Acting Federal Home Loan Bank Board Chairman Anita Miller warned this week that the thrift industry "faces serious erosion" of its profitability and its role as the nation's home financier unless it expands its services to compete with commercial banks.
Miller, named July 6 by President Carter to temporarily head the savings and loan regulatory agency, said that the lending institutions "must be allowed to offer a broader range of consumer services."
Those services, she said, should include negotiable orders of withdraw als -- NOW accounts -- which are checking provileges on savings accounts. In addition, "consumer lending powers, credit card powers and trust authority are necessary if thrifts are to compete adequately with commercial banks and achieve a more stable deposit base," Miller told the Women in Housing and Finance group.
But she said that savings and loan associations do not want to become commerical banks, because "to do so would erode their special status in this nation's housing finance system."
"But we do seek powers to provide yields and savings flows sufficient to meet these housing needs in an inflationary environment, where Regulation Q is no longer able to provide the protection to housing that it once did," she added.
Regulation Q limits the amount of interest banks and thrift institutions can pay small investors. President Carter last May proposed phasing out this regulation, at the same time allowing S&Ls to offer consumer loans, variable-rate mortgages and interest on individual checking and checkinglike accounts.
The year 1990 is being considered for the complete phaseout of Regulation Q in pending legislation, but Miller said no definite deadline should be established.
"Regulation Q has turned out to be a hindrance to the normal functioning of a competive market," Miller said.
In response to a question from the audience, Miller said savings and loans must become family financial centers.
"They have to attract new customers, not undertake business activity of commercial banks."