Regulatory Relief Measures Set For Introduction in Both Houses

WASHINGTON - Major regulatory relief legislation is expected to be introduced by key members of the House and Senate banking committees as early as today.

Measures to be introduced by Rep. Doug Bereuter, R-Neb., and Sen. Richard C. Shelby, R-Ala., are expected to attack a laundry list of regulations, topped by the Community Reinvestment Act.

The Senate bill would exempt from CRA banks under $250 million of assets. It would also shield larger institutions with good CRA ratings from community group protests.

"The Community Reinvestment Act is one of the keystones of the regulatory relief bill this year," said Kathleen Casey, staff director for the Senate Banking Subcommittee on Financial Institutions and Regulatory Relief.

"So many people in the industry identify this as the most burdensome single piece of legislation on the industry," she added.

Rep. Bereuter is contemplating a slightly different approach to paring CRA. His bill may allow banks under $250 million of assets to "self- certify" that they are complying with CRA if they had satisfactory ratings in the previous year.

"We're trying to change CRA from an adversarial process to a cooperative process," said an aide.

Sen. Shelby and Sen. Connie Mack, R-Fla., introduced similar legislation in the last Congress. Portions of the measure were incorporated into the Community Development Financial Institutions bill passed last September.

The new measures, which are expected to be introduced as companion bills, would address a host of regulations that were in the last Shelby- Mack package but did not make it into the CDFI Act.

The legislation would move jurisdiction of the Real Estate Settlement Procedures Act to the Federal Reserve from the Department of Housing and Urban Development.

"The Fed has all of the expertise that HUD doesn't have," said Peter Kravitz, Senate lobbyist for the Independent Bankers Association of America. "The Fed writes virtually all the regulations for consumer laws."

This shift would end some bank paperwork by allowing the Fed more easily to coordinate the timing of some of the settlement procedures act requirements with those mandated by the Truth in Lending Act, Mr. Kravitz said.

The Shelby and Bereuter bills would repeal most of Truth in Savings, leaving certain interest calculation requirements that were the original intent of the law.

"Truth in Savings has grown way beyond the reason it was written," said a House Banking Committee aide.

In an attempt to increase credit availability, the measures would also ease "fairly artificial" portfolio restrictions on qualified thrift lenders, Ms. Casey said.

Truth in Lending and the Electronic Funds Transfer Act would be amended under the legislation to place more responsibility upon card holders for the unauthorized use of credit or debit cards.

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