Action on Legislation
The White House said amendments had made the bill more consumer-friendly but that the President opposes a minimum-wage hike in the legislation as insufficient and objects to some tax-cut provisions. The administration has previously threatened to veto the House bill and has said any compromise must preserve the Senate bill's consumer protection items.
It is unclear how soon a conference committee will be named.
Amendments adopted in the Senate would require credit card companies to warn customers about the cost of making just the minimum monthly payment and to give a standard illustrative example or mathematical tables to help customers estimate their indebtedness. People could call a toll-free number to find out how long it would take to pay off their balances while making just the minimum monthly payment.
Introduced by Sen. Charles E. Grassley, the Senate bill would let bankruptcy judges force debtors who could afford to pay $15,000 or 25% of unsecured credit over five years to file under Chapter 13 of the bankruptcy code. A debtor may appeal based on "special circumstances." Creditors could also ask judges to force a debtor into Chapter 13 reorganization, rather than eliminating their debts in Chapter 7.
In May 1999, on a vote of 313 to 108, the House passed a stricter version, introduced by Rep. George W. Gekas, R-Pa. It would force debtors into Chapter 13 who can pay $6,000 or 25% of unsecured credit over five years. Appeals may be based on "extraordinary circumstances."
The House on Nov. 9 voted 356 to 66 for legislation - sponsored by House Commerce Committee Chairman Thomas J. Bliley Jr. - that would do the same. But unlike the Senate bill, it also would permit financial services companies to make mortgage and other disclosures required by consumer protection laws electronically, instead of on paper.
The Clinton administration opposed the House bill - which is favored by the financial services industry - as anti-consumer and instead endorsed a scaled-down Senate bill offered by Sen. Spencer Abraham. The House adopted an amendment that would require the consent request for electronic disclosures and records to be "conspicuous and visually separate" so customers know what they are signing. And customers would be able to review, retain, and print records. Sen. Abraham promised to work with the House to send a compromise to President Clinton early this year, but a conference committee has not yet been appointed.
In September, House Banking Committee Chairman Jim Leach and Sen. Charles E. Schumer offered companion bills that would prohibit a U.S. bank from opening or maintaining an account for a foreign person or company unless the bank identified and kept a record of the account's true owners. Some provisions in these bills overlap with the bills introduced in November.
A Senate Judiciary subcommittee has scheduled a hearing today on the administration bill, and House Banking plans to invite Treasury Secretary Lawrence H. Summers to a hearing this spring to offer counterproposals to the Leach bill.
FDIC Exams: H.R. 3374House Banking Committee Chairman Jim Leach held a hearing Tuesday on legislation introduced Nov. 16 that would give the Federal Deposit Insurance Corp. chairman sole authority to order a special examination of any financial institution. Current law requires a majority vote of the full FDIC board before the agency may send examiners into a bank overseen by the Office of the Comptroller of the Currency or another regulator. The bill's purpose is to prevent the heads of other agencies who sit on the FDIC board from blocking back-up exams of institutions by the agency.
Savings Accounts: S. 2023Sens. Joseph Lieberman and Rick Santorum introduced legislation Feb. 2 that would give a federal tax credit to financial institutions that match deposits made by low-income people.
Financial institutions would get a 90% credit for every dollar contributed to an Individual Development Account, up to $500 per account and up to $100 million overall. Other contributors would get a 50% investment credit for every dollar they pitch in, up to $500 per account and $10 million overall. Under the Savings for Working Families Act of 2000, the accounts could be used to buy a house, pay tuition, or start a small business.
Meanwhile, President Clinton issued a budget proposal Monday that would allocate $54 billion over 10 years to subsidize retirement savings accounts for 76 million Americans.