[Congressional Record Volume 140, Number 47 (Tuesday, April 26, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]
[Congressional Record: April 26, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
INTERSTATE BANKING AND BRANCHING ACT OF 1994
The PRESIDING OFFICER. The Senate will now resume consideration of S.
1963, which the clerk will report.
The legislative clerk read as follows:
A bill (S. 1963) to permit certain financial institutions
to engage in interstate banking and branching.
The Senate resumed consideration of the bill.
Mr. RIEGLE. 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. DODD. 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the quorum call be rescinded.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. DODD. Mr. President, what is the business before the Senate?
The PRESIDING OFFICER. The pending business is S. 1963.
Mr. DODD. Mr. President, I want to commend the chairman of the Senate
Banking Committee, Senator Riegle, for his strong leadership in
bringing this bill before the Senate. I speak specifically of the
Interstate Banking and Branching Act of 1994.
Mr. President, the Congress of the United States has considered the
issue of interstate banking and branching for far too many years, in my
opinion. We have debated every nuance, contemplated every scenario, and
literally cited every statistic many times over. But, finally, after
all this ruminating over many years, I believe we have achieved
consensus on this most important issue.
The swift movement of legislation through both Houses indicates just
how strong this consensus is. The Senate Banking Committee, Mr.
President, reported the interstate banking and branching bill out 19 to
0 in February. In March of this year, the House Banking Committee
approved a very similar bill by a vote of 50 to 1. The full House of
Representatives then passed the bill by a voice vote.
Mr. President, we need to continue this momentum, in my view, and to
do everything possible to pass this legislation without amendments, I
would say, that will immediately kill the bill or sentence it to a slow
death, so that we may have an interstate banking bill on the
President's desk by Memorial Day. I think, frankly, we can meet that
goal.
Mr. President, I have long supported changes to our archaic
constraints on interstate banking and branching. For many years, I have
introduced legislation to bring the geography of banking into the 20th
century. With the passage of this bill, I believe we will be closer
than we have ever been to finally doing away with a set of restrictions
that simply no longer serve any legitimate purpose. Full interstate
branching will streamline the administration, improve bank
efficiencies, ease regional economic slumps, boost consumer
convenience, ameliorate the impact of future credit crunches, and I
think enhance the safety and soundness of the banking industry overall.
Most important, Mr. President, it will benefit consumers in a way
that should not be underestimated. The lives of bank customers
nationwide will change considerably for the better as a result of this
legislation. Interstate branching will permit customers to enjoy a full
range of bank services available at their bank in any State in which
that bank operates.
For those who believe that the number of individuals who would
benefit from these conveniences is small, recent statistics reveal
otherwise. The Census Bureau reports that 16 million Americans who live
in metropolitan areas cross State lines; 4 million Americans commute
interstate each and every workday; and 493 million trips are taken by
Americans each year across regions in this country. The countless
Americans who vacation throughout these regions will be able for the
first time in many instances to make deposits and conduct other normal
bank business without regard to State lines. That is merely catching up
with the reality of everyday life in our society.
Recently, Mr. President, in my home State of Connecticut, a large
money center bank opened its first bank in the State. Connecticut
residents who work in New York--and many do--have deluged the bank with
requests to deposit money in New York and withdraw it at home or vice
versa. Due to interstate restrictions, the bank has had to say no. That
just does not make any sense at all, in my view.
In addition to increased convenience for customers and consumers,
consumers will benefit from the savings achieved from the breakdown of
market barriers and through increased competition. Recent studies have
revealed that bank performance improves with increased market entry and
lower prices, higher returns and greater convenience results. That is
obvious, Mr. President--allow another bank to come in the area or view
and start competing for consumers' business and consumers benefit.
The economic benefits of interstate banking and branching are
extremely important. Full interstate banking and branching authority
would have been enormously invaluable in cushioning the impact in my
region of New England's devastating credit crunch. I believe interstate
banking and branching would have brought badly needed capital to our
region from other parts of the Nation, easing economic difficulties,
saving jobs, and avoiding much pain for people and their families. Bank
failures and regional economic slumps could have been prevented if
banks had been able to hold loan portfolios with greater geographic
diversity.
The legislation before us has been painstakingly crafted to address a
wide variety and array of concerns that have been raised over many
years when we have considered this issue.
This legislation contains safeguards to preserve safety and soundness
by prohibiting undercapitalized institutions from participating in
interstate branching. It respects the interests of States by giving
them a long transition time and requiring branches to abide by
applicable State laws.
Further, the legislation meets community needs by maintaining
Community Reinvestment Act requirements. The legislation ensures
competition and diversity of services by providing safeguards against
overconcentration of banking assets in any one State.
Mr. President, while personally I would prefer a swifter and more
comprehensive shift to interstate banking and branching, I believe that
this legislation establishes a sensible and consistent approach which
will promote bank efficiency and growth.
The legislation, Mr. President, further contains several wrinkles
that need to be ironed out in my view when we resolve our differences
with the House of Representatives, the other body. One I would like to
mention is the failure of this legislation to provide national
treatment to banks from other nations.
As it is currently drafted, the bill would only permit foreign banks
to branch through subsidiaries. I am concerned that this provision will
adversely affect the ability of our institutions, our banks, to receive
fair and equitable treatment in other nations. The Treasury Department
also has serious concerns about this provision.
I would point out for instance that an institution like Citicorp, or
Citibank, has been located in Latin America since 1913. That has not
only been a valuable asset for Citibank but also for many American
businesses and individuals who travel and do business in Latin America.
To have been able to have an American financial institution in those
nations for almost a century has been extremely important to us as a
nation.
If we do not allow foreign institutions that meet our basic standards
and tests to operate here, then U.S. institutions that operate so
effectively and have over the years elsewhere of course could be badly
adversely affected. This law is the exception to an otherwise I think
well crafted piece of legislation which should and must be passed.
We have reached an ideal time in my view to act on this enormously
critical legislation which will bolster the long-term health of our
banking system.
I strongly urge my colleagues to support this significant change to
our current system.
Mr. President, I am told that there are a number of amendments that
are being considered to be offered to this legislation. Let me just say
to my colleagues, I am told that some of the ideas, in fact, are the
ones that I have supported in the past and hopefully can support again.
But we have worked for so many years to arrive at this moment in point
to be able to have an interstate banking and branching bill which has
passed the other body, has come out of our Banking Committee with a 19-
to-nothing vote, and is on the brink of passage here. If we take
amendments to this legislation, no matter how meritorious they may be,
I can almost guarantee that this legislation will die. We have a
crowded agenda in the remaining weeks before us. If we get tied up in a
conference with the House of Representatives on this bill, then my view
is the legislation will fail, and once again, consumers in my view will
be adversely affected.
Our hope is today to be able to consider those amendments. Obviously
each and every Senator has a right to offer amendments to this
legislation. But if we consider those amendments today and pass this
legislation by this evening, then I am confident that we could adopt
this bill very, very quickly and make a significant contribution to
improving the financial conditions of our institutions but more
importantly to provide a real convenience and asset to millions of
Americans and consumers who need and have a right to interstate banking
and branching to meet their financial concerns and needs.
Mr. President, it is 11:05. My hope is that over the next 50 minutes
Members who have amendments will come to the floor so that we may
consider those proposals. I am told that we will take a break for our
respective conferences, as we do every Tuesday in the Senate normally
between 12 and 2. But because of the considerations of health care
legislation, the conferences are going to go a bit longer today until 3
o'clock.
So we will be tied up considering in our respective meetings the
various health care proposals. So any amendments I would welcome in the
next 50 minutes so we might dispose of before we go into that recess at
12 noon.
Without seeing any additional Members on the floor, Mr. President, I
suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Feingold). 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.
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