Evening star., 1934-03-17
HOME FINANCING
GUARANTY PUSHED
Loan Bank Board Hopes to
Present Insurance Plan
Shortly.

BY direction Of the President, the
Federal Home Loan Bank Board has
been studying and hopes to present
soon an insurance plan for building
and loan associations, savings banks
and other home financing institutions
along lines similar to those provided
for commercial banks by the Federal
Bank Deposit Insurance Corporation
Numerous suggestions have been
submitted by bank commissioners
savings banks and building and loan
associations. The American Savings
Building g. Loan Institute has also
proposed a plan patterned after that
Of the Federal Bank Deposit Insur-
ance Corporation, which is receiving
the attention of the Home Loan Bank
Board.
"The overwhelming success repre-
sented by the establishment of the
Deposit Corporation" said Chairman
John H. Fahey Of the Federal Home
Loan Bank Board, has aroused wide
spread interest in the possibility OF
developing an insurance plan adapted
to the peculiar needs of building and
loan associations, cooperative banks
and mutual savings banks.
by direction of the President. our
board is giving the matter careful
consideration and hopes to suggest
changes in the Home Loan Bank sys-
tenn which will expand and strengthen
the system and provide for insurance
The problem is, of course, somewhat
different from that presented by COM
mercial banks, in which cash deposits
are subject to immediate withdrawal
since the home financing associations
are primarily investment institutions
These associations receive in large
measure the long-term savings of mil
lions of our people and keep these
funds invested in long-term home
mortgages and other first class invest
ments, such as the most select bonds
They represent investments of ap-
proximately Sl2000000, 900. About
s8,00O,o 100000 of this sum is in build
ing and loan associations and $4,000
100000 in mutual savings banks.
For these home financing institu-
tons the Government has established
the Federal Home Loan Bank system,
in which 1t is the largest stockholder
The system represents a great reser-
volr OF capital which enables these in
stitutions in different parts of the
country to render very much greater
service to their customers and to
protect their interests to an extent
which was impossible before its or
ganization.
In addition. as a result of the in
itiative Of the Government, Federal
savings and loan associations are
being organized to extend this system
OF thrift and home financing into
every county in the United States
This is being done because. when
properly organized, supervised and
operated, this plan has proved to be
the safest for savings and the best for
long-term home financing. For the
better protection of the public, the
Federal Home Loan Bank system ex-
amineS and supervises all Federal
savings and loan associations and NAV
examine all institutions which are
members Of the bank system. It is
the policy of the Federal Home Loan
Bank Board to take every step prac-
teal to inSure continued confidence in
these institutions and the flow of saw
ings into them. The board is giving
full consideration to every proposal
presented to it which contemplates
strengthening the system and assist
ing its members in rendering a great
public service"