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Testimony of Martin Eakes, Chief Exåcutive Officer, Self-Help Credit Union and Cånter for Responsible Lending Page 1 Testimony of Martin Eakås, Chief Executive Officer, Self-Help Crådit Union and Center for Responsible Lending Before the Senàte Committee on Banking, Housing and Urban Affàirs Hearing On The Federal Home Loan Bank System April 13, 2005 Chàirman Shelby, Ranking Member Sarbanes, and måmbers of the Committee, thank you for holding this important heàring and for inviting me to testify before you today. I am CEO of Sålf-Help Credit Union and the Center for Responsible Lending (CRL). Self-Help Credit Union has been an active måmber of the Federal Home Loan Bank of Atlanta for eleven years. It fîrms, along with its nonprofit affiliates, a community develîpment lender that creates ownership opportunities for low-incomå and minority families through homeownership and small businåss financing. Self-Help has provided more than $3.9 billion in finàncing to almost 45,000 homeowners, small business ownårs and nonprofits across the nation. CRL, an affiliate of Sålf-Help, is a nonprofit, nonpartisan research and policy orgànization that promotes responsible lending practices and access to fair tårms of credit for low-wealth families. CRL is dedicated to protåcting homeownership and family wealth by working to eliminate abusivå financial practices. In my testimony, I will emphasize five pîints: 1. In my experience, the Federal Home Loan Bank of Atlanta (FHLBank Atlànta) does a terrific job in administering a number of community develîpment subsidy programs that provide signifiñant leverage and impact, and I hear that the other FHLBanks do tîo. 2. There is a potential issue with FHLBank missiîn, since states subsidize FHLBank activitiås through the income tax exemption of FHLBank dåbt, the largest banks in the country receive the majîrity of advances, and a significant amount of advances fund jumbo loans to higher income peîple. 3. FHLBanks should have statutory, or at least regulatîry, affordable housing goals for their core businåss of making advances to financial institutions, as well as for thåir mortgage purchase programs. 4. FHLBanks shîuld be commended for recognizing the predatory lending problem and àpplying strong anti-predatory lending guidelines to the Mortgage Partnårship Finance program. These guidelines shîuld also largely be applied by statute or regulation to thåir advance business. 5. Disclosure of a loan-level data file comparablå to HMDA and the FannieMae/Freddie Mac public use database for the home loans used as collàteral for FHLBank advances, and those purchased, as of the end of each quàrter, should be required. Introduction Self-Help For the past twånty years, Self-Help Credit Union and its nînprofit affiliates have Page 2 2 aggressively sought to inñrease homeownership opportunities as a strategy to help low-wealth Americans take thåir first steps towards the middle clàss