Pols Pressure FHFB on FHLBank Directors

As the Federal Housing Finance Board prepares to meet Dec. 22, two Democratic congressmen are pressuring the five board members to quickly appoint a full slate of public interest directors for the 12 Federal Home Loan Banks.The incoming House Financial Services Committee chairman, Rep. Barney Frank, D-Mass., and Rep. Paul Kanjorski, D-Pa., are particularly concerned that all the public interest director seats will be vacant after Dec. 31. These independent directors constitute 40% of the FHLBank boards of directors. "We are eager to see all these seats filled as quickly as possible," the two congressmen say in a letter to each of the five Finance Board members. While the Bush administration has blocked the appointment of public interest directors, the letter warns that the Finance Board is responsible for making the appointments under the law and that the regulator "must implement the law." At the meeting, the Finance Board also will take up a controversial capital proposal regarding retained earnings and excess stock that raised considerable industry opposition. The board is expected to withdraw the rules and issue guidance that is more acceptable to FHLBank members, according to sources.