Advances to nontraditional members of the Federal Home Loan Bank System, including commercial banks, grew 50% last year, to more than $22.6 billion.

The dramatic increase makes legislation increasing the system's ceiling on loans to banks more urgent.

Nearly 18% of the capital extended by the 12 Home Loan banks in 1995 went to commercial banks, insurance companies, and credit unions, according to data released Tuesday by the Federal Housing Finance Board.

The Home Loan System banks are barred from advancing more than 30% of their capital to these nonthrift members.

"It just proves the point that we need relief on that cap soon," said Alfred A. DelliBovi, president the Federal Home Loan Bank of New York, "because the only business we have that's growing is business with members who are covered by the cap."

Without a legislative fix, commercial bank members, who own stock in the system as do other member institutions, would lack access to low-cost housing funds, Mr. DelliBovi said.

Legislation that would have increased the cap to 40% was introduced last year by Rep. Richard Baker, R-La., but never approved.

The ratio of advances to nonthrift members may bump up against the 30% cap by the end of 1996, according to Bruce Morrison, chairman of the finance board, which regulates the system.

The New York Home Loan Bank was the system's most profitable last year, paying member institutions a dividend rate of 7.7%. The worst performer was the San Francisco bank, whose members pocketed a 4.9% dividend last year.

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