[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2530 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 2530

 To prohibit the Student Loan Marketing Association from conditioning 
 the waiver of redemption premiums, otherwise chargeable in connection 
with the refinancing of securities acquired by the Association while it 
was a government-sponsored enterprise, on the use of its own investment 
                          banking subsidiary.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 23, 1997

  Mr. Skaggs introduced the following bill; which was referred to the 
                Committee on Education and the Workforce

_______________________________________________________________________

                                 A BILL


 
 To prohibit the Student Loan Marketing Association from conditioning 
 the waiver of redemption premiums, otherwise chargeable in connection 
with the refinancing of securities acquired by the Association while it 
was a government-sponsored enterprise, on the use of its own investment 
                          banking subsidiary.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds as follows:
            (1) The Student Loan Marketing Association (hereinafter 
        referred to as the ``Association'') was established as a 
        government-sponsored enterprise, but is now being transformed 
        into a wholly private business entity.
            (2) The Association has established a subsidiary 
        (Educational Securities, Inc.) that functions as a finance 
        broker dealer which competes with other such dealers with 
        regard to financing of higher education.
            (3) While it was a government-sponsored enterprise, the 
        Association purchased for its own portfolio tax-exempt 
        municipal bonds issued by various educational institutions.
            (4) The Association has informed some of the institutions 
        issuing such bonds that it will waive redemptions premiums 
        otherwise chargeable in connection with refunding such bonds if 
        the institutions agree to retain the Association's subsidiary 
        to carry out such transaction.
            (5) To the extent that such a condition involves securities 
        obtained by the Association during the period when it was a 
        government-sponsored enterprise, such requirement constitutes 
        unfair competition with other broker dealers who have not been 
        associated with government-sponsored enterprises.
    (b) Purpose.--The purpose of this Act is to prohibit the 
Association from engaging in the practice described in subsection 
(a)(4).

SEC. 2. PROHIBITION AND REGULATIONS.

    (a) Prohibition.--On and after September 23, 1997, the Association, 
and any other entity obtaining securities from the Association pursuant 
to a restructuring of the common stock ownership of the Association 
under section 440 of the Higher Education Act of 1965, shall not engage 
in the practice described in section 1(a)(4) with respect to any 
securities acquired by the Association prior to January 1, 1997.
    (b) Regulations.--The Secretary of the Treasury shall issue 
regulations to implement this Act.
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