[Congressional Record Volume 140, Number 29 (Wednesday, March 16, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]
[Congressional Record: March 16, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
COMMUNITY DEVELOPMENT AND BANKING FINANCIAL INSTITUTIONS ACT OF 1993
The Senate continued with the consideration of the bill.
Mr. RIEGLE. Mr. President, in a moment, after I have completed giving
a summary of it, a managers' amendment will be coming, in my behalf and
on behalf of Senator D'Amato, representing both sides of the committee.
This managers' amendment contains a number of improvements and
refinements and additions to the bill as it has been laid down. All of
these provisions have been agreed to by Senator D'Amato and by me.
I want to briefly describe the most important of those changes.
Before I do, I ask unanimous consent that a longer summary of the
managers' amendment be printed in the Record now along with the text of
the amendment.
There being no objection, the summary was ordered to be printed in
the Record, as follows:
Summary of Managers' Amendment
Amendments to Title i--Community Development and Consumer Protection
Subtitle A: Community Development Banking and Financial
Institutions Act--
Permits a State agency to apply for assistance if there are
no existing community development financial institutions in
the State or other entities that have the capacity.
Requires an assisted organization to keep records on
gender, race, etc. of persons served by the organization.
Allows CDFIs to use Federal funds to meet matching
requirements in limited circumstances. The Administrator of
the Fund could reduce the match by 50 percent, or permit
funds provided under certain Federal grant programs to be
used to meet part of the match requirement, in certain
hardship cases. Further, rural institutions with less than
$100,000 in assets may receive up to $25,000 without a non-
Federal match. No more than 25 percent of the total funds
awarded by the Fund may be matched under these discretionary
standards.
Requires the Fund to consult with tribal governments when
evaluating a CDFI serving an Indian reservation, requires a
CDFI serving a reservation to coordinate community
development efforts with tribal governments, and mandates a
study on barriers to private lending on Indian reservations.
Makes several technical corrections to S. 1275 as reported
by the Banking Committee.
Subtitle B: Home Ownership and Equity Protection (Consumer
Protection for High Cost Mortgages)--
Exempts ``reverse mortgages'' from Subtitle B and provides
more appropriate disclosures for such mortgages. ``Reverse
Mortgages'' are mortgages where funds are advanced but the
principal and interest are not payable until the premises are
sold, the consumer moves, or the consumer dies.
Title II--Small Business Capital Formation
Subtitle A: Small Business Loan Securitization--
Changes tax language to ``sense of the Senate'' that small
business loan investment conduits should be taxed like real
estate conduits.
Allows equipment leases by small businesses, as well as
loans to small businesses, to be securitized.
Subtitle B: Small Business Capital Enhancement
Permits a political subdivision of a State, as well as a
State, to establish an eligible Capital Access Program, if it
has a population in excess of the population of the least
populated State, or if the Secretary of HUD determines has
the capacity to participate in the program.
Grandfathers eligibility of certain State Capital Access
Programs. Provides that if a State statute, enacted prior to
the date of enactment of this title, authorized a
participating financial institution to count contributions
and interest earned thereon as assets of the institution, the
institution may continue to do so.
Title III--Paperwork Reduction and Regulatory Improvement
Modifies the audit requirement in section 36(i) of the FDI
Act so that well-capitalized, well-managed institutions with
CAMEL ratings of 1 or 2 and assets over $9 billion may meet
audit committee requirements if comparable functions are
provided at the holding company level and, at the same time,
no large bank customers sit on the holding company audit
committee.
Clarifies joint regulatory authority to implement any
regulations on limited bank liability for foreign branch
deposits.
Streamlines broadcast disclosures for radio advertising of
consumer leasing.
Repeals duplicative lending limit for loans collateralized
by securities.
Extends for 5 years interlocks that were grandfathered
under the Depository Institution Management Interlocks Act.
Clarifies that well-capitalized institutions need not
register as deposit brokers.
Requires the regulatory authorities to take into account
the size and activities of financial institutions and not to
cause undue reporting burdens in connection with revisions of
the risk-based capital standards.
Eliminates the statutory provision requiring specific board
of directors approval before a mortgage or home equity line
of credit is made by a financial institution to an officer of
that institution. The overall borrowing caps contained in the
insider lending statutory provisions and regulations would
still apply to these extensions of credit.
Modifies the civil liability provisions of the Truth in
Savings law to eliminate statutory damages but not to
eliminate actual damages for advertising mistakes.
Amends the Truth in Savings law to expand its scope to
include business accounts for unincorporated nonbusinesses.
Modifies the Expedited Funds Availability Act to give the
Federal Reserve Board greater flexibility to extend the check
hold period for local checks if there are ``significantly
increased check losses'' due to the funds availability
requirement under the permanent schedule now in law.
Modifies the requirements of Section 132 of FDICIA to give
regulatory agencies more discretion on asset quality,
earnings and market valuation standards and to allow the
agencies to issue guidelines instead of regulations.
Modifies the contemporaneous recordkeeping of Section 13 of
the Federal Deposit Insurance Act of deposits by public
entities at failed banks.
Clarifies that bankers' banks can provide correspondent
banking services to their members.
Mr. RIEGLE. Mr. President, I will do this quickly, and I want
everybody to be on notice as to these modifications.
First, the managers' amendment makes a few changes to the community
development bank provisions of title I. Under the managers' amendment,
a State agency may apply for assistance as a community development
financial institution if there is no existing community development
financial institution in the State, and no entity within the State that
has the capacity to become a community development financial
institution.
As a general rule, the bill requires institutions receiving
assistance to match those funds with private capital. The managers'
amendment allows institutions to use other forms of Federal assistance
to meet the matching requirements in limited circumstances.
The managers' amendment also requires an institution receiving
assistance to keep data on the individuals utilizing the services of
the assisted institution. This will ensure that low-income residents of
the investment areas are adequately served. The amendment requires the
new fund to consult with native American tribal governments when
evaluating a CDFI serving an Indian reservation, requires a CDFI
serving a reservation to coordinate community development efforts with
tribal governments, and mandates a study of barriers to lending on
Indian reservations.
In subtitle B of title I, the provision strengthening consumer
protections for high cost mortgages, the Managers' Amendment exempts
so-called reverse mortgages from the bill's definition. Reverse
mortgages are arrangements whereby homeowners receive payments over
time, with a balloon repayment due at the end. These are sometimes used
by elderly homeowners, who make ends meet in their later years by
tapping into the equity they have built up in their homes. Recognizing
that these transactions serve a legitimate purpose for older Americans,
the managers' amendment provides more appropriate, special disclosures
for reverse mortgages.
Title II of S. 1275 contains two provisions designed to make it
easier for small businesses to raise and borrow capital. The first,
small business loan securitization, includes a section providing that
entities that pool and securitize small business loans be taxed in the
same way as conduits that securitize residential mortgages. To comply
with constitutional requirements on the origin of tax bills, the
managers' amendment changes the bill's language to sense-of-the-Senate
language. The managers' amendment also permits equipment leases to be
included in pools with small business loans.
Subtitle B of title II provides Federal assistance to State small
business lending programs. The managers' amendment allows a political
subdivision of a State, as well as a State, to establish an eligible
capital access program. This will allow New York City, Akron, OH, and
Milwaukee, WI, all of which have capital access programs, to apply for
Federal matching funds. The managers' amendment also grandfathers
certain existing State capital access programs that do not exactly
conform to the requirements of the bill, such that they remain eligible
to participate.
Finally, title III of the bill contains more than 20 provisions
designed to reduce the paperwork required of banks and thrifts and to
improve the regulation of those institutions. The managers' amendment
contains more than a dozen additional provisions in this area. These
include: Requiring bank regulators to consider the size and activities
of financial institutions, and to tailor reporting burdens accordingly;
repealing a duplicative, inconsistent lending limit for loans
collateralized by securities; clarifying that well-capitalized
institutions need not register with the FDIC as deposit brokers;
allowing well-capitalized, well-managed institutions with assets of
over $9 billion to meet statutory audit committee requirements at the
holding company level in certain circumstances; streamlining disclosure
requirements for radio advertising of consumer leasing; and eliminating
statutory damages from the civil liability provisions of the Truth in
Savings Act related to advertisements.
As I say, the provisions of this managers' amendment, which are
supported both by me and by Senator D'Amato, will improve each title of
the bill.
I do not know if my colleague has any comment he wants to make on
that at this point.
Mr. D'AMATO. I have none.
Amendment No. 1523
(Purpose: To make a series of technical and other amendments)
Mr. RIEGLE. Mr. President, I send an amendment to the desk and ask
for its immediate consideration.
The PRESIDING OFFICER. The amendment will be stated.
The legislative clerk read as follows:
The Senator from Michigan [Mr. Riegle], for himself and Mr.
D'Amato, proposes an amendment numbered 1523.
Mr. RIEGLE. I ask that further reading of the amendment be dispensed
with.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The text of the amendment is printed in today's Record under
``Amendments Submitted.'')
Mr. RIEGLE. I ask unanimous consent, then, that the managers'
amendment be adopted at this point.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
So the amendment (No. 1523) was agreed to.
The PRESIDING OFFICER. Who seeks recognition?
The Chair recognizes the Senator from Alaska.
Mr. MURKOWSKI. Mr. President, I ask unanimous consent that I may be
allowed to speak as if in morning business for about 10 minutes.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
The Senator from Alaska is recognized for 10 minutes as if in morning
business.
Mr. MURKOWSKI. Mr. President, I thank the Chair and my colleagues.
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