Magazine article American Banker

Small Banks to Seek Home Loan Board Seats

Magazine article American Banker

Small Banks to Seek Home Loan Board Seats

Article excerpt

Community banks, which have rushed to join the Federal Home Loan Bank system in recent years are now trying to influence the system's policies.

The Independent Bankers Association of America is urging community bankers to run for 52 Federal Home Loan Bank seats, up for election this year.

The elections are being held in 35 states. The deadline for nominations is July 15. In all there are 109 seats.

"We are trying to get them interested to run, to go for it," said Kenneth Guenther, executive vice president of the IBAA.

The Federal Home Loan Bank system, was set up in the 1930s to provide low cost funds to thrifts. In 1989, it was opened to mortgage-minded commercial banks.

Community bankers say they should have more say as to how things are run because there are now more bank members than thrift members. Since 1989, bank membership has soared to 2,442, compared with 2,145 thrifts. Meantime, community banks - or banks with assets up to $2 billion - increased their outstanding borrowings from the system to $7.3 billion at yearend 1993 from $1.1 billion two years earlier.

Said David Ballweg, president of Community State Bank, Union Grove, Wis. "As policies are set at district bank board levels and systemwide, it is going to be increasingly important that the community banking industry have some input."

Mr. Ballweg, whose bank has $85 million of assets, plans to run for a seat on the Federal Home Loan Bank of Chicago. He ran a year ago but lost.

He says there are inequities in the system, and he thinks changes should be made. …

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