Evening star., 1935-05-25
LOAN INSTITUTION
EXPANSION SEEN
Flow of Private Money Into
Agencies Visioned by
League Head.

Greatly increased mortgage lending
by the savings, building and loan
associations, an accelerated flow Of
private money into their shares be-
cause Of the changes in the Federal
savings and loan insurance corpora
ton provisions, and a new program
of expansion by the Federal Home
Loan Bank System are in the offing.
All these factors will lead directly
into the great desirable, the revival
of home building.
This was the prediction of I.
Friedlander, Houston, Tex, president
of the United States Building and
Loan League, in anticipating the re-
suits of the PENDING home mortgage
legislation in Congress on basis OF
the House and Senate conferees' re-
port. The bill now awaiting only the
final passage of the report by both
houses and the Presidents signature,
amends the Federal Home Loan Bank
act, the National housing act and
the home owners loan act. Mr.. Fried
lander said that from all present ap-
pearances it will finish the rehabili-
tation task of the Government in this
sphere and that it will give decided
thrust forward to the normal mort
gage lending activities.
Investment for Thrift.
Besides giving the Home Owners
Loan Corp. an additional bonding
power of S1,75O,0OO,0OO to take care
of applications already on file and
those filed during 30-day period
after the final passage Of the act, the
new measure directs its attention
definitely to encouraging investments
of funds in thrift and home financing
institutions and to developing other
sources of funds for them to supple
ment the privately held shares, Mr..
Friedlander said.
Salient points are Cd reduction of
the insurance premium in the Fed
eral Savings and Loan Insurance
Corp. from Il to Is of ! per cent OF
share liabilities of the insured saw
ings. building and loan association,
(2) liberalization of the Federal Home
Loan Bank act to permit mortgages
worth as high as $4,000 to be used
as collateral for advances to its
member associations. and to give
H. o. L. C. bonds a 100 per cent
value as collateral for such advances,
and go the empowering by law Of a
Federal Savings and Loan Advisory
Council composed of practical business
men managing building and loan as
sociations. to confer with the Federal
Home Loan Bank board from time to
time on conditions and board rulings
For the immediate expansion of
loans by the building and loan asso-
Citations, an important provision Of
the pending bill sets aside S300,000,000
for the purchase of shares by the
H. o. L. C. not only in Federal aSso-
Citations but also in State-chartered
building and loan associations, pro-
vided they are members of the Fed
eral Home Loan Bank System or have
their shares insured with the Federal
Savings and Loan Insurance Corp.
This source of money to the COM
munity home lending institutions has
previously been confined to those
operating under Federal charter, Mr.
Friedlander pointed out, but much
more widespread outlet for home
building and home undermining funds
in the communities is the great system
of State-chartered institutions, hun
dreds of them so and go years old,
which have proved their soundness
and are now anxious to serve their
communities with all possible funds
for lending.