As thrift institutions move further into the traditional banking areas of checking and credit cards, banks are becoming eager to move into the S&L's territory of lending money for home finance.
And it was apparent at the annual convention of the American Banking Association here this week that the industry has its eyes on a bigger share of the housing finance market.
The ABA said it is formulating a new housing strategy, one intended to "faciliate the banking industry's continuing role in meeting the rising demand for housing finance."
R. Van Bogan, chairman of the ABA's housing and real estate finance division, said that the ABA plans to recommend changes in the National Banking Act to give banks "whatever new substantive lending powers they need" to compete with other institutions in the real estate business, chiefly savings and loan associations.
He said the association also wants legislative changes that would allow banks to help meet the overall housing demand in the coming decade and to move into the market for loans to low-income buyers, minorities and women.
The bankers want lawmakers to allow them to establish services like those of savings and loans, so that smaller banks, in particular, can save by having their mortgages jointly packaged for resale in the secondary market or by having their mortgage portfolios jointly serviced.
Van Bogan said that the ABA will work to develop a "viable market for adjustable-rate mortgages" and plans to make recommendations to the Comptroller of the Currency about current proposals for such mortgages.
In the longer term the association, which represents 90 percent of the nation's nearly 15,000 banks, would like to see the structure of home finance and its regulations changed so that banks and thrifts are treated equally.
The Federal Home Loan Bank Board should be restructured as the nation's "central housing credit facility, servicing all depository institutions -- not just thrifts," the ABA said. It should evolve into "a government bank for housing," taking over the jurisdiction of the Government National Mortgage Association, which is part of the Department of Housing and Urban Development.
HUD should also give up the Federal Housing Administration, the bankers association suggested, to allow FHA to be reconstituted as an independent mortgage-insuring agency, along the lines of the Federal Deposit Insurance Corp., which insures bank deposits.
HUD should retain jurisdiction over subsidized housing programs, however, the bankers said.
"Legislative and regulatory changes, such as the adjustable-rate mortgage proposals, will continue to make the yields on residential mortgages attractive either for banks' own portfolios or for secondary investment through the pension funds managed in trust by banks," Van Bogan said.