Banking Committee Chairman Jim Leach to leave the Home Mortgage Disclosure Act alone. Andrew Fois, assistant attorney general for legislative affairs, said in a Nov. 1 letter that a proposal to exempt banks with up to $50 million in assets from the law's reporting requirements would complicate enforcement efforts. The change is included in the House's regulatory relief bill. Raising the exemption - it is currently at $10 million - would require the Justice Department to conduct intrusive reviews at small banks it suspects of lending bias, because it no longer could look at HMDA data, Mr. Fois explained. "We urge that HMDA be maintained," he said. "To do so would be in the best interest of both the government and financial institutions." The department also criticized new lender-liability protections, saying they would "needlessly generate litigation and create obstacles to government enforcement." Mr. Fois said the legislation would protect banks that actively participated in managing a facility that caused pollution. The administration only supports protecting lenders that were not directly involved with the operation. The Justice Department also objected to a provision requiring the government to reimburse banks for providing financial records of their corporate customers. "Enactment of this provision would be extremely burdensome and costly, and would set an undesirable precedent," he wrote. The department also blasted a provision that would prevent the banking agencies from imposing sanctions on outside directors for unsafe or unsound banking practices. Outside directors, Mr. Fois said, are as responsible for losses as inside directors. They shouldn't receive preferential treatment, he added. Mr. Fois did support several initiatives, including a measure that provides limited protections from self-incrimination for banks that conduct fair-lending self-assessments. The bill would allow the Justice Department to get self-assessments only if the reports were voluntarily released, used as a defense against fair-lending charges, or needed to determine an appropriate remedy to an existing bias problem. He also supported making it easier for foreign banks to open branches here. But he added a caveat - the Federal Reserve Board should consider money laundering issues before approving an application.

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