Evening star., 1961-05-28

Addressing the closing sess
Loan League at The Home
stead, Mr.. Knapp said that by
the end of this year or early
1862 the flow of savings may
not be adequate to keep up
with loan demands.
Noting that mortgage loan
demand has been tagging be-
hind the accumulation of saw
ings in Washington asSocia-
tioI1s, Mr.. Knapp said he was
confident the national upturn
would be reflected in the Ma
tiolial Capital also.
The number one problem of
the savings and loan industry
al. present is the campaign of
commercial banks for legisla-
ton to impose heavier Federal
Lakes on savings and loan as
aceiations and mutual savings
banks, he declared.
Scores Banks Slogan
Recent hearings on Capitol
Hill have shown that bankers
are using the slogan "tax uni
fofmity" to disguise their real
purpose of seriously handicap
ping the savings and loans and
mutual savings banks in their
competition for savings, the
speaker charged.
The bankers want to force
the associations to lower their
dividends, to check their saw
lngs growth, to turn more saw
ilgs their way and add to their
already fat pocketbooks, he
declared.
II heavier taxes are imposed,
the volume of mortgage money
VIII be curtailed seriously and
the cost of home financing will
be- increased contrary to the
public interest, he warned.
I'VE believe the savings and
loan business needs the 121a
per cent reserve provided under
present law and we propose to
Defend it to the last ditch" he
promised.
- Opposes 4O-Year Loans
. The industry also is con-
ceEned with Capitol Hill moves
to. increase maturities on home
mortgages to 40 years and be-
heves such a step would be un-
wise, he continued. With the
backlog of housing needs dwin-
ding. such liberal terms might
expose the mortgage market to
danger from the slightest down.
turn in value or demand, he
said.
Some people do not realize
that under a 40-year arrange
ment, a homeowner's payments
In the first seven years would
hardly accumulate enough
equity to pay the commission
ON selling the property, he de-
olared.
eWhat do you think would
happen if the homeowner was
transferred to a lob in another /!
city" he asked.
2 Among long-term problems
az the industry is the question
cfa code of ethics, Mr.. Knapp
said. Referring to the leagues
criticism ola recent member
association in Los Angeles for
the manner in which it ac-
CURED another association. he
EXPRESSED hope the Federal
Home Loan Bank Board would
take q firm stand in this case. |
TOO Many Associations?
The industry also faces the
problem of whether or not there
are too many associations in
some sections, he said.
This is a question that only
regulatory authorities can de-
eide because existing aSsocia-
tioias always dislike more COM
petition, he said. Outside re-
search organizations should be
called in to make impartial sur
veys in some sections, he sug-
gested.
An argument is going on in
the industry as to whether to
eliminate the present provision
in Federal law that savings and
loan associations can require a
savings member to await his
turn to get his money in case
Of. great emergency, he re-
ported.
This so called rotation pro-
Wsien" never has been invoked
in.the industry and is not like
ly.to be, but bankers have un-
fairly claimed it as a reason
why money is more readily
available in their institutions,
he said.
Actually, in time of an emer-
gency the banks customers al
most certainly would be re-
quired to wait also, but legisla-
tion affecting the savings and
loans is a little more realistic,
he said.
Both banks and savings and
loans should ask Congress to
increase the ceiling for Federal
insurance Of deposits and saw
ings to $4,000 from the pres
ent $4,000, he said. Recalling
the raising of the limit to $10,-