Sen. Robert Bennett
Sen. Richard Shelby
Exempting stored value cards from the Electronic Funds Transfer Act is the aim of S 1270, introduced by Sen. Robert Bennett, R-Utah. The exemption would absolve issuers of so-called "smart cards" from responsibility for lost cards and eliminate the need for receipts for purchases with smart cards. The bill is similar to an amendment sponsored by Sen. Richard Shelby, R-Ala., in the Senate Banking Committee's regulatory relief package as well as a provision in the House banking panel's relief bill.
Sen. Robert C. Smith
Rep. Michael G. Oxley
Legislation clarifying the extent of a lender's liability for cleanup of hazardous chemicals was introduced in the Senate last month.
The measure is tucked into a broader bill, S1285, sponsored by Sen. Robert C. Smith, R-N.H., that aims to reform Superfund, the federal toxic- waste cleanup law.
The Senate Banking Committee last month approved a regulatory relief bill, S650, containing provisions that would clarify lenders' responsibility for hazardous-chemical cleanups.
The House companion to the Senate regulatory relief bill, HR1858, which contains similar language, is expected to be taken up on the House floor as early as this month.
And Rep. Michael G. Oxley, R-Ohio, is expected to introduce a companion to Sen. Smith's legislation this month.
ACTION ON LEGISLATION
Rep. Bill McCollum
President Clinton signed into law a measure limiting the liability of lenders for technical errors made when filling out mortgage disclosures required by Truth-in-Lending.
The measure, introduced in the House by Rep. Bill McCollum, R-Fla., limits the reach of the Rodash court decision. That ruling essentially allowed borrowers to repudiate mortgage contracts if errors were found.
The court case produced about 50 class actions alleging violations of Truth-in-Lending because of a lender's exclusion of closing costs in the calculation of finance costs.
Sen. Christopher S. Bond
Congress gave final approval to a bill that would rescue the Small Business Administration's loan guarantee program, which is rapidly running out of money.
The bill, which awaits President Clinton's signature, would decrease the level of loan-guarantee protection offered to lenders. The government would guarantee 75% of loans over $100,000 and 80% of smaller loans.
The measure also would increase the SBA fees lenders must pay. The bill sent to the President's desk included a provision pulled from the Senate version, sponsored by Small Business Committee Chairman Christopher S. Bond, R-Mo., which would replace the current fee of 2% on the guaranteed portion of most loans with a sliding scale of one-time fees on borrowers.
The House version's fee structure would have cost lenders more because it would have applied the sliding scale to the whole loan amount, not just the guaranteed portion.
Rep. William Goodling
In a victory for student lenders, the House Economic and Educational Opportunities Committee last month approved a budget measure that would end President Clinton's direct loan program. Killing the program has been a priority of committee Chairman William F. Goodling, R-Pa., since the Congressional Budget Office determined that eliminating it could save the government as much as $1.2 billion over seven years.
The Senate Labor and Human Resources Committee's budget measure, also approved last month, would retain the federal student loan program but limit its market share to 20%.
Both bills, which will now be wrapped into omnibus cost cutting measures by the House and Senate budget committees, would increase fees on financial institutions that make student loans.
Thrift fund rescue
Sen. Alfonse M. D'Amato
Rep. Jim Leach
House Banking Committee Chairman Jim Leach remains committed to a comprehensive approach, while Senate Banking Committee Chairman Alfonse M. D'Amato is focused on a narrow financial fix.
A House Banking subcommittee has prepared a bill that would capitalize the insurance fund with a one-time charge on thrifts of about 87 basis points. The annual interest due on thrift bailout bonds would be spread to banks, the thrift and bank insurance funds would be merged, and a single charter would be created.
The House panel must resolve difficult tax and chartering issues if its plan is to be enacted.
The Senate Banking Committee approved an 85-basis-point fee on thrifts and a sharing of the Financing Corp. bond payments, but linked a merger of the funds to resolution of charter issues by Jan. 1, 1998.
House Republican leaders, including Speaker Newt Gingrich, announced plans to link Glass-Steagall repeal with regulatory reform legislation and bring the combined bill to a vote this month, possibly Oct. 17. The bill also would limit bank insurance powers, restrict the Office of the Comptroller of the Currency, and force banks to move some securities activities to separate units. Most Community Reinvestment Act changes will also be stripped from the bill.
The reg-relief bill would streamline a number of laws, including Truth- in-Lending.
The Senate Banking Committee is not preparing a Glass-Steagall package, but did pass a regulatory relief bill. As in the House Banking bill, Sen. D'Amato, in an effort to avoid a presidential veto, removed a provision that would exempt small banks from the CRA.