NEW LEGISLATION: Financial Industry diversification with mugs of: Sen. Alfonse M. D'Amato R-N.Y. Rep. Richard Baker R-La.
Senate Banking Committee Chairman Alfonse M. D'Amato's Depository Institution Affiliation Act would break down the barriers between banking and commerce, permitting commercial and industrial companies to own banks and thrifts. It would also allow an expanded range of cross-marketing and other activities involving banks and nonbank affiliates under a new "financial services holding company" structure. A companion bill was introduced in the House last week by Rep. Richard Baker, R-La.
The measure would go much further than a bill introduced by House Banking Committee Chairman Jim Leach, R-Iowa. The Leach bill would repeal provisions of the Glass-Steagall Act that separate the commercial and investment banking industries, but would maintain the distinction between banking and commerce. The House panel is expected to begin work on the Financial Services Competitiveness Act, HR 18, early in the session. Mutual Funds Disclosure Rep. Charles E. Schumer D-N.Y..
Rep. Henry B. Gonzalez of Texas, ranking Democrat on the House Banking Committee, and Rep. Charles E. Schumer reintroduced legislation that would require banks to provide customers with written disclosures of the uninsured nature of products such as mutual funds and annuities.
Legislative sources have said that because of the new anti-regulatory climate on Capitol Hill, they do not give the bill much chance of passage. Direct Loan Cap Rep. William F. Goodling R-Pa.
Rep. William F. Goodling, chairman of the House Economic and Educational Opportunities Committee, last month introduced legislation to limit the federal government's share of the student loan market to 40%. Industry sources said the Republican-sponsored measure, HR 530, would enable the banking industry to stave off competition from the government. Electronic Funds Transfers Sen. Joseph Lieberman D-Conn.
Sen. Joseph Lieberman, D-Conn., introduced legislation to overturn a decision by the Federal Reserve Board that puts electronic benefit transfers under Regulation E. The bill, S 131, would reverse a ruling subjecting EBT cards issued by states to the same liability limits as ATM or credit cards.
Under the Fed's ruling, in 1997 Reg E will be extended to hold state agencies that run electronic benefit transfer programs responsible for losses of more than $50 from debit card fraud.
"The Federal Reserve has ... extended the Electronic Funds Transfer Act into a realm it was not intended to cover, and created for states a new liability of unprecedented size," according to Sen. Lieberman. Fair Credit Reporting: Rep. Henry B. Gonzalez D-Tex.
The Consumer Reporting Reform Act of 1995, which aims to increase the accuracy of credit reports and make it easier for consumers to correct mistakes, was introduced last month by Rep. Gonzalez.
The bill, HR 561, also would hold banks and other credit providers responsible for data passed on to credit bureaus.
The legislation mirrors a bill introduced during the last Congress by Rep. Joseph P. Kennedy 2d, D-Mass. The measure passed both chambers but foundered when Rep. Gonzalez tacked on a controversial amendment dealing with Texas home equity loans. Lender Liability Rep. Billy Tauzin D-La.
On Jan. 4, Rep. Frederick Upton, R-Mich., and Rep. Billy Tauzin, D-La., introduced the Lender and Fiduciary Fairness in Liability Act, which would exempt banks from liability for environmental cleanup costs in cases where the institutions acquire polluted sites through foreclosure. The bill, HR 200, is a high priority for the banking industry. NOTE - all entries up to this point are new additions to the list. Everything that follows is from the last leglist. Awaiting Action: Regulatory Consolidation Rep. Jim Leach R-Iowa.
The Bank Regulatory Consolidation and Reform Act, introduced by Rep. Leach, would create a new Federal Banking Agency by merging the Office of Thrift Supervision and the Office of the Comptroller of the Currency. The bill would give jurisdiction for all freestanding state-chartered banks to the FDIC and would put the Federal Reserve over large bank holding companies. Fed President Selection Sen. Paul Sarbanes D-Md.
Rep. Leach introduced the Federal Reserve Governance Act to give the central bank responsibility for selecting the system's 12 district bank presidents. If the legislation makes it over to the Senate, it is likely to earn the support of Sen. Paul Sarbanes, the Senate Banking Committee's ranking Democrat. Sen. Sarbanes has railed against the Fed president selection process for years. IRA Expansion Sen. William V. Roth R-Del.
Contributions to individual retirement accounts would become fully deductible once again under the Super IRA bill introduced by Sen. William V. Roth, R-Del., and Sen. John Breaux, D-La. The bill, S 12, would expand the traditional IRA by allowing penalty-free early withdrawals of IRA savings for college expenses, first-time home purchases, catastrophic medical expenses, and certain unemployment emergencies.
Rep. Bill Thomas, R-Calif., is expected to introduce a companion bill in the House.