|Our Efforts to Promote Bank Reform Must Continue'
President Bush sent a legislative proposal to Capitol Hill last Wednesday that asks Congress to reduce the number of regulations for banks, credit unions, and savings and loans. This is a copy of an accompanying statement released by the White House:
Today, I will submit to Congress the Credit Availability and Regulatory Relief Act of 1992, an important initiative to enhance the availability of credit in the economy by reducing excessive regulatory burdens on banks, thrifts, and credit unions.
It builds on the administrative steps taken over the last 18 months to address the credit crunch and create a more balanced regulatory environment.
The reform of antiquated or misguided regulations governing financial institutions has long been a cornerstone of this administration's economic policy. In March of last year, as a key component of my domestic program, we proposed a comprehensive bill to modernize the financial system, which addressed the fundamental causes of declining competitiveness of our nation's banks.
The Congress rejected these proposals and substituted instead yet more layers of regulation and further restrictions on the operations of depository institutions.
Last year's misguided congressional action was simply the latest in a long series of such efforts: Over the last 10 years, the Congress has enacted hundreds of statutory provisions governing every conceivable element of the banking business, from the education of real estate appraisers to the proper system of credit scoring.
This regulatory micromanagement has encumbered the financial system with a host of unnecessary costs - costs that are inevitably passed on to borrowers in the form of restricted credits and higher-priced loans.
As a result, the regulatory restrictions on our nation's financial intermediaries have now reached a level that creates unacceptable obstacles for economic growth.
The legislation proposed today would reduce or eliminate a wide range of these excessive regulatory burdens without modifying any of the fundamental safety and soundness protections of current law.
At a time when the availability of credit is of particular importance to the economy, we cannot let costly government directives continue to weigh down the consumer and business lending that will fuel economic recovery.
I urge the Congress to move swiftly to pass this important legislation, but the passage of this bill is not the end of reform.
Until our proposals to resolve the fundamental problems of the financial system have finally been addressed, our efforts to promote bank reform must continue.