The Bureau of the Budget advises that it has no objection to the submission of this report. Sincerely, LEO A. HOEGH. [S. 3282, 86th Cong., 2d sess.] MR. SMATHERS (for himself and Mr. MORSE) A BILL To amend section 5 of the Home Owners Loan Act of 1933 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 5 of the Home Owners Loan Act of 1933, as amended (12 U.S.C. 1464), is amended by adding at the end thereof a new subsection as follows: "(1) Such associations may invest their funds in shares, accounts, deposits, or certificates of indebtedness in local mutual thrift and home financing institutions located outside the territorial limits of the United States. Such investments shall be to encourage the establishment and growth of savings instiutions financing home building and home buying and shall be matched with and not exceed similar savings funds accumulated by the institution in its area of operation. No investment in any one such institution shall exceed $100,000 nor more than one one-hundredth of the investing institution's reserves, nor shall the total of such investments by an association exceed 10 per centum of its reserves established for the sole purpose of absorbing losses." S. 3282 DIGEST OF BILL Amends section 5 of the Home Owners' Loan Act of 1933 to provide that Federal savings and loan associations may invest in shares, accounts, deposits, or certificates of indebtedness in local mutual thrift and home financing institutions located outside the territorial limits of the United States. Investments in any one such institution may not exceed $100,000 or exceed more than one onehundredeth of the investing institution's reserves. Also prohibits the total of such investments by any one institution from exceeding 10 percent of the reserves established for the sole purpose of absorbing losses. HOUSING AND HOME FINANCE AGENCY, Re S. 3282, 86th Congress. Chairman, Committee on Banking and Currency, U.S. Senate, Washington, D.C. DEAR MR. CHAIRMAN: This is in further reply to your letter of March 28 requesting the views of this Agency on S. 3282, a bill to amend section 5 of the Home Owners Loan Act of 1933. The bill would authorize Federal savings and loan associations to invest limited amounts of their funds in foreign mutual thrift and home financing institutions, in order to encourage the establishment and growth of such institutions financ ing home building and home buying in the countries involved. This Agency favors the objectives of S. 3282. The experience and studies of our Agency would indicate that foreign thrift institutions, where authorized to be established under the laws of the particular country, might be organized in considerable number if they had the benefit of leadership, instruction, and some founding money. One of the principal obstacles to the provision of adequate housing in underdeveloped countries is the shortage of investment capital, which stems in large part from the absence of home financing institutions. Assistance to these foreign thrift institutions is one of the important objectives of the U.S. Government in this field. I understand that you have requested the views of the Federal Home Loan Bank Board on S. 3282 and that you will obtain from the Board comments on the technical aspects of the bill as applied to the savings and loan associations in this country which would be affected by the bill. We have been informed by the Bureau of the Budget that this report is without objection insofar as the Bureau is concerned. Sincerely yours, NORMAN P. MASON, Administrator. TREASURY DEPARTMENT, May 11, 1960. Hon. A. WILLIS ROBERTSON, Chairman, Committee on Banking and Currency, MY DEAR MR. CHAIRMAN: Reference is made to your request for the views of the Treasury Department on S. 3282, to amend section 5 of the Home Owners Loan Act of 1933. While the Treasury is sympathetic to the development of financial institutions abroad to assist private home ownership, it is the view of the Department that the authority to permit Federal savings and loan associations to invest their funds in shares, accounts, deposits, or certificates of indebtedness of associations abroad is not desirable. It is our view that these associations, whose experience is entirely domestic, are not in a position to make prudent foreign investments. Moreover, there would be specal risks in investment in foreign home financing institutions arising from inflation in the less-developed countries and their difficulties in transferring foreign exchange. The loans of the foreign institutions would be in local currencies, which under inflationary situations are likely to depreciate in terms of dollars, so that the investment of the American associations in these institutions would tend to shrink in value over time. If the foreign institutions were to assume a dollar obligation, the American investing association would be afforded some protection against inflation. Such arrangements, however, would impose a serious financial burden on the foreign association under inflationary conditions, which would tend to jeopardize its financial position, and thus to impair the investment of the American association. Moreover, there would be an increased burden on the balance of payments of the country concerned. In general, these countries should conserve their limited foreign exchange earnings for necessary imports and other currency payments, and for the servicing of obligations on productive investments which contribute more directly to the development of their resources. If foreign savings and loan associations are to be encouraged by the use of funds provided from the United States, it is our view that it would be more appropriate to have such investments or loans made by an existing governmental institution, accustomed to foreign operations, which could assume the risk in the national interest, rather than to permit these risks to be assumed by the individual investors in domestic Federal savings and loan associations. Furthermore, the Treasury Department is of the opinion that the activities contemplated by the amendment should be assisted only in limited instances which are in the national interest and where the projects are sound and feasible. It is the view of this Department also that where private home ownership is to be stimulated, assistance to that end should be given in dollars only when local currencies owned by the United States are not available for that purpose. For these reasons the Treasury does not favor the enactment of S. 3282. The Department has been advised by the Bureau of the Budget that there is no objection to the submission of this report to your committee. Very truly yours, JULIAN B. BAIRD, Acting Secretary of the Treasury. [S. 3291, 86th Cong., 2d sess.] MR. HART A BILL To authorize the Housing and Home Finance Administrator to make certain modifications in the terms of sale of the Oakdale Residents Cooperative Housing Project of Royal Oak Township, Oakland County, Michigan Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That notwithstanding any other provision of law, the Housing and Home Finance Administrator shall, upon request of the Oakdale Residents Cooperative Housing Corporation, consent to such modifications, with respect to purchase price, repayment period, rate of interest, time of payment of any installment on principal or interest, security, or any other term, of any contract, mortgage, or other agreement entered into in connection with the sale of the housing project known as the Oakdale Residents Cooperative Housing Project of Royal Oak Township, Oakland County, Michigan, as he may determine are necessary or desirable in the public interest, and in the fulfillment of the purposes of title VI of the Act of October 14, 1940, as amended (42 U.S.C. 1587). S. 3291 DIGEST OF BILL Requires the Housing and Home Finance Administrator, as he may determine to be necessary in the public interest and upon request of the Oakdale Residents' Cooperative Housing Corp., to amend or otherwise change the terms of the agreement entered into in connection with the sale of the housing project known as the Oakdale residents' cooperative housing project of Royal Oak Township, Oakland County, Mich. HOUSING AND HOME FINANCE AGENCY, Re S. 3291, 86th Congress. Hon. A. WILLIS ROBERTSON, Chairman, Committee on Banking and Currency, U.S. Senate, Washington, D.C. DEAR MR. CHAIRMAN: This is in further reply to your letter of March 30 requesting the views of this agency on S. 3291, a bill to authorize the Housing and Home Finance Administrator to make certain modifications in the terms of sale of the Oakdale residents cooperative housing project of Royal Oak Township, Oakland County, Mich. This bill would direct the Housing Administrator to renegotiate with the Oakdale Residents Housing Corp. any of the terms and conditions under which the subject housing project was sold to them. He would be directed to make such modifications in those terms and conditions as he determined were necessary or desirable in the public interest, and in fulfillment of the purposes of title VI of the act of October 14, 1940 (Lanham Defense Housing Act) under which the sale was made. The project involved is war housing project No. MICH-20237, consisting of 590 dwelling units located in 109 buildings. The project was sold by the Public Housing Administration on June 1, 1955, to the cooperative at a purchase price of $1,443,875. The price was based on the value of the property as set by private appraisers, taking fully into consideration the type of construction involved. The terms of sale were a downpayment of $33,635.63 and a mortgage of $1,410,239.37, payable over 15 years at 44 percent interest. The monthly installments are $10,971.66, and none are in default to date. This mortgage has very recently been transferred to the Federal National Mortgage Association for management and liquidation under the authority provided by section 306(a) of the Housing Act of 1959 (Public Law 86-372). The FNMA already has the requisite authority with respect to any mortgages held by it, to consent to modifications of the types mentioned in the bill where they are necessary or desirable in the public interest. These would include modifica tions relating to repayment period, rate of interest, security, time of payment of any installment on principal or interest, or waiver of payment of such installment. It would appear, therefore, that enactment of S. 3291 would serve no purpose. In the exercise of its authority to modify mortgages the FNMA of course acts with due regard for all the circumstances of the situation. In this case it has not yet had time to become acquainted with the current circumstances and wishes of the cooperative. It is understood, however, that the cooperative is interested primarily in securing sufficient funds with which to effect needed repairs and rehabilitation of its property. This might perhaps be accomplished through a temporary deferral of principal payments, as the FNMA has the power to grant and may find justified. This does not mean, of course, that the FNMA would either have the desire or the authority to grant to the cooperative special consideration, through reduction of the principal of the mortgage or otherwise, which could not be agreed to by the FNMA in the exercise of its good judgment in the interest of the Government. Special legislation (differing both technically and in substance from S. 3291) would be necessary for such preferential treatment, and it would be a general rule for this agency to oppose such legislation in the absence of unusual hardship. We have been informed by the Bureau of the Budget that this report is without objection insofar as the Bureau is concerned. Sincerely yours, NORMAN P. MASON, Administrator. [S. 3292, 86th Cong., 2d sess.] MR. CLARK AND OTHERS A BILL To provide for the establishment of a Department of Housing and Metropolitan Affairs, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, ESTABLISHMENT OF DEPARTMENT; OFFICE OF SECRETARY SECTION 1. (a) There is hereby established an executive department which shall be known as the Department of Housing and Metropolitan Affairs (hereinafter referred to as the "Department"). There shall be at the head of the Department a Secretary of Housing and Metropolitan Affairs (hereinafter referred to as the "Secretary"), who shall be appointed by the President by and with the advice and consent of the Senate. Th Secretary shall receive compensation at the rate now or hereafter prescribed by law for the heads of departments. (b) The Secretary shall cause a seal of office to be made for the Department of such design as the President shall approve, and judicial notice shall be taken thereof. UNDER SECRETARY AND ASSISTANT SECRETARIES SEC. 2. (a) There shall be in the Department an Under Secretary of Housing and Metropolitan Affairs, and three Assistant Secretaries of Housing and Metropolitan Affairs, who shall be appointed in the same manner as the Secretary and who shall perform such duties as may be prescribed by the Secretary. The Under Secretary and Assistant Secretaries shall receive compensation at the rate now or hereafter prescribed by law for under secretaries and assistant secretaries, respectively, of the executive departments. (b) In the absence of the Secretary or when he is unable to perform the duties of his office the Under Secretary shall act as Secretary. In the event of the absence of both the Secretary and the Under Secretary, or in case both are unable to perform the duties of the office of Secretary, an Assistant Secretary to be designated by the Secretary shall act as Secretary; or in the absence of designation by the Secretary, the Assistant Secretary who is senior in office shall act as Secretary. TRANSFERS TO THE DEPARTMENT 1 SEC. 3. (a) All functions of the Housing and Home Finance Administrator are hereby transferred to the Secretary. All agencies of the Housing and Home Finance Agency, together with their respective functions, personnel, property, records, and unexpended balances of appropriations, allocations, and other funds (available or to be made available), and all other functions, personnel, property, records, and unexpended balances of appropriations, allocations, and other funds (available or to be made available) of the Housing and Home Finance Agency are hereby transferred to the Department. (b) The President shall from time to time exercise his authority under the Reorganization Act of 1949 with a view to further consolidating within the Department such functions and agencies of the Government as will further the purposes of this Act. The President shall submit to the Congress, on or before January 3, 1961, a report setting forth what action has been taken or is proposed to be taken by him in accordance with the provisions of this section and the reasons therefor. RESEARCH AND TECHNICAL ASSISTANCE SEC. 4. (a) The Secretary shall (1) conduct a continuing study of problems peculiar to urban and metropolitan areas, including problems of coordinating Federal programs as they affect such areas, and (2) provide technical assistance to State and local governmental bodies in developing solutions to such problems. Such assistance shall include whenever appropriate the dissemination to interested bodies of the results of the studies undertaken pursuant to this section. (b) The Secretary shall from time to time make such recommendations to the Congress, as a result of the studies to be undertaken under this section and after consultation with appropriate representatives of State and local governments, as he shall determine to be appropriate. (c) As used in this section the term "State" includes the District of Columbia and the Commonwealth of Puerto Rico. COORDINATION OF FEDERAL ACTIVITIES AFFECTING METROPOLITAN AREAS SEC. 5. The Secretary shall advise the President on the coordination of Federal programs as they affect metropolitan areas, and shall initiatè consultation among officers of departments and agencies concerned, and among Federal, State, and local government officials, in order to improve the coordination and effectiveness of Federal programs in contributing to the solution of the problems of metropolitan areas. ABOLITIONS SEC. 6. The Housing and Home Finance Agency (exclusive of the agencies thereof transferred by section 3 of this Act) and the Office of the Housing and Home Finance Administrator are hereby abolished. The Secretary shall make such provisions as may be necessary in order to terminate any outstanding affairs of the agencies and offices abolished by this section. ADVISORY COMMITTEES SEC. 7. The Secretary may establish such advisory committees on urban affairs as he may determine to be desirable and in furtherance of the purposes of this Act. The members of any such committee shall be reimbursed for actual travel and subsistence expenses incurred in attending meetings of the committee. AMENDMENT SEC. 8. Section 158 of the Revised Statutes of the United States, as amended (5 U.S.C. 1), is amended by adding at the end thereof the following: "Eleventh: The Department of Housing and Metropolitan Affairs." REPORT SEC. 9. The Secretary shall cause to be prepared, published, and transmitted to the Congress an annual report of the activities and accomplishments of the Department. INTERIM APPOINTMENTS SEC. 10. Pending the initial appointment of officers of the Department, the functions of any such officer may be performed temporarily (not in excess of sixty days) by such officer of the Housing and Home Finance Agency, including its constituent agencies, as the President shall designate. |