Carol S. Greenwald, the outspoken former Massachusetts Banking Commissioner, will be named the first president of the National Consumer Cooperative Bank, sources said yesterday.
Greenwald, 36, is now a visiting professor at the Harvard Business School and a member of the newly-created White House Price Advisory Commission.
Her appointment will b formally announced after the NCCB board of directors completes final paperwork, the sources said. But the board voted at a meeting last week to name her to the top spot at the bank.
The Co-Op Bank is a mixed ownership corporation created by the Congress last year to provide funding, credit services and technical assistance to cooperatively-owned businesses.
The passage of the legislation creating the bank was hailed as a victory for consumer advocates, who had claimed that cooperatives -- which frequently offer low-price goods and services to consumer -- were having difficulty getting credit from banks because of the co-ops' non-profit status.
The Co-Op Banks wad modeled after financial institutions serving certain farm and rural areas under the Farm Credit Administration.
Although $300 million has been earmarked by Congress for seed money to get the bank started, only $74 million has budgeted for its first year's operation.
The bank is scheduled to open for business on March 11, and approve its first loans on March 21, according to a bank spokesman.
The government essentially buys stock in the bank. But the government role will gradually decrease as outside stockholders buy in.
The 13-member (soon to increase to 15-member) board of directors of the bank is appointed by President Carter with the consent of the U.S. Senate. bEach board member serves for three-year terms, with seven of the board members coming form the ranks of officers of agencies and department of the U.S. government.
Eventually, the members of the board will be selected by stockholder-elected directors.
Eligible for loans and technical assistance from the bank will be nonprofit cooperatives in such areas as health, housing, food, and repair services. Cooperatives are controlled by their members, under a one-person, one-vote basis.
When a cooperative supermarket makes money, for example, the profits are distributed to the members based on how much they spent at the co-op. The directors of each coop are elected by the members.
Greenwald was an assistant vice prsident and economist with the Federal Reserve Bank in Boston before being named Massachusetts banking commissioner in 1975 by then-governor Michael Dukakis.
She quickly made of a name for herself as a bank regulator and shocked bankers by attacking the bank practice of redlining -- a system under which many banks draw a red line around decaying urban areas they consider poor loan risks, and discourage officers from making loans to that area.
Then, she pursued bank hiring policies, leading the way for federal hearings adn actions aimed at enforcing equal opportunity and credit laws.
She once said, during the Bert Lance affair, that "the problem is, the regulators don't know the problem (from the consumer's point of view.) They aren't unemployed and they haven't been turned down for a mortgage."
Her salary in the new post has not yet been determined.
NCCB officials would not confirn or deny the appointment, and Greenwald was unavailable for comment.