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The Federal Home Loan Banks of Des Moines and Seattle have announced they will merge, after entering into an arrangement to prepare for a potential merger in August.

The merger was unanimously supported by the boards of directors of both banks; the closing of the merger will hinge on the approval of the Federal Housing Finance Agency and ratification by the FHLBs' member-owners.

FHFA Director Mel Watt released a statement in favor of the merger, saying, "Given the fundamental changes that have occurred in the financial system since the creation of the Federal Home Loan Banks, FHFA views the merger agreement approved by the boards of the Federal Home Loan Bank of Seattle and the Federal Home Loan Bank of Des Moines positively … FHFA has and will continue to work with the Banks throughout this process, and we will review the merger application to ensure that this transaction results in a financially strong Bank that supports the interests of all its members."

The two banks combined would serve nearly 1,500 member financial institutions in 13 states as well as U.S. Pacific territories.

As of June 2014, FHLB Des Moines had $82.2 billion in assets, and FHLB Seattle had 36.5 billion in assets.

NCUA Call Report data from March shows that 1,212 credit unions – or 18.7 percent of all credit unions – are members of FHLBs, which are a source of liquidity for mortgage lending.