[Congressional Record Volume 140, Number 30 (Thursday, March 17, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 17, 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. KERRY. Regular order.
  The PRESIDING OFFICER. Regular order is amendment No. 1541.


                           Amendment No. 1541

  Mr. KOHL. Mr. President, I rise in support of the amendment of the 
Senator from Massachusetts, and congratulate him on his tireless 
efforts to bring some reason to the Federal flood insurance program. 
This amendment is good for the taxpayers, it's good for the 
environment, and it's good for communities located in the flood-prone 
areas of the Nation.
  Because of the disastrous floods that we in the Midwest experienced 
last year, I have come to a better understanding of the need for these 
sorts of reforms. Studies have shown that only 5 to 10 percent of the 
structures damaged by the floods last year were covered by flood 
insurance. That is certainly a sign to me that our National Flood 
Insurance Program needs fixing.
  The National Flood Insurance Program was created in 1968 to provide 
affordable flood insurance for existing buildings in flood-prone areas, 
and to try to prevent future flood damages by encouraging communities 
to guide new development away from the water's edge.
  The program has achieved the first objective, because Federal flood 
insurance is affordable. In some cases, it can be said that the program 
is far too affordable. Already, millions of taxpayer dollars have been 
diverted into the supposedly self-supporting national flood insurance 
fund.
  But the program has failed miserably at the second objective, because 
rather than guiding development away from flood hazard shoreline areas, 
the flood insurance program actually subsidizes building in high hazard 
zones. And in many cases these shoreline areas are also very 
ecologically sensitive, and they are damaged or destroyed by the 
structural development that is encouraged by the Federal flood 
insurance program. The Kerry amendment will end this perverse 
incentive.
  The Kerry amendment also authorizes a grant program to help 
communities mitigate the damages of future floods.
  In my State of Wisconsin, the community of Soldiers Grove experienced 
significant damage in its business district as a result of the 1978 
flood on the Kickapoo River. Instead of waiting for the next flood to 
devastate their town, the community got to work immediately in an 
effort to relocate the business district out of the floodplain. Over 
the next few years, the community was able to piece together various 
sources of funding to relocate the business district out of the 
floodplain.
  Their work has not been for naught. In the past 2 years, when the 
Kickapoo River has again overflowed its banks, the community of 
Soldiers Grove has remained high and dry because of the foresight of 
its residents. And I'm proud to say that other Wisconsin communities, 
such as Prairie du Chien, Darlington, Eau Claire County, and Trenton 
Island, have followed Soldiers Grove's example and made efforts to 
mitigate against future flood damages, or are in the process of doing 
so.
  Soldiers Grove, WI, is a national model of a community that had the 
foresight to relocate out of harm's way. But it was very difficult for 
Soldiers Grove to find the funding for their project. The Kerry 
amendment would create a specific mitigation grant program to make it 
easier for communities in flood-prone areas to do what Soldiers Grove 
had to struggle to do 15 years ago.
  Mr. President, this amendment makes good sense fiscally, and it makes 
good sense environmentally. I urge my colleagues to support this 
important amendment.
  Mr. KERRY. Mr. President, I believe both sides are clear on the 
amendment.
  The PRESIDING OFFICER. Is there further debate?
  The question is on agreeing to the amendment.
  The amendment (No. 1541), as modified, was agreed to.
  Mr. KERRY. Mr. President, I move to reconsider the vote.
  Mr. D'AMATO. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. D'AMATO. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. (Mr. Daschle). The clerk will call the roll.
  The bill 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. Mr. President, I ask unanimous consent that any amendment 
that may be pending that may be at the desk be set aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 1542

 (Purpose: To require the Federal banking agencies to perform a survey 
         to determine public awareness of Federal banking laws)

  Mr. RIEGLE. Mr. President, I send to the desk an amendment on behalf 
of Senator Dole. The amendment provides for a study of the 
effectiveness of numerous consumer protection statutes administered by 
the Federal banking regulatory agencies and the Department of Housing 
and Urban Development.
  The amendment has been agreed to by myself and Senator D'Amato.
  I ask that the amendment be adopted once it has been delivered to the 
desk and read.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The bill clerk read as follows:

       The Senator from Michigan [Mr. Riegle], for Mr. Dole, 
     proposes an amendment numbered 1542.

  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 end of title III, add the following new section:

     SEC.   . CONSUMER SURVEYS AND REPORT.

       (a) Surveys.--Not later than 6 months after the date of 
     enactment of this Act, the Federal banking agencies (as 
     defined in section 3 of the Federal Deposit Insurance Act) 
     and the Secretary of Housing and Urban Development shall 
     jointly conduct an objective and statistically valid survey 
     of financial services consumers to determine the general 
     public awareness of, perceived benefits to consumers of, and 
     effectiveness of the Federal banking laws under which the 
     Federal banking agencies and Department of Housing and Urban 
     Development operate that are intended for the protection of 
     such consumers, including--
       (1) the Expedited Funds Availability Act;
       (2) the Truth in Lending Act;
       (3) the Truth in Savings Act;
       (4) the Real Estate Settlement Procedures Act of 1974;
       (5) the Home Mortgage Disclosures Act of 1975;
       (6) the Equal Credit Opportunity Act;
       (7) the Community Reinvestment Act of 1977;
       (8) the Home Equity Loan Consumer Protection Act;
       (9) the Fair Credit and Charge Card Disclosure Act; and
       (10) the rules and regulations promulgated under those 
     banking laws.
       (b) Consultation.--In developing such a survey, the Federal 
     banking agencies and the Secretary of Housing and Urban 
     Development shall consult with consumer groups, insured 
     depository institutions, other lenders, and any other 
     interested parties.
       (c) Information for Surveyed Consumers.--The survey shall 
     provide for distribution to participating consumers a summary 
     explanation of the Federal banking law being surveyed and how 
     each is currently being implemented.
       (d) Report.--Not later than 60 days after completion of its 
     survey under subsection (a), the Federal banking agencies and 
     the Secretary of Housing and Urban Development shall jointly 
     submit a report of the results of their survey to the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate and the Committee on Banking, Finance and Urban 
     Affairs of the House of Representatives.

  Mr. DOLE. Mr. President, I do not think anyone would argue that this 
bill seeks to aid communities that are being underserved, whether in 
the rural or urban areas. Areas that desperately need access to capital 
and credit in order to improve their businesses, their housing, their 
neighborhoods, their communities.
  I do not think anyone here would argue that there has been a lack of 
available credit and access to capital, particularly for small 
businesses. Unfortunately, outdated regulatory burdens and overly 
restrictive examination practices by bank regulators have discouraged 
banks from making even prudent loans, thereby choking off capital to 
creditworthy businesses. The result is fewer jobs and less economic 
growth.
  This bipartisan bill seeks to address these issues. By focussing on 
community development and consumer protection; paperwork reduction and 
regulatory improvement; by encouraging securitization of small business 
loans; and by enabling more small companies to raise capital in the 
public markets.
  However, all too often, Mr. President, Congress passes laws under the 
banner of ``consumer protection'' without having a clear sense of 
whether these laws will work as they are supposed to. I suspect some 
consumer protection laws actually end up harming the consumer in the 
long run, due to additional costs of regulation being passed on to 
them. To determine whether bank consumers are, in fact, benefiting from 
the laws we pass, Congress and the regulators should do what most 
businesses usually do--ask the consumers themselves whether or not the 
laws we enact are helping them. That is what my amendment will do.
  This amendment directs each Federal banking regulatory agency to 
conduct a statistically valid survey of bank customers to determine 
whether those laws that Congress designed to protect consumers are, in 
fact, achieving their intended goals. Each survey would have to be 
conducted within 6 months of enactment of this bill and a report 
summarizing the survey results must be submitted to the House and 
Senate Banking Committees within 30 days of the surveys' completion. 
The laws that will be surveyed include the Truth-in-Savings Act, the 
Truth-in-Lending Act, and the Community Reinvestment Act.
  Mr. President, let my distinguished colleagues understand. Neither 
this amendment, nor this bill, will end the credit crunch overnight. 
But they are a step in the right direction. We all agree that 
regulation is necessary to protect the taxpayers from the costs of bank 
failures and to protect the consumers from the unscrupulous practices 
of the few bad apples in the banking industry. But regulation should 
never be an end in itself, and it should never act as an obstacle to 
long-term economic growth and prosperity.
  The PRESIDING OFFICER. If there is no further debate, the question is 
on agreeing to the amendment.
  The amendment (No. 1542) was agreed to.
  Mr. D'AMATO. Mr. President, I move to reconsider the vote by which 
the amendment was agreed to.
  Mr. RIEGLE. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                           Amendment No. 1543

  (Purpose: To modify a provision of the bill related to selection of 
          institutions for assistance, and for other purposes)

  Mr. RIEGLE. Mr. President, I now ask unanimous consent that an 
amendment proposed by Senator Dorgan be incorporated into S. 1275. The 
amendment will modify the definition of an investment area to include 
rural communities that have lost more than 10 percent of their 
population between the 1980 and 1990 census.
  I send the amendment to the desk and ask that it be reported.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from Michigan [Mr. Riegle], for Mr. Dorgan, 
     proposes an amendment numbered 1543.

  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:

       On page 43, line 16, strike ``or''.
       On page 43, line 20, strike the period at the end and 
     insert ``; or''.
       On page 43, between lines 20 and 21, insert the following:
       (D) is located in an area which is not a metropolitan 
     statistical area and which has experienced a decrease in 
     population of not less than 10 percent (as determined in the 
     most recent decennial census) between 1980 and 1990.

  The PRESIDING OFFICER. If there is no further debate, the question is 
on agreeing to the amendment.
  The amendment (No. 1543) was agreed to.
  Mr. RIEGLE. Mr. President, I move to reconsider the vote by which the 
amendment was agreed to.
  Mr. D'AMATO. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. RIEGLE. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill 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.


                           Amendment No. 1544

(Purpose: To make an amendment to offset the costs of certain programs 
                     in order to pay for the bill)

  Mr. RIEGLE. Mr. President, I will shortly send an amendment to the 
desk on behalf of Senator Dole, the purpose of which is to offset the 
cost of certain programs in order to pay for this bill.
  The text of the amendment is quite long, but I send it to the desk 
and ask that it be reported.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Michigan [Mr. Riegle], for Mr. Dole, 
     proposes an amendment numbered 1544.

  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. DOLE. Mr. President, come April 15, a lot of Americans are going 
to be in for a big shock. Why? Because last year, Congress socked the 
American people with the largest tax package in American history.
  Although we won't fully realize the larger implications of the tax 
hikes for some time, it is clear to me that many small businesses 
continue to be uncertain about their future. And until this uncertainty 
gives way to confidence, and a stronger economy, they are going to 
postpone hiring, and spending and investment decisions that could give 
the economy a much-needed boost.
  Mr. President, S. 1275 will do much to make credit available and 
allow the small businesses of our country access to much needed 
capital. And it will encourage aid to communities that are being 
underserved, whether in rural or urban areas. Areas that desperately 
need access to capital and credit in order to improve their businesses, 
their housing, their neighborhoods, their communities.
  It is my understanding that the pending bill will cost $437 million 
during the next 4 years--$382 million for a community development 
financial institutions fund and $5 million to provide technical 
assistance and loans to low-income credit unions, in title 1 of this 
bill; $50 million for Federal matching funds to State capital access 
programs in title 2. It is further my understanding that this $437 
million is not paid for.
  Mr. President, just a few weeks ago, a majority of the Senate voted 
in favor of the balanced budget amendment. We did not have the 
necessary two-thirds majority to pass the bill, but the American people 
watched C-Span closely and saw Congress debate what to many Americans 
is a fundamental principle of survival--the ability to pay their bills. 
Now, with a budget deficit of $234 billion, some people in this Chamber 
may think that $437 million is a small figure. But, Mr. President, 
there is no reason why we cannot start today what we told the American 
people we would do just a few weeks ago--that we would be fiscally 
responsible. And I think my amendment does just that.

  Mr. President, my amendment seeks some simple spending cuts which I 
proposed earlier this year in S. 1843, the Government Downsizing, 
Performance, and Accountability Act of 1994. I seek two spending 
reductions in particular: streamlining the Department of Housing and 
Urban Development's multifamily housing disposition process; and 
terminating funds for the Small Business Administration's tree planting 
program.
  The Department of Housing and Urban Development currently owns 69,000 
units of multifamily housing. Although HUD was never meant to function 
as a realtor, the agency has been unable to sell these units because of 
restrictions in section 203 of the Housing and Community Development 
Amendments of 1978 requiring that each unit be sold with 15-year 
project-based section 8 assistance. Over the past several years, 
funding for section 8 has been significantly reduced. This proposal 
would loosen the restrictions of section 203, allowing HUD to dispose 
of the multifamily units more easily. Streamlining this process, 
according to the Congressional Budget Office, would save the Federal 
Government $425 million over the next 5 years. Mr. President, this 
particular provision is also recommended by Vice President Gore's 
national performance review, as well as the Penny-Kasich task force, 
and the Kerrey-Brown plan.
  The second provision would terminate funds from the Small Business 
Administration's tree planting program. Mr. President, I do not think 
anyone would disagree that tree planting does not fall under the 
jurisdiction of job promotion by the SBA. These funds were not 
requested by the administration or by SBA. The program should be 
terminated, and doing so would free up $64 million over the next 5 
years.
  That's a total of $489 million to pay for this bill. A bill that is 
being supported by the President. A bill that will be a good step in 
helping communities and small businesses across the Nation. I think it 
is imperative that we show the American people that the Federal 
Government has heard their wake-up call, and that we will pay its bill 
just like they do.
  The PRESIDING OFFICER. The question is on agreeing to the amendment.
  The amendment (No. 1544) was agreed to.
  Mr. D'AMATO. Mr. President, I move to reconsider the vote by which 
the amendment was agreed to.
  Mr. RIEGLE. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. FORD. Mr. President, 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. D'AMATO. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           amendment no. 1545

  Mr. D'AMATO. Mr. President, on behalf of Senator Craig, I send an 
amendment to the desk and ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from New York [Mr. D'Amato], for Mr. Craig, 
     proposes an amendment numbered 1545.

  Mr. D'AMATO. 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:

     SEC.   . SIMPLIFIED DISCLOSURE FOR EXISTING DEPOSITORS.

       (a) In General.--Section 43(b)(3) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1831t(b)(3)) is amended to read as 
     follows:
       ``(3) Acknowledgement of disclosure.--
       ``(A) New depositors.--With respect to any depositor who 
     was not a depositor at the depository institution before June 
     19, 1994, receive any deposit for the account of such 
     depositor only if the depositor has signed a written 
     acknowledgement that--
       ``(i) the institution is not federally insured; and
       ``(ii) if the institution fails, the Federal Government 
     does not guarantee that the depositor will get back the 
     depositor's money.
       ``(B) Current depositors.--Receive any deposit after the 
     effective date of this paragraph for the account of any 
     depositor who was a depositor before June 19, 1994, only if--
       ``(i) the depositor has signed a written acknowledgement 
     described in subparagraph (A); or
       ``(ii) the institution has complied with the provisions of 
     subparagraph (C) which are applicable as of the date of the 
     deposit.
       ``(C) Alternative provision of notice to current 
     depositors.--
       ``(i) In general.--Transmit to each depositor who was a 
     depositor before June 19, 1994, and has not signed a written 
     acknowledgement described in subparagraph (A)--
       ``(I) a card containing the information described in 
     clauses (i) and (ii) of subparagraph (A), and a line for the 
     signature of the depositor; and
       ``(II) accompanying materials requesting the depositor to 
     sign the card, and return the signed card to the institution.
       ``(ii) Manner and timing of notice.)
       ``(I) First notice.--Make the transmission described in 
     clause (i) via first class mail within 90 days after June 19, 
     1994.
       ``(II) Second notice.--Make a 2d transmission described in 
     clause (i) via first class mail not less than 30 days and not 
     more than 45 days after a transmission to the depositor in 
     accordance with subclause (I), if the institution has not, by 
     the date of such mailing, received from the depositor a card 
     referred to in clause (i)(I) which has been signed by the 
     depositor.
       ``(III) Third notice.--Make a 3d transmission described in 
     clause (i) via first class mail not less than 30 days and not 
     more than 45 days after a transmission to the depositor in 
     accordance with subclause (II), if the institution has not, 
     by the date of such mailing, received from the depositor a 
     card referred to in clause (i)(I) which has been signed by 
     the depositor.''.
       (b) Effective Date.--Section 43(b)(3) of the Federal 
     Deposit Insurance Act, as amended by subsection (a), shall 
     take effect in accordance with section 151(a)(2)(D) of the 
     Federal Deposit Insurance Corporation Improvement Act of 
     1991.

  Mr. D'AMATO. This language deals with private community development 
banks, credit unions. There is similar language in the House. Ideally, 
we believe these provisions will make it easier, rather than send 
separate notices to credit union members. I urge its adoption. It has 
been cleared on both sides.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAIG. Will the Senator from New York yield?
  Mr. D'AMATO. Yes.
  Mr. CRAIG. I thank my colleague and the chairman for consideration of 
this amendment affecting privately insured credit unions after a 
reasonable effort to deal with their members and full notification. We 
hope we could agree with the House. I think it is after three efforts 
and proper notification of changes and all of that that this satisfies 
the need that is currently not the case in the law. This addresses only 
privately insured.
  THE PRESIDING OFFICER. If there be no further debate, the question is 
on agreeing to the amendment.
  The amendment (No. 1545) was agreed to.
  Mr. RIEGLE. Mr. President, I move to reconsider the vote.
  Mr. D'AMATO. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. FORD. Mr. President, 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. MITCHELL. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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