DEFINITION of 'Instrumentality'
An organization that serves a public purpose and is closely tied to federal and/or state government, but is not a government agency. Many instrumentalities are private companies, and some are chartered directly by state or federal government. Instrumentalities are subject to a unique set of laws that shape their activities.
BREAKING DOWN 'Instrumentality'
Fannie Mae, Ginnie Mae, Freddie Mac and Sallie Mae are all federal instrumentalities. So are many other financial services organizations, including the Federal Reserve Banks, national banks, commercial banks, most thrifts, most credit unions and insurance companies.