A $1.3 Trillion Banking System Gone Astray Is Fighting Overhaul (1)

Over a five-course Italian dinner in Philadelphia, congressional staffers were pitched about the benefits of the $1.3 trillion Federal Home Loan Bank system.

In Washington, a trade group representing the same system hired a top lobbying firm and ramped up its spending on political influence by nearly 40%.

And in blast emails, the home-loan banks of San Francisco, Topeka and New York urged the hundreds of financial institutions that borrow from them to engage with regulators and lawmakers.

Across the US, a campaign has been building to push back against an effort to overhaul the FHLBs, a system Congress ...