Page images
PDF
EPUB

WEDNESDAY, AUGUST 9, 1961.

FEDERAL HOME LOAN BANK BOARD

WITNESSES

JOSEPH P. MCMURRAY, CHAIRMAN OF THE BOARD

JOSEPH J. WILLIAMS, JR., MEMBER OF THE BOARD

IRA DIXON, MEMBER OF THE BOARD

CHARLES M. TORRANCE, DIRECTOR, OPERATING ANALYSIS DIVISION, F.S. & L.I.C.

THADDEUS CORCORAN, BUDGET OFFICER

Mr. THOMAS. Gentlemen, we have with us our distinguished friends from the Federal Home Loan Bank Board. First let me welcome the group. We are delighted and honored to have all of you. I note that in House Document No. 168 an increase of $145,000 in the limitation on administrative and nonadministrative expenses of the Federal Home Loan Bank Board and an increase of $100,000 in the limitation on administrative expenses of the Federal Savings and Loan Insurance Corporation are requested.

GENERAL STATEMENT

Tell us what your problem is here, Mr. Chairman.

(The following was submitted as a general statement and justification for the requests.)

FEDERAL HOME LOAN BANK BOARD,
Washington, D.C., May 26, 1961.

Hon. ALBERT THOMAS,
Chairman, Independent Offices Subcommittee, House Appropriations Committee,
Washington, D.C.

DEAR MR. CHAIRMAN: The President recently approved and forwarded to the Speaker of the House an amendment to the Federal Home Loan Bank Board's 1962 budget estimates. The amendment affects the estimates of both the Board proper and the Federal Savings and Loan Insurance Corporation. In connection with this action the Board wishes to make the following explanation.

At my meeting with the President on April 26, 1961, I discussed plans for the improvement of the organization and operations of the Board, including the Federal Savings and Loan Insurance Corporation. The President suggested that I discuss these plans further with the Budget Director.

Accordingly, on May 2, 1961, the Board attended a meeting at the Bureau of the Budget presided over by Deputy Director Staats. Resulting from this meeting and later telephone conversations between the Bureau and me, agreement was reached on the following proposals of the Board.

The Board proposed and has established a temporary task force of advisers familiar with the operations and problems of the savings and loan industry. This task force will consult with the Board on a variety of policy and managerial matters. Such matters would include but not be confined to variable dividends, length of mortgage terms, reserve requirements, liquidity, possible liberalization of investment portfolio of bank members, extension of lending area, Federal charters for mutual savings banks, examination of relationship between the 11 Federal home loan banks and the Board, capitalization of the banks, the most effective organization and operation of the activities of the Federal Home Loan Bank Board, and the rendering of maximum service to the public. The Board expects to benefit from the views of individuals knowledgeable on many of the Board's most difficult problems. The task force would consist of 12 members; there would also be 2 consultants. The members would be selected from all sections of the country. The task force would meet about 20 times during the fiscal year and would spend an average of 11⁄2 days at each meeting. The two consultants would spend an average of 3 days each time the task force would meet. Invitations have been extended to you and to the

respective chairmen of the Senate Appropriations Committee, House Banking and Currency Committee, Senate Banking and Currency Committee, and to the Bureau of the Budget to have a staff representative at these meetings. The members of the task force would be paid not to exceed $25 per diem and transportation costs; the two consultants would be paid not to exceed $100 per diem and transportation costs. The estimated cost of the operation-included in schedule A attached-is $62,250. Of this amount $12,000 is in personnel compensation and $50,250 in travel and transportation of things.

The Board also proposes to set up in the Board a new office to be called Office of Research and Home Finance. This Office would have a staff of seven employees headed by an adviser to the Board (GS-18). Under him would be one specialist in banking and mortgage finance (GS-16), one specialist in real estate and housing (GS-16), one statistical clerk (GS-7), and three secretaries (one GS-9 and two GS-8). The Office would analyze all economic, financial, mortgage, and housing data and information relating to the money market generally. It would advise the Board on developments relating to the work and jurisdiction of the Board. It would initiate studies and investigations intended to provide information and generate ideas which may develop into policies of the Board and the Insurance Corporation. It would conduct special assignments as requested by the Chairman and/or the other Board members. It would cooperate with directors of comparable offices in other agencies such as the Bureau of the Budget, Council of Economic Advisers, Treasury Department, Federal Reserve, Housing and Home Finance Agency, Department of Commerce, and Veterans' Administration in connection with their economic, mortgage finance, and real estate studies. The Office would work closely with the Joint Committee on the Economic Report and would cooperate with other economists in other economic and trade organizations. The estimate for this new activity-also included in schedule A attached-is $82,750. Of this amount $64,940 is for personnel compensation, $4,800 for personnel benefits, $6,650 for rent, communications, and utilities, and $6,360 for equipment.

In connection with the three supergrades requested, the Board asks your assistance and the assistance of the committee in its efforts to obtain these three grades; we will also seek the assistance of the chairman of the House Post Office and Civil Service Committee.

The Council of Economic Advisers recently requested the Board to expand and place on a monthly basis its limited report on interest and dividend rates of insured savings and loan associations. This activity is carried on by the Operating Analysis Division of the Federal Savings and Loan Insurance Corporation.

In addition, the Board wishes to obtain similar information from the mutual savings banks, commercial banks, and life insurance companies. The information necessary to prepare the reports on both the savings and commercial banks will be obtain through the cooperation of the Federal Deposit Insurance Corporation and the Federal Reserve Board, respectively. Information in such reports would involve:

1. Monthly reporting by all insured associations and mutual and commercial banks of weighted average interest rates on loans made for construction of homes and for new and existing homes.

2. Monthly or quarterly reporting of dividend rates paid.

3. Reporting of related financial data for gaging effects of rate changes and for use in computing effective charges.

4. Interest charges to be computed by the Federal Savings and Loan Insurance Corporation in terms of effective yield as well as contract rate. 5. Computing detailed frequency distributions by the Federal Savings and Loan Insurance Corporation in terms of number of insured associations, mutual banks, and commercial banks reporting various average rates.

6. All data will be summarized by Federal home loan bank districts and/or by major geographic areas.

The attached schedule B reflects an estimated cost of $100,00 for this additional work in fiscal 1962. Of this amount, $48,400 is for personnel compensation, $3,600 for personnel benefits, $6,650 for rents, communications, and utilities, $5,350 for printing and reproduction, and $36,000 for automatic data processing services and other related costs.

Your favorable consideration and that of your committee of our request for additional funds in fiscal 1962 for the purposes outlined will be sincerely appreciated. We shall be glad to furnish any additional information or respond to any further inquiries you or your committee may wish to make.

Sincerely yours,

JOSEPH P. MCMURRAY, Chairman.

FEDERAL HOME LOAN BANK BOARD

SCHEDULE A.-Amended summary of administrative expenses, fiscal year 1962

[merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][ocr errors][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small]

FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION

SCHEDULE B.—Amended summary of administrative expenses, fiscal year 1962

[blocks in formation]

Chairman, Independent Offices Subcommittee,
House Appropriations Committee, Washington, D.C.

DEAR MR. CHAIRMAN: Reference is made to the President's proposed amendment to the Federal Home Loan Bank Board's 1962 budget estimates-House Document No. 168-and to our letter to you of May 26, 1961, in connection therewith.

We are enclosing 15 copies of proposed language provision for inclusion in House bill.

We are also enclosing 15 copies of statement "Supplement to Schedule A" (two pages) showing a more detailed breakdown and an analysis of the items making up the $145,000 requested for the Federal Home Loan Bank Board. Schedule A was one of the two attachments to our letter of May 26, 1961.

Fifteen copies of a comparable statement "Supplement to Schedule B" (one page) showing an analysis of the $100,000 requested for the Federal Savings and Loan Insurance Corporation are also enclosed. Schedule B was the second attachment to our letter of May 26, 1961.

Sincerely yours,

JOSEPH P. MCMURRAY, Chairman.

73884-61- -11

LIMITATION ON ADMINISTRATIVE AND NONADMINISTRATIVE EXPENSES,
FEDERAL HOME LOAN BANK BOARD

The limitation under this head in the Independent Offices Appropriation Act, 1962, on the amount available for administrative expenses is hereby increased by $145,000.

LIMITATION ON ADMINISTRATIVE EXPENSES, FEDERAL SAVINGS AND LOAN

INSURANCE CORPORATION

The limitation under this head in the Independent Offices Appropriation Act, 1962, on the amount available for administrative expenses is hereby increased by $100,000.

SUPPLEMENT TO SCHEDULE A, FEDERAL HOME LOAN BANK BOARD
Detail of amendment to the 1962 budget estimates

[blocks in formation]

Travel and transportation of persons.

Provision is made for the travel costs of 14 people (task force) for 20 trips at an average of $150 per trip ($42,000); per diem not to exceed $25 for 11 of the 14 people for 20 meetings of the task force at an average of 12 days each meeting ($8,250) is also provided.

Rent, communications, and utilities.

Provision is made for 1,620 square feet of office space at $3.25 per square foot for the 7 employees in the new Office of Research and Home Finance ($5,265) and associated telephone costs ($1,385) of the new office.

Total, contractual services and supplies

[blocks in formation]

18

16

16

866798

1

1

$17.088 13,505

1

13,505

1

4,724

5.704

10, 414

(2)

12,000

7

76,940

580

225

3,995

4,800

81, 740

50, 250

6, 650

56,900

6, 360

[blocks in formation]
« PreviousContinue »