U.S. Senator Charles Schumer (D-NY) on Monday called for federal regulators to probe billions of dollars of loans made by the Federal Home Loan Bank of Atlanta to Countrywide Financial. By the end of September, Countrywide had borrowed $51.4 billion from the FHLB system, 37 percent of the Atlanta bank’s outstanding advances, leading Schumer to charge the Calabasas, Calif.-based lender with using the government-backed lending programs “like its personal ATM.” From TheStreet.com:

… Schumer (D., New York) expressed “serious concern” that loans Countrywide Bank was pledging as collateral for those advances “may pose a risk to the safety and soundness of the FHLB system as a whole.” … the $62.4 billion in loans Countrywide has put up as collateral represents 78% of its total mortgage holdings, Schumer said. “I find these numbers alarming as reports continue to emerge about how Countrywide’s reckless and predatory lending practices were a leading contributor to today’s foreclosure crisis,” Schumer wrote in calling for the probe.

Most FHLB banks used words like “dramatically” (Boston), “noticeable” (Dallas) and “significantly” (Iowa) to describe advance lending activity in the FHLB system during the third quarter — that being said, putting up nearly 80 percent of any company’s entire mortgage holdings as collateral for loans should serve as a red flag. Countrywide last week sought to reassure investors and the markets over its liquidity and future, saying it had access to ample operating capital.