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<B><FONT SIZE=4><P ALIGN="CENTER">UNITED STATES</P>
<P ALIGN="CENTER">SECURITIES AND EXCHANGE COMMISSION<BR>
Washington, D.C. 20549</P>
</B><P ALIGN="CENTER"></P>
<B><P ALIGN="CENTER">FORM 8-K</P>
</B></FONT><FONT SIZE=2><P ALIGN="CENTER"></P>
</FONT><B><FONT SIZE=3><P ALIGN="CENTER">CURRENT REPORT</P>
<P ALIGN="CENTER">Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</P>
<P ALIGN="CENTER"></P>
</B><P ALIGN="CENTER">Date of Report (Date of earliest event reported): September 24, 2007</P>
</FONT><FONT SIZE=2><P ALIGN="CENTER"></P>
</FONT><B><FONT SIZE=5><P ALIGN="CENTER">FEDERAL HOME LOAN BANK OF CHICAGO</P>
</B></FONT><FONT SIZE=2><P ALIGN="CENTER">(Exact name of registrant as specified in its charter)</P>
<P ALIGN="CENTER"></P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 WIDTH=678>
<TR><TD WIDTH="41%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="CENTER">Federally chartered corporation</B></FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="CENTER">000-51401</B></FONT></TD>
<TD WIDTH="40%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="CENTER">36-6001019</B></FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">(State or other jurisdiction of                       incorporation or organization)</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="CENTER">&nbsp;</B>(Commission File Number)</FONT></TD>
<TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">(IRS Employer                                     Identification No.)<B>&nbsp;</B></FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="40%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="CENTER">&nbsp;</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="CENTER">&nbsp;</FONT></TD>
<TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="CENTER">&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" ROWSPAN=2>
<B><FONT SIZE=2><P ALIGN="CENTER">111 East Wacker Drive</P>
<P ALIGN="CENTER">Chicago, Illinois</B></FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" ROWSPAN=2>
<FONT SIZE=1><P ALIGN="CENTER">&nbsp;</FONT></TD>
<TD WIDTH="40%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="CENTER">60601</B></FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">(Zip Code)<B>&nbsp;</B></FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">(Address of principal executive offices)</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="CENTER">&nbsp;</B></FONT></TD>
<TD WIDTH="40%" VALIGN="TOP">&nbsp;</TD>
</TR>
</TABLE>
</CENTER></P>
<FONT SIZE=2><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">Registrant's telephone number, including area code: </P>
<B><P ALIGN="CENTER">(312) 565-5700</P>
<P ALIGN="CENTER"></P>
</B><P ALIGN="CENTER">Former name or former address, if changed since last report:</P>
<B><P ALIGN="CENTER">Not Applicable</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
</B><P>Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:</P>
<P>&nbsp;</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=648>
<TR><TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Wingdings" SIZE=2><P>o</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP">
<FONT SIZE=2><P>Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)</FONT></TD>
</TR>
</TABLE>
<FONT SIZE=2><P>&nbsp;</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=648>
<TR><TD WIDTH="5%" VALIGN="TOP">
<FONT FACE="Wingdings" SIZE=2><P>o</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP">
<FONT SIZE=2><P>Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12)</FONT></TD>
</TR>
</TABLE>
<FONT SIZE=2><P>&nbsp;</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=642>
<TR><TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Wingdings" SIZE=2><P>o</FONT><FONT SIZE=2>&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="96%" VALIGN="TOP">
<FONT SIZE=2><P>Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</FONT></TD>
</TR>
</TABLE>
<FONT SIZE=2><P>&nbsp;</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=641>
<TR><TD WIDTH="4%" VALIGN="TOP">
<FONT FACE="Wingdings" SIZE=2><P>o</FONT></TD>
<TD WIDTH="96%" VALIGN="TOP">
<FONT SIZE=2><P>Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</FONT></TD>
</TR>
</TABLE>
<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<B><P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>Item 7.01  Regulation FD Disclosure </P>
</B><P>On September 24, 2007, the Federal Home Loan Bank of Chicago (the &quot;Bank&quot;) received a draft consent cease and desist order from its regulator, the Federal Housing Finance Board (&quot;Finance Board&quot;).  The draft order includes the proposed terms discussed below.</P>
<P>Under the terms of the draft order, capital stock repurchases and redemptions, including redemptions upon membership withdrawal or termination, would be prohibited until such time as may be determined by the Finance Board unless the Bank has received approval of the Director of the Office of Supervision of the Finance Board (&quot;OS Director&quot;). The draft order contemplates that the OS Director may approve proposed redemptions, provided that allowing the redemption would be consistent with maintaining the capital adequacy of the Bank.  The draft order also proposes that dividend declarations would be subject to the prior written approval of the OS Director.</P>
<P>The Bank is currently in discussions with the Finance Board regarding the terms of a consensual cease and desist order, but we cannot predict whether the Bank's Board of Directors and the Finance Board will reach agreement as to the terms of a consensual order, the time frame for negotiation of a consensual order, or the scope of the final terms of a consensual order.  Management believes that the requirements under a final cease and desist order could result in delays or denials of capital stock redemptions in connection with membership withdrawal or termination and significantly reduce dividend levels compared to recent period dividends.  </P>
<P>The Bank is sending to its members a letter informing them of the draft consent order and other matters.  The text of the letter is included as Exhibit 99.1 to this report.</P>
<P>The information being furnished pursuant to Items 7.01 and 9.01on this Current Report on Form 8-K shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. </P>
<P>This Current Report contains forward-looking statements which are based upon our current expectations and speak only as of the date hereof. These statements may use forward-looking terminology, such as &quot;preliminary,&quot;  &quot;anticipates,&quot;  &quot;believes,&quot;  &quot;expects,&quot;  &quot;could,&quot;  &quot;plans,&quot;  &quot;estimates,&quot;  &quot;may,&quot;  &quot;should,&quot;  &quot;will,&quot; or their negatives or other variations on these terms. The Bank cautions that, by their nature, forward-looking statements involve risk or uncertainty, that actual results could differ materially from those expressed or implied in these forward-looking statements and that actual events could affect the extent to which a particular objective, projection, estimate, or prediction is realized.  These forward-looking statements involve risks and uncertainties including, but not limited to, the risk factors set forth in the Bank's periodic filings with the Securities and Exchange Commission, which are available on the Bank's Web site at www.fhlbc.com. The Bank assumes no obligation to update any forward-looking statements made in this release.</P>
<B><P>Item 9.01 Financial Statements and Exhibits</P>
<P>(d)&#9;Exhibits</P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=638>
<TR><TD WIDTH="18%" VALIGN="TOP">
<B><FONT SIZE=2><P>Exhibit No.</B></FONT></TD>
<TD WIDTH="82%" VALIGN="TOP">
<B><FONT SIZE=2><P>Description</B></FONT></TD>
</TR>
<TR><TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P>99.1</FONT></TD>
<TD WIDTH="82%" VALIGN="TOP">
<FONT SIZE=2><P>Letter to Members, dated September 26, 2007, from President and CEO of the Bank</FONT></TD>
</TR>
<TR><TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="82%" VALIGN="TOP">&nbsp;</TD>
</TR>
</TABLE>
<B><FONT SIZE=2><P ALIGN="CENTER">Signatures</P>
</B><P>Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</P>
<P>&nbsp; </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=687>
<TR><TD WIDTH="31%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=2><P>Federal Home Loan Bank of Chicago</FONT></TD>
</TR>
<TR><TD WIDTH="31%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="55%" VALIGN="TOP" HEIGHT=6>
<FONT SIZE=2><P>&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="31%" VALIGN="TOP">
<FONT SIZE=2><P>Date: &#9;September 26, 2007</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=2><P>By: &#9;<U>/s/ Peter E. Gutzmer</U> <U>                                             </U></FONT></TD>
</TR>
<TR><TD WIDTH="31%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="55%" VALIGN="TOP"><DIR>
<FONT SIZE=2><P>Peter E. Gutzmer<BR>
Executive Vice President, General Counsel and <BR>
Corporate Secretary</DIR>
</FONT></TD>
</TR>
</TABLE>
<FONT SIZE=2><P ALIGN="JUSTIFY">&nbsp;</P>
</FONT><FONT SIZE=1><P>&nbsp;</P></FONT></BODY>
</HTML>
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UNITED STATES
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 24, 2007
FEDERAL HOME LOAN BANK OF CHICAGO
(Exact name of registrant as specified in its charter)
Federally chartered corporation
000-51401
36-6001019
(State or other jurisdiction of                       incorporation or organization)
(Commission File Number)
(IRS Employer                                     Identification No.)
111 East Wacker Drive
Chicago, Illinois
60601
(Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code:
(312) 565-5700
Former name or former address, if changed since last report:
Not Applicable
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 7.01  Regulation FD Disclosure
On September 24, 2007, the Federal Home Loan Bank of Chicago (the "Bank") received a draft consent cease and desist order from its regulator, the Federal Housing Finance Board ("Finance Board").  The draft order includes the proposed terms discussed below.
Under the terms of the draft order, capital stock repurchases and redemptions, including redemptions upon membership withdrawal or termination, would be prohibited until such time as may be determined by the Finance Board unless the Bank has received approval of the Director of the Office of Supervision of the Finance Board ("OS Director"). The draft order contemplates that the OS Director may approve proposed redemptions, provided that allowing the redemption would be consistent with maintaining the capital adequacy of the Bank.  The draft order also proposes that dividend declarations would be subject to the prior written approval of the OS Director.
The Bank is currently in discussions with the Finance Board regarding the terms of a consensual cease and desist order, but we cannot predict whether the Bank's Board of Directors and the Finance Board will reach agreement as to the terms of a consensual order, the time frame for negotiation of a consensual order, or the scope of the final terms of a consensual order.  Management believes that the requirements under a final cease and desist order could result in delays or denials of capital stock redemptions in connection with membership withdrawal or termination and significantly reduce dividend levels compared to recent period dividends.
The Bank is sending to its members a letter informing them of the draft consent order and other matters.  The text of the letter is included as Exhibit 99.1 to this report.
The information being furnished pursuant to Items 7.01 and 9.01on this Current Report on Form 8-K shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
This Current Report contains forward-looking statements which are based upon our current expectations and speak only as of the date hereof. These statements may use forward-looking terminology, such as "preliminary,"  "anticipates,"  "believes,"  "expects,"  "could,"  "plans,"  "estimates,"  "may,"  "should,"  "will," or their negatives or other variations on these terms. The Bank cautions that, by their nature, forward-looking statements involve risk or uncertainty, that actual results could differ materially from those expressed or implied in these forward-looking statements and that actual events could affect the extent to which a particular objective, projection, estimate, or prediction is realized.  These forward-looking statements involve risks and uncertainties including, but not limited to, the risk factors set forth in the Bank's periodic filings with the Securities and Exchange Commission, which are available on the Bank's Web site at www.fhlbc.com. The Bank assumes no obligation to update any forward-looking statements made in this release.
Item 9.01 Financial Statements and Exhibits
(d)	Exhibits
Exhibit No.
Description
99.1
Letter to Members, dated September 26, 2007, from President and CEO of the Bank
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Federal Home Loan Bank of Chicago
Date: 	September 26, 2007
By:
/s/ Peter E. Gutzmer
Peter E. Gutzmer
Executive Vice President, General Counsel and
Corporate Secretary