WASHINGTON - Federal Home Loan bank presidents who push community investment will see a bigger reward for it in their paychecks, thanks to the Federal Housing Finance Board.
The board voted last week to tie half of Home Loan bank presidents' annual bonuses to their success in meeting Community Investment Program targets. Previously, community investment performance had counted for about one-tenth of the presidents' bonuses.
Under the Community Investment Program, Home Loan banks provide low-cost advances to system members to finance housing for low- and moderate-income families and commercial projects that benefit low-income neighborhoods.
The other half of the bank presidents' bonuses will be decided by the boards of the individual Home Loan banks.
Since 1991, bank presidents' bonuses had been calculated according to a formula that considered the performance of the entire Home Loan Bank System; the market share, profitability, and community lending activities of the individual bank; and other criteria set by each bank's board.
The Home Loan bank presidents' base salaries averaged $250,000 last year. A president's bonus can amount to no more than 37.5% of his base salary; last year the bonus percentages ranged from 0% to 27%.