Action on Legislation
Thrift Fund Rescue
Rep. Jim Leach, R-Iowa
House Banking Committee Chairman Jim Leach on June 27 proposed letting the Treasury Department create a new formula for paying off Financing Corp., or Fico, bonds used to bail out the thrift industry in the late 1980s. In an 11th-hour attempt to break bank industry opposition to the plan, Rep. Leach said he wants his panel to propose a narrow menu of options from which the Treasury could choose.
The options include: limiting Fico assessments on Federal Deposit Insurance Corp.-insured institutions to 50% of bond payments; assessing Fannie Mae, Freddie Mac, and the Federal Home Loan Banks; tapping interest earned on the FDIC insurance funds or on Federal Reserve "sterile" reserves; or using $2 billion of the Fed's surplus funds or the $200 million in exit fees earned by the thrift insurance fund.
Bank lobbying has thwarted efforts this year to capitalize the Savings Association Insurance Fund.
Securities Regulation Reform
Sen. Alfonse D'Amato, R-N.Y.
Legislation freeing bank holding companies from overlapping state and federal securities laws was passed by the Senate June 27. It was a companion bill to a measure passed by the House June 19. A conference committee must work out differences between the two pieces of legislation before a final bill can go to President Clinton. Senate Banking Committee Chairman Alfonse M. D'Amato said he hopes Congress will have the final package ready by early August.
Sen. William Roth, R-Del.
A plan to exempt thrifts from $3 billion of back taxes was attached to a bill creating adoption incentives by the Senate Finance Committee, whose chairman is Sen. William Roth, R-Del.
The plan would protect thrifts from taxes on bad-debt reserves taken before 1988. The legislation would also make thrifts liable for $1.5 billion of taxes on reserves taken since Jan. 1, 1988. The money would offset revenue lost as the result of a $5,000 tax credit to defray adoption costs for families earning less than $115,000.
Previously, the bad-debt plan had been included in health insurance legislation to pay for medical savings accounts and mental health insurance.
Rep. Doug Bereuter, R-Neb.
Rep. Doug Bereuter, R-Neb., introduced legislation June 6 that would reward banks with regulatory relief for their help in paying off Fico bonds. His plan would also tap the Fed's surplus and allow deposit insurance premiums from banks that own thrift deposits to help pay off the bonds.
After withdrawing his financial modernization bill that same day, Rep. Leach announced he was pushing a regulatory relief plan that would also expand the Office of the Comptroller of the Currency's ability to grant powers to banks. His proposal would give regulators more authority to expand bank holding company powers, but banks would be prohibited from affiliating with securities firms or insurance companies.
Rep. Marge Roukema, R-N.J.
Sen. D'Amato holds a hearing today on legislation that would prevent automatic teller machine operators from levying surcharges on noncustomers who use their equipment. Rep. Marge Roukema, R-N.J., introduced a bill June 26 that would force ATM owners to disclose their surcharges.