[Congressional Record Volume 149, Number 16 (Wednesday, January 29, 2003)]
[Extensions of Remarks]
[Page E112]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     FEDERAL HOME LOAN BANK SYSTEM

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                        HON. HAROLD E. FORD, JR.

                              of tennessee

                    in the house of representatives

                      Wednesday, January 29, 2003

  Mr. FORD. Mr. Speaker, I rise today to urge Congress to pay closer 
attention to proposed changes to the Federal Home Loan Bank system.
  The two changes being considered would allow the Federal Home Loan 
Banks to buy, sell, and potentially securitize mortgages nationally, 
and would allow banks and thrifts to become members of multiple Home 
Loan banks.
  As federal regulators including the Treasury Department have noted, 
these proposals would seem to expand the Federal Home Loan Banks' 
charter to a sufficient extent to warrant congressional consideration. 
A number of issues must be weighed before they are implemented.
  For example, if the Federal Home Loan Banks enter the business of 
securitizing mortgages, it would seem appropriate that they be subject 
to the same requirements as other housing government sponsored 
enterprises, including limits on conforming loans, affordable housing 
goals, and mandatory mortgage insurance.
  The GSEs' federal charter ensures that they serve the interests of 
their shareholders as well as the public by expanding homeownership 
opportunities--especially in communities where homeownership rates are 
lower than the national average of 68 percent. The public is also 
served through fair competition, which can only be maintained if 
competitors in a given market are forced to play by the same rules.
  In addition, unlike Fannie Mae and Freddie Mac, the banks have not 
taken the voluntary step of registering their stock with the Securities 
and Exchange Commission. The wave of corporate accounting scandals last 
year demonstrated the need for transparency, which is of utmost 
importance for enterprises serving a public mission.
  To ensure that the public is served by fair competition and 
appropriate oversight, any changes to the Federal Home Loan Banks' 
charter must be given due congressional consideration.

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