ACTION ON LEGISLATION
Thrift Fund Rescue
Rep. Newt Gingrich, R-Ga.
Republican lawmakers endorsed using the Savings Association Insurance Fund capitalization plan to offset the cost of repealing a federal gasoline tax.
Earlier plans to pass the thrift fund fix were dashed April 23, when the House Rules Committee voted to strip it from a one-day spending bill. The bailout was attached to the stop-gap funding bill by House Speaker Newt Gingrich and Majority Leader Richard Armey hours before the legislation was scheduled to be brought for a vote on the House floor.
Banks have furiously resisted the plan because they would be forced to assume 75% of the payment on bonds used to bail out the thrift industry, about $600 million a year through 2017.
Administration officials vowed to try again, possibly by attaching the thrift fund fix to the 1997 budget bill now being negotiated by lawmakers.
Bad Debt Recapture
Bill Archer, R-Tex.
The Senate approved legislation April 23 protecting thrifts from $3 billion in back taxes. The bill forgives taxes owed on bad-debt reserves built up before 1988. But savings and loans must still pay $1.5 billion over seven years for tax breaks received on reserves taken after Jan. 1, 1988. Thrifts could defer payment for up to two years if they meet a residential lending test.
The tax plan is attached to a health insurance bill to help offset the costs of mental health care programs. The House approved the plan in March as part of its health insurance bill.
Charles Schumer, D-N.Y., and Bernard Sanders
House Banking Committee members Charles Schumer, D-N.Y., and Bernard Sanders, Vermont independent, introduced legislation to restrict banks from increasing ATM fees.
Senate Banking Committee Chairman Alfonse M. D'Amato is expected to follow suit with his own legislation to ban ATM surcharges.
Rep. Sanders' bill also would ban surcharges; Rep. Schumer's bill simply would require disclosure of all ATM fees at the time of a transaction.
The lawmakers rushed to oppose the surcharges after MasterCard and Visa announced they would allow ATM machine owners to charge fees on the Cirrus and Plus networks.
Jim Leach, R-Iowa
Spurred by a Supreme Court decision, House Banking Committee Chairman Jim Leach revised his Glass-Steagall/regulatory relief bill to let banks and insurance companies own each other. Rep. Leach said the new insurance provision may soften opposition to the legislation. Many bankers still oppose the bill, arguing that states would retain too much power to block bank insurance sales.
Federal Home Loan Bank Reorganization
Richard Baker, R-La.
The House Banking Committee's capital markets subcommittee approved legislation March 28 to modernize the Federal Home Loan Bank System. The bill would make membership voluntary for all institutions, including thrifts. Sponsored by Rep. Richard H. Baker, R-La., the legislation also would drop residential lending requirements on the 12 newly named Enterprise Resource Banks and broaden their mission to include lending to rural or underserved areas.
Under the measure, members' combined annual interest obligation on Resolution Funding Corp. bonds, currently $300 million - would be fixed at 23.7% of system earnings.