Penalty-free withdrawals from individual retirement accounts would be allowed for first-home purchases and other purposes under two bills introduced last week.

Legislation sponsored by Rep. Bill McCollum, R-Fla., would also permit withdrawals for education expenses, dramatic health care costs, and during periods of unemployment. Rep. McCollum also wants to increase the annual tax-deductible contribution from $2,000 to $4,500 and raise income limits for IRA investors.

Current IRA rules deter individual savings because "the money will not be available without paying a substantial penalty," Rep. McCollum said.

Reps. Bill Thomas, R-Calif., and Richard Neal, D-Mass., have introduced similar legislation. Their "Super IRA" bill, however, would eliminate income limits for tax-deductible contributions. Homemakers also would be allowed to contribute to an IRA, regardless of whether their spouses participate in an employer pension plan.

Their legislation also would create "IRA-plus," a new type of account letting holders withdraw earnings tax-free after age 59 and a half. Contributions to IRA-plus, however, would not be tax-deductible.

It's too early to tell whether these new bills will pass, but attempts to expand IRAs in the past were thwarted by budget pressures.

Rep. McCollum also introduced legislation to eliminate most Community Reinvestment Act reporting requirements.

Instead, he proposed, banks would file public notices detailing their community lending, allowing activists and neighborhood leaders to raise concerns at any time without having "extraordinary authority" to hold up mergers or other bank business, he said.

His bill also would make the practice of "redlining" a violation of fair-lending and housing laws. Currently, no prohibition exists, but courts have ruled that lenders may not deny loans based on neighborhood characteristics.

Finally, the legislation would bar officials from bringing discrimination charges based solely on statistical evidence, such as a lack of lending to a particular community.

In another bill from Rep. McCollum, directors and officers of failed institutions would be freed from liability for "good-faith business decisions" or actions taken with regulatory approval. Also, they would not be liable for financial problems caused by unforeseen economic conditions.

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