The Federal Housing Finance Board has dismissed one third of the public interest directors who serve on the boards of the 12 Federal Home Loan Loans after learning that it exceeded its powers in extending their terms.Presented with a Department of Justice legal opinion, the Finance Board rescinded a Dec. 30 resolution that extended the terms of the PIDs for up to six months. "Any appointed director whose term expired on December 31, 2004 is no longer a member of the Bank's board of directors," the Jan. 5 rescission order says. DOJ's Office of Legal Counsel found that the Finance Board does not have "express holdover" authority to extend the three-year terms of PIDs. Finance Board Chairman Ronald Rosenfeld could not be reached for comment. Some FHLBank watchers believe this episode is part of the Bush administration's effort to separate the government-sponsored enterprises from their ties to the federal government. The White House stopped appointing public interest directors to the boards of Fannie Mae and Freddie Mac last year.

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