Examination of Financial Statements of the Federal Home Loan Bank Board and Related Agencies for the Years Ended December 31, 1978 and 1977

The statements of financial condition of the Federal Home Loan Bank Board (FHLBB), the Federal home loan banks, the Federal Savings and Loan Insurance Corporation, and the Federal Home Loan Mortgage Corporation were examined as of December 31, 1978 and 1977. Also examined were their related statements of income, expense, retained earnings and primary reserve, and changes in financial position for the years then ended. FHLBB showed a deferred credit of $44,400,000 and $42,094,280 as of December 31, 1978 and 1977 respectively. The deferred credit represents assessments to the 12 federal home loan banks for the cost of the FHLBB new building and land. This deferred credit is currently shown as a liability; however, there is no intention by FHLBB to repay any portion of this assessment to the 12 banks. Accordingly, GAO believes that this and all future capital assessments should be classified as paid-in-capital, and the amounts above should be reclassified.