Bankers’ interest in MPF program grows again after long hiatus
“In creating MPF, we put the member in the role of Fannie Mae. Instead of paying Fannie Mae a guarantee fee, the member bank provides the credit enhancement and receives the guarantee fee,” said Pollock, who is now with the R Street Institute, in an interview.
During 2016, participating FHLB members earned $2 million in credit support income.”It gives them a strong interest in originating high quality loans. And they are getting non-interest income in the form of enhancement fees,” Pollock said.