WASHINGTON - Work on banking legislation moved at a feverish pace over the last two weeks - from action on the thrift insurance fund to a separate measure to kill President Clinton's direct-student-loan program.
While much of the activity on Capitol Hill focused on a budget reduction bill - itself a vehicle for major banking legislation - the House and Senate worked on a number of other measures important to the industry.
Here's a summary of recent congressional action on financial services industry legislation:
Savings Association Insurance Fund
Congress is addressing the undercapitalized thrift insurance fund in two separate measures. The first is a budget package that's widely expected to fall victim to a presidential veto. As a backup, the House Banking subcommittee on financial institutions voted out a separate measure containing similar language.
Both the House and Senate versions of the budget bill would capitalize the thrift fund, then merge it with its bank industry counterpart. Like the House bill, the Senate measure also would oblige commercial banks to help pay for thrift bailout bonds and would levy an 85-basis-point charge on thrifts.
The Senate panel also set a timetable for the merging of the bank and thrift industries. However, its approach was not as direct as that of the House Banking Committee, which called for a merger of both the insurance funds and the two industries' charters by Jan. 1, 1998.
The Senate bill would condition the fund merger on the adoption of additional legislation to combine the bank and thrift charters.
Regulatory relief legislation cleared a few hurdles over the last couple of weeks.
The Senate Banking Committee approved its version of the legislation last Wednesday. While the bill contained plenty of reductions in reporting and paperwork requirements for banks, committee chairman Alfonse M. D'Amato, R-N.Y., dropped provisions that would have exempted small banks from the Community Reinvestment Act.
On the House side, Banking Committee Chairman Jim Leach, R-Iowa, met with Republican leaders last week and settled on a way to bring Glass- Steagall and regulatory relief legislation to the House floor. The plan would merge the two bills into a single measure, and would drop a controversial provision that would have allowed banks and insurance companies to affiliate in most states.
On the House side, leaders gathered last week and settled on a way to bring Glass-Steagall and regulatory relief legislation to the House floor. The plan would merge the two bills into a single measure, and would drop a controversial provision that would have allowed banks and insurance companies to affiliate in most states.
Under the agreement, a measure in the regulatory relief bill that would bar the Comptroller of the Currency from expanding national bank insurance powers would "sunset" after five years.
The House Banking Committee also added a watered-down version of the Community Reinvestment Act relief measure to its budget package.
Instead of an outright exemption, banks with up to $100 million in assets would be allowed to "self-certify" that they are complying with CRA. Banks with $100 million to $250 million in assets would get the same treatment but examiners would have to check to make sure the bank was being "reasonable."
President Clinton on Saturday signed into law a measure that would limit the liability of lenders that make technical errors when filling out mortgage disclosures required by Truth-in-Lending.
The House and Senate each approved the bill last week.
The measure, sponsored by Rep. Bill McCollum, R-Fla., would limit the reach of the Rodash court decision. That ruling essentially allows borrowers to repudiate mortgage contracts if errors are found. The court case produced an about 50 class-actions alleging violations of Truth-in- Lending because of a lender's exclusion of closing costs in the calculation of finance charges.
"This finally brings an end to the massive potential liability facing the mortgage industry as a result of extraordinary penalties under the Truth-in-Lending Act for technical errors," Rep. McCollum said Wednesday.
The House last week approved a bill to rescue the Small Business Administration's loan guarantee program, which is rapidly running out of money.
The bill, also approved by the Senate last week, now awaits President Clinton's signature. The measure would decrease the level of loan-guarantee protection offered to lenders by the SBA. It would also increase the SBA fees lenders must pay.
While industry lobbyists are not happy with the increased fees, they said there's little choice but to accept the changes rather than see the program dismantled.
Fair Housing Investigations
The Senate approved a measure Sept. 27 that would shift the responsibility for investigating fair housing complaints from the Department of Housing and Urban Development to the Justice Department.
The measure was part of a broader spending bill for the departments of Veteran Affairs and Housing and Urban Development.
"The Senate bill would require the Justice Department to reinvent a wheel that is already working well," said HUD Secretary Henry Cisneros.