One of Robert Barone's earliest memories from his Ohio childhood is this: From his mother's car, he is intrigued by signs outside a local bank displaying the rates for savings and for loans.
Today, the Reno businessman plays a key role in setting some of those lending rates as he has been elected chairman of the Federal Home Loan Bank Board of San Francisco.
He's the first non-Californian elected chairman of the 14-member board, and he's the first chairman to come from a small community bank.
Barone, who works as chairman of Reno-based Adagio Trust Co., is a director of Nevada Security Bank.
Part of a system of 12 Home Loan Banks around the nation, the Federal Home Loan Bank of San Francisco exists to promote housing.
Its primary mission, Barone said, is providing wholesale credit to its 353 members banks, thrifts, credit unions and insurance companies in Nevada, Arizona and California.
Those members, in turn, use the funds to provide loans for housing and community development.
For small institutions, an advance from the Home Loan Bank is one of the few places they can borrow at rates identical to those commanded by giants of the financial industry.
(Among institutions based in northern Nevada, only Nevada Security Bank and Northern Nevada Bank are members of the Federal Home Loan Bank of San Francisco.) The wholesale bank's business has been booming lately.
The Federal Home Loan Bank of San Francisco reports assets of $150 billion, up from $105 billion just six months ago.
That, Barone said, reflects both the continued strength of housing sales throughout the West as well as higher housing prices.
The bank raises the money it lends by sale of bonds the home loan bank system carries an AAA bond rating and it uses a variety of derivatives such as interest rate swaps and futures to protect itself against fluctuating rates.
While the bank's debt isn't considered a government issue, the markets assume the federal government wouldn't let the Federal Home Loan Banks default if they got in trouble.
It's a highly complex system, and Barone said most members of the board need the first two years of their three-year terms to fully understand the bank's complexities.
Barone's experience on the board is a rarity.
He first was selected in 1996 when he was chairman of the board and chief executive officer of Comstock Bank.
He continued to serve even after Comstock Bank was acquired by First Security Bank which, in turn, was acquired by Wells Fargo.
In 1998, he served a year as vice chairman of the board.
While wholesale lending is the biggest part of the bank's business, it also provides grants for development of affordable housing and community economic development.
Those grants are funded by the allocation of 10 percent of the bank's profits.
The rest of the profits are paid as dividends to member institutions.
The board is composed of eight directors elected by the bank's members one is elected from Nevada, one from Arizona and six from California along with six appointed by the Federal Housing Finance Board.
Within days after he was elected chairman, Barone was in Washington, D.C., testifying before a Congressional committee studying governance of the Federal Home Loan Bank board and other government- sponsored entities such as the Federal National Mortgage Association.
Despite the heavy time commitment required of the board's chairman, Barone couldn't be happier.
"I was very humbled that these people elected me," he said.
"I love banking.
Banking has been in my blood since I was five years old."
