Date: 1982-02-23
Speaker: ST GERMAIN (democrat)
Chamber: H

Mr. Speaker. today I am introducing legislation which addresses a major problem facing our Nation. You have all heard about the state of the housing industry. Housing starts for January 1982 were at the lowest level since 1946. The sales of new homes have been at similar low levels. Unemployment. among construction workers has reached the 18percent level. Related industries. such as lumber mills and home appliance manufacturing. have begun to show the severe impact of these reductions. The thrift industry continues to record the most massive earnings losses in recent history. Last July the Banking Committee held hearings on the conduct of monetary policy at which time the banking regulatory agencies were questioned about the future outlook of the thrift Industry. In its report. the committee stated: The likelihood. or even possibility. that interest rates could remain at current levels over the next twelve months poses a signifIcant threat to the safety and soundness of savings and loan associations. mutual savings banks. credit unions. For example. in a briefing for the Presidents Commission on Housing on July 8. 1981. Federal Home Loan Bank Board Chairman Pratt said that about onethird of the S&L Industry holding assets of about $200 billion is not viable under current financial conditions. He affirmed this statement in testimony before the Committee on July 14. The numbers have not improved since then. Initially. I supported quick action on legislation to provide the insuring agencies additional flexibility to handle problem cases. That legislation passed the House on October 28. 1981. The Senate has not acted. upon that legislation. In the interim. interest rates have fluctuated. but remained at a high level. The current rates are such that the thrift institutions are faced with continued drains on their resources. What is needed now is a program which will: First. get homebuilding -started again. second. assure a flow of mortgage money into the economy. third. relieve the burden being placed on the Federal insuring funds for depository institutions. fourth. directly attack the problems of the industry. fifth. provide sufficient discretion to the agencies yet assure continuation of a specialized thrift industry serving local needs. and sixth. requires a payback of Federal assistance and even more importantly. a flow of mortgage money into the economy. The bill I am introducing will do that. It would authorize appropriations for a home mortgage capital stability fund totaling $7.5 billion. The FDIC. the FHLBB. and the NCUA would draw on this fund to administer a program of direct capital assistance for home mortgage lending institutions whose net worth slips below 2 percent of assets. Any institution receiving such assistance would have to pay back these funds with Interest and would also have to earmark 50 percent of its new deposits for mortgage loans on family residences. It is imperative that the Congress act quickly and in a fashion that will move funds im i.ediately into the mortgage lendin industry. Not only is it essential that this Nation get on with the business of providing decent housing for all Americans. but it is critically important that we put thousands of men and women who depend directly and indirectly on housing production back to work. The legislation I am introducing will go a long way to meeting that goal. The Banking Committee will hold hearings on this bill in the near future at which time I hope there will be a fruitful discussion of the specific provisions of the bill to make it as effective as possible In meeting the goals I have outlined. At this point I Include inthe RECORD a summary of the bill and the text of the bill: