[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 BANKING AND FINANCIAL INSTITUTIONS ACT OF 1993
The Senate continued with the consideration of the bill.
Mr. RIEGLE. Mr. President, if I may have, we have two amendments to
send to the desk. I am going to send them one after the other. I am
going to send them en bloc, and I am going to ask unanimous consent
that they be adopted on that basis.
Let me just make a brief description of each. They have both been
cleared with my ranking member, Senator D'Amato.
Amendment No. 1524
(Purpose: To make amendments relating to consumer protections for
certain mortgage loans)
Mr. RIEGLE. The first amendment I am going to send to the desk
contains a number of improvements to subtitle B of title I of the bill,
the Home Ownership and Equity Protection Act.
Significant concerns have been expressed about this legislation by
other Senators and the lending industry. To address these concerns,
Senator D'Amato and I have prepared this comprehensive amendment. I
will briefly describe the most important of those changes.
I ask unanimous consent that a summary of the amendment be printed in
the Record.
There being no objection, the summary was ordered to be printed in
the Record, as follows:
Summary of Riegle-D'Amato Amendment to Title I, Subtitle B, the Home
Ownership and Equity Protection Act
Revises the entire subtitle to eliminate the term ``High
Cost Mortgage.''
Treats credit insurance consistently with other sections of
the Truth in Lending Act.
Permits balloon payment structures on mortgages covered by
the legislation, provided the loan is at least 5 years in
length.
Allows lenders to charge points and fees on refinancing,
but directs Federal Reserve to address abuses in this area.
Allows lenders to charge prepayment penalties on loans
covered by the legislation for 1 year.
Insulates assignees from liability if the loan documents do
not indicate such potential liability.
Mr. RIEGLE. Mr. President, many have objected to the stigma attached
to the loans covered by the legislation. In response to those concerns,
this amendment revises the entire subtitle to eliminate the term ``high
cost mortgage.''
Likewise, some Senators have expressed concerns that the prohibitions
in the bill reported by the committee were overly broad and would
capture credit transactions that were not unfair. Our amendment tailors
these prohibitions to focus on the truly problematic issues. Rather
than prohibiting balloon payment loans, for instance, the amendment
prohibits balloons only on short term loans--those less than 5 years in
length--that most often trap unwitting borrowers. These changes,
combined with the regulatory authority provided to the Federal Reserve
to waive the prohibitions on mortgages that are in the interest of the
borrower, should ensure that this legislation productively addresses
the problem of reverse redlining without restricting traditional credit
flows.
The provisions of this amendment, which are supported by both me and
by Senator D'Amato, will improve the Home Ownership and Equity
Protection Act. I will now yield to Senator D'Amato if he cares to
comment on the amendment, and then ask unanimous consent that the
amendment be adopted.
I send that amendment to the desk and ask that it be held until I
send the second amendment, and then I will ask that they be adopted en
bloc.
The PRESIDING OFFICER. The clerk will report the amendment.
The assistant legislative clerk read as follows:
The Senator from Michigan [Mr. Riegle], for himself and Mr.
D'Amato, proposes an amendment numbered 1524.
Mr. RIEGLE. Mr. President, I ask unanimous consent that reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment reads as follows:
On page 78, line 23, strike ``The term `high cost mortgage'
means'' and insert ``A mortgage referred to in this
subsection means''.
On page 78, line 25, insert ``, a reverse mortgage
transaction,'' before ``or a''.
On page 79, line 22, insert ``and'' after the semicolon.
On page 79, strike lines 23 through 25.
On page 80, line 1, strike ``(D)'' and insert ``(C)''.
On page 80, line 14, strike ``for high cost mortgages''.
On page 80, line 19, strike ``high cost mortgages'' and
insert ``mortgages referred to in subsection (aa)''.
On page 80, beginning on line 20, strike ``high cost'' and
insert ``such''.
On page 81, line 3, strike ``HIGH COST'' and insert
``CERTAIN''.
On page 81, line 7, strike ``high cost mortgage'' and
insert ``mortgage referred to in section 103(aa)''.
On page 82, line 22, strike ``high cost mortgage'' and
insert ``mortgage referred to in section 103(aa)''.
On page 83, beginning on line 1, strike ``the high cost
mortgage'' and insert ``a mortgage referred to in section
103(aa)''.
On page 79, line 25, strike ``and''
On page 80, line 8, strike ``.'' and insert ``; and
(E) such other changes as the Board determines to be
appropriate.''
On page 83, line 5, strike ``high cost'' and insert
``such''.
On page 83, strike lines 14 through 19.
On page 83, line 20, strike ``(4) Exception.--A high cost
mortgage'' and insert ``(3) Exception.--A mortgage referred
to in section 103(aa)''.
On page 83, line 24, strike ``90 days'' and insert ``1
year''.
On page 84, line 1, strike ``high cost mortgage'' and
insert ``mortgage referred to in section 103(aa) having a
term of less than 5 years''.
On page 84, beginning on line 5, strike ``high cost
mortgage'' and insert ``mortgage referred to in section
103(aa)''.
On page 84, line 10, strike ``high cost mortgage'' and
insert ``mortgage referred to in section 103(aa)''.
On page 84, line 16, strike ``high cost mortgage loan'' and
insert ``mortgage''.
On page 85, strike lines 11 through 15, and insert the
following:
``(2) Prohibitions.--The Board, by regulation or order,
shall prohibit acts or practices in connection with--
``(A) mortgage loans that the Board finds to be unfair,
deceptive, or designed to evade the provisions of this
section; and
``(B) refinancing of mortgage loans that the Board finds to
be associated with abusive lending practices, or that are
otherwise not in the interest of the borrower.''.
On page 85, strike the item immediately following line 20,
and insert the following:
``129. Requirements for certain mortgages.''.
On page 85, beginning on line 24, strike ``high cost
mortgage, as defined'' and insert ``mortgage referred to''.
Beginning on page 87, line 14, strike all through page 88,
line 6, and insert the following:
``(d) Rights Upon Assignment of Certain Mortgages.--
``(1) In general.--Any person who purchases or is otherwise
assigned a mortgage referred to in section 103(aa) shall be
subject to all claims and defenses with respect to that
mortgage that the consumer could assert against the creditor
of the mortgage, unless the purchaser or assignee
demonstrates, by a preponderance of the evidence, that a
reasonable person exercising ordinary due diligence, could
not determine, based on the loan documentation required by
this title, that the mortgage was in fact a mortgage referred
to in section 103(aa). The preceding sentence does not affect
a consumer's rights under sections 125, 130, or any other
provision of this title.
``(2) Limitation on damages.--Notwithstanding any other
provision of law, relief provided as a result of any action
made permissible by paragraph (1) may not exceed--
``(A) with respect to actions based upon a violation of
this title, the amount specified in section 130; and
``(B) with respect to all other causes of action, the sum
of--
``(i) the amount of all remaining indebtedness; and
``(ii) the total amount paid by the consumer in connection
with the transaction.
``(3) Offset.--The amount of damages that may be awarded
under paragraph (2)(B) shall be reduced by the amount of any
damages awarded under paragraph (2)(A).
``(4) Notice.--Any person who sells or otherwise assigns a
mortgage referred to in section 103(aa) shall include a
prominent notice of the potential liability under this
subsection as determined by the Board.''.
On page 88, line 13, strike ``high cost''.
On page 88, line 14, strike ``(as defined'' and insert
``referred to''.
On page 88, line 15, strike ``Act, as'' and insert ``Act
(as''.
AMENDMENT NO. 1525
(Purpose: To promote free trade in financial services)
Mr. RIEGLE. Mr. President, the second amendment that I am now
proposing is the Fair Trade in Financial Services Act of 1994, which
was recently reported by the Banking Committee.
Fair trade in financial services legislation has passed the Senate
three times before. The amendment we are considering this morning was
introduced on October 7, 1993, on a bipartisan basis by a majority of
the members of the Banking Committee. It is designed to give U.S.
negotiators new leverage to obtain the same equality of competitive
opportunity for U.S. financial firms operating in foreign markets that
we extend to foreign firms in our markets. On October 26, 1993, the
committee held a hearing at which S. 1527 received united
administration support, as well as support from the financial services
industry. And on February 10, 1994, the committee reported out this
legislation by a vote of 17 to 2.
The act builds on provisions of the 1988 Omnibus Trade and
Competitiveness Act that require the Treasury Department to identify
countries that deny U.S. financial firms de facto national treatment,
meaning equality of competitive opportunity and effective market
access. If negotiations to obtain national treatment fail to succeed,
the act allows but does not require the Secretary of the Treasury, the
U.S. negotiator on trade in financial services, to publish in the
Federal Register a determination that a given country discriminates
against U.S. financial institutions.
Following any such publication, the Treasury Secretary may, after
consultation with the U.S. Trade Representative and the Secretaries of
State and Commerce, recommend to the appropriate Federal financial
services regulator that it deny applications filed by banking or
securities firms from the discriminatory country. Such denials would
only affect opportunities for future expansion in the U.S. market and
would not force foreign financial firms to shrink their existing
operations. The bill is designed to give U.S. negotiators new leverage
to open foreign financial markets, not close our own.
President Clinton in February announced the principles that would
guide trade policy in his administration. One such principle he said:
* * * will say to our trade partners that we value their
business, but none of us should expect something for nothing.
We will continue to welcome foreign production and services
into our markets, but insist that our products and services
be able to enter theirs on equal terms.
That is precisely the guiding principle on which the Fair Trade in
Financial Services Act is based.
The role of the United States in an increasingly global economy
magnifies the importance of making sure that U.S. financial firms are
not discriminated against their operations abroad. This is important
not only for the financial institutions themselves, but also for U.S.
exporters in general. Deputy U.S. Trade Representative Rufus Yerxa, at
the committee's October 26, 1993, hearing on S. 1527 stated:
* * * it's been demonstrated by all of the studies we've done
about our trade relationships in the world, that there is a
clear relationship between exports and finance and
investment. That is, where we've been able to obtain greater
access to investment markets and to the markets for finance
and financial services, we have also expanded our trade.
These are all part of a seamless web in international
business * * *. Removal of trade and investment barriers
without removal of barriers to U.S. banks and securities
firms will limit the ability of all U.S. companies to compete
in the world market.
At a time when it is crucial for American industry to export in order
to reverse the massive current account deficits that have accrued in
the last decade, our Government must ensure industry is not impeded by
foreign market barriers to our financial services firms.
On January 26, 1994, Senator D'Amato and I received a joint
letter from Secretary Bentsen and Ambassador Kantor urging ``swift
enactment of the Fair Trade in Financial Services Act'' because it is
``an essential component of our strategy'' to open foreign financial
markets to U.S. institutions. This legislation is critical to the
success of U.S. negotiators in both the ongoing negotiations under the
auspices of the General Agreement on Tariffs and Trade [GATT], as well
as the stalled United States-Japan Framework for a New Economic
Partnership discussions.
Under GATT, financial services are included within the General
Agreement on Trade in Services [GATS], which establishes a multilateral
framework of principles and rules for trade in financial services.
However, the commitments made by many countries to open their markets
to U.S. financial institutions under that framework were less than the
United States had hoped for. The United States, therefore, has taken a
most favored nation [MFN] exemption for banking and other financial
services including insurance, but will suspend it for 6 months after
the GATT Agreement goes into effect. Until that time, negotiations will
continue within the GATS framework.
In their January 26 letter, Ambassador Kantor and Secretary Bentsen
explained why the passage of the Fair Trade in Financial Services Act
is needed to help complete a successful GATT agreement on financial
services. In that letter they stated:
We agreed on a framework for trade in financial services
but did not obtain the full commitments on market access we
had sought. However, the financial services agreement
provides for continuing negotiations within the GATT context
to seek improved commitments. In the event we are not able to
achieve sufficient progress in these negotiations, this
legislation [Fair Trade in Financial Services] will help
ensure that we will have incentives to encourage other
countries to liberalize in the future. The success of this
effort will provide increased competitive opportunities for
U.S. financial services and enhance their ability to
facilitate U.S. exports.
I urge my colleagues to heed the administration's plea for swift
enactment of this legislation. I also ask unanimous consent that a copy
of the letter be printed in the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
Department of the Treasury,
Washington, DC, January 26, 1994.
Hon. Donald W. Riegle, Jr.,
Chairman, Committee on Banking, Housing, and Urban Affairs,
U.S. Senate, Washington, DC.
Dear. Mr. Chairman: We are writing to urge swift enactment
of the Fair Trade in Financial Services legislation. The
Administration supports the objectives of the legislation as
introduced and will continue to work closely with Congress to
complete the final details. We believe that the original
intent of S. 1527 and HR 3248 provides an effective
foundation for legislation.
The passage of this important legislation is a priority
matter for the Administration, and an essential component of
our strategy to continue multilateral negotiations to open
foreign financial markets to U.S. financial institutions.
The Administration is very pleased with the results of the
recently completed Uruguay Round of multilateral negotiations
conducted under the auspices of the General Agreement on
Tariffs and Trade (GATT). The lowering of trade barriers
achieved there will help ensure a continued and equitable
expansion of world in the years ahead.
In financial services the outcome was more modest. We
agreed on a framework for trade in financial services but did
not obtain the full commitments on market access that we had
sought. However, the financial services agreement provides
for continuing negotiations within the GATT context to seek
improved commitments. In the event that we are not to achieve
sufficient progress in these negotiations, this legislation
will help ensure that we will have incentives to encourage
other countries to liberalize in the future.
The success of this effort will provide increased
competitive opportunities for U.S. financial services and
enhance their ability to facilitate U.S. exports.
This Administration has clearly stated its objective to
open foreign financial markets. Fair Trade in Financial
Services legislation will complement our multilateral,
bilateral and regional efforts to gain access to foreign
markets in the basis of national treatment and equality of
competitive opportunity. The proposal would give the
authority to act to the Treasury Department, after
appropriate interagency consultation and subject to the
specific direction of the President.
It is our view that enactment of the Fair Trade in
Financial Services legislation is needed at the earliest
possible time to safeguard the progress we achieved in the
Uruguay Round and to support additional market opening talks,
both within the GATT framwork and on a bilateral basis.
Thank you for your attention to this matter which is so
important to America's financial firms. We look forward to
working with you to achieve early enactment of this critical
legislation.
Sincerely,
Lloyd Bentsen,
Secretary of the Treasury.
Michael Kantor,
U.S. Trade Representative.
I send that amendment to the desk as well.
The PRESIDING OFFICER. The clerk will report the amendment.
The assistant legislative clerk read as follows:
The Senator from Michigan [Mr. Riegle], for himself and Mr.
D'Amato, proposes an amendment numbered 1525.
Mr. RIEGLE. Mr. President, I ask unanimous consent that 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 that the two amendments be
adopted en bloc.
Mr. D'AMATO addressed the Chair.
The PRESIDING OFFICER. The Senator from New York.
Mr. D'AMATO. Mr. President, let me say I strongly, strongly support
this amendment because I believe it is absolutely essential for our
financial institutions to have the ability to compete fairly abroad,
and this legislation accomplishes exactly that. It says to those
governments who are practicing policies of excluding or keeping our
financial services industry from doing their work abroad, from truly
being able to compete freely, that they, too, will find we will
restrict those who are here from expanding. It is fair play, and that
is the essence of free trade. Free trade that goes one way and there is
no fairness to it does not make sense.
I have been given to understand that one of my colleagues, a
Republican on the Banking Committee, objects to the inclusion of this
amendment. So on his behalf I will ask the distinguished manager of the
bill and my colleague, the chairman of the Banking Committee, if he
will withhold that amendment. I will say this. I ask that the member be
given an opportunity to come down and take whatever position he wants
to on this amendment--if he wants to amend the amendment, if he wants
to oppose the amendment--whatever he wants to do. I think we should
give him a fair opportunity. If he does not come down within a
reasonable time, I will no longer, then, carry that objection. If
someone has objection to this, to our going forward, come forth and
state why, let us get it out and let us do whatever has to be done.
At this time I ask my colleague if he would withhold. I have every
intention of supporting it as strongly as I possibly can.
The PRESIDING OFFICER. The Senator from Michigan.
Mr. RIEGLE. Mr. President, I thank the Senator from New York. I will,
then, on the basis of his request to separate the two amendments, leave
the second of the two at the desk and not ask we act on it at this
time. I think that is a reasonable request. I think the colleague's
rights should be protected and properly are being protected by Senator
D'Amato, and I respect that.
I also appreciate the fact the Senator is prepared to move ahead on
this once we have had an opportunity for somebody to come down and
present their objection directly.
Let me now revise my request. I ask unanimous consent that the first
amendment I sent to the desk now be incorporated into the bill.
The PRESIDING OFFICER. Without objection, it is so ordered.
The question is on agreeing to the amendment.
The amendment (No. 1524) was agreed to.
Mr. RIEGLE. We are at a point, then, where we will leave the second
amendment there for now. I must say we are very much of a mind. We want
to move this bill through and finish it as early as possible today. So
I hope if anybody has any amendments they want to offer, any comments
they want to make, they will come to the floor at this time and do so,
so we can expedite the completion of the bill.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. RIEGLE. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Michigan.
Mr. RIEGLE. Mr. President, I have another amendment ready to offer
now, and this is probably a suitable time to do it.
The PRESIDING OFFICER. The Chair would advise the Senator from
Michigan the amendment now pending before the Senate is amendment No.
1525.
Mr. RIEGLE. I ask unanimous consent that amendment be temporarily
laid aside.
The PRESIDING OFFICER. Without objection, it is so ordered.
amendment no. 1526
(Purpose: To make amendments relating to the Comptroller of the
Currency)
Mr. RIEGLE. Mr. President, I send an amendment to the desk together
with Senator D'Amato, to ensure that the Office of the Comptroller of
the Currency [OCC] has much the same independent authority as the
Office of Thrift Supervision [OTS]. The amendment only provides the OCC
with the same authority already given to the OTS.
Specifically, the amendment: Authorizes the OCC to follow the same
procedures as the OTS in reporting to Congress; clarifies that the
Comptroller of the Currency has the same independent authority as the
Director of the OTS over agency staff and functions; gives the OCC the
same independent litigating authority as the OTS.
The OTS currently has each of the above authorities. A number of
independent agencies have considerably more authority. The
administration in its bank regulatory consolidation proposal also
provides independent authority to the new agency that would conduct
Federal bank and thrift regulation.
I ask for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:
The Senator from Michigan [Mr. Riegle], for himself and Mr.
D'Amato, proposes an amendment numbered 1526.
Mr. RIEGLE. Mr. President, I ask unanimous consent that reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
At the appropriate place in title III of the bill, insert
the following:
SEC. . INCLUSION OF COMPTROLLER OF THE CURRENCY;
CLARIFICATION OF REVISED STATUTES.
(a) Public Law 93-425.--Section 111 of Public Law 93-495
(12 U.S.C. 250) is amended by inserting ``the Comptroller of
the Currency,'' after ``Federal Deposit Insurance
Corporation,''.
(b) Revised Statutes.--
(1) Section 5240.--The third paragraph of section 5240 of
the Revised Statutes (12 U.S.C. 482) is amended by inserting
``or section 301(f)(1) of title 31, United States Code,''
after ``provisions of this section''.
(2) Section 324.--Section 324 of the Revised Statutes (12
U.S.C. 1) is amended by adding at the end the following:
``The Comptroller of the Currency shall have the same
authority over matters within the jurisdiction of the
Comptroller as the Director of the Office of Thrift
Supervision has over matters within the Director's
jurisdiction under section 3(b)(3) of the Home Owners' Loan
Act.''.
(3) Section 5239.--Section 5239 of the Revised Statutes (12
U.S.C. 93) is amended by inserting at the end the following
new subsection:
``(d) Authority.--The Comptroller of the Currency may act
in the Comptroller's own name and through the Comptroller's
own attorneys in enforcing any provision of this title,
regulations thereunder, or any other law or regulation, or in
any action, suit, or proceeding to which the Comptroller of
the Currency is a party.''.
The PRESIDING OFFICER. The Senator from New York.
Mr. D'AMATO. Mr. President, I commend Senator Riegle, because it
really was the Senator and his staff who developed this initiative as
it relates to this amendment.
I do not care whether it is a Republican administration or Democratic
administration, these independent agencies should be truly independent.
Consequently, this amendment addresses exactly the kinds of situations
that we are concerned about, that if there is a course of action that
should be pursued as it relates to undertaking a lawsuit, it gives the
independent regulator the ability to do that without going to Justice.
It also gives the independent agency the ability to come in and give
testimony before us that is not censored.
What is the sense of having testimony that has to be approved, which
seeks changes, if the regulator has to submit that first to the
executive branch to get their sign-off on it? Then we in the Congress
do not get the true feelings of the people who are out there in the
field, out there on the battle line.
So what the Senator has done with this amendment is removed that
barrier. It will give us in the Congress and our committees the ability
to get that information directly, uncensored, in the right way so we
can make the proper determinations.
I would have gone even further to grant the banking agencies--all of
the banking agencies, including the Federal Reserve Board and the
FDIC--independence from Justice Department control. I also would have
removed the OMB from interfering with OCC rulemaking authority.
However, in the spirit of compromise, I agreed to this more limited
amendment suggested by Senator Riegle.
So I applaud his efforts. I am pleased to join in sponsoring this
amendment. I urge its adoption.
The PRESIDING OFFICER. If there be no further debate, the question is
on agreeing to the amendment.
The amendment (No. 1526) was agreed to.
Mr. RIEGLE. Mr. President, I move to reconsider the vote and move to
lay that motion on the table.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Michigan.
Mr. RIEGLE. We are ready to move forward on the bill, so again I
invite Members who want to be heard on this matter or have amendments
or points to make to come to the floor now so we can try to conclude
action as early today as possible.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. DODD. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Feingold). Without objection, it is so
ordered.
Mr. DODD. Mr. President, what is the pending business?
The PRESIDING OFFICER. The pending business is amendment 1525.
Mr. DODD. Mr. President, I ask unanimous consent that the pending
amendment be temporarily laid aside for the purpose of considering
another amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
Amendment No. 1527
(Purpose: To authorize the minting of coins to commemorate the 1995
Special Olympics World Games)
Mr. DODD. Mr. President, I send an amendment to the desk and ask for
its immediate consideration.
The PRESIDING OFFICER. The clerk will report the amendment.
The legislative clerk read as follows:
The Senator from Connecticut [Mr. Dodd] proposes an
amendment numbered 1527.
Mr. DODD. Mr. President, I ask unanimous consent that reading of the
amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
On page 160, between lines 6 and 7, insert the following:
SEC. 334. COMMEMORATION OF 1995 SPECIAL OLYMPIC WORLD GAMES.
(a) Coin Specifications.--
(1) One dollar silver coins.--
(A) Issuance.--The Secretary of the Treasury (hereafter in
this section referred to as the ``Secretary'') shall issue
not more than 800,000 $1 coins, which shall weigh 26.73
grams, have a diameter of 1.500 inches, and shall contain 90
percent silver and 10 percent copper.
(B) Design.--The design of the coins issued under this
section shall be emblematic of the 1995 Special Olympics
World Games. On each such coin there shall be a designation
of the value of the coin, an inscription of the year
``1995'', and inscriptions of the words ``Liberty'', ``In God
We Trust'', ``United States of America'', and ``E Pluribus
Unum''.
(2) Legal tender.--The coins issued under this section
shall be legal tender as provided in section 5103 of title
31, United States Code.
(3) Numismatic items.--For purposes of section 5132(a)(1)
of title 31, United States Code, all coins minted under this
section shall be considered to be numismatic items.
(b) Sources of Bullion.--The Secretary shall obtain silver
for the coins minted under this section only from stockpiles
established under the Strategic and Critical Materials Stock
Piling Act.
(c) Selection of Design.--The design for the coins
authorized by this section shall be selected by the Secretary
after consultation with the 1995 Special Olympics World Games
Organizing Committee, Inc. and the Commission of Fine Arts.
As required by section 5135 of title 31, United States Code,
the design shall also be reviewed by the Citizens
Commemorative Coin Advisory Committee.
(d) Issuance of the Coins.--
(1) Quality of coins.--The coins authorized under this
section may be issued in uncirculated and proof qualities.
(2) Mint facility.--Not more than 1 facility of the United
States Mint may be used to strike any particular quality of
the coins minted under this section.
(3) Commencement of issuance.--The coins authorized under
this section shall be available for issue not later than
January 15, 1995.
(4) Sunset provision.--No coins shall be minted under this
section after December 31, 1995.
(e) Sale of the Coins.--
(1) Sale price.--The coins issued under this section shall
be sold by the Secretary at a price equal to the sum of the
face value of the coins, the surcharge provided in paragraph
(4) with respect to such coins, and the cost of designing and
issuing such coins (including labor, materials, dies, use of
machinery, overhead expenses, marketing, and shipping).
(2) Bulk sales.--The Secretary shall make bulk sales at a
reasonable discount.
(3) Prepaid orders.--The Secretary shall accept prepaid
orders for the coins authorized under this section prior to
the issuance of such coins. Sales under this subsection shall
be at a reasonable discount.
(4) Surcharge required.--All sales shall include a
surcharge of $10 per coin.
(f) General Waiver of Procurement Regulations.--No
provision of law governing procurement or public contracts
shall be applicable to the procurement of goods or services
necessary for carrying out the provisions of this section.
Nothing in this subsection shall relieve any person entering
into a contract under the authority of this section from
complying with any law relating to equal employment
opportunity.
(g) Distribution of Surcharges.--The total surcharges
collected by the Secretary from the sale of the coins issued
under this section shall be promptly paid by the Secretary to
the 1995 Special Olympics World Games Organizing Committee,
Inc. Such amounts shall be used to--
(1) provide a world class sporting event for athletes with
mental retardation;
(2) demonstrate to a global audience the extraordinary
talents, dedication, and courage of persons with mental
retardation; and
(3) underwrite the cost of staging and promoting the 1995
Special Olympics World Games.
(h) Audits.--The Comptroller General of the United States
shall have the right to examine such books, records,
documents, and other data of the 1995 Special Olympics World
Games Organizing Committee, Inc. as may be related to the
expenditure of amounts paid under subsection (g).
(i) Financial Assurances.--
(1) No net cost to the government.--The Secretary shall
take all actions necessary to ensure that the issuance of the
coins authorized by this section shall result in no net cost
to the United States Government.
(2) Adequate security for payment required.--No coin shall
be issued under this section unless the Secretary has
received--
(A) full payment therefore;
(B) security satisfactory to the Secretary to indemnify the
United States for full payment; or
(C) a guarantee of full payment satisfactory to the
Secretary from a depository institution whose deposits are
insured by the Federal Deposit Insurance Corporation or the
National Credit Union Administration Board.
Mr. DODD. Mr. President, I rise to offer S. 1860, the 1995 Special
Olympics World Games Commemorative Coin Act, as an amendment to S.
1275, the Community Development, Credit Enhancement, and Regulatory
Improvement Act of 1993.
I introduced this legislation in February with strong bipartisan
support. This bill now has 50 cosponsors. This bill authorizes the
minting of 800,000 limited-edition $1 silver coins, at no net cost to
the Federal Government. The funds will be used to stage a world-class
sporting event in Connecticut for these very special athletes.
Through the years, Special Olympics has become one of the largest and
most successful sports and volunteer organizations in the world. Today,
there are nearly $1 million Special Olympic athletes worldwide and
nearly 450,000 in the United States alone.
In addition to more than 6,500 participating athletes, it is
estimated that the 1995 Special Olympics world games will attract a
half-million spectators, 45,000 volunteers, and more than 1,500
representatives from national and international media.
An event of this magnitude requires considerable planning,
organization, and financial resources. This no net cost bill would
raise up to $8 million to help underwrite the cost of staging the 1995
Special Olympics World Games.
Twenty-five years ago, Eunice Kennedy Shriver founded Special
Olympics with the premise that bringing people together--those with and
without mental retardation--will break down existing barriers and
result in acceptance, understanding, and new relationships.
Mr. President, the people of Connecticut are already gearing up for
the celebration of the 1995 games. Each of the towns and cities from
around the State is being paired with a specific participating country,
and these communities will be opening their hearts and homes to these
visitors. Athletes and their families will spend several days relaxing,
adjusting, and soaking in the hospitality of the host cities prior to
the start of the games.
More than 6,500 athletes from every corner of the globe and every
State in the Union will then travel to New Haven, CT, to compete for
the love of sport and the thrill of participation. This is one event in
which winning is not everything. These sometimes forgotten athletes are
given the chance to show us all what true sportsmanship is all about.
I would like to thank the chairman of the Banking Committee, Mr.
Riegle, and also Mr. D'Amato for moving this piece of legislation so
quickly.
Finally, I would like to take this opportunity to express my
gratitude to Sargent and Eunice Shriver, our former colleague, Gov.
Lowell Weicker, and the entire World Games organizing committee for
their commitment to Special Olympics and the success of the 1995
Special Olympics World Games.
I urge my colleagues to support this important legislation and honor
the tremendous spirit of the Special Olympics.
I appreciate the support of the distinguished Senator from New York
and the distinguished Senator from Michigan, and I urge approval of the
amendment.
Mr. RIEGLE. Mr. President, I am pleased to support S. 1860, the 1995
Special Olympics World Games Commemorative Coin Act, as an amendment to
S. 1275.
S. 1860, introduced by Senator Dodd, authorizes the minting of a $1
coin to commemorate the 1995 Special Olympics World Games. I strongly
support the minting of this coin which will augment the fundraising
efforts for the international event which will be hosted by the State
of Connecticut.
The surcharges collected from the sale shall be used to provide a
world class sporting event for athletes with mental retardation; to
demonstrate to a global audience the extraordinary talents, dedication,
and courage of persons with mental retardation; and underwrite the cost
of staging and promoting the 1995 Special Olympics World Games.
The World Games will bring together special athletes from around the
world for 9 days of international sport competition. Mentally retarded
adults and children will compete in the Olympic Games with the
assistance of coaches, parents, friends and countless volunteers.
This international event will, no doubt, touch a record number of
people. In a world where hopes are often dashed by crises of the day,
special olympians inspire us with their spiritual and physical strength
and their moral value. They are, in fact, everyday profiles in courage.
More than 6,500 special olympic athletes from over 130 countries will
bring spectators together for 9 days. The Special Olympics bring out
the best in all involved. I firmly believe that the Special Olympics
World Games commemorative coin would be a wonderful remembrance of the
experience. I consider this a unique and thrilling event and believe it
warrants a commemorative coin. I support the efforts of the 1995
Special Olympics World Games organizing committee and all those who
have worked so long and hard to prepare for this spectacular event and
can think of no better way to do this than to wholeheartedly support
this amendment at this time.
Mr. D'AMATO. Mr. President, I rise today to add my support for adding
the 1995 Special Olympics World Games Commemorative Coin Act, as an
amendment to this bill.
I, along with most of the world, watched in awe the Winter Olympics.
Each of the athletes had a personal story of how they overcame
obstacles like injuries, economic problems, losses of loved ones, and
so many of the athletes from the former Communist countries saw such
changes in the political makeup of their nations that they were forced
to leave their training areas and coaches to continue their dream of
competing in the Olympics.
However, not one of those athletes has overcome as many obstacles as
those competing in the Special Olympics. Everyone of us has seen the
look of determination and pride in the eyes of a special olympian as
they cross the finish line, whether it be in first place or last place.
Many of these youngsters and adults have been told their whole lives
that they couldn't compete or play, but the Special Olympics allow them
not only to participate, but they are able to shine. July 1995 in New
Haven, CT, will be the time and place for these exceptional athletes to
show the world what they got. For the athletes, families, coaches, and
thousands of volunteers, these Olympics will be an experience of a
lifetime.
I am proud to have been an original cosponsor of this coin bill. The
legislation calls for the minting of 800,000 silver dollar coins. The
coins will be minted at no net cost to the Government.
I would like to commend my colleague on the Banking Committee,
Senator Dodd, on not only introducing this bill, but his hard work on
gathering 50 cosponsors so quickly. I also would like to thank my
colleague, the esteemed chairman of the Banking Committee, Senator
Riegle, for agreeing to allow this bill to be incorporated into the
manager's amendment. Most of all, I commend Sargent and Eunice Shriver
and my former colleague, Gov. Lowell Weicker, for their dedication to
ensure the success for the Special Olympics World Games. The Special
Olympics World Games would not be able to happen without their
immeasurable and constant support.
The PRESIDING OFFICER. Is there further debate on the amendment?
Mr. RIEGLE. Mr. President, I am going to ask that we defer
momentarily as this is being checked out on a generic basis on the
Republican side. We should have an answer on that momentarily, and
assuming that is affirmative, then I will urge adoption of the
amendment.
So at this point, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. RIEGLE. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. RIEGLE. I have received notification that the amendment has been
cleared on both sides, and so I urge adoption of the amendment.
The PRESIDING OFFICER. Is there any further debate on the amendment.
If not, the question is on agreeing to the amendment.
The amendment (No. 1527) was agreed to.
Mr. RIEGLE. Mr. President, I move to reconsider the vote.
Mr. DODD. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. RIEGLE. I thank the Chair. I thank the Senator from Connecticut.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. BOND. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BOND. Mr. President, I want to thank and commend Chairman Riegle
and our ranking member, Senator D'Amato, for pulling together S. 1275,
the Community Development, Credit Enhancement, and Regulatory
Improvement Act of 1993.
I support this measure, along with the managers' amendment, as a
significant piece of bipartisan legislation that addresses a number of
issues that are really key to the committee, issues of community
development banking, small business capital formation, bank paperwork
reduction, and regulatory relief. These are areas of tremendous
importance to me personally, and to the people in my State. While in
some cases I do not believe the bill goes far enough, it does reflect
the legislative process, which requires bipartisan cooperation and
compromise.
I will highlight a couple of particular aspects of the legislation
which I support. Subtitle A, the Community Development Banking and
Financial Institutions Act, is a significant improvement over the
President's initial proposal on community development banking. The
subtitle recognizes the important contributions that financial
institutions can provide to distressed communities by allowing banks
and other entities to form ``community partnerships'' with Community
Development Financial Institutions, or CDFI's. Funding under the act is
limited to the partner that qualifies as a CDFI. Banks, however, will
receive credit under the Community Reinvestment Act for participating
in the partnership.
Moreover, a consortium of banks or bank holding companies may own a
CDFI so long as no single parent owns 25 percent or more of the voting
shares of the subsidiary. CRA credit will be available for bank
participation.
Mr. President, that is something that I have worked on for some time.
A number of smaller bankers in my State have said, ``We want to perform
our responsibilities under the Community Reinvestment Act, but we are
so small that we would like to join and pool our efforts with others,
so we can have a greater impact.'' This, in effect, would permit them
to do so.
I emphasize that including traditional financial institutions in the
community development banking proposal is critical, because it will
provide the expertise of banks to CDFI's and help make available
mainstream conventional banking practices to distressed and financially
underserved communities.
I also highlight an amendment that I cosponsored in the committee
with my colleagues, Senators Domenici, Kerry, and Moseley-Braun, which
has been included in the managers' amendment. This amendment would
allow up to 5 percent of amounts appropriated to CDFI's to be provided
to organizations for the purpose of the wholesale purchase of loans
from CDFI's or to otherwise provide liquidity to CDFI's. Basically,
this will help to provide additional capital to CDFI's and should help
to greatly expand the availability of credit through CDFI's to
financially distressed or underserved communities.
Next, I strongly support subtitle B, the Home Ownership and Equity
Protection Act, of title I. This is a revised version of S. 924, a bill
Senator D'Amato and I introduced. This legislation addresses concerns
where some high-rate lenders have used mortgages for high-cost loans
for home improvements or credit consolidation to take advantage of
unsophisticated, low-income, and very often elderly homeowners. That
measure in this bill protects borrowers through a combination of
increased disclosure to consumers, a new 3-day waiting period, and
substantive prohibitions against loan terms that have been particularly
troublesome. In addition, the managers' amendment makes several
improvements to this subtitle to ensure that legitimate businesses will
not be adversely affected.
Title II of the bill addresses small business capital formation by
allowing the private sector to develop a secondary market for small
business loans. That is something that Senator D'Amato has long been a
champion of. These are important provisions that are designed to help
make credit available to small businesses to create jobs. Small
business, as we know, is the backbone of our Nation's economy, and it
is high time we took steps to ensure the availability of credit to
these institutions.
Title III of the bill provides a number of provisions designed to
reduce paperwork and regulatory burdens on financial institutions.
While I do not believe the bill as reported by the committee goes far
enough, the managers' amendment adds significantly to bank regulatory
relief. I urge my colleagues to endorse these provisions and also to
support other regulatory relief amendments which may be offered to the
bill. If we are going to get credit out, as we must, to the underserved
areas of this country, regulatory relief is a vitally important part of
the reform process.
This title is designed to reduce regulatory and paperwork burdens on
financial institutions through measures for agencies to review and
streamline rules and regulations, coordinate examinations, modernize
reporting, and establish a regulatory appeals process. The title also
contains a number of provisions to improve existing regulations by
repealing outmoded, duplicative, and unnecessary statutory
requirements. It also requires studies of the impact of risk-based
capital standards and the payment of interest on sterile reserves.
I want to highlight one amendment of mine that was included--and,
again, I thank the managers--in their amendment. This amendment
provides additional flexibility or bankers' banks to provide
correspondence services, and it increases the lending limit for loans
secured by securities from 10 percent of capital to 15 percent of
capital. This will allow the bankers' banks to grow. In my State and
other States which serve many of the small institutions, it will make
them much more effective providers of credit in their community, and it
will improve the service and the credit they provide.
I am most grateful to Senator D'Amato and his staff for the help and
insertions into the managers' amendment. I also note my thanks to the
chairman and ranking member for all their hard work on this
legislation. I urge my colleagues to support S. 1275. Since we have not
seen too many people opposing S. 1275, I assume that the chairman and
the ranking member have been extremely persuasive. I add my support for
their strong statements in behalf of the bill.
Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. KOHL. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. KOHL. Mr. President, I rise today to express my strong support
for S. 1275, the Community Development, Credit Enhancement, and
Regulatory Improvement Act. Let me begin by commending the managers of
the bill--Chairman Riegle and Senator D'Amato--for their work on this
important measure. They have crafted a comprehensive, balanced, and
effective piece of legislation that will help communities and
businesses help themselves.
Let me tell you why I support this legislation. First, the community
development fund created by this bill will help community banks and
credit unions provide credit to the businesses that build and sustain
communities. As a former businessman, I know well that communities are
built on jobs. Jobs that are provided by community based businesses.
And the community development fund will help traditional lenders and
financial institutions provide job creating credit where it is most
needed.
Furthermore, this legislation will achieve that goal by utilizing
existing community banks, credit unions and other financial
institutions, rather than creating massive new Federal bureaucracies.
In my own State, Mr. President, most of our bankers are community
bankers. They live in the communities where their banks are located,
they know their neighbors, and they know the businessmen and
businesswomen who invest in their communities. In Wisconsin, bankers
invest in their communities not only because it makes good business
sense, but also because they are a part of the community. So I commend
the managers for recognizing what we in Wisconsin know well: that
community bankers are part of the solution, and not part of the
problem.
But this bill does more. This legislation also recognizes the need to
ensure an adequate flow of credit to job creating small businesses. The
provisions on securitization of small business loans represent an
important first step toward that goal. As we all know, small businesses
create most of the new jobs in this country, and this provision will
provide much needed assistance to the very people who lay the
foundation for successful community development.
Finally, this bill will help traditional lenders free up additional
resources by providing relief from unnecessary and wasteful
regulations. While we all agree that fair credit, safety and soundness
and other legitimate concerns need to be addressed, it is clearly
apparent that unnecessary regulatory burdens make it difficult for
financial institutions to focus their efforts on their primary activity
which is lending money to creditworthy consumers and businesses. The
regulatory relief measures in this legislation represent an important
first step toward reducing the burden that affects not only bankers,
but the communities that they are attempting to serve.
So, once again I commend the managers of the bill for their efforts,
and I urge the swift adoption of this bill. I yield the floor.
Mr. MITCHELL. Mr. President, I would like to commend you and the
Banking Committee on the bill you have brought to the floor today. This
legislation will provide a much needed economic boost to depressed
rural and urban communities by providing assistance to new and existing
community development financial institutions [CDFI's].
I would like to ask the chairman to clarify an issue for me. Four
organizations in Maine--the Androscoggin Valley Council of Governments,
the Eastern Maine Development Corporation, the Kennebec Valley Council
of Governments and the Northern Maine Development Commission intend to
form a consortium with a statewide banking interest to create a CDFI
pending passage of this legislation. Each of these organizations is an
Economic Development District designated by the Economic Development
Administration.
These organizations represent areas that cover nearly 80 percent of
Maine's territory and 60 percent of its population. These are areas
that exceed national and Maine average unemployment rates and poverty
levels, and consequently fall far behind in per capita income. The
organizations I have mentioned monitor the state of the economy in
their geographic areas, and correspondingly, develop new initiatives
and modify existing programs that address the needs of their local
citizens.
Mr. President, it is my understanding that this legislation would
preclude agencies or instrumentalities of Federal, State, or local
government from being CDFI's. I am concerned that because three of the
four organizations I have mentioned carry out functions which give them
status as agencies of Government and they might be precluded from
participating in this initiative. Could the chairman clarify how these
types of institutions can participate in this program?
Mr. RIEGLE. I would be pleased to clarify for my colleague the roles
that State, local, regional or quasi-governmental agencies can play in
this initiative. While governmental entities may not apply directly for
assistance as CDFI's, they may participate in several other ways.
First, a governmental entity--or a bank--can submit a joint
application for assistance with a CDFI called a community partnership.
A community partnership is an agreement between a CDFI and a community
partner to provide development services and loans or equity investments
to an investment area or a targeted population. An agreement will
specify the functions that the CDFI and the community partner will each
perform to achieve the partnership's goals. For example, a CDFI and a
local government could agree to rehabilitate several apartment
buildings for low-income families. The CDFI could provide renovation
and mortgage financing, while the city could acquire the property, make
site improvements, or offer afterschool programs for children who are
residents. A community partnership is intended to marry the resources
of a CDFI with government and other community organizations.
Second, a governmental entity could invest in a CDFI or provide
grants to assist in meeting Federal matching requirements. In the
scenario you have described involving the organizations that operate in
Maine, these entities could create a new CDFI by investing, making
grants, and providing expertise and technical assistance. Assuming this
CDFI meets the requirements set forth in S. 1275 and the banking
interest does not own more than 25 percent of the CDFI's stock, it
would be eligible to apply for fund assistance. By providing matching
funds or serving as an investor, a governmental entity could play a key
role in setting the priorities of the CDFI. For example, a State
industrial development authority could provide funds to match a Federal
equity investment. In exchange for the matching funds, the CDFI could
agree to operate a microenterprise lending program to serve unemployed
residents of a rural county that has lost jobs due to plant closing.
Mr. MITCHELL. Mr. President, in addition to their designation as
Economic Development Districts, the four organizations I have mentioned
carry out many other important functions as regional planning
commissions and councils of government. These multiple roles are
necessary to effectively serve the needs of rural areas. Thus, these
organizations have developed a wealth of expertise in serving the needs
of rural communities and bring resources that individual small towns
typically do not possess. Can the distinguished chairman clarify the
manner in which the expertise and resources these organizations can be
tapped in establishing a CDFI?
Mr. RIEGLE. I thank my distinguished colleague for raising this
important question. In fact, in my home State of Michigan, officials in
Wayne County are working to establish a CDFI. As in Wayne County,
governmental entities can assist in establishing a CDFI by providing
planning, financial, and technical assistance, but most importantly--by
providing leadership and getting other organizations and private
investors on board in supporting a local CDFI.
The purpose of this legislation is to create a national network of
independent, market-oriented institutions that have the ability to
respond quickly and efficiently to market opportunities in distressed
communities. Governmental entities, while very effective in promoting
community development in many circumstances, generally speaking, they
are not flexible enough to respond to quickly changing economic forces.
CDFI's are a new hybrid-type of organization that have been found to
be highly effective in restoring market forces in distressed
communities. They combine the market orientation of for-profits with
the commitment to distressed communities typical of government and
nonprofits. CDFI's are not intended to supplant the activities of
government--they will complement them. In communities that already have
CDFI's, these organizations work effectively in partnership with
government. They are another tool to help localities eradicate poverty.
Mr. MITCHELL. I appreciate the support of the chairman in clarifying
the intent of this legislation. I look forward to the passage of this
bill.
cdfi matching requirements
Mr. WELLSTONE. I would like to commend the chairman of the Banking
Committee for his leadership in developing this important legislation.
As a cosponsor of S. 1275, I am extremely pleased the chairman has been
able to bring it to the floor, and I look forward to voting in favor of
its passage.
I would like to thank the chairman--for myself and on behalf of our
colleagues Senators Leahy, Daschle, Pryor, Wofford, and Ford--for his
willingness to include in the manager's amendment a provision that will
help ensure rural applicants to the Community Development Financial
Institutions [CDFI] Fund have an equal chance to participate in the
program. I would like to thank, as well, the ranking minority member of
the Banking Committee, Senator D'Amato, for his cooperation in arriving
at acceptable language.
As the chairman knows, the new provision will allow rural applicants
to the CDFI fund who face severe constraints on raising private
matching funds to utilize funds from two Department of Agriculture
rural economic development programs for a portion of their match. The
programs are USDA's Intermediary Relending Program and the Rural
Business Enterprise Program. The money from these programs would be
considered as non-Federal for this purpose.
As the chairman also knows from the letter our colleagues and I sent,
our intention was to overcome any inadvertent bias in the CDFI program
that might have put rural applicants at a disadvantage, despite the
regional diversity directive contained in the bill. I am gratified he
has agreed to make that adjustment.
This exception to the matching requirements should provide
flexibility for applicants who are working in rural communities with
very limited resources.I would suggest that when regulations are
drafted to implement the provision of the legislation concerning
matching requirements, particular attention be paid to the criteria
used to determine whether an applicant is severely constrained, and
therefore eligible to make use of the reduced match. I look forward to
having the opportunity to comment on such draft regulations. it was my
intention and that of the other signatories of the letter urging this
provision, that factors such as the following would be taken into
account when considering rural applicants--the relative availability of
matching funds from private sector sources; the relative economic
distress of the community to be served; and whether the applicant would
target investment to a particularly disadvantaged population or a
community that is losing population.
Could the chairman indicate whether he shares my understanding of the
manner in which the matching requirements will operate given the
changes in the manager's amendment? I would also ask the chairman
whether he agrees that the criteria I suggest for determining whether
applicants are severely constrained in raising matching funds are
reasonable?
Mr. RIEGLE. I would like to thank my distinguished colleague from
Minnesota for his kind remarks's I would also like to explain what the
matching requirements of the Community Development Financial
Institutions [CDFI] Fund are and why they are important. The intent of
this initiative is to establish a national network of market-responsive
institutions that are specifically dedicated to community development.
There are many existing institutions that have grown up from the urban
and rural grassroots and been successful in promoting revitalization.
One of the greatest impediments to the expansion of existing or
creation of new CDFI's is the availability of investment capital. The
CDFI fund is created for the purpose of providing patient capital to
enable CDFI's to grow. however, it is equally important, if these
institutions are to be responsive to the market, that private and other
local funds be leveraged and invested in CDFI's. Thus, the fund
requires CDFI's to come up with a local match from non-Federal sources.
Generally speaking, CDFI's must provide one dollar in matching funds
for each dollar of fund assistance. The fund has some discretion to
adjust the match if it finds that some types of institutions have a
greater capacity to leverage Federal dollars. The fund also has the
discretion to lower the match for some institutions that face severe
constraints on available sources of matching funds. The fund may reduce
the match for up to 25 percent of the funds available in any fiscal
year in two ways: One, it can reduce the match by up to 50 percent; or
two, it can allow funds from the Community Development Block Grant
Program, the Intermediary Relending Program, and the Rural Business
Enterprise Program to be used for up to 60 percent of the match.
I appreciate Senator Wellstone's remarks concerning the factors that
the Fund should take into consideration in determining what constitutes
severe constraints. I believe his suggestions are reasonable and
appropriate. I urge the fund administrator to consider these factors
and others that address the constraints experienced by our nation's
poorest communities. I appreciate and am sympathetic to Senator
Wellstone's concerns about rural communities. I believe Senator
Wellstone's amendment will help many people located in both distressed
rural and urban communities by recognizing the disparities that often
exist in attracting capital.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Lieberman). The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. FEINGOLD. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. FEINGOLD. Mr. President, I ask unanimous consent to speak as in
morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________