Unnoticed by many industry players, Rep. Richard H. Baker late in the congressional session slipped through a measure that he claims will increase mortgage lending to low-income applicants.

The provision, included in the spending bill for housing and other programs that the President signed last week, would reduce FHA coverage from 100% to 26% on loans of less than $70,000. Only certified community development financial institutions could originate and service these loans. It also bars Ginnie Mae, the federal government entity that sells FHA- backed loans, from securitizing these small credits.

Karen Shaw Petrou -whose ISD/Shaw Inc. consulting firm co-publishes GSE Activity Report, which first spotted the provision-said the new law could have far-reaching implications.

She argued that it may spur competition because Fannie Mae, Freddie Mac, and the Federal Home Loan banks will jump at the chance to insure and buy these affordable-housing loans.

"It's a profound, if partial, redefinition of the FHA," she said, and will stir the public policy debate next year on government-sponsored enterprises.

Other observers predicted the measure's impact would be minor because the loans involved are small and risk is being shifted to the private sector. Fannie Mae officials were caught off guard by the measure and are still studying it, a spokeswoman said.

Bank One Corp. has named Annie Hall its chief federal lobbyist. Ms. Hall, who held the same post at the old Banc One Corp. before its Oct. 2 merger with First Chicago NBD Corp., said that as public policy director she plans to emphasize grass-roots involvement of employees.

"The most important thing we have to do in 1999 is sell the 40,000-plus employees at First Chicago NBD on the Banc One government relations model and Banc One PAC program," she said, referring to the company's political action committee.

That includes relying more on bankers and other company officials to lobby and eliminating the First Chicago PAC's practice of accepting corporate donations for spending in state and local races and making soft- money contributions at the federal level. Corporate donations tend to dissuade potential employee contributors from participating, she said.

She said it is undecided whether John L. Currie, who had been First Chicago's senior vice president of government relations, will remain with the merged company. "No personnel decisions have been made, but I hope John stays," she said. Mr. Currie did not return phone calls for comment on Tuesday.

The Consumer Bankers Association's board decided last weekend that the group should spend more time persuading lawmakers and regulators that banks are protecting the privacy of their customers' financial data.

Privacy was the hot topic at the group's four-day annual conference in Aventura, Fla., which ended Monday. Acting Comptroller Julie A. Williams told the conference Monday that her agency is preparing guidelines on how to handle private consumer information.

Besides helping members develop privacy policies, the association will also work harder to communicate these efforts to policymakers in order to forestall burdensome laws or regulation, government relations director Marcia Z. Sullivan said. Outreach initiatives will include cooperating with regulators on public education campaigns and encouraging banking regulators to develop uniform rules, she said.

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