Money Laundering Hearings Planned

WASHINGTON - Rep. Marge Roukema, chairwoman of House Banking's financial institutions subcommittee, said she plans hearings next year on money laundering, a merger of the bank and thrift deposit insurance funds, regulatory relief, and consumer privacy.The New Jersey lawmaker announced this week that she and fellow Republican Bill McCollum of Florida will introduce legislation to crack down on money launderers; the announcement came after recent recommendations by the Clinton administration. Treasury Department officials unveiled a plan in November that, among other things, would make it a crime for U.S. banks or foreign banks with U.S. operations to knowingly handle money traceable to corruption or bribery in a foreign government.

She said she plans to offer legislation to merge the insurance funds because the thrift fund is relatively small and susceptible to regional economic disruptions. Her bill would also merge the Office of the Comptroller of the Currency and the Office of Thrift Supervision. The subcommittee will also revisit regulatory relief legislation that would let banks pay interest on business checking accounts and earn interest on reserves held at the Federal Reserve.

On privacy, Rep. Roukema praised the protections included in the financial reform law "as a firm foundation" but said her subcommittee would hold more hearings in 2000 to "determine what additional protections are needed."

- Dean Anason


Finance Board Plans To Reshuffle Jobs

WASHINGTON - The Federal Housing Finance Board is planning a sweeping reorganization.Finance board Chairman Bruce A. Morrison said Tuesday that total employment will not shrink, but up to 25% of the agency's 120 existing positions could be eliminated while an equal number are created.

Some agency employees will be offered early retirement, he said, and others will be laid off if they cannot qualify for the new jobs.

The reorganization is a response to the financial reform law, which overhauls the Federal Home Loan Bank System. The finance board must revamp the system, including rules on capital, investment management, and governance of the Home Loan banks. The finance board is also planning to create an office of technology.

"We're basically in a very rapidly changing environment here," Mr. Morrison said.

- Katharine Fraser


N.Y. Bank's Founder Charged with Fraud

WASHINGTON - The Manhattan District Attorney's office has charged the founder and the chairwoman of a small New York bank with multiple counts of fraud.Jack Liu, founder of $87 million-asset Golden City Commercial Bank, and Martha Chu, the bank's chairwoman, were accused last week of forging documents to help employees, relatives, and business associates obtain loans from the bank and other unnamed financial institutions. It is alleged that at least part of the loan proceeds were kicked back to Mr. Liu.

The district attorney's office also charged that the two defendants misled the Federal Deposit Insurance Corp. and the New York State Department of Banking about Golden City's financial condition. The bank itself was indicted on counts of fraud, forgery, and violating state banking law. Golden City officials did not return a call for comment.

Mr. Liu did not show up for his arraignment last Thursday and is considered a fugitive. If convicted, he and Ms. Chu could face life in prison.

A pretrial hearing is scheduled for Jan. 12.

- Scott Barancik

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