WASHINGTON — Though the Federal Home Loan banks have so far deftly avoided the worst of the financial downturn, one of the system's former regulators is worried for their future.

Geoff Bacino, who until Friday was a director of the now-defunct Federal Housing Finance Board, said the Home Loan banks run the risk of being lost in the shuffle as the new government-sponsored enterprise regulator, the Federal Housing Finance Agency, focuses more on the needs of Fannie Mae and Freddie Mac.

"Obviously, being in with Fannie and Freddie right now leaves the banks with a disadvantage because it's taking up most of the Finance Agency's time," he said in an interview Monday. "Things could fall through the cracks."

To be sure, not everyone shares Mr. Bacino's concern. Alfred DelliBovi, the president of the Federal Home Loan Bank of New York said he is not worried that the system will be "crowded out."

"The Home Loan banks are functioning very well," he said. "To say that a regulatory agency that has responsibility for 14 enterprises, 12 of which are functioning very well and two of which are not, that the emphasis has to be on the two that aren't working doesn't make a lot of sense to me. You're going to have a desire to keep the 12 that are working well continuing to work well."

James Lockhart, the director of the federal agency, also disputed the idea. Though he thanked Mr. Bacino for his service, he wrote in an e-mail that the "FHFA is very actively involved in FHLBank issues and the merger has gone very smoothly."

Mr. Bacino, who is starting a consulting firm, emerged as a key figure on some of the biggest issues that faced the Finance Board during his more than two years on it. He is most closely associated with the fight against a retained earnings policy that dominated the Finance Board in 2006. Though other directors also had qualms about the plan, which would have required Home Loan banks to cut their dividends in half until their retained earnings portfolio totaled at least $50 million, plus 1% of nonadvance assets, Mr. Bacino was particularly vocal.

"It looks like we have a flawed regulation," he told American Banker in September 2006. When the proposal was tabled later that year, Finance Board Chairman Ronald Rosenfeld, referring to that statement, said, "In retrospect, I would agree."

Now that the FHFA is rumored to be eyeing a new proposal to boost retained earnings, Mr. Bacino said it is important not to interfere with dividends too much.

"You have to understand, they have a business model under which they work and under which they've worked for 75 years," he said. "If you tinker with that business model, you have to be very careful to understand what you're doing and understand what it means to them."

The original retained earnings plan would have "put such a severe limitation and put such a crimp in their business that it really was more punishment than it was a prescription to try to fix something," he said.

Mr. Bacino also took aim at a proposal by the Federal Deposit Insurance Corp. to raise financial institutions' assessment rates by up to 7 basis points if more than 15% of their domestic deposits are tied up in secured liabilities, such as Home Loan bank advances.

He said he looks at the premium hike as a response of sorts to the Home Loan banks' super lien, giving them first claim on assets of a failed bank. Instead of raising premiums, Mr. Bacino said, the FDIC and the Home Loan banks should compromise. One area for potential negotiation should be prepayment penalties on hedges that get passed on to the FDIC when a bank fails.

But perhaps Mr. Bacino's biggest concern is what the FHFA might do with the wide-ranging powers granted by Congress when it was established this summer. Though Mr. Lockhart and other public officials have never questioned the Home Loan banks' financial health, Mr. Bacino said the system should be wary. "You watch the fact that you could take over Fannie and Freddie over the course of a weekend," he said. "The banks would be kidding themselves if they didn't look at that event and say, 'There but for the grace of God go I.' It would be a lot easier to put a bank into conservatorship now that you've taken Fannie and Freddie over."

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