President Clinton on Aug. 7 signed a law easing membership limits on credit unions.
The Credit Union Membership Access Act overturns a Feb. 25 Supreme Court decision requiring members of the nonprofit institutions to share a single, common bond. It permits a credit union to serve unrelated companies or other groups, provided they have fewer than 3,000 people.
The Senate approved the legislation by a 92-to-6 vote July 28 after three days of debate. The House passed the legislation on a voice vote Aug. 4. (The House had approved its own bill by a 411-to-8 margin on April 1 but had to vote again last week because the Senate version imposed capital requirements and a commercial loan cap of 12.25% of assets.)
House and Senate panels approved regulatory relief for banks in the past two weeks, but a controversial provision in the House version has thrown the legislation's prospects into doubt.
The House Banking Committee's financial institutions subcommittee approved a broad bill on Aug. 4 on a 15-to-7 vote. Among other things, it would let banks pay interest on corporate checking and authorize the Federal Reserve Board to pay interest on required reserves.
The Senate Banking Committee approved legislation by a voice vote July 30 that included these same provisions.
But the House Banking subcommittee, backed by Chairwoman Marge Roukema, R-N.J., angered Democrats by approving 11 to 8 an amendment that would exempt banks with less than $250 million of assets from the Community Reinvestment Act. Banking Committee Chairman Jim Leach said the bill "has no chance of becoming law" because the provision would draw a presidential veto.
A law signed by President Clinton July 29 automatically cancels private mortgage insurance when a borrower's equity in a home reaches 22%. Sponsored by Rep. James V. Hansen, R-Utah, and Sen. Alfonse M. D'Amato, R- N.Y., the law applies to mortgages made after July 29, 1999.
Homeowners will be able to ask lenders to cancel their policy after their equity reaches 20%, provided their loan payments are current and the home has not depreciated below its purchase price.President Clinton vetoed legislation July 21 that would have expanded education savings accounts, calling it "bad education policy and bad tax policy." Lawmakers lack enough votes to override the veto. Senate bill sponsor Paul Coverdell, R-Ga., accused the president of pandering to teacher unions.
The House and Senate approved legislation in June that would have let parents contribute $2,000 annually to tax-free accounts for a child's education costs at public or private schools-quadrupling the current limit.The House Banking Committee approved legislation Aug. 5 that would make it a federal crime to trick, or attempt to trick, a bank into divulging private customer data.
Sponsored by Rep. Leach, the legislation would not subject financial institutions to any penalties or regulations. Sen. D'Amato pledged to push similar legislation in September.
Separately, the Senate passed legislation July 30 that would make "identity theft," or stealing Social Security numbers and other personal data, a federal crime. It would also be illegal to use such stolen information to open financial accounts or establish credit under the victim's name. The House voted July 29 to let the Department of Housing and Urban Development's FHA program insure mortgage loans as high as $197,620 in high-cost areas and $109,032 in the cheapest housing markets. The Senate approved similar increases on July 17. The measures are contained in the appropriations bills for HUD, which President Clinton has threatened to veto for unrelated reasons.
Sen. D'Amato has tentatively scheduled a committee vote for Sept. 3 on financial reform legislation. Yet the odds remain slim that the full Senate can approve the complex bill before adjournment in October because it is preoccupied with appropriations and other issues.
Senate Banking's chairman has called his target date "ambitious," but said banking and insurance industry officials are making "substantial progress" in talks over the bill's controversial insurance provisions.
Other obstacles remain. In an Aug. 7 letter to Sen. D'Amato, White House Chief of Staff Erskine B. Bowles said the President would veto the bill unless restrictions on bank operating subsidiaries are removed.
The House on May 13 voted 214 to 213 for legislation that would overhaul the financial services industry and allow mergers among banking, securities, and insurance firms.