The Federal Home Loan Bank of San Francisco has announced that President and CEO Alanna McCargo will leave that position.
After leaving her current job, McCargo will move to a special policy advisor post in Washington, where she was previously based for many years. Chief Financial Officer Joseph Amato will fill her role temporarily until a permanent leader can be found.
The FHLBank declined to comment on questions about the catalyst for the move, which comes as the Trump administration and
"This is a pivotal time for housing and financial markets and I am pleased to continue working with the board in this new capacity," McCargo said in a press release, which characterized the transition as a departure. Her status as an employee or contractor in the new role was unclear.
McCargo recently helmed government bond insurer Ginnie Mae as President Biden's nominee, but her career spans multiple federal administrations and both public and private roles in ways that could make her valuable as an advisor. She
While the Biden and Trump administrations take vastly different views on many topics, both have shown interest in scrutinizing the FHLBanks, albeit with potential disparate aims.
Cornelius Hurley, a lecturer at Boston University Law School and critic of the system, said in an op-ed last year he foresees a new Department of Government Efficiency's review
Both proponents and critics of the FHLBanks, which were established by law in 1932 to support affordable housing, have clashed over the extent to which they are public entities, the degree to which they can support themselves and whether their AH activities go far enough.
They have an implied U.S. government guarantee on their borrowing that amounts to around $6.9 billion with a total subsidy of $7.3 billion, according to
Ryan Donovan, president and CEO of the Council of Federal Home Loan Banks, the system's trade group and lobbying arm, characterized those costs as paid for by bond buyers
"There is no explicit guarantee of the Home Loan bank system. When we issue debt, we specifically say the United States does not guarantee it. The investors in our debt do take a slightly lower return on their investment, perhaps because of the way they perceive this implied guarantee, so I suppose to the extent there is a subsidy, it's a subsidy that's ultimately paid by the investors in our debt, not the U.S. taxpayers," he said.
However, critics like Hurley additionally question whether the system acts in the public's interest.
"Banks fund themselves by borrowing cheaply from the system as an alternative to gathering deposits. It is unreasonable to require taxpayers to subsidize a government enterprise whose primary function is to deprive consumers of a fair rate of return on their savings," he said in his op-ed.
Donovan said in his 2024 interview that the system provides value to citizens in multiple ways.
The FHLBbanks "provide tremendous public benefit through both our liquidity and affordable housing missions. There have been studies showing we reduce interest rates and the cost of mortgages," he said.
