WASHINGTON House Financial Services Committee Chairman Michael G. Oxley is expected this week to propose a sweeping agenda that covers a possible overhaul of the federal deposit insurance system and more oversight of government-sponsored enterprises.
The committee would also consider whether to toughen consumer privacy protections and take steps to combat predatory lending.
The 70-member Financial Services panel is scheduled to vote Wednesday on its agenda, which is detailed in a 16-page oversight plan that American Banker obtained on Monday. All committees must submit their agendas to House leaders by Thursday.
The committees plan provides an outline for examining the pros and cons of overhauling federal deposit insurance. The new committee will consider merging the bank and thrift funds, various options for raising deposit insurance pricing and coverage, and the appropriateness of the statutory minimum ratios of the funds reserves to insured deposits.
A comprehensive review of the adequacy of supervision of government-sponsored enterprises will remain a priority of the committee, according to the plan. It calls for making sure Fannie Mae and Freddie Mac stick to a deal they struck last fall with Rep. Richard H. Baker, R-La., committing them to publicly disclose their annual debt ratings by independent agencies; raise capital; issue as much as $15 billion of subordinated debt; and take other steps to strengthen risk management and disclosures.
Additionally, the oversight plan calls for reviewing the implementation of all provisions of the Gramm-Leach-Bliley Act of 1999 including limits on new merchant banking powers, financial holding company requirements, insurance sales practices of financial institutions, and the sunshine provisions of the Community Reinvestment Act.
On data protection, the plan says the committee will hold hearings on emerging threats to privacy and the adequacy of industry safeguards. The committee also will consider whether further reforms may be needed to protect consumer identities and to allocate further responsibility for protecting and fixing consumer credit after an identify theft occurs.
Rep. Oxley, R-Ohio, called for hearings on comprehensive mortgage financial reform to assess what regulatory and statutory changes are necessary to curb predatory lending practices. Specifically, the panel will review laws such as the Home Ownership and Equity Protection Act to find a way to distinguish between subprime lending activity and abusive practices associated with predatory lending.
The panel will consider whether to reopen the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. Among other things, it prohibits a banking companys deposits from exceeding 10% of domestic deposits in federally insured banks and thrifts, and allows states to pass higher caps. Some banking companies would like to raise the cap.
The panels to-do list also includes finding more ways to relieve banks from regulatory burdens, including allowing interest to be paid on business checking accounts as well as authorizing the government to pay interest on reserves that banks and thrifts are required to deposit with the Federal Reserve.