Fired Federal Housing Finance Board member Lawrence U. Costiglio came out on the losing end of a showdown Wednesday with the agency's chairman, Bruce A. Morrison.

Mr. Costiglio, who claims his March 9 dismissal by President Clinton was illegal, made a dramatic entrance at a meeting of the agency's board and proclaimed he would "take his rightful seat."

But Mr. Morrison insisted that he sit with the public. "If there is to be further review into this matter, it must be the President who makes this decision, not the finance board," Mr. Morrison said.

Mr. Costiglio's term on the board ended in 1995, but he has argued that he may continue as a member until the White House nominates a successor. He sat silently through the meeting but afterward told reporters he may challenge his firing in court.

At the meeting, the board agreed to hold a May 11 public hearing to discuss a staff report released Wednesday that recommends several options for reducing non-housing-related investments at the 12 Federal Home Loan banks.

Also approved was a proposal giving the banks, rather than the finance board, power to certify people as eligible to be directors.

The board delayed until April 9 a vote on a final rule that would let any loan secured by farm or business property qualify for system advances as long as there is a residence on the property.

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