Sponsors of legislation designed to broaden membership in the Federal Home Loan Bank System were assured last week by Chairman Henry B. Gonzalez. D-Texas, of the House Banking. Finance and Urban Affairs Committee. that a markup of their bill will be held this session.
The principal sponsors. Reps. Stephen L. Neal, D-N.C., and Richard H. Baker. R-La., lost on a 4-3 vote of the House Rules Committee Aug. 4 when they tried to have their proposal considered as an amendment to the Housing and Community Development Act (H.R. 5334), which was passed by the House the next day by a 369-54 roll call vote.
Gonzalez assured both the Rules panel and on the House floor that the Banking Committee would consider the measure this session. "[W]e are going to proceed as soon as it is humanly possible.' Gonzalez said on the House floor. "We are not going to wait until next year."
The Neal-Baker proposal would:
* Set the annual contribution of the Federal Home Loan Banks to the Resolution Funding Corporation at 20% of aggregate net earnings of the banks;
* Equalize the eligibility rules so banks would be on the same footing as thrifts;
* Make membership voluntary for thrifts as well as banks;
* Order a feasibility study of an `affiliate' membership for both mortgage bankers and state housing finance agencies.
A principal stumbling block is the opposition of thrifts to any increase in deposit insurance premiums to cover any-shortfall that might occur if the 20% limit on the amount of aggregate net earnings that must be paid to Refcorp. The Financial Institutions Reform, Recovery and Enforcement Act set an annual $300 million levy on the FHLBs to pay for the cleanup of the thrift industry.
Neal and Baker have pushed the legislation much further than their colleagues or industry lobbyists had thought possible. They persuaded Gonzalez to hold three days of hearings in June, which laid a solid foundation for dramatic change. The Treasury Department and the Office of Thrift Supervision are strongly urging delay on the matter until a study is completed (see The Mortgage Marketplace. June 15, page 1).