Cyclopedia of Congressional Budget Law
Federal Financing Bank (FFB)
The Federal Financing Bank (FFB) is a government corporation, created by Congress in 1973 under the general supervision of the Secretary of the Treasury. The FFB was established to centralize and reduce the cost of federal borrowing, as well as federally-assisted borrowing from the public. The FFB was also established to deal with federal budget management issues which occurred when off-budget financing flooded the government securities market with offers of a variety of government-backed securities that were competing with Treasury securities. Today the FFB has statutory authority to purchase any obligation issued, sold, or guaranteed by a federal agency to ensure that fully guaranteed obligations are financed efficiently.
Chapter 24 of the U.S. Code – Federal Finance Bank (sections 2281 to 2296)
GAO Glossary of Terms and Definition (September 2005)
Federal Financing Bank (FFB)
A government corporation created by the Federal Financing Bank Act of 1973 under the general supervision of the Secretary of the Treasury. FFB was established to (1) finance federal and federally assisted borrowings in ways that least disrupt private markets, (2) coordinate such borrowing programs with the government’s overall fiscal policy, and (3) reduce the costs of such borrowing from the public.
FFB provides financial assistance to or on behalf of federal agencies by (1) making direct loans to federal agencies to help them fund their programs, (2) purchasing loan assets from federal agencies, and (3) making direct loans to nonfederal borrowers (including foreign governments) that are secured by federal agency guarantees against risk of default by borrowers on loan principal and interest payments. FFB obtains funds by borrowing from the Department of the Treasury. For more information, see www.treas.gov/ffb/.
Title 12 of the U.S. Code — Banks And Banking
Chapter 24—Federal Financing Bank
§2281. Congressional findings and declaration of purpose
The Congress finds that demands for funds through Federal and federally assisted borrowing programs are increasing faster than the total supply of credit and that such borrowings are not adequately coordinated with overall Federal fiscal and debt management policies. The purpose of this chapter is to assure coordination of these programs with the overall economic and fiscal policies of the Government, to reduce the cost of Federal and federally assisted borrowings from the public, and to assure that such borrowings are financed in a manner least disruptive of private financial markets and institutions.
Section 405(b) of the Congressional Budget Act of 1974 (CBA)
Section 405(b) of the Congressional Budget Act of 1974 reads as follows:
“(b) All receipts and disbursements of the Federal Financing Bank with respect to any obligations which are issued, sold, or guaranteed by a Federal agency shall be treated as a means of financing such agency for purposes of section 1105 of title 31, United States Code, and for purposes of this Act.”
Joint Explanatory Statement for Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA)
This section was added to the Congressional Budget Act of 1974 by BBEDCA as section 406 (CBA), though it was later renumbered section 405 (CBA):
Section 406. Off-Budget Agencies, Programs, and Activities.
Section 406(a) provides that budgetary activities of federal agencies, including budget authority, credit authority, and estimates of outlays and receipts, which are off-budget immediately prior to enactment of this section, shall be included in the President’s and the Congress’ budgets.
Section 406(b) provides that all receipts and disbursements of the Federal Financing Bank with respect to any obligations issued, sold, or guaranteed by a Federal agency shall be treated as a means of financing such agency.
U.S. House of Representatives, Balanced Budget and Emergency Deficit Control Act of 1985: Conference Report to Accompany H. J. Res. 372, House Report 99-433 (December 10, 1985).
Federal Credit Reform Act (FCRA)