Since then, three generations of Americans have purchased millions of homes to create for themselves, their families, and their communities a new and better life. In 1998, the Federal Home Loan Bank System undertook new initiatives that have the potential to do for economic development in the 21st century what the 30-year mortgage did for homeownership in the 20th century. CICA and LOC programs will be particularly helpful to smaller, local, community-oriented banks. It is these institutions, which are in closest touch with the lending needs of a community, that we believe are the best vehicles for stimulating economic development.
Local banks lending to local businesses help create jobs.
Strong communities with vibrant economic activity are a hallmark of American progress, and we look forward to accepting an even larger role in creating those communities in the future. The Finance Board authorized CICA to provide for housing activities and long-term economic development financing that is not being met by the financial community generally, nor by FHLBank System members using existing programs. The FHLBanks also have the authority to create other types of CICA programs to meet local needs with prior Finance Board approval. The 1998 CICA regulation provides the FHLBanks with an array of specific standards for projects, targeted beneficiaries, and targeted income levels the Finance Board has determined support community lending. CICA has five components, each providing financing to FHLBank members, which may use all five components.