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Treasury IG: Audit of the Federal Financing Bank's Financial Statements for FY 2025
WASHINGTON, Jan. 18 -- The Treasury Inspector General issued the following audit report (No. OIG-26-007) on Jan. 9, 2026, entitled "Audit of the Federal Financing Bank's Financial Statements for Fiscal 2025."Here are excerpts:
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MEMORANDUM FOR SECRETARY BESSENT
FROM: Loren J. Sciurba, Deputy Inspector General
SUBJECT: Audit of the Federal Financing Bank's Financial Statements for Fiscal Year 2025
We hereby transmit the attached subject report. Under a contract monitored by our office, KPMG LLP (KPMG), a certified independent public accounting firm, audited the financial statements of ... Show Full Article WASHINGTON, Jan. 18 -- The Treasury Inspector General issued the following audit report (No. OIG-26-007) on Jan. 9, 2026, entitled "Audit of the Federal Financing Bank's Financial Statements for Fiscal 2025." Here are excerpts: * * * MEMORANDUM FOR SECRETARY BESSENT FROM: Loren J. Sciurba, Deputy Inspector General SUBJECT: Audit of the Federal Financing Bank's Financial Statements for Fiscal Year 2025 We hereby transmit the attached subject report. Under a contract monitored by our office, KPMG LLP (KPMG), a certified independent public accounting firm, audited the financial statements ofthe Federal Financing Bank (FFB) as of September 30, 2025, and for the year then ended, provided a report on internal control over financial reporting, and on compliance with laws, regulations, and contracts tested. The contract required that the audit be performed in accordance with U.S. generally accepted government auditing standards, Office of Management and Budget (OMB) Bulletin No. 24-02, Audit Requirements for Federal Financial Statements, and the Government Accountability Office/Council of the Inspectors General on Integrity and Efficiency, Financial Audit Manual.
In its audit of FFB, KPMG found
* the financial statements were fairly presented, in all material respects, in accordance with U.S. generally accepted accounting principles;
* no deficiencies in internal control over financial reporting that are considered material weaknesses; and
* no instances of reportable noncompliance with laws, regulations, and contracts tested.
In connection with the contract, we reviewed KPMG's reports and related documentation and inquired of its representatives. Our review, as differentiated from an audit performed in accordance with U.S. generally accepted government auditing standards, was not intended to enable us to express, and we do not express, an opinion on FFB's financial statements or conclusions on the effectiveness of internal control or compliance with laws and regulations. KPMG is responsible for the attached auditors' report dated January 9, 2026, and the conclusions expressed therein. However, our review disclosed no instances where KPMG did not comply, in all material respects, with U.S. generally accepted government auditing standards.
If you wish to discuss this report, please contact me at (202) 927-5869, or a member of your staff may contact Pauletta Battle, Acting Assistant Inspector General for Audit, at (202) 927-5400.
Attachment
cc: Gary Grippo, Acting Fiscal Assistant Secretary
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Table of Contents
Page
Management's Discussion and Analysis (unaudited) ... 1
Independent Auditors' Report ... 5 Financial Statements ... 8
Notes to Financial Statements ... 11
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Introduction
The Federal Financing Bank (the Bank) is a government corporation under the general supervision and direction of the Secretary of the Treasury. The Congress created the Bank in 1973, at the request of the U.S. Department of the Treasury (Treasury). The Bank borrows from Treasury and lends to Federal agencies and to private entities that have Federal guarantees. The Bank also has debt obligations to the Civil Service Retirement and Disability Fund (CSR&DF).
Mission
The mission of the Bank is to reduce the costs of Federal and federally assisted borrowings, to coordinate such borrowings with the Government's overall fiscal policy, and to ensure that such borrowings are done in ways that least disrupt private markets. To accomplish this mission, the Bank exercises its statutory authority to purchase obligations issued, sold, or guaranteed by Federal agencies.
Objectives
The Bank was formed to be the vehicle through which Federal agencies finance programs involving the sale or placement of credit market instruments, including agency securities, guaranteed obligations, participation agreements, and the sale of assets. This objective is achieved in a manner consistent with the Federal Financing Bank Act of 1973 (12 U.S.C. 2281 et seq.) and its legislative history.
The Bank makes funds available to Federal agencies and to federally guaranteed borrowers in accordance with agency program requirements. The Bank is capable of providing lending terms for a wide variety of loan structures.
The methods used to determine interest rates charged by the Bank for terms such as prepayment provisions and service charges are applied consistently for all borrowers.
The lending policy of the Bank is flexible enough to preclude the need for agencies to accumulate pools of funds. This policy does not preclude the maintenance of liquidity reserves for those agencies that have such a need. In no case are funds provided by the Bank invested in private credit instruments outside of Federal agency programs or used to speculate in the market for public securities.
Organizational Structure
The Bank is subject to the general supervision and direction of the Secretary of the Treasury. The Board of Directors is comprised of the incumbents of the following Treasury offices: the Secretary of the Treasury, who as provided by law is the Chairman; the Deputy Secretary; the Under Secretary for Domestic Finance; the General Counsel; and the Fiscal Assistant Secretary.
The officers are incumbents of the following Treasury offices (corresponding Bank positions are in parentheses): the Under Secretary for Domestic Finance (President); the General Counsel (General Counsel); the Assistant Secretary for Financial Markets (Vice President); the Fiscal Assistant Secretary (Vice President); the Deputy Assistant Secretary for Public Finance (Vice President and Treasurer); the Director, Office of Federal Program Finance (Vice President); and the Director, Office of Federal Lending (Secretary and Chief Financial Officer). A delegation by the Bank President authorizes any Bank Vice President, in consultation with any other Bank officer, to exercise the powers of the Presidency.
The staff of the Bank is organized into four units: accounting, information technology, lending, and operations. Each functional unit is headed by a Director who reports to the Chief Financial Officer. The Director of Accounting is responsible for loan transactions, including but not limited to overseeing loan disbursements and repayments as well as managing accounting and financial reporting. The Director of Information Technology is responsible for management and oversight of the IT infrastructure, including but not limited to software development and maintenance of mission critical applications that support lending and accounting functions. The Director of Lending is responsible for loan administration functions, including but not limited to loan origination, loan structuring, and managing customer relationships. The Director of Operations is responsible for general management functions, including but not limited to budgeting, procurement, human resources, strategic planning, and facilities.
Loan Programs Activity
The Bank makes funds available to Federal agencies and to federally guaranteed borrowers in accordance with agency program requirements. However, the Balanced Budget and Emergency Deficit Control Act of 1985, commonly known as Gramm-Rudman-Hollings Act, the Consolidated Omnibus Budget Reconciliation Act of 1985, and the Federal Credit Reform Act of 1990 included provisions that have prohibited or limited the Bank's financing of certain loans.
Impact of Economic Conditions
With the exception of loans to the United States Postal Service (USPS), all Bank assets are full faith and credit obligations of the U.S. government and economic conditions do not affect repayments to the Bank. See "Note (2) Loans Receivable" included in Notes to Financial Statements for further details about the loans receivable from the USPS.
Loans backed by the full faith and credit of the U.S. government are the credit equivalent of Treasury securities. The Bank does not expect to suffer any credit losses from loans backed by the full faith and credit of the U.S. government.
Credit Performance
The Bank has not incurred any credit-related losses on its loans as of the date of these statements.
Financial Highlights
For the year ended September 30, 2025, the Bank's interest revenue was $8,844,562 on a net portfolio balance of $220,742,679 at September 30, 2025. Accrued interest receivable at September 30, 2025 was $1,496,506.
For the fiscal year ended September 30, 2025, interest on borrowings was $8,299,482. Net borrowings were $217,774,452 and interest payable was $1,110,592 at September 30, 2025.
After including servicing revenue of $496 and deducting administrative expenses of $12,727, net income was $532,849. The Bank concluded the year at September 30, 2025, with a Treasury Fund balance of $3,836,234.
Remaining loan commitments and net loans receivable were $320,470,917 and $220,742,679, respectively, at September 30, 2025. Details are below.
[See table at the link below]
On October 4, 2024, the Bank executed a Program Financing Agreement with the DSCA. At September 30, 2025, DSCA has outstanding commitments of $8,000,000 but no loan disbursements to date.
At September 30, 2025, the Department of Commerce has outstanding commitments of $5,500,000 but no loan disbursements to date.
On December 9, 2024, the Bank executed a Certificate Purchase Agreement with USAID, and Ukraine, represented by the Minister of Finance of Ukraine, to facilitate the purchase of a $20,000,000 Certificate of Indebtedness.
The Bank executed a significant number of commitments offered for purchase within the two DOE programs in 2025. At September 30, 2025, the DOE loan portfolio totaled $28,987,622.
The Rural Utilities Service (RUS) loan program continues to be an important FFB guarantor with its outstanding balance at $54,865,570 in 2025. The Historically Black College and Universities (HBCU) loan portfolio was $830.31 million in 2025.
The Housing and Urban Development (HUD)-542 Risk Share Program portfolio was $3,135,678 at September 30, 2025. With sixteen Housing Finance Agencies (HFAs) participating in the program in 2025, an additional five HFAs are finalizing documents to begin participation in 2026.
The loan portfolio of the Community Development Financial Institution (CDFI) Fund, Department of Treasury, was $1,482,397 at September 30, 2025. No new loans were disbursed in 2025 for MARAD or FDIC, acting in its capacity as Receiver, although interest was capitalized on certain FDIC loans disbursed in prior years.
The USPS is an independent establishment of the executive branch of the U.S. government, which borrows from the Bank to finance its capital improvements and operating expenses. The USPS Note Purchase Agreement (NPA) with the Bank was renewed in 2023. The USPS is authorized to borrow a maximum of $15,000,000. The USPS has utilized its total borrowing authority and has no new borrowings as of September 30, 2025.
The Bank's net position was $7,189,308 at September 30, 2025, and the current year net income was $532,849.
Performance Highlights
During fiscal year 2025, the Bank processed 86 new loan commitments. The interest rate was set or reset on 1,439 new loans or maturity extensions. The Bank processed 58 prepayments and 48,987 loan repayments.
Management Controls
The Bank completed an in-depth testing of its internal accounting and administrative control procedures in accordance with OMB Circular No. A-123, Management's Responsibility for Enterprise Risk Management and Internal Control, as of September 30, 2025. Accordingly, we believe that the Bank's systems of internal accounting and administrative controls fully comply with the requirements for agency internal accounting and administrative control systems, providing reasonable assurance that they are achieving the intended objectives.
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Independent Auditors' Report
Deputy Inspector General, U.S. Department of the Treasury and The Board of Directors, Federal Financing Bank:
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of the Federal Financing Bank, which comprise the statement of financial position as of September 30, 2025, and the related statements of income and changes in net position, and cash flows for the year then ended, and the related notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Federal Financing Bank as of September 30, 2025, and the results of its operations and its cash flows for the year then ended in accordance with U.S. generally accepted accounting principles.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS), the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and Office of Management and Budget (OMB) Bulletin No. 24-02, Audit Requirements for Federal Financial Statements. Our responsibilities under those standards and OMB Bulletin No. 24-02 are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Federal Financing Bank and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with U.S. generally accepted accounting principles, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events considered in the aggregate that raise substantial doubt about the Federal Financing Bank's ability to continue as a going concern for one year after the date that the financial statements are available to be issued.
Auditors' Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and OMB Bulletin No. 24-02 will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, Government Auditing Standards, and OMB Bulletin No. 24-02, we:
* Exercise professional judgment and maintain professional skepticism throughout the audit.
* Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
* Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Federal Financing Bank's internal control. Accordingly, no such opinion is expressed.
* Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
* Conclude whether, in our judgment, there are conditions or events considered in the aggregate that raise substantial doubt about the Federal Financing Bank's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
Other Information
Management is responsible for the other information included in the financial statements. The other information comprises the Table of Contents and Management's Discussion and Analysis but does not include the financial statements and our auditors' report thereon. Our opinion on the financial statements does not cover the other information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements as of and for the year ended September 30, 2025, we considered the Federal Financing Bank's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Federal Financing Bank's internal control. Accordingly, we do not express an opinion on the effectiveness of the Federal Financing Bank's internal control. We did not test all internal controls relevant to operating objectives as broadly defined by the Federal Managers' Financial Integrity Act of 1982.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Federal Financing Bank's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Federal Financing Bank's financial statements as of and for the year ended September 30, 2025, are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards or OMB Bulletin No. 24-02.
Purpose of the Other Reporting Required by Government Auditing Standards
The purpose of the communication described in the Report on Internal Control Over Financial Reporting and the Report on Compliance and Other Matters sections is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Federal Financing Bank's internal control or compliance. This communication is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Federal Financing Bank's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
KPMG LLP
Washington, DC
January 9, 2026
* * *
(1) Summary of Significant Accounting Policies
The Federal Financing Bank (the Bank) was created by the Federal Financing Bank Act of 1973 (12 USC 2281) as an instrumentality of the U.S. government and a body corporate under the general supervision of the Secretary of the Treasury (the Secretary). The budget and audit provisions of the Government Corporation Control Act apply to the Bank in the same manner as they apply to other wholly owned government corporations.
The Bank was established by Congress at the request of the U.S. Department of the Treasury (Treasury), in order "to assure coordination of Federal and federally assisted borrowing programs with the overall economic and fiscal policies of the U.S. government, to reduce the cost of Federal and federally assisted borrowing from the public, and to assure that such borrowings are financed in a manner least disruptive of private financial markets and institutions." The Bank was given statutory authority to finance obligations issued, sold, or guaranteed by Federal agencies so that the Bank could meet these debt management objectives.
The Bank is authorized, with the approval of the Secretary, to issue publicly and have outstanding at any one-time obligations not in excess of $15,000,000. Additionally, the Bank is authorized to issue obligations in unlimited amounts to Treasury which, at the discretion of the Secretary, may agree to purchase any such obligations.
(a) Basis of Presentation
The Bank has historically prepared its financial statements in accordance with U.S. generally accepted accounting principles (GAAP), based on standards issued by the Financial Accounting Standards Board (FASB), the private-sector standards-setting body. The Federal Accounting Standards Advisory Board (FASAB) has indicated that financial statements prepared based upon standards promulgated by the FASB may also be regarded as in accordance with GAAP for those Federal entities, such as the Bank, that have issued financial statements based upon FASB standards in the past. Accordingly, consistent with historical reporting, the Bank's financial statements are presented in accordance with accounting and financial reporting standards promulgated by the FASB.
In compliance with the Memorandum to the Heads of Executive Departments and Agencies from Office of Management and Budget within the Executive Office of the President, dated June 23, 2025, the Bank only reports single-year of the statement of financial position, the related statement of income and changes in net position, statement of cash flows, and the related notes to the financial statements as of September 30, 2025 and for the year then ended.
(b) Basis of Accounting
The financial statements are presented on the accrual basis of accounting. The Bank recognizes loans when they are issued and related repayments when they are received. The Bank recognizes borrowings when they are received and repayments when they are made. In addition, the Bank recognizes interest on loans, interest on investments, and revenue from servicing loans when they are earned and recognizes interest on borrowings and expenses when they are incurred.
(c) Funds with U.S. Treasury
As a government corporation, the Bank maintains a Fund Balance with Treasury and does not hold cash. For the purposes of the statement of cash flows, the funds with Treasury are considered cash.
(d) Loans Receivable
The Bank issues loans to Federal agencies for their own use or to private sector borrowers whose loans are guaranteed by a Federal agency. When a Federal agency has to honor a guarantee because a private sector borrower defaults, the Federal agency must obtain an appropriation or use other resources to pay the Bank. Loans receivable and potential loss reserves are evaluated under FASB's Accounting Standards Codification (ASC) 310 - Receivables and ASC 450-20 - Loss Contingencies. ASC 326-Financial Instruments Credit Losses is not applicable to the Bank, as all Bank lending is either a means of financing fully guaranteed Federal government lending activity or direct lending to a federal entity under common control. The Bank has not recorded a reserve for default on any loans receivable.
(e) Prepaid call option premiums
In certain situations, a borrower will choose to purchase a call option for the right to prepay a loan at par. The premiums associated with these call options are prepaid and non-refundable. At the same time, premiums are paid by the Bank for related borrowings from Treasury. The Bank defers premiums collected from borrowers and premiums paid to Treasury. Related interest revenue and interest expense are recognized over the life of the loan using the interest method. Premiums collected are reported as part of net loan receivables and premiums paid are reported as part of net borrowings on the Statement of Financial Position.
(f) Interest on Loans
The Bank's general policy is to capture the liquidity premium between Treasury securities and private sector lending rates, and to charge a rate that reflects the risk inherent in a borrower or transaction, when such a rate will accomplish a broader policy goal. Under amendments to the Federal Credit Reform Act (FCRA), effective October 1, 1998, while the Bank is permitted to charge a spread on loans to government-guaranteed borrowers, the spread is not retained by the Bank but rather is retained by the loan guarantor. In the event that this requirement results in the Bank being unable to fund its administrative expenses related to these loans, FCRA, as amended, states that the Bank may require reimbursement for administrative expense from loan guarantors.
(g) Capitalized Interest
In accordance with their loan agreements with the Bank, the Historically Black Colleges and Universities - Department of Education (HBCU), the Department of Energy (DOE), Federal Deposit Insurance Corporation (FDIC), acting in its capacity as Receiver, and the United States Agency for International Development (USAID) have the option of deferring payments of interest on their loans until future periods. When HBCU, DOE, FDIC, acting in its capacity as Receiver, or USAID elect, in advance, to defer interest payments, the accrued interest is recorded as capitalized interest receivable and added to the respective loan balance by the Bank. The Bank correspondingly capitalizes the interest payable on its related non-FCRA borrowings.
(h) Interest on Borrowings from Treasury
Interest rates, interest payable, and interest expense on borrowings from Treasury used to fund guaranteed loans that require the guaranteeing Federal agencies to comply with FCRA are determined annually by the borrowing agencies using FCRA and Office of Management and Budget (OMB) guidelines. Interest on borrowings from Treasury for non-FCRA loans is based on the daily Treasury New Issue Curve (TNIC).
(i) Revenue from Servicing Loans
The Bank charges certain Rural Utilities Service (RUS) borrowers a loan service fee that is reported as revenue from servicing loans on the Statement of Income and Changes in Net Position. The Bank's loan servicing fee is equal to one-eighth of one percent more than the contractual interest rate with Treasury.
(j) Administrative Expenses
The Bank is subject to the general supervision and direction of the Secretary. As provided by law, the Secretary acts as Chairman of the Board of Directors. Employees of Treasury's Departmental Offices perform the Bank's management and operational functions, and its legal counsel is the General Counsel of the Treasury. The Bank reimburses Treasury for the facilities and services it provides. The amounts of such reimbursements are reported as administrative expenses in the Statement of Income and Changes in Net Position.
(k) Net Position
Net position is the residual difference between assets and liabilities and is composed of cumulative results of operations and prior capital transactions. The last capital transaction occurred when the Bank executed a debt exchange with the Civil Service Retirement and Disability Fund (CSR&DF) on May 25, 2023. The Bank can borrow from Treasury to meet its immediate cash needs and can also seek appropriations from Congress to make up for accumulated losses that will not be met by income.
Gains and losses related to early repayments of debt to Treasury in which there is no related prepayment by the Federal agency borrower are recognized immediately and treated as capital transactions in the Statement of Income and Changes in Net Position.
(l) Loan Commitments
The Bank is authorized to make commitments to purchase, and to purchase, on terms and conditions determined by the Bank any obligation which is issued, sold, or guaranteed by a Federal agency. The Bank has offered Federal agencies the opportunity to enter into mutually beneficial agreements, which provide for the standardization of processes, documents, and conditions upon which the Bank will purchase obligations. A Note Purchase Agreement (NPA) generally sets forth processes, documents, and conditions for the purchase of obligations issued by a Federal agency. A Program Financing Agreement (PFA) sets forth the processes, documents, and conditions for the purchase of obligations guaranteed by a Federal agency. The Bank can purchase obligations under NPA's up to the lesser of individual agency legally authorized borrowing limits or amounts set forth in the NPA. The Bank may purchase obligations under PFAs up to amounts authorized in individual agency annual program appropriations. All NPAs and PFAs are renewed annually upon the request of the agency and at the discretion of the Bank, unless otherwise provided for in the agreement.
Loan commitments represent the Bank's obligations to fund loans under fully executed promissory notes less amounts previously advanced under the notes and expired commitments. The Bank often uses a future advance promissory note structure allowing a borrower the contractual right to take a single or multiple advances under a note during an agreed upon allowable period for advance.
(m) Classified Activities
The operating results of classified programs (those designated as classified by the U.S. Government which cannot be specifically described), if any, are included in our financial statements and are subjected to the same oversight and internal controls as our other programs.
(n) Tax-Exempt Status
The Bank is exempt from tax in accordance with Section 11(a) of the Federal Financing Bank Act of 1973 (12 USC 2281).
(o) Related Parties
The Bank conducts significant transactions in the ordinary course of business with the Department of the Treasury and its components, which are considered related parties as defined by GAAP.
(2) Loans Receivable
Loans receivable represents the outstanding balances treated as loans to agencies. The Bank has the ability and intends to hold loans receivable until maturity or payoff.
At September 30, 2025, the Bank had outstanding loans receivable of $221,095,574. Certain of these loans were funded using FCRA borrowing procedures. The outstanding amount of loans funded using FCRA borrowing procedures was $97,907,921 with interest rates ranging from 0.378% to 5.858%, a weighted average rate of 3.651%, and maturity dates ranging from October 2, 2025 to October 15, 2065. The remaining non-FCRA loans receivable of $123,187,653 had interest rates ranging from 0.458% to 7.976%, a weighted average rate of 4.172%, and maturity dates ranging from October 15, 2025 to December 31, 2054.
The FDIC notes are backed by a guarantee from the FDIC in its corporate capacity. The unamortized premium was $352,895 at September 30, 2025, with $125,021 accreted for the year ended September 30, 2025.
Loans receivable at September 30, 2025 consists of the following:
[See table at the link below]
The Bank evaluates, as part of its normal procedures, all loans for potential impairment. As of September 30, 2025, the Bank has not incurred any credit-related losses on its loans. All receivables are full faith and credit of the U.S. government with the exception of the USPS.
The loans receivable due within one year are $31,369,069 as of September 30, 2025.
USPS
Receivables due from the USPS are intragovernmental obligations, within the executive branch of the U.S.
Government, which are incurred to finance postal activities authorized by Congress under Article I, Section 8 of the U.S. Constitution.
The Bank monitors the performance of the USPS through quarterly briefings from USPS senior management and through financial and operational reports that are required under the Bank's lending agreement with the USPS.
The USPS, pursuant to the lending agreement, maintains a dedicated interest repayment reserve account in the U.S. Treasury that is sufficiently funded to meet current debt service to the Bank. USPS has never defaulted on any payment due to the Bank.
USPS's debt obligations are not guaranteed by the Government of the United States, except as provided by 39 USC 2006(c), which states that USPS obligations shall be obligations of the Government of the United States, and payment of principal and interest thereon is fully guaranteed by the Government of the United States, if and to the extent that the USPS requests the Secretary of the Treasury to pledge the full faith and credit of the Government of the United States and the Secretary determines that it would be in the public interest to do so.
The Bank will monitor the USPS's implementation of the operational, financial, and legal reforms in its strategic plan. As of the date of this report, management believes the USPS, as stated in its public filings, will, if necessary, prioritize payments to the Bank to meets its obligations to the Bank. Management has determined that no impairment of USPS loans receivable exists as of September 30, 2025 and the Bank does not record an allowance for credit loss on USPS obligations.
(3) Borrowings
Under the Federal Financing Bank Act of 1973, the Bank may, with the approval of the Secretary, borrow without limit from the Treasury.
For certain borrowings used to fund certain guaranteed loans based on FCRA, the interest rate is determined annually by the borrowing agencies using FCRA and OMB guidelines. At September 30, 2025, the Bank had $97,628,675 of Treasury borrowings used to fund guaranteed loans based on FCRA with interest rates ranging from 1.2219% to 4.5685%, a weighted average rate of 3.3%, and maturity dates from September 30, 2050 to September 30, 2065. Under FCRA borrowing procedures, interest on borrowings from Treasury are not capitalized.
For the Bank's non-FCRA borrowings, repayments on Treasury borrowings generally match the terms and conditions of corresponding loans made by the Bank and bear interest at the respective rate, as determined by the Secretary, and are repayable at any time, unless the underlying note terms provide for an agreed upon no-call period. At September 30, 2025, the Bank had $113,310,554 of Treasury borrowings for non-FCRA related loans, with interest rates ranging from 0.458% to 7.976%, a weighted average rate of 4.172%, and maturity dates from October 15, 2025 to December 31, 2054.
The Bank incurred interest expense of $125,021 for the year ended September 30, 2025 related to a prepaid call option premium to Treasury of $602,184. The unamortized premium at September 30, 2025 is $352,895. There were no new prepaid premiums in 2025.
Treasury may take certain extraordinary measures in the event that the public debt nears the statutory debt limit and a delay in raising the statutory debt limit occurs. During such a period, one option for Treasury is to exchange outstanding Treasury securities, which are subject to the debt limit, for securities of the Bank, which are not subject to the U.S. Federal debt limit, within the investment portfolio of the CSR&DF. At September 30, 2025, the Bank had borrowings of $4,092,675, from the CSR&DF, which is administered by the Office of Personnel Management. At September 30, 2025, these borrowings were at an interest rate range of 2.25% to 3.00%, a weighted average interest rate of 2.389%, and with maturity dates ranging from June 30, 2026 to June 30, 2035.
The scheduled principal repayments below reflect maturities of the Bank's borrowings and do not necessarily match the maturities of assets in the Bank's loan portfolio. Scheduled principal repayments of borrowings before unamortized prepaid premiums as of September 30, 2025, are as follows:
[See table at the link below]
(4) Capitalized Interest
Capitalized interest receivable was $3,342,241 and the related capitalized interest payable was $3,095,433 as of September 30, 2025. Capitalized interest receivable and payable are reported as part of the loans receivable and borrowing balances, respectively, on the Statements of Financial Position. The difference between capitalized interest receivable and capitalized interest payable is due to the effects of debt limit transactions on October 15, 2015, and May 25, 2023. These transactions altered the structure of existing debt and capitalized interest.
(5) Loan Commitments
The Bank makes loan commitments to extend credit to Federal program agencies based on the loan agreements executed between the parties. The loan commitments are not reported on the Statements of Financial Position and generally have fixed expiration dates or other termination clauses. Since many of the loan commitments are expected to expire without being completely drawn upon, the total loan commitment amounts do not necessarily represent future cash requirements. The Bank uses the same credit policies in making loan commitments as it does for loans receivable reported on the Statements of Financial Position. The Bank funds loan commitments with its borrowing authority from Treasury. There is no exposure or credit risk related to these commitments.
The contract amounts and remaining loan commitments by program agency as of September 30, 2025, are as follows:
[See table at the link below]
In addition to the above, the Bank has PFAs to purchase obligations guaranteed by the Department of Transportation's Maritime Administration (MARAD) and the Department of Housing and Urban Development, Federal Financing Bank Section 542 Risk Share Program (HUD-542) and an NPA with the U.S. Postal Service. MARAD and HUD-542 program activities are expected to continue in fiscal year 2026 but currently have no active commitments. Obligations purchased under the HUD-542 program are immediately disbursed upon transaction close. U.S. Postal Service has reached its maximum borrowing authority as of September 30, 2025. There are no outstanding commitments with the FDIC (acting in its capacity as a Receiver) which is distinct from FDIC-DIF shown above.
(6) Subsequent Events
The Bank has evaluated subsequent events from the balance sheet date through January 9, 2026, the date at which the financial statements were available to be issued and determined that there are no other items to accrue or disclose.
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The report is posted at: https://oig.treasury.gov/system/files/2026-01/OIG-26-007_secured-%28508%2C-web-copy%29.pdf
SEC Obtains Final Consent Judgment as to Podcast Host Charged With Offering Fraud
WASHINGTON, Jan. 17 -- The Securities and Exchange Commission issued the following litigation release (No. 23-cv-1853; N.D. Ohio filed Sept. 25, 2023):* * *
Securities and Exchange Commission v. Matthew M. Motil et al., No. 23-cv-1853 (N.D. Ohio filed Sept. 25, 2023)
On January 13, 2026, the Securities and Exchange Commission obtained a final consent judgment in the SEC's enforcement action against defendant Matthew Motil.
The SEC's complaint, filed on September 25, 2023 in federal district court in the U.S. District Court for the Northern District of Ohio, alleged that Motil defrauded investors ... Show Full Article WASHINGTON, Jan. 17 -- The Securities and Exchange Commission issued the following litigation release (No. 23-cv-1853; N.D. Ohio filed Sept. 25, 2023): * * * Securities and Exchange Commission v. Matthew M. Motil et al., No. 23-cv-1853 (N.D. Ohio filed Sept. 25, 2023) On January 13, 2026, the Securities and Exchange Commission obtained a final consent judgment in the SEC's enforcement action against defendant Matthew Motil. The SEC's complaint, filed on September 25, 2023 in federal district court in the U.S. District Court for the Northern District of Ohio, alleged that Motil defrauded investorsof millions of dollars with promises of low-risk, high return promissory notes purportedly fully collateralized by first mortgages on homes located throughout Ohio. According to the complaint, the promissory notes were not, in fact, fully collateralized by first mortgages, and Motil used investor money to make Ponzi payments to prior investors and to pay personal expenses.
Motil consented to entry of a final judgment permanently enjoining him from violating the registration requirements of Section 5 of the Securities Act of 1933, as well as the anti-fraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; permanently enjoining him from participating in the issuance, purchase, offer, or sale of any security outside of certain transactions for his personal account; and ordering him to pay disgorgement of $2,967,535, plus prejudgment interest thereon of $340,396, which shall be deemed satisfied by the restitution order entered against Motil in the parallel criminal case, United States v. Matthew M. Motil, No. 24-cr-289 (N.D. Ohio filed Aug. 12, 2024). On July 18, 2025, the criminal court sentenced Motil to 70 months in prison and ordered him to pay restitution of $5,040,862.
The SEC's investigation was supervised by Jeff Leasure, and the SEC's litigation was led by John Timmer under the supervision of James Carlson. The SEC appreciates the assistance of the U.S. Attorney's Office for the Northern District of Ohio, and the State of Ohio Division of Securities.
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Resources
* SEC Complaint (https://www.sec.gov/files/litigation/complaints/2026/comp26462.pdf)
* Final Judgment (https://www.sec.gov/files/litigation/litreleases/2026/judg26462.pdf)
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Original text here: https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26462
Reclamation Announces Public Comment Period for Long-Term Warren Act Contract With San Juan Water District
WASHINGTON, Jan. 17 -- The U.S. Department of the Interior's Bureau of Reclamation issued the following news release:* * *
Reclamation Announces Public Comment Period for Long-Term Warren Act Contract With San Juan Water District
FOLSOM, Calif. - The Bureau of Reclamation and San Juan Water District have completed negotiation of a long-term Warren Act contract for conveyance of non-Central Valley Project Water through federal facilities. The contract was negotiated and is available for public comment pursuant to the Warren Act of 1911.
This contract would continue the conveyance of up to ... Show Full Article WASHINGTON, Jan. 17 -- The U.S. Department of the Interior's Bureau of Reclamation issued the following news release: * * * Reclamation Announces Public Comment Period for Long-Term Warren Act Contract With San Juan Water District FOLSOM, Calif. - The Bureau of Reclamation and San Juan Water District have completed negotiation of a long-term Warren Act contract for conveyance of non-Central Valley Project Water through federal facilities. The contract was negotiated and is available for public comment pursuant to the Warren Act of 1911. This contract would continue the conveyance of up to25,000 acre-feet, per year, of non-Central Valley Project water using excess capacity in Folsom Reservoir. This contract supports San Juan Water District commitments made in the American River Basin Water Forum Agreement.
Written comments on this draft contract must be received by close of business on
Feb. 18, and sent to Chanthea Khoun, repayment specialist, Central California Area Office, Bureau of Reclamation, 7794 Folsom Dam Road, Folsom, CA 95630, or emailed to ckhoun@usbr.gov.
For more information or to request a copy of the draft long-term Warren Act contract, contact Khoun at 916-537-7052 or ckhoun@usbr.gov.
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The Bureau of Reclamation is a federal agency under the U.S. Department of the Interior and is the nation's largest wholesale water supplier and second largest producer of hydroelectric power. Our facilities also provide substantial flood control, recreation opportunities, and environmental benefits.
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Original text here: https://www.usbr.gov/newsroom/news-release/5266
National Park Service: Grand Canyon National Park Receives Highway Safety Grant Funding
WASHINGTON, Jan. 17 -- The U.S. Department of the Interior National Park Service issued the following news release:* * *
Grand Canyon National Park Receives Highway Safety Grant Funding
Funding supports pedestrian, bicycle, speed and DUI enforcement efforts
Grand Canyon National Park has received grant funding from the Arizona Governor's Office of Highway Safety (GOHS) through the National Highway Traffic Safety Administration (NHTSA) to support pedestrian and bicycle safety, speed enforcement and impaired driving prevention.
The funding helps park rangers purchase equipment, conduct high-visibility ... Show Full Article WASHINGTON, Jan. 17 -- The U.S. Department of the Interior National Park Service issued the following news release: * * * Grand Canyon National Park Receives Highway Safety Grant Funding Funding supports pedestrian, bicycle, speed and DUI enforcement efforts Grand Canyon National Park has received grant funding from the Arizona Governor's Office of Highway Safety (GOHS) through the National Highway Traffic Safety Administration (NHTSA) to support pedestrian and bicycle safety, speed enforcement and impaired driving prevention. The funding helps park rangers purchase equipment, conduct high-visibilitytraffic enforcement and participate in community outreach aimed at reducing crashes, injuries and fatalities on park roadways. Through this partnership, Grand Canyon National Park and GOHS are working to improve pedestrian and bicyclist safety, reduce speeding, decrease impaired driving, increase seat belt and child safety seat use, and limit driver distractions that contribute to traffic-related injuries and deaths.
Each year, park rangers, working with state and local partners, stop impaired drivers and issue traffic citations to help keep visitors and residents safe. The park has received GOHS support in recent years for traffic enforcement, impaired driving prevention and the purchase of essential law enforcement equipment.
For 2025, the park received:
* $3,676 in Federal 402 Pedestrian and Bicycle Safety funds to support community outreach events, parking lot patrols, International Police Mountain Bike Association training and the purchase of safety equipment such as bike helmets.
* $21,324 in Federal 405 Alcohol funds for overtime related to Route 66 DUI Task Force operations, targeted impaired driving enforcement and equipment used to detect and prevent driving or boating under the influence.
* $5,310 in Federal 402 Police Traffic Services funds to support overtime for high-visibility enforcement efforts focused on speeding and aggressive driving.
The grant funding strengthens the park's ability to protect visitors, residents and employees while maintaining safe travel conditions throughout the park.
Visitors are reminded to enjoy the park responsibly. If you choose to drink or use substances, do not drive. Designate a sober driver. Penalties for impaired driving in Arizona can include jail time, fines, license suspension and vehicle impoundment.
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Original text here: https://www.nps.gov/grca/learn/news/gohs-2025-grants.htm
Individual Extradited to the United States From the Dominican Republic to Face Drug Trafficking Charges
SAN JUAN, Puerto Rico, Jan. 17 -- The office of the U.S. Attorney for the District of Puerto Rico posted the following news release on Jan. 16, 2026:* * *
Individual Extradited to the United States from the Dominican Republic to Face Drug Trafficking Charges
Dominican authorities extradited Esteffani Jose Vasquez-Amarante, also known as "Ethian" or "Baby" to the United States to face drug trafficking and money laundering charges filed in the District of Puerto Rico, announced W. Stephen Muldrow, United States Attorney for the District of Puerto Rico. Vasquez-Amarante was arrested in the Dominican ... Show Full Article SAN JUAN, Puerto Rico, Jan. 17 -- The office of the U.S. Attorney for the District of Puerto Rico posted the following news release on Jan. 16, 2026: * * * Individual Extradited to the United States from the Dominican Republic to Face Drug Trafficking Charges Dominican authorities extradited Esteffani Jose Vasquez-Amarante, also known as "Ethian" or "Baby" to the United States to face drug trafficking and money laundering charges filed in the District of Puerto Rico, announced W. Stephen Muldrow, United States Attorney for the District of Puerto Rico. Vasquez-Amarante was arrested in the DominicanRepublic on November 6, 2025, at the request of the United States and extradited to Puerto Rico on Wednesday, January 14, 2026.
"This extradition is another important step in our fight against drug trafficking and transnational organized crime. This prosecution demonstrates the commitment of the Department of Justice and our law enforcement partners, and the cooperation of the Dominican Republic, to work together to bring international drug traffickers to justice," said U.S. Attorney Muldrow. "We will continue to maximize our multi-agency efforts to disrupt and dismantle international drug cartels that smuggle drugs into Puerto Rico and the continental United States."
"This extradition sends a clear message: leveraging political access, financial technology, or international borders, will not shield criminals from accountability," said Claudia Dubravetz, Acting Special Agent in Charge of the FBI's San Juan Field Office. "The FBI, along-side our federal and international partners, will aggressively pursue transnational drug traffickers and money launderers who undermine the rule of law and threaten communities in the United States and abroad."
On September 7, 2023, a federal grand jury returned a superseding indictment charging Esteffani Jose Vasquez-Amarante with international conspiracy to distribute cocaine, international distribution of cocaine, and conspiracy to commit money laundering derived from specified unlawful activity - drug trafficking. Vasquez-Amarante facilitated drug trafficking and money laundering activity between La Romana, Dominican Republic, and Puerto Rico, through cryptocurrency.
According to the superseding indictment, since at least February of 2022, Vasquez-Amarante conspired to distribute five kilograms or more of cocaine intending, knowing, and having reasonable cause to believe that it would be imported into the United States. The indictment also charges that Vasquez-Amarante conspired to commit money laundering derived from drug trafficking since no later than March 17, 2021. Specifically, the indictment states that Vasquez-Amarante and another co-conspirator directed the delivery of approximately $400,000 in U.S. currency - the product of drug trafficking -- to an individual in San Juan, Puerto Rico, who converted the drug proceeds to cryptocurrency.
On March 24, 2021, Vasquez-Amarante and another co-conspirator directed the delivery of approximately $2,000,000 in U.S. currency / drug proceeds to an individual in San Juan, Puerto Rico, who converted the drug proceeds to cryptocurrency. On or about April 14, 2021, another co-conspirator, at the direction of Vasquez-Amarante, attempted to deliver approximately $2,200,000 in U.S. currency / drug proceeds to an individual in San Juan, Puerto Rico, who had previously converted drug proceeds to cryptocurrency.
On January 14, 2026, Vasquez-Amarante was extradited from the Dominican Republic to San Juan, Puerto Rico by the Homeland Security Task Force (HSTF) Region 22, located in Puerto Rico and the U.S. Virgin Islands.
The Justice Department's Office of International Affairs, FBI Legal Attache in Santo Domingo and law enforcement partners in the Dominican Republic provided substantial assistance in securing the arrest and extradition to the United States of Vasquez Amarante.
The case is being prosecuted by Assistant U.S. Attorney Antonio L. Perez-Alonso under the supervision of Chief Myriam Y. Fernandez-Gonzalez and Deputy Chief Maria L. Montanez-Concepcion from the Money Laundering & Transnational Organized Crime Section.
If convicted, Vasquez-Amarante faces a minimum sentence of 10 years and up to life in prison for the drug trafficking charges and a sentence of up to 20 years of imprisonment for the money laundering charge.
This prosecution is part of the Homeland Security Task Force (HSTF) initiative established by Executive Order 14159, Protecting the American People Against Invasion. The HSTF is a whole-of-government partnership dedicated to eliminating criminal cartels, foreign gangs, transnational criminal organizations, and human smuggling and trafficking rings operating in the United States and abroad. Through historic interagency collaboration, the HSTF directs the full might of United States law enforcement towards identifying, investigating, and prosecuting the full spectrum of crimes committed by these organizations, which have long fueled violence and instability within our borders. In performing this work, the HSTF places special emphasis on investigating and prosecuting those engaged in child trafficking or other crimes involving children. The HSTF further utilizes all available tools to prosecute and remove the most violent criminal aliens from the United States. HSTF San Juan comprises agents and officers from the following federal partners: FBI, ICE-HSI, CBP (OFO, AMO and Border Patrol), the U.S. Marshals Service for Puerto Rico and the U.S. Virgin Islands, DEA, ATF, IRS, U.S. Coast Guard, U.S. Coast Guard Investigative Service, U.S. Postal Inspection Service, the Department of State, and the U.S. Secret Service, the Puerto Rico/U.S. Virgin Islands HIDTA, TSA, FAA, and the U.S. Attorney's Offices for the Districts of Puerto Rico and the U.S. Virgin Islands. The HSTF also has the following state and local law enforcement partners as participating agencies: the Puerto Rico Police Department; the San Juan, Carolina, Guaynabo, Barceloneta, and Ponce Municipal Police Departments, the Puerto Rico National Guard - Counter Drug Program; the Puerto Rico Department of Corrections and Rehabilitation; the Puerto Rico Internal Revenue Service (Hacienda); the Puerto Rico Port Authority; and the Virgin Islands Police Department.
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An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Original text here: https://www.justice.gov/usao-pr/pr/individual-extradited-united-states-dominican-republic-face-drug-trafficking-charges
First Lady Melania Trump Inspires America's Children to Be Curious, Use AI to Achieve Their Career Ambitions
WASHINGTON, Jan. 17 -- The White House issued the following news on Jan. 16, 2026:* * *
First Lady Melania Trump Inspires America's Children to be Curious, Use AI to Achieve their Career Ambitions
First Lady Melania Trump advanced her mission to improve America's children's understanding of artificial intelligence (AI) today. Her goal to empower the next generation with AI and education reached thousands of schools nationwide, in partnership with Zoom Communications.
America's First Lady inspired participants, "The Age of Imagination is a new era, powered by artificial intelligence, where ... Show Full Article WASHINGTON, Jan. 17 -- The White House issued the following news on Jan. 16, 2026: * * * First Lady Melania Trump Inspires America's Children to be Curious, Use AI to Achieve their Career Ambitions First Lady Melania Trump advanced her mission to improve America's children's understanding of artificial intelligence (AI) today. Her goal to empower the next generation with AI and education reached thousands of schools nationwide, in partnership with Zoom Communications. America's First Lady inspired participants, "The Age of Imagination is a new era, powered by artificial intelligence, whereone's curiosity can be satisfied almost magically, in seconds."
The First Lady also emphasized that curiosity optimizes AI use, "History reminds us that curiosity is the driving force behind every great achievement. The world's greatest minds - our writers, architects, scientists, and painters - all had endless interest about human nature, and they all questioned that which was yet to be answered."
Zoom's CEO & Founder Eric Yuan, a clear leader in the TechEd space, stressed the need for AI safety, "AI is changing how we learn, work, and connect every day. That's why it's so important to help students and educators build AI literacy and feel confident using these tools in thoughtful, creative, and ethical ways."
Mrs. Trump concluded, "Although artificial intelligence can generate images and information, only humans can generate meaning and purpose. Choose to let your imagination drive your intellectual progress. But never use AI as a quick solution. Be intellectually honest with yourself - use AI as a tool - but do not let it replace your personal intelligence."
Mrs. Trump called on the international community to join her mission to empower children with technology and education during the 2025 United Nations General Assembly. The First Lady, Melania Trump, will be hosting the inaugural meeting of Fostering the Future Together at the White House this spring.
Remarks by First Lady Melania Trump (as prepared for delivery)
Curiosity For Intellectual Freedom
Thank you, Mr. Yuan, Zoom's leadership in the TechEd space is unmatched. Your support directly advances my mission to prepare America's next generation to use AI to enhance their education, and ultimately their careers. Indeed, this is an incredible time.
We are living in the Age of Imagination.
The Age of Imagination is a new era, powered by artificial intelligence, where one's curiosity can be satisfied almost magically, in seconds. You are fortunate to have the capability to fulfill your dreams through the power of learning, with AI serving as the primary engine for creative exploration.
History reminds us that curiosity is the driving force behind every great achievement. The world's greatest minds - our writers, architects, scientists, and painters - all had endless interest about human nature, and they all questioned that which was yet to be answered.
Are you ready to produce your own movie? Do you want to build the next Dress to Impress empire? Have you ever wondered how to become the next master artist? Create your own song?
Every giant, at some point in time, questions the status quo. Their singular vision pushes humanity in a new direction.
Artificial intelligence is changing today's world, and your curiosity should serve as the driving force. For the first time in history, the young girl dreaming of becoming a fashion designer and the young boy who wants to stand-up his cool animated superhero series can do so, from their own home.
Artificial Intelligence provides all the tools needed to implement your creative vision - today. You can develop movie characters, scripts, fashion, music, art - the entire ecosystem. All with AI.
But, what do you need to start? You need to harness your Imagination. In the new AI era, the most powerful skill is knowing what to ask, why it matters, and how to think beyond the first answer.
I encourage you to be stubbornly curious, think outside the box, and question everything.
Creators must stretch their minds to think differently. The world of possibility is endless, and AI is extending the conceptual in ways never dreamed of before. In the past, memorization unlocked opportunity. Today, your curiosity will open new doors to meaning, innovation, and leadership.
But we must remember, although artificial intelligence can generate images and information, only humans can generate meaning and purpose. Deep thinking, patience, and staying curious are where purpose begins.
Today, I urge you to take action: use AI to unlock new parts of your imagination. Lead with your ideas, stay sharp, but remember - never surrender your thinking to AI.
Choose to let your imagination drive your intellectual progress. But never use AI as a quick solution. Be intellectually honest with yourself - use AI as a tool - but do not let it replace your personal intelligence.
Pursue understanding with passion like no generation before. Make an impact.
Knowledge is power. Nobody can take it away from you. Good luck and wishing you a successful year ahead!
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Original text here: https://www.whitehouse.gov/briefings-statements/2026/01/first-lady-melania-trump-inspires-americas-children-to-be-curious-use-ai-to-achieve-their-career-ambitions/
DOE: Trump Administration Calls for Emergency Power Auction to Build Big Power Plants Again
WASHINGTON, Jan. 17 -- The U.S. Department of Energy issued the following news release on Jan. 16, 2026:* * *
Trump Administration Calls for Emergency Power Auction to Build Big Power Plants Again
Building a more reliable and affordable electricity supply for American industry and families across the Mid-Atlantic U.S.
*
U.S. Secretary of Energy Chris Wright and Secretary of the Interior Doug Burgum, vice-chair and chair of the National Energy Dominance Council (NEDC) respectively, today joined Mid-Atlantic governors urging PJM Interconnection, L.L.C. (PJM) to temporarily overhaul its market ... Show Full Article WASHINGTON, Jan. 17 -- The U.S. Department of Energy issued the following news release on Jan. 16, 2026: * * * Trump Administration Calls for Emergency Power Auction to Build Big Power Plants Again Building a more reliable and affordable electricity supply for American industry and families across the Mid-Atlantic U.S. * U.S. Secretary of Energy Chris Wright and Secretary of the Interior Doug Burgum, vice-chair and chair of the National Energy Dominance Council (NEDC) respectively, today joined Mid-Atlantic governors urging PJM Interconnection, L.L.C. (PJM) to temporarily overhaul its marketrules to strengthen grid reliability and reduce electricity costs for American families and businesses by building more than $15 billion of reliable baseload power generation.
The initiative calls on PJM to conduct an emergency procurement auction to address escalating electricity prices and growing reliability risks across the mid-Atlantic region of the United States. The action follows a series of PJM policies over the years that have weakened the electric grid, including the premature shutdown of reliable power generation.
President Trump declared a National Energy Emergency on his first day in office, warning that the previous administrations energy subtraction agenda left the country vulnerable to blackouts and soaring electricity prices. During the Biden administration, PJM forced nearly 17 gigawatts of reliable baseload power generation offline. For the first time in history, PJM's capacity auction failed to secure enough generation resources to meet basic reliability requirements. If not fixed, it will lead to further rising prices and blackouts.
"High electricity prices are a choice," said Energy Secretary Chris Wright. "The Biden administration's forceful closures of coal and natural gas plants without reliable replacements left the United States in an energy emergency. Perhaps no region in America is more at risk than in PJM. That's why President Trump asked governors across the Mid-Atlantic to come together and call upon PJM to allow America to build big reliable power plants again. Our directives will restore affordable and reliable electricity so American families thrive and America's manufacturing industries once again boom. President Trump promised to unleash American energy and put the American people first. This plan keeps that promise."
"For too long, the Green New Scam has left Mid-Atlantic families in the dark with skyrocketing bills," said Interior Secretary Doug Burgum. "Today, under President Trump's leadership, the National Energy Dominance Council has come up with a solution to end these high costs, roll back the Biden administration's policies of energy scarcity, and ensure we are powering the Mid-Atlantic and part of the Midwest's future without charging its citizens a cent. This initiative will ensure we usher in the age of artificial intelligence with new power plants funded by the technology companies, not taxpayers, securing the steel of Pennsylvania, the manufacturing of Ohio, and the ships of Virginia. The Trump administration is keeping the lights on, the factories humming, and the American Dream affordable."
Today's direction includes:
* Providing long-term certainty for new power generation: Provide 15-year revenue certainty for new power plants to accelerate the development of reliable power generation.
* Protecting residential electricity rates: Protect ratepayers by limiting the amount existing power plants can be paid in the PJM capacity market.
* Ensuring data centers pay their fair share: Make data centers pay more for new generation than residential customers by allocating costs for any new generation procured to data center customers that have not self-procured new capacity or agreed to be curtailable.
* Prioritizing immediate grid stability: Take other steps to ensure more affordable, reliable, and secure electricity for the American people.
Today's recommendations propose temporary but critical measures to ensure American businesses, especially those in some of the nation's most manufacturing intensive regions, have the reliable power they need to operate. The measures will also help keep electricity prices affordable for residential customers, while addressing rising demand from data centers.
In the years ahead, America's industrial resurgence, advanced manufacturing growth, and leadership in the global AI race will require additional reliable, around-the-clock power that runs without interruption. See the signed statement of principles here (https://www.energy.gov/documents/statement-principles-regarding-pjm) and fact sheet here (https://www.energy.gov/articles/fact-sheet-trump-administration-outlines-plan-build-big-power-plants-again).
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Original text here: https://www.energy.gov/articles/trump-administration-calls-emergency-power-auction-build-big-power-plants-again