INTEROFFICE MEMORANDUM

TO: FROM: SUBJECT: DATE: CC:

Matthew R. Feldman, President and CEO Nicholas Ioriatti Proposal of BusinessFederal Home Loan Bank of Chicago 10/15/2013 Amy Newendorp

After concluding my initial assessment of the Federal Home Loan Bank of Chicago's staff, employees, and member institutions, I was able to gain significant insight into understanding the Federal Home Loan Bank of Chicago and the system of Federal Home Loan Banks as a whole. Originally founded in Evanston in 1932 as part of the congressional response to the Great Depression, the Federal Home Loan Bank of Chicago is one of the twelve United States Government Sponsored Banks (FHLBC para. 1). The primary mission of the Federal Home Loan Bank of Chicago is to provide the 800 plus member financial institutions in Illinois and Wisconsin with financial services designed to assist in the financing of housing development and lending in communities throughout both states. The Bank is structured as a cooperative effort and is governed by its member financial institutions (FHLBC para. 3). The membership of the Federal Home Loan Bank of Chicago is made up of federally insured depository institutions, insurance companies, credit unions, and community development financial institutions located in Illinois and Wisconsin. The primary benefit of membership with the FHLBC is that membership allows the member institution to gain access to low cost secured borrowings, known as advances, that provide an incredible source of liquidity to the member institution which they can utilize to provide competitively priced financial products to their local community. Since its member institutions govern the Bank, it is cardinal that the FHLBC continues to operate effectively and work cooperatively to support the missions of those individual financial institutions. As it works cooperatively with its member institutions, the FHLBC is continually collecting information about each of its unique member institutions. Therefore, it is important the Bank is utilizing this information appropriately towards working continually to promote the missions of all its member institutionsboth the small and incredibly large. Due to the fact that the membership of the Federal Home Loan Bank of Chicago is so incredibly diverse, there is tremendous value in identifying and valuing membership groups. Like traditional marketing, this process will include segmenting the total membership into relevant groups that will allow the FHLBC to direct their marketing efforts appropriately (Schultz 90). Once the members have been placed into groups, a database will need to be created to manage and develop relevant marketing strategies to ensure the FHLBC is executing its mission of helping members make a difference in their local communities.

To ensure relevant decision makers have immediate access to the data and have an understanding of the filtering process that takes place in targeting specific member institutions, the database should be managed and operated by the Member Services Department. This group not only includes the Marketing Group of the Bank, but also the Member Support Group and Member Transaction Desk, two departments which interact with the Banks members on an everyday basis. Due to their constant communication with the members, they can provide insight into the individual financial institutions objectives and provide commentary on how the FHLBC can help them be successful based on information they work with, which includes the type and frequency of transactions made with the Bank. By identifying similarities between the 800 plus members of the Federal Home Loan Bank cooperative, the Member Services Department could design financial literacy programs and create financial products that will advance the missions of those individual institutions. The ability to segment and work with a select group of the members more effectively based on easy to identify and manage characteristics could pay tremendous dividends to both the Bank and its members over time. The Federal Home Loan Bank of Chicagos continued commitment to working cooperatively with its member financial institutions in critical to the overall success of the Bank. Despite the difficult economic times, the Bank has proven thus far to be a valuable partner to its 800 plus financial institutions. As the political and economic climate of the country continue to evolve, the Federal Home Loan Bank should remain focused on serving its members effectively by adapting the financial products and services they provide to meet the needs of the members.

Works Cited "FHLBC.com--What We Do." FHLBC.com. N.p., n.d. Web. 15 Oct. 2013. Schultz, Don E., and Beth E. Barnes. Strategic Brand Communication Campaigns. Lincolnwood, IL: NTC Business, 1999. 90-91. eBook.

Links http://www.fhlbc.com/OurCompany/Pages/federal-home-loan-bank-chicago-what-we-do.aspx http://web.ebscohost.com.ezproxy2.lib.depaul.edu/ehost/detail?vid=13&sid=cd018529-a732454c-904b1c98b54c0ef0%40sessionmgr113&hid=124&bdata=JnNpdGU9ZWhvc3QtbGl2ZSZzY29wZT1 zaXRl#db=nlebk&AN=13259