The House Banking subcommittee on capital markets is expected to approve legislation today to modernize the Federal Home Loan Bank System, despite objections from the Clinton administration.

Treasury Under Secretary John D. Hawke Jr. weighed in late Tuesday against the bill, which would allow the 12 Home Loan banks to make development loans in rural areas. In a letter to House Banking Committee Chairman Jim Leach, Mr. Hawke said the measure would extend the lending powers of the government-sponsored enterprise too far.

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