[Congressional Record Volume 144, Number 136 (Friday, October 2, 1998)]
[Senate]
[Pages S11342-S11343]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FAIRCLOTH:
  S. 2544. A bill to enhance homeownership through community 
development financial institutions; to the Committee on Banking, 
Housing, and Urban Affairs.


        the community development and homeownership act of 1998

  Mr. FAIRCLOTH. Mr. President, today I introduce legislation that will 
allow Community Development Financial Institutions (CDFIs) and their 
affiliates to borrow from the Home Loan Bank System.
  Since the 1930's the Home Loan Bank System has provided the nation's 
savings institutions with advances that can be used to make home 
mortgages. In 1989, the System was opened up to banks and credit 
unions. The Home Loan Bank System is critical for homeownership in the 
U.S. The Bank System has nearly 7,000 members and has outstanding 
nearly $181 billion in housing advances.
  The membership of the system is reserved for insured institutions. My 
legislation, however, would permit Community Development Financial 
Institutions to have ``non-member'' borrowing status. This would allow 
approximately 200 CDFIs to borrow from the System, with the approval of 
their regional Home Loan Bank and on the same terms as all other 
members.
  Mr. President, this is a small, but important step toward creating 
more homeownership opportunities, particularly for low income 
individuals. CDFIs were created for the purpose of reaching out to 
provide housing and economic opportunity in distressed areas. My home 
state of North Carolina is home to more CDFIs than any other state in 
the United States, except for California, New York and Illinois. North 
Carolina has been a leader in finding new and different ways to foster 
economic growth and home ownership.
  Very simply, this legislation will allow CDFIs to have a source of 
credit to make home loans. These loans will have to meet the normal 
collateral requirements of any other institution that belongs to the 
Home Loan Bank System. Because CDFIs are chartered to target distressed 
communities, however, this could be an important source of credit for 
homeownership that might not otherwise exist. We know from experience 
that once an individual has a home--he or she has a stake in the 
community. This can help turn distressed communities into thriving 
communities. We have made great

[[Page S11343]]

progress in the last few years. Welfare rolls are at their lowest point 
since 1969. Homeownership is at its highest level ever. We are no 
longer running our federal budgets in the red. Now we can begin to take 
new and creative steps to continue promoting economic growth and 
opportunity.
  I would urge my colleagues to co-sponsor and support this 
legislation.
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