The hearing is called to order. I called this hearing for the purpose of conducting a thorough review of the Federal Housing Finance Board and the Home Loan Banks, which we have not done for a few years.
Since 1989, the Home Loan Bank System has undergone dramatic change. Commercial banks now outnumber savings and loans in membership. The advances that the System makes to banks and savings and loans have doubled in the last five years -- and the System's income has nearly doubled in the last five years.
Despite the good news, I do have some concerns about certain items.
First, what really is the mission of the Home Loan Bank System?
Should the banks go beyond their traditional housing finance mission and begin making other kinds of loans, such as community development loans?
If so, who should decide this expansion -- the Congress or the Federal Housing Finance Board?
The duties of the Finance Board are clearly laid out in statute.
One of these duties is to insure the safety and soundness of the Home Loan Banks. I have to wonder if expanding the mission of the banks and regulating them is not an inherent conflict of interest for the Finance Board.
I think the Congress should decide what the mission is -- and not the regulators. This is why I have opposed the so called "mission achievement" statement put out by the Finance Board which I think exceeds their authority.
Second, I also have concerns about the appointments to the Bank Boards. In my view, Roberta Achtenberg is not a public interest director. She is too far left to be acting in the public's interest. The Finance Board appoints 72 people to 12 different Bank Boards, but little is known about the selection process. I intend to explore that today.
Finally, I want to solicit the views of the Finance Board on whether legislation is needed to modernize the Home Loan Bank System. As I said, the Bank System is doing very well now. The question is do we need legislation to keep pace with the changes or should we leave well enough alone.
I want to thank Bruce Morrison, the Chairman of the Finance Board for being here today.
Now let me turn to my colleagues for their opening statements.
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