Action on Legislation
Reverse MortgagesThe House approved a bill that would let the Department of Housing and Urban Development prohibit "excessive" fees on reverse mortgages. The Senate passed identical legislation in April but must approve some unrelated provisions tacked on to the House bill.
The legislation, sponsored by Senate Banking Committee Chairman Alfonse M. D'Amato and Rep. Rick Lazio, is meant to prevent "scam artists" from charging senior citizens for information that HUD provides for free about reverse mortgages.
If the bill is enacted, HUD Secretary Andrew Cuomo has said, lenders that do business with lawbreakers will be banned from all the department's programs.
Reverse mortgages are available through a federally guaranteed program that allows people 62 or older to receive payments based on the equity in their homes.Resolution Trust Corp. Oversight
The House on Sept. 23 passed legislation to abolish the Thrift Depositor Protection Oversight Board. The legislation, introduced by Chairman Jim Leach, would save $250,000 annually, according to Treasury Department estimates.
The board's chief function, monitoring the Resolution Trust Corp., was eliminated in 1995 when that agency was abolished. Other responsibilities- oversight of the Resolution Funding Corp. and membership on the Affordable Housing Advisory Board-would be transferred to the Treasury Department.Foreign IncomeThe House Ways and Means Committee approved a bill Sept. 24 that would allow financial firms to defer taxes on foreign income until the profits were returned to the parent company in the United States. The measure, which would be in effect for one year beginning Jan. 1, reflects a compromise with the Clinton administration that avoided a showdown over the President's first use of the line-item veto. President Clinton deleted a similar provision from the balanced budget package in August.
To prevent companies from shifting income to tax havens such as the Cayman Islands, President Clinton insisted that a foreign subsidiary be permitted to defer taxes only on income earned in the country where it is based. Pending Legislation Financial Modernization
Members of the House Banking and Commerce committees meet today to work out differences between their financial reform plans.
The meeting, ordered by House Majority Leader Richard Armey and Republican Conference Chairman John Boehner, is intended to craft a plan that can be brought to the House floor before Congress adjourns Nov. 7.
The meeting comes three weeks after GOP leaders announced that the legislation was too controversial to pass this year. Intense lobbying from Banking Committee Chairman Jim Leach and Rep. Marge Roukema, R-N.J., persuaded Republican leaders to keep negotiations alive.Business Checking Accounts/Sterile Reserves
Rep. Jack Metcalf, R-Wash. introduced legislation that would let banks pay interest on business checking accounts. The measure is intended to help small banks compete with large ones, many of which already offer sophisticated "sweep" money market accounts to businesses.
Rep. Metcalf's plan also would require the Federal Reserve banks to pay interest on required reserves.
On the Senate side, Sen. D'Amato has pledged to hold hearings on a the proposal this fall. New Legislation Bankruptcy High-income borrowers would find it substantially tougher to eliminate their debts in bankruptcy under a bill introduced by Reps. Bill McCollum, R-Fla., and Rick Boucher, D-Va.
The legislation would create the "needs-based" bankruptcy concept that lenders have advocated. Eligibility for Chapter 7 filings, which allow insolvent consumers to wipe out unsecured debt, would be severely limited.
Also, consumers would not be allowed to shed credit card debt incurred within 90 days of declaring bankruptcy. The current threshold is 60 days.
Another provision would make it harder for consumers to make repeated filings.