FEDERAL HOME LOAN PROGRAM
The Voting Rights Act,
MEDICARE AND MEDICAID!
Votes for our Women,
40 Hour Work Week
Minimum Wage and
The Social Security Act.
Increasingly dire economic circumstances caused by the Depression in 1932 spurred President Herbert Hoover to press Congress for action. In particular, he wanted to encourage home construction, reduce foreclosures and support the idea of widespread home ownership.
The congressional response came in the form of the Federal Home Loan Bank Act that created a five-member Federal Home Loan Bank Board, whose role was to supervise a series of discount banks spread across the country. Initial capitalization of $125 million was provided.
The intent of this system was to increase the supply of money available to local institutions that made home loans and to serve them as a reserve credit resource. Existing financial institutions — savings banks, insurance companies, building and loan associations, etc. — could apply for membership in the system.
The law appeared to have a beneficial impact. The rate of foreclosures READ MORE