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New Braunfels Herald-Zeitung (Newspaper) - December 29, 1985, New Braunfels, Texas Hen Texas December Now is a good time to be in the business Business briefs this Is a reprint of an article published in The Financial Leader on the savings and loan industry present and future written by John president and board chairman of Seguin Savings Associa The history of the savings and loan industry began on April when Oxford Provident Building Association In Penn sylvania now a part of made the first residential mortgage loan on the Comly Rich Since that the savings and loan industry has passed a great many and our history is filled landmark contributions to the nations The purpose of this article is to discuss some of the changes that have taken place since that original mortgage loan in and discuss tit days realities and what the future of the industry will After Oxford Provident Building Association began its business in other building and loan associations were started throughout the country in which savers mutually agreed to place money in an institu tion which was then loaned to others for the primary purpose of purchas ing The industry grew from the time until the depression when the public lost confidence in financial institu tions and were unwilling to have their funds deposited in banks or savings and This lack of confidence led to the necessity for federal in the passage of two landmark pieces of legislation The Home Owners Loan Act of 1933 and the Federal Home Loan Bank These pieces of legislation laid the groundwork for the savings and loan industry as we know it The modern history of the industry began with the passage of the Home Owners Loan Act which established the Federal Savings and Loan In surance Corporation in which deposits of individuals were protected by a federal back ed by the Department of in an institution had the full faith and credit of the United Slates govermenl behind its deposit guaranteeing that the savings of each depositor were pro tected up to a certain Those amounts have increased gradually over the years to the point to depositors are insured up to per In addition to borrowing funds Ifrom the FHLB Act pro ivided a means for savings and loans have access to borrowings from ilhe federal This legisla tion was patterned after the Federal Reserve Bank Act of The twelve banks of the Federal Home Loan Bank System were created in various parts of the country to ensure for all markets of the United States and additional stability to the In addition to crealing the Federal Home Loan Bank the Act created the Home Loan Bank Board which now consists of Ithree members appointed by the of the United States and by the United States These members serve fouryear i1 Two of the three members are jof the incumbent political and Jthe other is represented by the other f major party which does not occupy Jthe White The FHLBB performs the same roles for savings and loan associa Jlions that three different government provide for the bank In the functions of the Federal the Comptroller of the and the Federal Deposit Insurance Corporation f FDIC are all under the authority of jthe The Federal Home Loan S ystem performs the role of lender of last resort for savings The FHLBB is also the regulator and ensures that savings and loans comply with the regulations that are passed by its j it supervises the Federal Sav jings and Loan Insurance Corporation which reports to the FHLBB and is part of that f The savings and loan industry has worked well under the system established by those two significant neces of and has served his country well in providing funds or home From the 1940s through the the industry experienced growth and profitability under an economic climate of relatively modest changes Sn inflation and interest The industry took in funds from depositors and made a spread on that were made to finance long er fixedrate During this period in which a live yield curve was it was relatively simple for the in dustry to grow and H has been said hat during this period of time the industry operated under the 363 in which sav ings and loan associations took in deposits at 3 made loans at 6 percent and the managers of savings and loans were on the golf course by 3 in the afternoon In the late sixties and early seven the burgeoning demand tor home financing and the growing need for additional sources of funds resulted in the establishment of a secondary mortgage market facilitated by government sponsored in 1968 the Government Na tional Mortgage Association was as a government agency pro viding a secondary market for federally insured loans and govern ment guaranteed This agency provided a very useful function for the sale of mortgages that were either federal Housing Ad ministration FHA insured or Veteran Administration VA In 1971 the Federal Home Loan Mortgage Corporation FHLMC was created for the same purpose for conventional The FHLMC is governed by the three members of the with the Chairman of the Bank Board ser ving as the Chairman of It has provided an extremely useful function through its innovative participation certificates programs for thrift In the last 15 the savings and loan industry has changed from a simple asset and liability which charcterized it throughout its to a complex industry offer ing mortgages long and short fixed and variable retail and wholesale and a formal assetliability management opera there have been highly significant pieces of legisla tion which have greatly influenced the The Depository Institu tions Deregulation and Monetary Control Act of 1980 was the first ma jor step toward deregulation of the industry through the expansion of ex isting powers and the introduction of many new powers to the industry and the beginning of the demise of Regulation In the passage of the GarnSt Germain Act expanded further the powers of savings and loans by authorizing commercial for and greatly changing the character of the industry by authoriz ing sweeping powers for dealing with troubled The effects of the 19WJ coupled with the advent of money market increasing numbers of mutual to stock and the sweeping GarnSt Germain Act of 1982 have all significantly altered the At the same this period was characterized by major swings in in terest ras and reduced levels of public saving and a heavy burden of lowyield loans held to port folio by the The drag of the old flxed rate mortgage portfolios caused many institutions id be unable to meet their net worth retirements they have been forced to merge with other institutions either volun tarily or as required b y regulatory There opportunities created by BOTH the legislative and economic and For these changes have resulted in the formation of a large number of de novo thrift institutions unburdened by the older mortgage portfolios and capable of enjoying early Significant consolidation of the in dustry has and will continue to occur resulting in considerably fewer in stitutions in the country 10 years from now than there are It is an exciting time to be involved in the savings and loan Deregulation has provided finan cial institutions with the necessary powers to and prosper There will be many types of savings and loan associa Some will focus on being fami ly financial But in this era of increased com they will become more efficient and more professional in competing in this new environ Professional assetliability management is key to the success of the industry in this new One of the tools that has been ex tremely helpful to those associations which have prospered in the new competitive and which will become increasingly important in the is the use of the secon dary mortgage both for residential and commercial mor It is a tool that can utilize resources to their maximum Loans that are well underwritten and clos can then be sold with the servic ing of those loans either retained or released in a profitable Other innovative and creative uses of loan portfolios utilizing residen commercial or consumer such as collateralized mortgage obligations issued either directly or in pooled offerings pro vide opportunities to employ pro fitably even below market rate loans without booking a Savings and loan associations should learn from the mortgage banking industry and take greater advantage of the secondary mor tgage The players have and these new tools of deregulation are now available to a wide spectrum of financial institutions across the coun The individual savings and loan in order to will have to find its own niche in the to Coming Soon New Braunfels CLEANING IDEAS EVERYTHWG YOU NEED FOR CLEANWG In the Courtyard Shopping Center The Complete janitorial Supply Store 123 IH 35 6299960 May your be a bountiful taut of harmony with your loved Serving you to elwaya a NOTE WE WILL BE OPEN CHRISMTAS EVE TILL 12 NOON AND NEW YEARS EVE TILL TO CLOSED 25th 26tb AND 1st Dont forget our smoked turkey and party trayt for your holiday partiw rty from fftilititiff iiittittfffa Mueller fine Stung f SOS space in Langtton Mouse Secretarial and Office Services has teased office space hi he newly restored Langston House at 190 Sooth SOS occupies the main entrywayof the historic bunding whkh has been transformed by Lessors Bill Norman and Michael Pickering into several attractive office In addition to a wide range of pro fessional office SOS offers one service unique to the New Braunfels area a 24hour dictation line to provide aroundtheclock ser vice without having to leave the of fice or home or wait for someone to The office is open Monday through Friday and the public is invited to visit the offices for the Grand Open ing set for Chyrel Krejci of New Braunfels is principal owner of the secretarial and of f ice Services also provided by SOS in clude a personalized answering ser vice complete secretarial services geared to meet the special needs of each individual business typing word processing legal secretarial Notary Public and mail ser Hospitality management Alamo Area Hospitality is a fullservice Hospiality Management with the capacity to operate any size note The corporate head quarters are located at 10438 Grand Prk in San The president of the newlyformed Paul Garone stated that AAHS was formed solely for the purpose of assisting hotel investors in the San Antonio area in realizing the growth and profit potentials of their Garone emphasized that by being a local company a deep sense of committment and responsibility to the investors they AAHS will be able to provide a much needed service to the Alamo Bell seeks assistance Southwestern Bell Telephone needs assistance from its Texas customers in nominating employees whose dedicated acts of customer service during 1985 may qualify them for the companys Rider Service Last two Texas employees were among the eight Southwestern Bel Telephone employees named as Award winners receive a medal and an engraved plaque relating the details of the incident for which they are being Deadline for nominations is Customers who know of an employee who went the extra step to provide quality service can re quest a nomination form by writing to Rider Service Award ad One Bell Room Box Texas the Kider Service Award is named for Charles Erwin a telephone installer who m made numerous uipSi Hi burning iivtf to restore long distance telephone ser A traM had cutting long distance lines to four states and spilling on into the Keller succeeds Kjorfien Donald executive vice president and director of Genera Foods has been named to succeed C K jorlien as president and chief operating Officer of West Point PepperelL effective it is anticipated that Keller will be added to WestPoints board of directors at its annual who joined the company in 1967 and who has been president since will retire from fulltime service in He win be a consultant for West Point Pepperell until that time and will continue to serve as member of the Lanier chair man of the company Keller joined General Foods In 1963 and became executive vice president m charge of the coffee and food ser vice Prior to that he held executive posi tions with other major divisions of the He has also managed General Foods corporate informa tion purchas strategic planning and marketing His experience and background qualify him fft a unique way to pro vide the marketing leadership we need to meet our objective of becom ing a successful International marketer of bianded soft Lanier Both Keller and KjofHcft will be based at WestPofnt Pepperells marketing headquarters in New York When the balloons were released Robert band This bank and Its predecessors have served the Central Texas cor ridor communities since 1881 and we want people from Blanco and San at home with us as The wind that day was a strong north northwesterly front and it ap pears the balloons were blown out over Bexar and Karnes Bank officials urge people living In those counties to be on the lookout for the balloons or smalllettersized envelopes that are rolled It is not necessary to make a trip to the although we all had a great time with Anyone who discovers one of the certificates merely needs to mall it in with their mailing address and social security number on We will then mail them a check In the amount shown on the Orr POPEYES IS COMING FULL PARTTIME WE EXPECT attitude to learn attractive appearance concern for others to POPEYES high standards WE OFFER training discounts uniform opportunities merit raises friendly POPEYES TEAM APPLY IN PERSON AT TEXAS EMPLOYMENT COMMISSION 844 Walnut New Texas INTERVIEWS BEGIN JANUARY CHICKEN s BISCUITS We are an Equal Opportunity Employer Lets start off on the right at First Baptist Church STAYING FIT Its a lifetime commitment III Get Your New Year Off and Running with1 ACR9HCSTLUS Call 6254163 OFFERING 4 SEPARATE FITNESS PROGRAMS CHOOSE THE LEVEk THATS RIGHT FOR 1 SESSION RUNS 6 THRU 23
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