NEW LEGISLATION Rodash Moratorium Rep. Bill McCollum Republican of Florida Rep. Henry Gonzalez Democrat of Texas Acting with unusual dispatch, the House passed legislation April 4 placing a six-month moratorium on all Rodash-style class actions brought under the Truth-in-Lending Act. HR 1184, pieced together the preceding night, was cosponsored by Rep. Bill McCollum, R-Fla., and Rep. Henry B. Gonzalez, D- Tex., among others. A hold placed upon the measure by Senate Democrats prevented its passage before Congress recessed April 7, but legislative sources expected the bill to be approved quickly when lawmakers return later this month. The measure gives Congress breathing room to deal with Rodash, a case in which a Florida court permitted a woman to rescind her mortgage, collecting fees and interest she paid to the lender, because of a technical error in the loan documents. Federal Home Loan Bank System Rep. Richard Baker Republican of Louisiana Legislation introduced last week by Rep. Richard Baker, R-La., would make membership voluntary for both banks and thrifts, while limiting the ability of departing institutions to pull capital out of the system. The bill, HR 1487, thus answers two major concerns: complaints by thrifts that they are compelled to join the system, while banks are free to come and go, and worries over the impact of voluntary membership on the system's capital base. Rep. Baker pressed this legislation in the last Congress, but was defeated - in large part because the Clinton administration asked for time to develop its own plan. With Republicans in control this year, his bill has a good chance of succeeding. FDIC and NCUA Board Membership Sen. Phil Gramm Republican of Texas Sen. Phil Gramm is sponsoring legislation that would add a state bank regulator to the Federal Deposit Insurance Corp.'s five-member board. "We are ... flying blind without having both elements of our dual banking system" represented on the board, the Texas Republican said. Under S 562, a state bank supervisor would be appointed to the board by the President and confirmed by the Senate to serve a two-year term. Bankers worry that the sixth member could make it hard for the board to reach a majority and that service on the FDIC could detract a state supervisor from home-state responsibilities. Sen. Gramm also introduced a bill that would add two members to the National Credit Union Administration Board. The State Credit Union Representation Act would place another "at-large" director and a state regulator on the agency's board, for a total of five members. Under S 711, a state regulator would be appointed for a two-year term, and would receive no reimbursement beyond travel expenses. The other new director would serve a six-year term, as with current directors. No more than three directors could belong to the same political party. Insurance Regulation Rep. Thomas Blilely Republican of Virginia A bill introduced by House Commerce Committee chairman Thomas Bliley would give states the right to limit insurance powers for national banks. The Virginia Republican's measure would open the door for states to shut down bank sales of annuities, a power the Comptroller of the Currency authorized as incidental to banking. The Bliley bill, HR 1317, is not likely to pass as a free-standing measure. Instead, it is expected to play into the debate over repeal of the Glass- Steagall Act. Rep. Bliley could offer it on the House floor as an amendment to the securities bill, a step that most observers believe would spell the end of Glass-Steagall legislation this year. However, others believe Rep. Bliley intended only to warn the banking committee against trying to expand bank insurance powers. Regulatory Relief Sen. Richard Shelby Republican of Alabama Rep. Doug Bereuter Republican of Nebraska Bankers did pretty well in the last Congress with Democrats in control. But with Republicans in charge, industry lobbyists are confident they can do even better on regulatory relief - an issue that many bankers cite as their top concern. In the Senate, Richard Shelby, R-Ala., and Connie Mack, R-Fla., are co- sponsoring a broad relief bill, S 650. Rep. Doug Bereuter, R-Neb., has introduced similar legislation in the House. Both measures seek to exempt small banks from the Community Reinvestment Act. The Senate version would exempt banks with assets of less than $250 million from CRA, while the Bereuter bill, HR 1362, helps banks with less than $100 million in assets located in communities of fewer than 30,000 people. However, the House version would allow banks under $250 million in assets to "self-certify" that they are in compliance with CRA. Both bills also contain provisions to scale back the Truth-in-Savings Act and eliminate reporting overlaps between the Fair Credit Reporting Act and the Equal Credit Opportunity Act. Insurance Fund Fix: Rep. John J. LaFalce Democrat of New York Rep. John J. LaFalce introduced 12 bills, HR 1470 through HR 1481, that cover a host of solutions to fix the insurance fund that backs thrift deposits. Eight of the New York Democrat's options propose the politically controversial idea of using money left over from the original savings and loan cleanup. Rep. LaFalce's solutions also include a one-time assessment on thrifts to recapitalize the Savings Association Insurance Fund or a merger of the bank and thrift insurance funds, which could include requiring banks to help thrifts pay off bonds floated by the Financing Corp. in 1987 to start the cleanup.
*** UPDATE ON PENDING BILLS Financial Industry Diversification Rep. Jim Leach Banking Committee chairman House Banking Committee Chairman Jim Leach announced that he expects to begin marking up the Financial Services Competitiveness Act on May 9. The Iowa Republican said he hoped to have the bill, HR 1062, to the House floor by the end of June. 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. Senate Banking Committee Chairman Alfonse M. D'Amato's Depository Institution Affiliation Act would go quite a bit further than Rep. Leach's bill. It aims to break down the barriers between banking and commerce, permitting commercial and industrial companies to own banks and thrifts.