My long-time friend, Con Hurley, has had a long career of service as a top lawyer at the Federal Reserve Board in the 1970s when I first met him, general counsel of one of the largest banks in Boston, a partner who ran the Boston office of my former consulting firm The Secura Group, a professor at Boston University, and a member of the board of directors of the Federal Home Loan Bank of Boston for 14 years. To say he is intelligent and knowledgeable about the financial system is an understatement. Con is a patriot and even ran for public office (for the wrong party I might add) years ago. Con recently published an article in the American Banker newsletter suggesting that it might be time to review and perhaps reform the charter/mission of the Federal Home Loan Bank System, perhaps to broaden the types of low and moderate income loans it makes beyond mortgage loans. I believe this article and the discussion it advocates are both timely and appropriate. I hope you will enjoy and perhaps participate in the discussion. Bill Isaac, Chairman, Secura/Isaac Group.
About six months ago I co-wrote a Bank Think article stating that, in light of its declining fortunes and its failure to adapt to a changing marketplace, the mission of the Federal Home Loan Bank System ought to be reevaluated. I followed that up weeks later with an open letter to FHFA director-designate Sandra Thompson, who regulates the system.
These articles led to a particularly useful meeting with Ms. Thompson and her senior staff on the topic. Later at a public event, Ms. Thompson commented favorably on the notion of establishing an advisory committee to explore the possibilities of modernizing the Home Loan Bank System.
These calls for reform were met with silence from the System and from the Federal Home Loan banks. Then last week, a community banker who also serves as vice chair of the American Bankers Association, came to the system’s defense. Her exhortation, “Don’t mess with success,” was a disappointment. Touting the dubious success of a deeply flawed system fails to recognize the enormous potential of that system.