Social Security Reform
HR 4895
In his Sept. 2 speech accepting the Republican Party's nomination for a second term, President Bush renewed his support for creating personal Social Security accounts so younger Americans could privately invest part of their contributions.
Three Republicans introduced a bill July 22 that would let Americans invest part of their Social Security contributions privately.
Reps. Sam Johnson, R-Tex., Pat Toomey, R-Pa., and Jeff Flake, R-Ariz., are sponsoring the Individual Social Security Investment Program Act of 2004.
Anyone born after Jan. 1, 1950, would be eligible for a personal retirement account. The program would be mandatory for those younger than 22 in 2005.
Half of a participant's payroll taxes would be diverted to a collective account each pay period. At the end of each year those funds would be directed to an individually owned and privately invested account. The money could be invested in a limited range of privately managed mutual funds determined by a Social Security board. Once an account's value reaches $10,000, the investor would be given more fund choices.
Regulatory Relief
HR 1375
Sen. Mike Crapo, R-Idaho, is working on a deregulatory bill to ease red tape for financial services companies.
Last month he released a list of 136 rules on which regulators, industry representatives, and consumer advocates told him they would like the bill to focus.
The recommendations include relaxing or eliminating things such as annual customer privacy notices, disclosures of community reinvestment-related spending, waiting periods for mergers and acquisitions, the ban on depository institutions' paying interest on corporate checking accounts, and restrictions on banks' ability to branch across state lines.
Sen. Crapo has not decided which ideas he will incorporate into his bill, which he may introduce before Congress adjourns for the year. That could come as early as Oct. 1.
The bill is expected to cover more ground than a regulatory relief measure the House approved in March.
The House voted 392 to 25 on March 18 to approve a bill sponsored by Rep. Shelley Moore Capito, R-W.Va., that would let banks and thrifts pay interest on business checking accounts, expand more easily across state lines, and be examined less frequently. It would also let thrifts make more auto, commercial, and small-business loans.
The bill had been stalled by a standoff over giving industrial loan companies more power to branch across state lines. But a compromise has emerged that would grant interstate branching powers only to ILCs that were established before Oct. 1, 2003, and are owned by financial companies.
It is unclear how Sen. Crapo would handle the issue.
Terrorism Insurance
S 2764, HR 4634, HR 4772
On July 22, 11 senators led by Christopher Dodd, D-Conn., introduced a bill that would extend the government's terrorism insurance though 2007.
The measure is similar to the ones that House Democrats introduced July 7 and House Republicans introduced June 22. One difference between the two House bills is that the Democratic one would make terrorism reinsurance available for group life insurance policies in addition to property/casualty ones.
The terrorism insurance program was established in 2002.
OCC Preemption Disapproval
SJ Res. 31, SJ Res. 32, HR 4236, HR 4237
The clock ran out July 14 for giving expedited consideration to Senate legislation that would overturn the preemption regulations the Office of the Comptroller of the Currency issued in January.
The rules, which took effect in February, exempt national banks from a number of state laws on lending and deposit taking, as well as state enforcement actions.
Sen. John Edwards, D-N.C., had introduced two "disapproval" resolutions in April and attracted two co-sponsors, Sens. Barbara Boxer, D-Calif., and Richard J. Durbin, D-Ill.
To win the expedited status that would allow the resolutions to skip committee approval and get a free pass from filibusters, Sen. Edwards needed to win the support of 29 other senators by July 14 - 60 days of congressional session after the OCC published the rules in the Federal Register.
The measures will remain active until Congress adjourns for the year, and they could be considered under the Senate's regular rules of debate. However, they are not likely to be taken up, because they do not have the support of Senate leaders.
Similar resolutions are pending in the House, where they do not get expedited status and also face dim prospects. The House versions are sponsored by Rep. Luis Gutierrez, D-Ill., and 33 co-sponsors, including four Republicans: Reps. Ron Paul of Texas, Roscoe Bartlett of Maryland, C.L. "Butch" Otter of Idaho, and Scott McInnis of Colorado.
On July 21, 10 House Financial Services Committee members called on Chairman Oxley to schedule a vote on the resolutions. He has not responded to the request.
S Corporations
S 2761
Senate Finance Committee Chairman Charles Grassley, R-Iowa, introduced a bill July 22 that would increase the maximum number of shareholders permitted in an S corporation by a third, to 100, and let members of a family be counted as one shareholder.
The bill, co-sponsored by Sen. Max Baucus of Montana, the committee's ranking Democrat, also would simplify the rules involving trust distributions, investment securities income, and director shares at the companies, which do not pay corporate income tax but instead pass on their obligations to shareholders.
The shareholder provisions are almost identical to those in a much broader corporate tax bill the House passed in June.
TILA Liability
HR 4719
Rep. Richard Baker, R-La., introduced a bill June 25 that would amend the Truth-in-Lending Act to limit the liability of purchasers of predatory loans who acted in good faith.
Under the Mortgage Market Protection Act, secondary market players would be shielded from liability for holding predatory loans in their securitized pools if the original creditor's disclosures were incomplete or inaccurate.
The bill also would limit fines to the total amount the borrower has paid in connection with the loan and would bar suits brought three years or more after the loan was purchased, among other changes.
