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While Fannie Mae and Freddie Mac are being propped up by taxpayers, says Daniel Gross in Slate, an obscure cousin agency has been propping up the banks. Removing 40 percent of the seats in a Boeing 757 and raising prices is a

Fannie and Freddie’s more successful cousin

While Fannie Mae and Freddie Mac are being propped up by taxpayers, says Daniel Gross in Slate, an obscure cousin agency, the Federal Home Loan Banks, has been propping up the banking industry. The 12 regional FHLBs are owned by 8,100 member banks, not by public shareholders, and they essentially funnel “cash from Wall Street to banks on Main Street.” Unlike Fannie and Freddie, the FHLB is doing quite well—largely because it avoided the “junky subprime” market. When the “mortgage house of cards began to collapse” last year, banks got $274 billion in new credit from the FHLB. That “dwarfs” the “public-rescue efforts” for Fannie and Freddie. And taxpayers probably aren’t on the hook.

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