a prime example of the issues with the Federal Home Loan Banks,” said UFCW. “Retail workers, including those employed at Cardenas Markets, need these government-sponsored banks to focus on financing affordable housing, not on increasing Apollo’s investment profits.”
UFCW’s comment letter highlights Apollo Global Management as a case where FHLBanks have deviated from their housing mission. As of March 31, 2024, Athene Annuity, owned by Apollo, is the second largest borrower from the FHLBank of Des Moines, with $7.6 billion in government-subsidized loans.
In contrast, retail workers such as those at Cardenas Markets, another Apollo-owned company, are struggling to afford housing, according to UFCW’s letter.
“Apollo illustrates the problems with the Federal Home Loan Banks,” stated Courtney Alexander, a UFCW researcher. “Retail workers, including those at Cardenas Markets, need these banks to focus on affordable housing rather than enhancing Apollo’s investment returns.”
To ensure that FHLBanks fulfill their housing mission and utilize their generous government subsidies effectively, UFCW has proposed several recommendations:
- Clarify that the FHLBanks’ mission is to provide liquidity for unmet housing needs, not just for liquidity’s sake.
- Require that FHLBanks’ government-subsidized loans be directly tied to a renewed focus on affordable housing.
- Consider rulemaking to prevent entities with offshore parent companies from borrowing from FHLBanks, ensuring that the benefits of this taxpayer-supported system remain in the U.S.
Additionally, UFCW is proud to be part of the Coalition for FHLB Reform, which includes housing, consumer, and racial equity groups. This coalition has proposed a series of recommendations to realign FHLBanks’ mission with affordable housing.
UFCW’s letter, submitted in response to the FHFA’s Request for Input on Federal Home Loan Banks’ Core Mission Activities, expresses gratitude to the Federal Housing Finance Agency for its review of FHLB’s mission on its centennial.
