WASHINGTON -- Federal Home Loan Bank System assets reached an all-time high last month, demonstrating that although it is preparing for a major overhaul, the system is alive and well.

The Federal Housing Finance Board, the agency that. oversees the system, reported on Friday that the total combined assets of all system banks in July averaged $200 billion, the highest level in the system's history.

"It's a reaffirmation of the strength and solvency of the system," said Federal Housing Commissioner Nicolas P. Retsinas.

"Advances are up 20% from a year ago, and we're on the verge of our 5,000th member. This is growth related to the independent decisions and actions of our member institutions."

Mr. Retsinas is a member of the finance board, which also administers the affordable housing and community investment programs.

Various parts of the government are working on ways to reform the Home Loan Bank System. An overhaul plan should be completed by early 1995, according to Mr. Retsinas, who said it would address issues concerning capital structure, membership mission, and system governance.

A recent Department of Housing and Urban Development study found the system's member financial institutions need to expand support for multifamily housing, ease access to advances to support nonresidential community development lending, and more aggressively promote low-income and moderate-income homeownership.

The study, prepared at the request of the House and Senate Banking committees, is one of five government reports fueling the efforts to tune up the bank system.

The 12 district banks have scheduled discussions with their member institutions starting the end of this month to determine what changes should be made to the system.

"From these discussions, we hope to get information that demonstrates the contribution that the system is making to community lending, not only through special programs but also through regular advances," said Rita Fair, acting managing director of the finance board.

After the meetings, recommendations will be made to help the board put together a comprehensive legislative package.

The Federal Home Loan banks provide advances to member financial institutions -- commercial banks, thrifts, credit unions, and insurance companies -- to help make home mortgages more available and affordable. For July, advances averaged $109 billion.

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