Action on Legislation
The House Banking Committee approved legislation March 5 authorizing $18 billion in additional funding for the International Monetary Fund. Following the 40-9 vote, the bill moves on to the Appropriations Committee and is expected to reach the House floor next month.
The legislation, sponsored by Committee Chairman Jim Leach, includes an amendment requiring "appropriate burden sharing" by banks and other private investors in Asian countries. Pending Legislation Financial Modernization
After a four-month stalemate, the House Banking and Commerce Committees unveiled a compromise bill Tuesday to let the banking, insurance, and securities industries merge.
The deal could reach the floor as early as next week. House Speaker Newt Gingrich ordered the committees to compromise.
Under the 400-page plan, the Federal Reserve Board would regulate combined diversified holding companies, which would be allowed to earn up to 5% of revenues from commercial activities. The revenue cap for existing insurance and securities firms that already own commercial businesses would be 15%.
The thrift charter would be preserved, but thrifts would have to dedicate 10% of their assets to home mortgages. Thrifts and their holding companies would continue under current regulations until Jan. 1, 2000. Existing unitary thrift holding companies would be grandfathered, but after that date would be regulated by the Fed. Applications for thrift charters filed by nonbanks after Sept. 16 would be rejected.
Even if the bill passes the House, there may not be time for Senate action this year. Bankruptcy
Rep. George W. Gekas, R-Pa., defended his pro-creditor bankruptcy reform bill Tuesday at the first of two hearings scheduled this week by the House Judiciary's commercial and administrative law subcommittee.
Legislation sponsored by Rep. Gekas-which has about 180 co-sponsors- would institute a needs-based bankruptcy system, which would require filers earning more than 75% of the median income to repay at least some of their debts. His bill would exempt filers who, after accounting for living expenses, could not afford to repay at least 20% of their unsecured debts over five years.
On Wednesday, Sen. Charles E. Grassley, R-Iowa, held a hearing on his bill to give bankruptcy judges greater authority to force high-income borrowers to repay their debts.
House Republican leaders want to vote on a bankruptcy bill in April, but some observers think issue is too complex for such fast action. Interest on Checking/Sterile Reserves
The Clinton administration on March 10 opposed legislation allowing banks to earn interest on funds they must keep at the Federal Reserve.
Treasury Under Secretary John D. Hawke Jr. said the plan would cost too much. But if the Fed is not allowed to pay interest on these reserves, central bankers said deposits will be moved into accounts that are exempt from the requirements.
The proposal is part of a bill sponsored by Sens. Richard Shelby, R- Ala., and Connie Mack, R-Fla., to roll back more than 40 banking regulations and allow banks to pay interest on business checking accounts. Derivatives Accounting
Senate Banking Committee Chairman Alfonse M. D'Amato said March 6 that he opposes legislation interfering with the Financial Accounting Standards Board's new derivatives rule.
A House bill would let corporations challenge new accounting rules in court and require the Securities and Exchange Commission to approve all rules promulgated by the FASB. Sen. Lauch Faircloth, R-N.C. introduced legislation in November to exempt banks from the rule if banking regulators determine it would distort earnings or impede risk-management efforts. New Legislation Credit Unions
Following the Supreme Court's credit ruling Feb. 25, several lawmakers have proposed fixes.
Rep. Richard H. Baker, R-La., introduced a bill March 10 to let occupation-based credit unions keep members as of Feb. 25 and continue recruiting new members from groups that they already serve.
A bill introduced last year by Steven C. LaTourette, R-Ohio, and Paul E. Kanjorski, D-Pa., to let credit unions serve multiple common bonds has the backing of 182 co-sponsors including Speaker Gingrich who endorsed it last month.
Credit union leaders fear legislation affecting them will be tied to the controversial financial reform bill.
Following suit, Rep. Joseph P. Kennedy 2d, D-Mass., was set to introduce a bill this week to impose community reinvestment requirements on all credit unions with assets exceeding $25 million.
On the Senate side, Banking Committee Chairman Alfonse M. D'Amato canceled plans to introduce a bill to ease credit union membership rules because of insufficient support from other senators. He has scheduled hearings for March 26 and April 2.