PRESIDENT CARTER is considering making an important nomination in the next few days - the chairman of the Federal Home Loan Bank Board. The three-member board is an independent federal agency that supervises and regulates the activities of the savings and loan industry - the country's major private source of funds to finance the construction and purchase of housing. More than 6,000 federal-and state-chartered banks, with assets of over $400 billion, come within its purview. So it matters who runs their agency - and how. And that is why we have spent a little time examining the credentials of Robert H. McKinney, a banker from Indianapolis, who is said to be Mr. Carter's first choice for the bank board's chairmanship.
From what we have learned, we think you will share our puzzlement over what the President had in mind when he agreed to consider Mr. McKinney for the position. Was Mr. Carter anxious to find someone who had a good deal of experience working with the savings and loan industry? Mr. McKinney certainly qualifies on that score. He is the president of First Federal Savings and Loan Association of Indianapolis, the third largest savings and loan institution in the state. He is also a senior partner in a law firm that represents a host of real estate and financial institutions and that serves as general counsel to First Federal - providing legal services for well over 50 per cent of the loans originated by the bank. And Mr. McKinney is also chairman of the board and president of a building-materials company that is a major supplier of construction materials for suburban housing developments - many of which are financed by First Federal.
Perhaps Mr. Carter is looking for someone who has had previous experience with the Federal Home Loan Bank Board. Once again, Mr. McKinney has credentials - of a sort. He was instrumental in convincing the bank board to abandon its proposed regulations that would have limited the number of savings and loan directors who could have real-estate holdings or interests. And, as recently as last fall, Mr. McKinney told the bank board that he considered public disclosure by savings and loan directors to be "unwise and unwarranted" - and has lobbied heavily to get the disclosure regulations modified.
Maybe the President wants a bank board chairman who is aware of the numerous problems that are facing the savings and loan industry - most notably red-lining and other racially discriminatory practices. Mr. McKinney can surely draw from his personal experience on that front. As an example, the lending policies of First Federal have been so biased against older neighborhoods in Indianapolis that community groups had to stage a sit-in at the bank before Mr. McKinney would even discuss the matter. And although there was documentable evidence that First Federal made less than 5 per cent of all of its loans to older neighborhoods, Mr. McKinney defended his lending policies as entirely satisfactory.
So the question remains: What did the President have in mind when he agreed to consider Robert H. McKinney for chairman of the Federal Home Loan bank Board? We figure it can only be the patronage appointment of a pal.