ACTION ON LEGISLATION
President Clinton opened the door for a new group of bank competitors Feb. 8 by signing a new telecommunications law lifting restrictions on telephone and cable providers. Now free of prohibitions against entering new businesses, telecommunications companies could offer on-line banking services.
A one-year extension of the FHA reverse mortgage program was enacted as part of a short-term funding bill. The program will be kept alive through 1996 as Congress debates the future of the Department of Housing and Urban Development, which runs the FHA. The extension was sponsored by Senate Banking Committee Chairman Alfonse M. D'Amato.
Reverse mortgages let elderly homeowners receive monthly payments based on the equity in their homes. Sen. D'Amato had previously introduced a bill to reauthorize the reverse mortgage initiative through the year 2000. The House has already passed a five-year reauthorization of the program. Farmer Mac Lugar
Legislation giving Farmer Mac new powers and more time to meet capital requirements was signed by President Clinton Feb. 10.
The measure lets banks sell loans to Farmer Mac without creating a 10% reserve. Sponsored by Sen. Richard Lugar, R-Ind., and Rep. Bill Emerson, R- Mo., the measure lets the agency pool loans itself rather than through an outside firm. In addition, it gives the agency three more years to meet minimum capital standards.
Entrepreneurial Investment Act
Rep. Richard Baker, R-La., introduced the Entrepreneurial Investment Act, which would let bank holding companies with assets of less than $1 billion invest in their corporate borrowers. Investments of this type could not exceed 50% of an institution's excess capital. The bill would let eligible holding companies acquire up to one-quarter of the voting shares of their banks' borrowers.
House Banking Committee Chairman Jim Leach introduced a bill to help law enforcement agencies combat counterfeiting and credit card fraud. It would increase the maximum penalty for counterfeiting from 10 years to 25 years and also broaden laws against passing off fake financial documents. The bill would authorize law officers to seize credit card embossers and other devices used to commit fraud.
Thrift Fund Rescue
may need update
Bank and thrift trade groups are lobbying furiously to bring House Speaker Newt Gingrich and other congressional leaders to their side on plans to replenish the Savings Association Insurance Fund. Thrifts desperately want the bill attached to "must pass" legislation such as a debt limit increase or spending authorization. Banks, angered that they would have to assume a big chunk of payments on bonds used to bail out the thrift industry, argue that the fund doesn't need to be shored up now.