A member of a regional regulatory board overseeing savings institutions in four states did not fully repay loans from thrifts under his purview, a legislator said Thursday.
Richard H. Hughes, a Dallas business executive, served on the board of the Federal Home Loan Bank of Topeka from 1979 until he was replaced Dec. 13.
During his tenure, he received "multiple loans totaling $6 million from five different thrift institutions within the Topeka region," Rep. Charles Schumer, D-N.Y., said in a letter to Daniel F. Evans, chairman of the federal agency overseeing the Topeka bank and 11 other similar institutions.
"Mr. Hughes' case is a perfect example of what happens when the fox is assigned to guard the chicken coop" and "epitomizes the inherent potential for conflict-of-interest that fueled the ongoing thrift crisis," Schumer said in a statement.
Schumer, chairman of the House Budget task force on urgent fiscal issues and a member of the House Banking Committee, released a statement on Hughes along with the letter to Evans and a report by his staff on the alleged conflicts.
Hughes didn't return telephone messages left at his Dallas-based business, Hinderliter Corp. Schumer wrote to Evans that the congressional staff report on Hughes "is simply shocking."
He said next year he will push for the adoption of stringent conflict-of-interest regulations, not just for all directors and officials of the Federal Home Loan Banks, but for officials and directors of banks and S&Ls as well.
He called on Evans to assist the effort.