WASHINGTON - The Federal Home Loan Bank System grew to a record $241 billion in assets - nearly the size of Citicorp - and to 5,328 members at the end of last year, its regulator reported this week.

System loans to member thrifts, banks, credit unions, and insurance companies reached $126 billion by yearend, up 22% from 1993, the Federal Housing Finance Board reported.

"Nineteen ninety-four was a good year. The system has grown prudently," said Nicolas P. Retsinas, head of the finance board.

Mr. Retsinas, who is also the Department of Housing and Urban Development's assistant secretary for housing, said that by March 31 the Clinton administration will introduce legislation to overhaul the system .

While he refused to disclose details of the bill, Mr. Retsinas said the legislation would propose changes in the system's mission, structure, membership requirements, capital rules, and governance.

As expected, the bill would make membership in the system voluntary and would require the system to keep capital on hand, Mr. Retsinas said. The bill is primarily being drafted by HUD and the Treasury Department.

The system's assets climbed 35% in 1994. Its income was $1 billion, up 16% from the end of 1993, the finance board said.

In 1994, 875 banks and thrifts joined the system, bringing its total membership up 20% from 1993. The 5,328 members comprise 3,149 commercial banks, 2,072 thrifts, 86 credit unions, and 21 insurance companies.

The Clinton administration recently renominated its two candidates for open seats on the finance board, lawyer J. Timothy O'Neill and former Congressman Bruce Morrison. Mr. Retsinas said, "The administration is cautiously optimistic" that the Senate will confirm them.

However, Mr. Retsinas refused to say whether the administration had reached any agreement with Sen. Phil Gramm, who blocked the nominations last year.

The bank system's two affordable housing programs also grew last year. Its community investment program made more than $2.5 billion in new advances last year, up 40% from 1993. Those loans will finance 56,700 units of housing.

The system's affordable housing program provided $88.8 million in grants last year, up from $65.7 million in 1993. The 1994 grants financed 22,900 new housing units, 17,300 of which were for those with very low incomes.

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