Home Loan Bank Pilot Funds First Loan
WASHINGTON-The Federal Home Loan Bank of Chicago on Tuesday launched its controversial pilot program to fund and hold mortgages.
The first loan, made to a Chicago construction worker and his wife, was provided by LaSalle Bank FSB.
Under the $750 million Mortgage Partnership Finance program, participating lenders will originate and service home mortgages and hold reserves against credit losses. The Chicago Home Loan Bank will manage the interest rate risk.
Federal Housing Finance Board Chairman Bruce A. Morrison said he is "delighted" the program is under way. "It offers a truly modern, competitive means to carry out the Federal Home Loan Bank System's traditional mission of housing finance."
Critics of the program, including many Home Loan Bank members, complain it is the first step toward direct lending by a government-sponsored entity.
Chicago-area lawmakers, however, praised the initiative.
"It appears to offer significant benefits for both consumers and financial institutions," said Sen. Carol Moseley-Braun, D-Ill. Clinton Backs Freeing Electronic Commerce
WASHINGTON-President Clinton said Tuesday that the government should promote the growth of electronic commerce with light regulation and no new taxes on sales made via the Internet.
Unveiling the administration's long-awaited report on global electronic commerce, the President encouraged the private sector to develop industry codes of conduct, ratings systems, and software products to protect privacy and children.
"The Internet has such explosive potential for prosperity," President Clinton said. "It should be a global free-trade zone. It should be a place where government makes every effort ... not to stand in the way, to do no harm."
According to the report, the federal government's role should be limited mainly to establishing contractual and intellectual property laws that promote electronic commerce. The administration also will lobby other nations against imposing tariffs or technical standards on electronic commerce.
Self-regulation and existing fraud laws are sufficient to protect consumers, according to the report. The administration still wants to limit foreign sales of encryption technology for national security reasons, but in May it eased that restriction for financial products. Fed Restricts Zia N.M. Bank and an Exec
WASHINGTON-The Federal Reserve Board on Monday issued a cease-and-desist order against Zia New Mexico Bank and its president, G.A. Poling Jr.
The Tucumcari, N.M.-based bank may not declare any dividends without the Fed's permission, must submit a capital adequacy plan to regulators within 60 days, and adopt a new policy for director oversight of bank operations.
The order also prevents Mr. Poling from making loans above $20,000 without permission from a majority of the bank's directors, collecting more than $500 per quarter in travel expenses, and purchasing any asset from the bank.
Separately, the Fed banned from banking David A. Kuhn, a former bond trader at the New York branch of Credit Lyonnais, for concealing trading losses.