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Project: Capital Assessment

Agency: Federal Home Loan Bank System (FHLBanks)


On February 28, 2011, the 12 Federal Home Loan Banks entered into a Joint Capital Enhancement Agreement (“the Agreement”) to enhance the capital position of each FHLBank by creating a restricted retained earnings account on each FHLBank’s balance sheet to absorb any possible losses. The account would be funded by the cash flow dedicated to the expiring Resolution Funding Corporation (REFCORP) debt obligation.


The FHLBanks retained Falcon, in partnership with the Dzivi Law Firm, P.C. (Dzivi), for strategic and technical assistance with the planning and execution of the Agreement. In doing so, Falcon and Dzivi:

  • Conducted a capital reserve assessment to determine the effects of the Agreement on the FHLBanks’ capital plans

  • Drafted documents necessary for the implementation of the new capital framework

  • Interacted with the Federal Housing Finance Agency (FHFA) to obtain its regulatory support and approval for the action  

  • Assisted the FHLBanks’ with developing an implementation and public roll-out strategy for the Agreement’s provisions


At the conclusion of the project, Falcon provided strategic and technical assistance for the initiative, which ultimately received strong support and approval by the FHFA.