The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-04-06
Me7O Procedure AdObted
in Examination of Home
Financing Associations
SimpIified Method Is Ex-
pected to Speed
Development.
BIZ Times Special

bU fUeS NptCtut
WASHINGTON, April 6.-The
Federal Home Loan Bank Board an
nounced today a new procedre in
examination of home financing in
situations applying to any of the
three agencies of the board.
John H. Fahey, chairman, said
that the new plan, although SEEM
ingly consisting only of a change of
routine, has an important signifl-
canoe to some 1000 building and
loan associations throughout the
country. He explained that the
simplified procedure is expected to
accelerate greatly the development Of
the three systems, and at the same
time allow considerable reductions
in examination costs, which are
borne by the institutions making
application.
The revised method provides for
simultaneous examination, in the
future, of institutions for Cd ad-
mission to the Home Loan Bank
system; CD conversion into Federal
savings and loan associations, and
CD the insurance of their investors
under the Federal Saving and Loan
Insurance Corporation. More than
seven million small investors and
home owners, according to Mr.. Fa-
hey, are neabled by the change to
gain Speedier advantage of these
three governmental efforts to
strengthen American home finance.
IL Branches Open
Examining activities under the
new procedure are centered in al
examining division in Washington,
with branches in each of the II
Federal Home Loan Banks, located
in Boston, Newark, Pittsburgh, Win
ston- Salem, Cincinnati, Chicago, In
dianapolis, Des Moines, Topeka.
Portland (Ore), Los Angeles and
Little Rock.
When established in 1882, the
board administered only the Home
Loan Bank System, created as a
credit reserve in the home-f1nan-
cling geld similar to the Federal
Reserve System in commercial
banking. There are now some 5000
Home Loan Bank member institu5
tions located in every part of the
country. An Act of 1888 authorized
the organization of new Federal
savings and loan associations ana
the conversion of existing state
chartered home financing units
into Federal associations. There are
now 752 Federal associations, OF
which 225 represent conversions.
In 1884, Congress provided for
the insurance up to $4,000 of in
vestors' accounts held in institu-
lions of the building and loan type,
compulsory for all Federal savings
and loan associations, and optional
for state chartered institutions.
Insured institutions now number
669.
Applications Analysed
Many member associations of the
Bany System desired to federalize
and also to obtain the further pro-
lection of insurance for their in
vestors. Other members applied
for insurance but wished to retain
their state charters. Many nom
member associations made applica-
ton for membership, liberalization
and insurance simultaneously.
Other non-members applied only
for membership or for insurance.
The examining division of the
Federal Home Loan Rank Board
analyses the ne wapplications in
these three categories, together
with the supporting data, and con-
ducts field examinations. and ap-
praisal of assets where necessary.
The standards and qualifications re-
quired by the board emphasize SOL
yency, earning power and sound
ness of management.
Progress is being made toward
uniform standards in all IL Home
Loan Bank districts, as wei s/
toward standard accounting systems
and operations among different
types of building and loan associa-
lions in all parts of the country, to
the benefit of the institutions and
the protection of their investors and
borrowers.