[Congressional Record Volume 140, Number 106 (Thursday, August 4, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 4, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
   CONFERENCE REPORT ON H.R. 3474, RIEGLE COMMUNITY DEVELOPMENT AND 
                   REGULATORY IMPROVEMENT ACT OF 1994

  Mr. NEAL of North Carolina. Mr. Speaker, pursuant to House Resolution 
506, I call up the conference report on the bill, (H.R. 3474) to reduce 
administrative requirements for insured depository institutions to the 
extent consistent with safe and sound banking practices, to facilitate 
the establishment of community development financial institutions, and 
for other purposes.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. Pursuant to House Resolution 506, the 
conference report is considered as having been read.
  (For conference report and statement, see proceedings of the House of 
August 2, 1994, at page H-6642.)
  The SPEAKER pro tempore. The gentleman from North Carolina [Mr. Neal] 
will be recognized for 30 minutes, and the gentleman from Nebraska [Mr. 
Bereuter] will be recognized for 30 minutes.
  The Chair recognizes the gentleman from North Carolina [Mr. Neal].


                             general leave

  Mr. NEAL of North Carolina. Mr. Speaker, I ask unanimous consent that 
all Members may have 5 legislative days within which to revise and 
extend their remarks on the conference report on H.R. 3474.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from North Carolina?
  There was no objection.
  Mr. NEAL of North Carolina. Mr. Speaker, I would like to do something 
out of the order a little. Let me point out to the membership we are 
holding hearings on Whitewater in our committee, and the gentleman from 
Massachusetts [Mr. Frank] is an important part of that. He had planned 
a colloquy a little later in the session. I would like to interrupt the 
normal flow of events and enter into that colloquy with him now so he 
might return to the hearing.
  Mr. Speaker, I yield such time as he may consume to the gentleman 
from Massachusetts [Mr. Frank].
  Mr. FRANK of Massachusetts. Mr. Speaker, this is an important point 
where I believe some of our friends on the other side kind of overwrote 
what they were trying to accomplish, and I would like to get us to what 
it seems to me was intended by the conference. This is a colloquy I 
would like to have about section 331, relating to the Secretary of the 
Treasury's review of rulemakings of two bureaus under the Treasury, the 
OCC and the OTS.
  Mr. Speaker, the language of section 331 regarding OCC and OTS 
rulemakings which Senator Riegle and I proposed and which the conferees 
accepted, states that ``[t]he Secretary of the Treasury may not delay 
or prevent the issuance of any rule or regulation promulgated by the 
[OCC or the OTS].'' The amendment does not state, nor does it imply, 
that the Secretary's role in reviewing and coordinating proposed 
regulations of its bureaus will be abrogated or otherwise adversely 
affected, does it Mr. Speaker?
  Mr. NEAL of North Carolina. No. the language does not disturb the 
existing working relationship between the Treasury and its bureaus.
  Mr. FRANK of Massachusetts. And as I recall, because I was one of 
those who proposed the compromise, the intent of the conferees was not 
to prohibit the Treasury's involvement in OCC and OTS rulemakings, but 
was to ensure that the Treasury does not, in the course of its review 
of proposed regulations, delay those regulations in a manner that is 
unreasonable under the circumstances or that effectively prevents their 
issuance. The term ``delay,'' as used in section 331, does not include 
the time reasonably required for the Secretary to review proposed 
regulations and ensure their consistency with other regulations and 
with sound financial institutions policy, would you agree?
  Mr. NEAL of North Carolina. The gentleman is correct.
  Mr. FRANK of Massachusetts. And this is what is intended by the 
managers' statement is it not, Mr. Speaker? The managers' statement 
makes clear that section 331 does not preclude the Treasury from 
communicating its policy goals and objectives regarding a rulemaking, 
nor does it preclude a review process that does not block, delay, or 
force the rewriting of regulations?
  Mr. NEAL of North Carolina. That is correct.
  Mr. FRANK of Massachusetts. So we can expect the Secretary's role in 
reviewing proposed regulations, and again I wanted to stress on broad 
policymaking, not on a case-by-case situation, we can expect that role 
to continue, and appropriately so?
  Mr. NEAL of North Carolina. Yes, the gentleman is correct.
  Mr. FRANK of Massachusetts. Mr. Speaker, I think that is all that we 
have to cover. Let us say again, if I might, briefly and I did want to 
stress since you mentioned the hearings, the gentleman from Florida is 
correct when he talked about the significance of the interstate bill. 
This is also a significant bill. I think people ought to take note of 
the fact that the Committee on Banking, Finance and Urban Affairs is 
capable simultaneously of having differences discussed in the hearing 
room and at the same time working together on a completely bipartisan 
basis to bring forward legislation that is going to improve the 
functioning of the economic system in the United States.
  Mr. NEAL of North Carolina. Mr. Speaker, I yield myself such time as 
I may consume.
  Mr. Speaker, I rise today to urge the adoption of the conference 
report on H.R. 3474, the Riegle Community Development and Regulatory 
Improvement Act of 1994.
  Mr. Speaker, I first would like to compliment the chairman of the 
Banking Committee, Mr. Gonzalez, and the ranking minority member, Mr. 
Leach, for their leadership on this legislation. I would also like to 
salute the gentleman from New York [Mr. Flake] for his work on the 
community development component of this legislation, Mr. Bereuter and 
Mr. Bacchus of Florida for their efforts on the regulatory reform 
issue, and Mr. Kennedy for his work on the consumer protection 
provisions.
  This conference report is the result of a lot of hard work on the 
part of these and other members of the Banking Committee for the past 
year and a half.
  It incorporates the Community Development Banking and Financial 
Institutions Act of 1993, passed by the House last November, which 
includes both a community development banking and a regulatory reform 
title; the Money Laundering Suppression Act of 1994, adopted by the 
House this past March; and the National Flood Insurance Reform Act of 
1994, passed by the House in May.
  This conference report contains five major titles. Let me briefly 
describe each of them.
  Title I establishes a Community Development Financial Institutions 
Fund, as requested by the administration, to provide financial and 
technical assistance to community-based financial institutions 
[CDFI's]. In turn, these CDFI's will provide credit and technical 
assistance to qualified distressed communities.
  This title also seeks to harness the expertise and resources of 
traditional financial institutions for community development purposes 
by funding and making various changes to the Bank Enterprise Act [BEA] 
program which provides such institutions with incentives for lending to 
qualified distressed communities.
  This legislation authorizes $382 million for fiscal years 1995 
through 1998, with one-third of the money designated for the BEA 
program.
  In addition, this title provides consumers with protections against 
reverse redlining, the practice of providing credit on unfair terms 
within certain geographic boundaries based on race or ethnicity.
  Title II is designed to increase small business access to capital by 
removing impediments to the securitization of small business loans and 
leases and by authorizing $50 million to expand State-run capital 
access programs for small businesses. This title also removes 
impediments to the securitization of commercial mortgages.
  Title III contains approximately 50 provisions designed to provide 
regulatory burden relief, primarily for smaller banks, by repealing 
outdated and duplicative provisions.
  These provisions direct regulators to consider regulatory burdens and 
benefits when developing new regulations; require more coordinated and 
unified examinations of financial institutions; lengthen the exam cycle 
for certain small, well-capitalized institutions; simplify CALL 
reports; require regulators to establish a regulatory appeals process, 
an ombudsman's office and an alternative dispute resolution program; 
and make various changes to simplify the formation of bank holding 
companies; among many other things.
  Title IV will reduce the filing of unnecessary currency transaction 
reports that have little or no value to law enforcement authorities, 
thereby reducing the paperwork burden on financial institutions and 
improving the ability of law enforcement officials to combat money 
laundering.
  Finally, title V will modernize and reform the National Flood 
Insurance Program.
  Mr. Speaker, taken together, this legislation will help ensure that 
Americans in downtrodden communities have access to more of the 
opportunities the rest of us take for granted. It will ensure that 
bankers can spend less time completing regulatory paperwork and more 
time making loans. It will increase the flow of credit to businesses 
across the country. And it will protect consumers from unfair credit 
practices and protect homeowners from the losses caused by devastating 
floods.
  This is important legislation and I encourage all Members to join 
with me in supporting this conference report.
  Mr. GONZALEZ. Mr. Speaker, I am happy that today the House will cast 
its final vote on a program that offers support to our Nation's low-
income and distressed communities. Right now, in almost all of our 
hometowns, community development financial institutions are at work 
building affordable housing, helping small businesses get off the 
ground, and providing essential basic financial services to those who 
have not historically been able to afford them. H.R. 3474 contains the 
President's initiative to establish a fund to provide financial and 
technical assistance to build greater capacity in these community 
lenders. While this program is not a panacea for distressed communities 
it does offer hope for their residents who have too often been bypassed 
by the financial services industry.
  As my colleagues may remember, the House version of H.R. 3474 passed 
under a suspension of the rules. It contained only two titles--the 
community development financial institutions program that I just 
described, and several changes to banking law that will streamline bank 
regulation. However, during the Senate's consideration of this bill, 
many other items were added which remain in the conference report 
before the House today. These include: a program to increase credit 
availability for small businesses, a measure to better protect 
consumers from abusive home equity lenders, improvements to the Federal 
Flood Insurance Program, and the Money Laundering Suppression Act, 
which also passed the House under suspension of the rules.
  H.R. 3474 contains very progressive and much needed consumer 
protections in title I, subtitle A, known as the Home Ownership and 
Equity Protection Act. This act amends the Truth in Lending Act to 
provide enhanced consumer protections for home equity loans with 
inflated interest rates or particularly high loan points and fees. 
Under the Home Ownership and Equity Protection Act, lenders that make 
these mortgages must provide consumers with additional disclosures so 
that consumers are fully aware of the terms of the loan, including that 
they could lose their homes if they default on payments. Additionally, 
this act prohibits certain loan terms that are most likely to cause 
hardships for low income consumers, particularly, prepayment penalties, 
balloon payments, and negative amortization. Finally, the act provides 
for State attorney general enforcement of the provisions, additional 
civil remedies for consumers, and the maintenance of consumer rights 
against assignees of these mortgages.
  Title II will increase small business access to capital by removing 
impediments in existing law to the securitization of small business 
loans and leases. In addition, this title will also facilitate the 
establishment of capital access programs by the States. Those programs 
are designed to assist new and developing businesses and the creation 
of jobs. Congressman Kanjorski, as chairman of the Economic Growth 
Subcommittee deserves credit for his work on this title.
  Title III includes numerous provisions intended to reduce regulatory 
burden and streamline needlessly complex regulatory requirements. Among 
the regulatory improvements are the streamlining of application 
requirements, the establishment of procedures at the Federal banking 
agencies to address questions and concerns of consumers and financial 
institutions, depository institution call report simplification, and a 
directive to the Federal banking agencies to coordinate, and eventually 
unify, examinations of institutions in holding company structures 
subject to oversight by more than one Federal regulator.
  Although many of the reforms in this title ease regulatory burdens, 
none of the measures impose any greater risks on the safety and 
soundness of insured depository institutions. All of the provisions 
have been carefully drafted to ensure that adequate protections and 
safeguards are retained, and that consumers' rights and benefits are 
not curtailed. In addition, several of the streamlining reforms tighten 
existing standards, such as the amendments to the Management Interlocks 
Act that require the Federal banking agencies to review the necessity 
for continued extension of otherwise prohibited interlocks that have 
been grandfathered for over 15 years.
  Regarding the money laundering reforms in title IV, the General 
Accounting Office testified before the Banking Committee in May of 1993 
and reported that the number of currency transaction reports [CTR's] 
submitted by financial institutions to the Federal Government was 
rising dramatically. In fact, the number of CTR's was nearing 10 
million on a yearly basis and was seriously threatening the 
effectiveness of the Federal Government's computerized system--one of 
the most potent weapons we have against money laundering. Title IV 
directs financial institutions to submit CTR's for only those currency 
transactions over $10,000 that provide law enforcement officers with 
real and useful information. In addition, title IV further perfects 
Federal and State efforts to track and detect money laundering 
activities.
  Title V contains important reforms to improve the operation and 
financial condition of the National Flood Insurance Program. The 
provisions will improve compliance with mandatory purchase requirements 
by lenders and secondary market purchasers, establish a supplementary 
mitigation insurance program to reduce claims, and requires a study of 
other issues for possible legislative action in the future, including 
the mapping of erosion hazard areas. I commend Congressman Kennedy for 
his work on this title.

                              {time}  1230

  Mr. BEREUTER. Mr. Speaker, this Member rises in strong support of the 
Community Development Banking and Regulatory Improvement Act.
  Mr. Speaker, I yield 2\1/2\ minutes to the distinguished gentleman 
from Florida [Mr. Goss].
  (Mr. GOSS asked and was given permission to revise and extend his 
remarks.)
  Mr. GOSS. Mr. Speaker, I thank the distinguished gentleman from 
Nebraska for yielding time to me.
  Mr. Speaker, I and many others are most pleased that the House is 
moving on this conference report today. Among other things, H.R. 3474 
will provide assistance to community-based financial institutions, will 
make it easier for small businesses to have access to capital, and it 
will provide some much-needed regulatory relief for many smaller banks. 
In addition, this conference report contains a package of reforms for 
the National Flood Insurance Program, which is of particular interest 
to people in my district of southwest Florida, and anyone who lives in 
a coastal or riverine community. Due to exemplary local management of 
the NFIP, Florida has consistently been a net donor to this program. 
Unfortunately, in other areas, the NFIP has been experiencing regular 
and repeated losses, threatening the solvency of the program. Earlier 
this year the House passed a flood insurance reform bill, H.R. 3191. 
This bill was a mixed bag--while it contained some sound, sensible 
measures, it landed wide of the mark in several places.
  Fortunately, the flood insurance reform package included in this 
conference report is greatly improved. As passed by the House, H.R. 
3191 would have:
  Created a new purpose for the NFIP, completely unrelated to insurance 
issues--while providing no measurable benefit, this new purpose could 
have been a major liability for both local governments and FEMA.
  In addition, the bill's original language establishing the community 
rating system was ambiguous, and there were concerns that it could have 
been used as a back-door means of creating the infamous erosion hazard 
zones which threatened the economic viability of coastal communities in 
Florida and other Coastal States.
  Finally, the original mitigation assistance program would have been 
overly burdensome for individuals.
  I am happy to say that each of these problems have been addressed in 
this conference report. I would like to thank my colleagues on the 
Banking Committee for listening to the comments of the Florida 
delegation and working to improve this bill in conference.
  Mr. Speaker, this is, I think, true deliberative democracy. We have a 
good product. I urge its support.
  Mr. BEREUTER. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, this Member rises in strong support of the Community 
Development Banking and Regulatory Improvements Act conference report 
and urges its adoption. This Member would like to thank the chairman of 
the House Banking Committee, the distinguished Member from Texas, Mr. 
Gonzalez, and the ranking minority member of the House Banking 
Committee, the distinguished Member from Iowa, Mr. Leach, for their 
very supportive attitude and assistance in securing a strong bank 
burden-relief section in this measure. This Member declares victory in 
his longstanding effort to reduce regulatory burdens for safe and 
soundly managed depository institutions--an issue that will benefit 
customers as well as financial institutions.
  Indeed, H.R. 3474 addresses many important issues that have been 
before the Banking Committee for the last several years. This 
conference report, in conjunction with the companion bill on interstate 
banking and branching, represent profound changes that will increase 
investment in underserved communities and small businesses, and will, 
on the whole, lead to a more efficient financial services industry.
  The conference report contains six titles. Title I concerning 
Community Development and Consumer Protection establishes a Community 
Development Financial Institutions Fund, as requested by the 
administration, to provide financial and technical assistance to 
community based financial institutions. This title also funds the 
Flake-Ridge Bank Enterprise Act program which promotes community 
lending by traditional financial institutions. The bill authorizes $382 
million for this purpose for fiscal years 1995 through 1998, with one-
third of the money designated for the BEA program. I am pleased that 
the administration has now indicated its strong support for the BEA and 
its commitment to funding the program.
  Title II on securitization removes impediments in existing law to the 
securitization of small business loans and leases, as well as 
commercial mortgages, with the intention of increasing access to 
capital. Title II also authorizes $50 million to expand State-run 
Capital Access Programs for small businesses.
  Title III on regulatory burden relief contains approximately 50 
provisions designed to provide regulatory relief primarily for smaller 
banks by repealing outdated and duplicative provisions, and would 
direct regulators to consider regulatory burden when developing new 
regulations. The Title is based on legislation I first introduced in 
the 102d Congress and reintroduced last year with Mr. Bacchus of 
Florida.
  This Member has been concerned, for quite some time, about the 
increasing amount of mindless or unnecessary regulation heaped on banks 
and thrifts and the resulting rising costs to consumers in fees. For 
example, this Member sponsored with a colleague an amendment to the 
1991 Federal Deposit Insurance Corporation Improvement Act, FDICIA, 
that called on the regulators to examine existing regulations and their 
specific impact on small banks. At the beginning of this session, this 
Member introduced two comprehensive bills to reduce regulatory burdens 
on financial institutions:
  H.R. 59, the Depository Institution Burden Relief Act of 1993; and
  H.R. 962, the Economic Growth and Financial Institutions Regulatory 
Paperwork Reduction Act of 1993, introduced February 18, 1993, along 
with his colleague, the distinguished gentleman from Florida, Mr. Jim 
Bacchus.
  Indeed, this Member would like to especially express his very sincere 
appreciation to the distinguished gentleman from Florida, Mr. Jim 
Bacchus, this Member's cohort in the battle against undue regulatory 
burdens. His was an active and crucial role in our joint, bipartisan 
effort to bring a regulatory burden relief conference report to the 
House Floor today. Although the gentleman has chosen to retire from 
this House at the end of this Congress, his contributions to regulatory 
burden-relief for sound financial institutions is but one more of many 
reasons why his contributions as an active and courageous legislator 
will be sorely missed.

  With respect to regulatory burden-relief, this Member has sought a 
legislative remedy based on two principles:
  First, to provide regulatory relief only for those institutions which 
are--according to accepted and existing criteria--safe, financially 
sound, and prudently managed; and
  Second, to require the regulators to discard stale regulations, but 
in a manner that does not affect bank regulators' authority to ensure 
that a financial institution is operating in a sound and lawful manner. 
Certain of the specific provisions of title III bear particular 
mention. Section 306, for example, would lengthen the exam cycle for 
certain small, well-capitalized institutions to allow these 
institutions to be examined every 18 months instead of every 12 months.
  Section 309 would require each banking agency and the National Credit 
Union Administration [NCUA] to appoint an ombudsman to act as liaison 
with respect to any problem that any party may have in dealing with the 
agency. The Conferees recognized that implementation of these 
provisions could impose an undue burden on certain Federal agencies 
with limited staff and budgetary resources. Specifically, it would be 
expected that the NCUA might meet the requirements by an appropriate 
part-time employee. Nonetheless, it is intended that these provisions 
be carried out by each agency identified in this section.
  Section 331 clarifies provisions relating to administrative autonomy 
by providing the FDIC, the Federal Revenue Board and the Office of the 
Comptroller of the Currency with exclusive authority to conduct 
litigation through their own attorneys.
  Section 342 includes a provision which would require the federal 
banking agencies to complete their regulatory review of the Community 
Reinvestment Act at the earliest practicable time.
  In addition, title III contains other notable regulatory relief 
provisions, including those which would streamline regulatory 
requirements, eliminate duplicative filings, coordinate and unify 
examinations, simplify call reports, improve holding company audit 
requirements, expedite procedures for forming a bank holding company, 
simplify disclosures for existing depositors, and establish a new 
notice procedure for bank holding companies to seek approval to engage 
in certain activities.
  Title III is strongly supported by the regulators and the financial 
industry. These regulatory improvements will lead to increased industry 
efficiency and consumer benefits.
  Title IV of the conference report regarding money laundering reduces 
the filing of unnecessary currency transaction reports that have little 
or no value to law enforcement authorities, thereby reducing the 
paperwork burden on financial institutions.
  Title V on flood insurance modernizes and reforms the National Flood 
Insurance Program. While I know that some Members, including this 
Member, would have liked to have seen certain additional reforms 
included, I am nevertheless satisfied that this legislation will make 
some helpful changes to existing law. I want to mention five reforms to 
the NFIP in particular.
  Title V, of which the chairman, Chairman Kennedy, of the 
subcommittee, has worked very long and hard with great energy and 
perseverance, does take modest steps forward. We had hoped for more, 
both he and I, but it does modernize and reform the National Flood 
Insurance Program.
  There is more that could be said about that, but I think that the 
important provisions, the most important improvements are the lender 
compliance provisions.
  Furthermore, Mr. Speaker, title V, the flood insurance provisions 
included in this conference report, are a small step forward in 
addressing the solvency and integrity of the National Flood Insurance 
Program [NFIP]. However, more than just small steps are necessary.
  For that reason, this Member is pleased that the conferees acquiesced 
to this Member's demand that the reauthorization be for 2 years only. 
This will provide the Congress with the opportunity to more seriously 
and comprehensively address shortcomings in the NFIP again in 2 years.
  This Member is pleased, however, that under the provisions agreed to 
in conference, Federal flood insurance will have to have been purchased 
at least 30 days in advance of a flood event for beneficiaries to be 
covered. This change initiated and insisted upon by this gentleman 
closes a loophole in existing law which had allowed persons to wait 
until the last moment to purchase flood insurance. It is a change which 
will serve to protect the interests of U.S. taxpayers and the other 
responsible flood insurance premium payers. It will cause more 
individuals who should purchase flood insurance to do so routinely to 
protect against future flooding.
  This provision, along with the more important and long overdue 
additional lender compliance provisions included in the legislation are 
the strongest points of the flood insurance title of H.R. 3474.
  There are about four specific provisions of title V which this Member 
would vote for his colleagues:
  First, title V contains bright line directions for lenders and 
services who make or service mortgages that are secured by property in 
special flood hazard areas. It states clearly that they must escrow for 
flood insurance premiums if they escrow for other items; that they can 
purchase flood insurance for a property if a borrower fails to do so; 
and that they will face penalties for noncompliance. This legislation 
also requires Fannie Mae and Freddie Mac to adopt policies to ensure 
that the mortgages they purchase that are secured by property in 
special flood hazard areas are covered by flood insurance for the term 
of the loan. The effect of these reforms should be to dramatically 
increase the rate of participation in the NFIP.
  Second, title V establishes a grant program for States and 
communities to fund cost-effective flood control measures such as 
elevating, relocating, or demolishing flood-prone properties. The grant 
program is designed to award grants evenly among States and communities 
and is not intended to fund large-scale projects such as seawalls or 
levies.
  Third, title V expands flood insurance coverage to include the costs 
of rebuilding structures that are repetitively damaged or substantially 
damaged, provided they are rebuilt in a manner to withstand future 
flooding. This is an important reform because, over time, it will 
remove from the inventory of insured properties those that have cost 
the NFIP the most.
  Fourth, title V requires a study of the economic impact of mapping 
coastal and riverine areas subject to high rates of erosion. The study 
will provide Congress with the specific information it currently lacks 
to make additional reforms to the NFIP.

                              {time}  1240

  Mr. Speaker, I reserve the balance of my time.
  Mr. NEAL of North Carolina. Mr. Speaker, I yield 1 minute to the 
gentleman from Maryland [Mr. Mfume].
  Mr. MFUME. Mr. Speaker, I want to commend the gentleman from North 
Carolina [Mr. Neal], the gentleman from Nebraska [Mr. Bereuter], the 
chairman of the Committee on Banking, Finance and Urban Affairs, and 
its ranking minority member, for their work to get us to this point. I 
also thank their respective colleagues in the other body, and other 
Members who have worked so hard to get us to where we are today on this 
conference report.
  Mr. BEREUTER. Mr. Speaker, it is my pleasure to yield 2 minutes to 
the gentleman from California [Mr. Moorhead], the ranking minority 
member of the Committee on Energy and Commerce.
  Mr. MOORHEAD. Mr. Speaker, I rise in strong support of the conference 
report on H.R. 3474. Of particular interest to the members of the 
Energy and Commerce Committee are the provisions of the bill relating 
to the securitization of small business and commercial real estate 
loans.
  The availability of capital is critical for millions of small U.S. 
businesses as they seek to develop new products, expand facilities and 
add employees.
  In recent years and for a number of reasons, the financing available 
to small businesses from traditional sources, such as banks, appears to 
have fallen short of the needs of small businesses. At the same time, 
many costs of small businesses, particularly those related to 
regulation, have grown. The result of these trends has contributed to 
less vitality in the small business sector, which is the traditional 
backbone of the U.S. economy.
  This legislation will help to increase the availability and 
affordability of credit to small business by removing regulatory 
obstacles that hinder the securitization of small business loans and 
leases.
  Securitization will enable investors who do not lend directly to 
small businesses, such as pension funds and insurance companies, to 
invest in small business loans made by other financial institutions.
  This bill also contains measures designed to make the commercial 
mortgage market more efficient and liquid and to increase the ability 
of commercial property lenders to obtain fresh capital for new loans. 
Although real estate markets in some areas of the country have begun to 
recover, instability and depressed values are still the norm in many 
regions. This bill will help to facilitate recovery in this important 
market sector.
  I urge my colleagues to join me in supporting this conference report.
  Mr. NEAL of North Carolina. Mr. Speaker, I yield 5 minutes to the 
gentleman from Pennsylvania [Mr. Kanjorski].
  Mr. KANJORSKI. Mr. Speaker, I rise in support of the conference 
agreement on H.R. 3474, the Community Development and Regulatory 
Improvement Act of 1994. This bill represents and important shot in the 
arm to our Nation's economy and I believe that many aspects of this 
legislation are essential for the United States to make long-term gains 
in the global marketplace.
  During the consideration of this legislation, I was particularly 
active in the parts of the bill dealing with the creation of new 
secondary markets. For the benefit of our colleagues, I would like to 
take a few minutes and describe how, under title II and section 347 of 
this conference agreement, this issue was resolved.
  Subtitle A of title II is intended to facilitate the creation of new 
jobs and stimulate economic growth in the United States by removing 
impediments in existing law to the securitization of small business 
loans and leases. This is accomplished by creating a new ``small 
business related security'' composed of small business loans and leases 
made by banks and other leading institutions. These new securities may 
then be sold to individual and institutional investors.
  We expect that as a result of the creation of these new securities, 
banks and other lending institution will experience increased demand to 
purchase many of the small business loans they have made and currently 
hold in their own portfolios. In addition to creating new demand for 
the purchase of small business loans and leases, the sale of these 
loans and leases by lending institutions will increase their own 
liquidity, which should translate into increased lending to small 
businesses at lower interest rates. In other words, through the use of 
a secondary market, lending institutions will be better able to turn 
over and recycle funds as new loans to small businesses.
  Under the subtitle's provisions, to enhance the creation of these new 
small business related securities, these securities are afforded 
benefits under the Secondary Mortgage Market Enhancement Act of 1984 
[SMMEA], including eased margin requirements, permission for insured 
depository institutions to purchase the securities, and preemption of 
certain State securities laws. In addition, subtitle A provides that 
federally insured depository institutions will be required to hold risk 
based capital only on the portions of small business loans which they 
retain.
  The Subcommittee on Economic Growth and Credit Formation, which I 
chair, held an extensive set of hearings on the creation of a new and 
robust secondary market. During this Congress, my subcommittee held six 
hearings on the need for a new secondary market for all business, 
commercial, and community development debt and equity investments. This 
is more hearings than were held by all other House and Senate 
committees combined. I believe that this conference report is a step in 
the right direction for robust securitization. At the same time, I am 
concerned that it does not go far enough.
  Mid-size businesses will not share in the opportunities offered by 
the secondary market because they will not meet the strict definition 
of a small business as dictated by the Small Business Administration's 
regulations. Hearings held by my subcommittee have conclusively shown 
that medium-sized businesses, often called gazelles, are creating an 
increasingly large proportion of new jobs in the U.S. economy. Across 
this country, countless healthy medium-sized businesses face the same 
obstacles as small businesses in securing new financing, or even 
renewing an established line of credit. Frequently these mid-sized 
businesses provide a significant share of the jobs in local economies. 
Nevertheless, these businesses, and their current and potential new 
employees, are excluded from the benefits of this legislation.
  As a result of this legislation, small business and commercial real 
estate will have access to a newly created secondary market. Large 
businesses already have access to the capital markets by virtue of 
their ability to directly issue their own commercial paper. The housing 
market enjoys its own established and successful secondary market. 
Medium-sized business will be one of the few sectors of our economy 
without effective access to a secondary market, putting them at a 
potentially severe competitive disadvantage.
  Ironically, one of the other sectors of our economy left without 
effective access to a secondary market under this legislation is 
community development loans. Testimony given during my subcommittee's 
hearings clearly outlines the very real need for a secondary market for 
community development loans. Yet, such access is not afforded in the 
very bill in which we provide for the establishment of community 
development financial institutions. Many of us in Congress regard the 
level of funding provided for the creation of community development 
financial institutions as insufficient. A way to multiply and leverage 
the limited Federal capital of these institutions would be to allow 
them to sell all of their loans into the secondary market.
  Despite these important missed opportunities, Mr. Speaker, I urge my 
colleagues to support the adoption of this conference report. While I 
believe that it is too limited, it is a positive step forward in 
increasing the availability of capital to small business and, 
therefore, in promoting economic development.
  Mr. Speaker, for the benefits of our colleagues, I would like to 
highlight one part of subtitle A of title II of this conference 
agreement. Section 209 calls for the Board of Governors of the Federal 
Reserve System and the Securities and Exchange Commission to conduct 
joint studies of the impact of the provisions of this title on the 
credit and securities markets. The studies will include an evaluation 
of the impact of this title on the availability of credit for 
businesses and commercial enterprises in general, and in particular for 
businesses in low- and moderate-income areas, businesses owned by women 
and minorities, community development efforts, community development 
financial institutions, different geographical regions, and a diversity 
of types of businesses.
  It is extremely important that we quickly gain insights into the 
extent to which the provisions of this subtitle are helping or hurting 
different types of businesses. During our hearings, concerns were 
raised that, if left unchecked, this new market may well increase 
demand for loans of only a limited number of business profiles. This 
so-called ``cherry-picking'' by the market may not be troubling in and 
of itself; however, if it results in decreasing the availability of 
credit to businesses which do not meet whatever profiles the market 
finds most desirable, it is critical that we understand if unintended, 
negative consequences are resulting from this legislation.
  These section 209 studies will also examine the structure and 
operation of these new markets including the types of entities, such as 
pension funds and insurance companies, that are expected to be 
significant purchasers of these securities. Again, it is extremely 
important for us to determine if the structure and operation of these 
new markets represent a threat to the integrity of pension and 
insurance funds. If corrective measures are necessary in the future, it 
is far better for us to recognize this as early as possible. This is 
particularly true in the case of pension funds.
  Let me remind my colleagues that, through the Pension Benefit 
Guaranty Corporation, the Federal Government is ultimately liable for 
the costs of large pension fund losses. Throughout my subcommittee's 
consideration of secondary market legislation, a constant theme I have 
sounded is the need to ensure that we are not sowing the seeds of a 
future savings and loan-type financial disaster for our pension funds. 
I am sufficiently convinced that this legislation does not represent 
such a threat; however, it is crucial that we have the kind of early 
warning system that is represented in the section 209 studies. In my 
mind, this is particularly important given the provisions contained in 
section 347 of this Act, which incorporate commercial real estate into 
the existing definition of a mortgage related security, significantly 
facilitating the securitization of commercial real estate.
  Mr. Speaker, facilitating the securitization of small business loans 
will play an important role in spurring economic growth in this 
country. For this reason alone, the conference report should be 
adopted; however, as many of my colleagues of the Banking Committee 
have noted, there are many other important reasons to support this 
legislation. The Community Development and Regulatory Improvement Act 
of 1994 is the bipartisan byproduct of all our banking subcommittees. 
It represents hundreds, if not thousands of hours of work over 20 
months by our entire committee. Virtually every Member of our committee 
contributed to this important legislation, and I would like to comment 
briefly on the other titles of this landmark legislation.

  Subtitle A of title I, the Community Development Banking and 
Financial Institutions Act, is President Clinton's original CDFI bill. 
Chairmen Gonzalez, Neal, Kennedy, and I jointly introduced the 
President's bill along with many other members of our committee. Our 
ranking Republican members, Mr. Leach, Mr. McCollum, Mr. McCandless, 
and Mr. Ridge, worked with us on this important legislation to help 
develop financial institutions and expand the availability of credit 
for economic growth in underserved areas. I am also pleased that 
subtitle A also includes the Flake-Ridge Bank Enterprise Act proposal 
to expand lending to underserved individuals by traditional financial 
institutions.
  Subtitle B of title I, the Home Ownership and Equity Protection Act, 
prohibits unfair and deceptive practices which have robbed many 
Americans of their most valuable asset, their home. It also requires 
better disclosure of the cost and terms of high cost mortgages. This 
legislation should put an end to the ability of unscrupulous lenders to 
prey on senior citizens and other vulnerable homeowners and 
consequently I was proud to join Consumer Credit Subcommittee Chairman 
Kennedy in introducing the original bill which eventually became 
subtitle B of this bill.
  I have already described in some detail, the importance of subtitle A 
of title II which promotes economic growth and credit formation by 
facilitating the securitization of small business loans and leases, and 
commercial real estate. Subtitle B of title II will also expand the 
supply of credit for small business lending by providing Federal 
matching funds for State programs that provide special reserves to 
guarantee losses on small business loans. These capital access programs 
represent a unique partnership among lenders, small business, State 
governments and the Federal Government. They have the potential to 
greatly expand small business lending.
  Since not all States currently have these capital access programs, it 
is my strong hope as the subcommittee chairman with jurisdiction over 
this program that the Community Development Financial Institutions Fund 
which will administer this program will work particularly closely with 
states which currently do not have capital access programs to help them 
set up programs. I also expect that the CDFI fund will work to ensure a 
fair geographic distribution of Federal funds under this act.
  Title III of the bill provides long overdue regulatory and paperwork 
reductions for federally insured financial institutions. Special credit 
should be given to Congressman Bacchus of Florida and Congressman 
Bereuter of Nebraska for shepherding this bipartisan initiative through 
the Congress. I was pleased to work with them to get rid of statutory 
and regulatory requirements that were duplicative or had outlived their 
usefulness. These changes will provide significant relief for financial 
institutions, making it easier for them to do their real job, providing 
credit to American consumers and businesses, without jeopardizing the 
safety and soundness of our financial system.

  Title IV of the bill is legislation which has passed the House 
several times which is designed to reduce money-laundering. By 
hampering the ability of drug kingpins, organized crime, and even 
common criminals to launder the proceeds of their ill-gotten gains, we 
make it more difficult for them to stay in business. Equally 
importantly, we make it easier for Federal, State, and local officials 
to track down and prosecute criminals. Chairmen Gonzalez and Neal 
worked diligently on this title which will have the side benefit of 
reducing the paperwork burden on honest businessmen and financial 
institutions while simultaneously enhancing the ability of our law 
enforcement community to catch criminals.
  Title V of the bill makes major changes in our Federal Flood 
Insurance Program. It is an initiative that is very important to 
northeastern Pennsylvania which, as many of my colleagues will 
remember, in 1972 was the center of the largest flood in our Nation's 
history to that date, the flood which accompanied tropical storm Agnes. 
At my request, former Policy Research and Insurance Subcommittee 
Chairman Ben Erdreich of Alabama brought our committee to Wilkes-Barre, 
PA, several years ago on the anniversary of the big flood to learn from 
the people of northeastern Pennsylvania how the flood insurance program 
could, and should, be changed.
  I am pleased that after Chairman Erdreich's departure his good work 
on this issue was taken up by Consumer Credit Subcommittee Chairman Joe 
Kennedy, who, working with myself, Congressman Bereuter of Nebraska, 
and other Members of our committee has produced a bill which will 
significantly increase both participation in the National Flood 
Insurance Program and the financial stability of the flood insurance 
fund. These amendments are the most significant improvements in this 
program since it was created.
  The bill brings into the flood insurance program lenders who were not 
previously included, it strengthens mandatory coverage requirements and 
requires escrowing of insurance premiums when an escrow account is 
established for other purposes like local real estate taxes and fire 
insurance, it codifies the current community rating system and provides 
incentives for better floodplain management, it creates a new 
supplementary mitigation insurance program to reduce the number of 
properties which are subject to flooding, and it provides direct 
funding for community mitigation assistance.
  I am particularly pleased that the conference agreement includes 
provisions I added to the original House version of the flood insurance 
bill which authorize mitigation funds to be used for minor physical 
changes for whole groups of homes, and even whole neighborhoods. In my 
area we have often seen how minor physical changes such as flood 
proofing sewers, grading to direct flood waters away from homes, 
installing or improving floodgates, retention ponds, drain pipes, and 
pumping stations, and minor changes to dikes and levees, can be much 
more cost-effective than moving or elevating homes.
  The conference agreement also includes provisions I authored which 
authorize the use of in-kind contributions to cover up to one-half of 
the cost of the local share of mitigation projects. It also includes 
language I inserted which allows communities to work together on 
mitigation activities, or to authorize other political subdivisions or 
authorities of a state such as counties to conduct broader mitigation 
activities for them. This is a sensible approach which will enable 
communities to achieve economies of scale, and to produce mitigation 
plans which help the entire region, rather than helping one community 
at the expense of another.
  Mr. Speaker, title V of this bill will increase participation in the 
flood insurance program, which has been much lower than it should have 
been. By spreading the risk over a broader pool, and by increasing 
mitigation activities which reduce losses, it should help to restrain 
flood insurance premiums. These are long overdue changes and I commend 
Subcommittee Chairman Kennedy, his ranking Republican Congressman Al 
McCandless, Congressman Bereuter and all the other Members who worked 
so long and hard to develop this bipartisan consensus bill.
  Finally, Mr. Speaker, title VI of this bill includes numerous 
miscellaneous and technical changes in our banking laws which will make 
them easier to understand and administer.
  Mr. Speaker, the bill which Chairman Gonzalez brings to the floor 
today on behalf of the Banking Committee is good for consumers, 
financial institutions, and our economy. It will make credit more 
readily available to average and underserved consumers and businesses 
thus creating jobs and expanding our economy. It will reduce 
unnecessary and expensive paperwork. It will protect senior citizens 
and other consumers from unfair and deceptive practices. It will shore 
up our National Flood Insurance Program. It will even help to deter 
crime and catch criminals. In short, it is a bipartisan bill which 
represents the best work of this institution, and it deserves the 
support of every Member of this body.

                              {time}  1250

  Mr. BEREUTER. Mr. Speaker, it is my pleasure to yield 5 minutes to 
the distinguished gentleman from Wisconsin [Mr. Roth], a member of the 
Committee on Banking, Finance and Urban Affairs.
  Mr. ROTH. Mr. Speaker, I thank my friend from Nebraska for yielding 
me this time.
  Mr. Speaker, I urge my colleagues to approve this conference report 
on the Community Development Financial Institutions Act. This bill will 
make credit more available and at lower cost for consumers and small 
businesses.
  We all know that no legislation is perfect. And this is a big, 
complicated, technical bill covering about 400 pages of very small 
type.
  My colleagues on the conference committee, as well as both House and 
Senate Banking Committees, worked diligently for many overtime hours on 
this measure.
  This legislation has strong bipartisan support in the Congress, in 
the financial services industry, and among many consumer groups.
  Wisconsin's strong and vibrant financial services industry supports 
and will benefit by this legislation.
  Looking ahead to future congressional action to further strengthen 
our financial services industry, I again commend to my colleagues the 
example of the Wisconsin experience.
  Wisconsin is rightly famous for its successful and effective 
combination of supervision and enterprise for all segments of our 
financial industry.
  Key sections of this measure move in the Wisconsin pattern.
  So I will vote for the bill even though I have grave reservations 
about the bill's provisions that create a new Federal bureaucracy to 
create new subsidized nonbank lending institutions in urban inner-
cities.
  More than offsetting these objectionable provisions, in my judgment, 
are the 51 new, substantive sections providing significant regulatory 
relief to our banks, savings and loan associations and to the consumers 
they serve.
  The bill addresses many other aspects of our Nation's financial 
services industry, including anticrime provisions to discourage money-
laundering by drug traffickers and other criminals.
  The bill clears away unnecessary legal obstacles to the 
securitization of business loans for resale into secondary markets.
  An attempt is made to provide greater consumer protection against so-
called high-cost mortgage lenders.
  The bill also reforms our flood-insurance program to reduce losses of 
taxpayers money and to discourage new construction in flood-prone 
areas.
  No other industry in the United States is more heavily regulated than 
our federally insured financial institutions.
  Trade associations have estimated the regulatory burden on banks 
alone at more than $40 billion a year--a staggering amount that 
inevitably is paid for by consumers in fees and higher interest rates.
  All in the name of safety and soundness, of course, Congress was 
panicked by the S&L collapse into imposing in 1991 layers and layers of 
new and unnecessary rules and regulations.
  Some of these new regulations are still being implemented. They are 
driving up consumer costs because lenders must pass on the regulatory 
costs to borrowers and savers.
  Insured lenders must do so if they are to remain in business and to 
continue their traditional vital role as the Nation's basic economic 
engine.
  This portion of the bill is extremely technical, but it does begin to 
peel off some of the red tape, unnecessary paperwork, and general 
aggravation that comes with the heavy hand of the Federal Government.
  The bill provides for formal consideration of the financial impact of 
any new regulations and a transition period for implementation.
  The legislation streamlines many regulatory requirements, eliminates 
duplicative filings, and reduces numbers and kinds of examinations.
  Community banking institutions with assets of $250 million or less 
will benefit most from these provisions.
  The bill mandates an appeals procedure to improve fairness and 
appropriateness of Federal examiners operations and directives.
  Federal regulatory agencies are required to coordinate their 
activities generally to reduce the Government's heavy hand upon the 
industry.
  Mr. Speaker, this bill contains hundreds of compromises, many the 
product of years of collective consideration and discussion.
  It is the distilled product of figurative legislative blood, sweat, 
and tears.
  This legislation deserves approval, and I urge my colleagues to join 
me in voting for this legislation.

                              {time}  1300

  Mr. NEAL of North Carolina. Mr. Speaker, I yield 3 minutes to the 
distinguished gentleman from New York [Mr. Flake].
  Mr. FLAKE. Mr. Speaker, I rise today in strong support of the 
conference report on the Community Development and Regulatory 
Improvement Act, H.R. 3474.
  We commend the President for lifting the concerns of communities to 
such a high height as he announced early on that he wanted to being new 
institutions that would invest in communities that have often been 
overlooked and, indeed, underserved by many of our banking communities.
  I commend the gentleman from Texas, Mr. Gonzalez, our chairman, 
Chairman Riegel, and commend all of those including the gentleman from 
North Carolina, Mr. Neal, who, as chairman of Financial Institutions, 
has brought to us this moment of sharing what I consider to be one of 
the greatest pieces of legislation in this body, because it speaks to 
an area of concern that has often been overlooked. I thank Senator 
Dodd. I thank the gentleman from Iowa [Mr. Leach], and I thank the 
gentleman from Pennsylvania [Mr. Ridge], who for the last 4 years have 
worked with me in trying to put together components of this bill that 
are now in place.
  One needs but to do an analysis of the various communities that are a 
part of this landscape to realize that our country has had certain 
communities that have been ignored and overlooked. In those communities 
there has been a lack of investment; therefore, small businesses have 
not been able to thrive. Many of the commercial strips have not been 
rebuilt.
  As the gentleman from Pennsylvania [Mr. Kanjorski] has indicated, in 
too many instances there has not been a will to make investments in 
those communities.
  This bill allows us an opportunity not only to create new entities 
but also to be able to mainstream existing entities in a way that will 
create jobs in the one sector of American society that is growing. That 
sector is the small-business sector.
  By building up the small-business sector in these communities, we 
create the kind of jobs that eliminate the necessity for building more 
jails, giving more young men and women who could otherwise be 
productive individuals if given an opportunity in those communities the 
right to be able to participate fully in the American dream, that dream 
of having a job, being able to afford a home, being able to get a good 
education for their children and fulfill their responsibilities.
  It is my hope that every Member today will vote in support of this 
conference report, because I believe that it says to the whole of 
America that at last we will not overlook communities but we will 
mainstream into the whole of this democracy all of those communities 
that have been ignored.
  Mr. Speaker, I hope that all of our colleagues will join us and vote 
unanimously for the passage of this conference report.
  Mr. BEREUTER. Mr. Speaker, I yield 3 minutes to the gentleman from 
New York [Mr. Lazio], a very active and distinguished member of the 
Committee on Banking, Finance and Urban Affairs. Even though he is in 
his first term, he is active in many important areas.
  Mr. LAZIO. Mr. Speaker, I thank the gentleman from Nebraska for his 
kind remarks, and I thank the gentleman for yielding me this time.
  Mr. Speaker, I rise today in support of the conference report to H.R. 
3474. In particular, I want to address title V of the bill, the 
National Flood Insurance Reform Act.
  Certainly, before he leaves, I want to commend my good friend, the 
gentleman from New York [Mr. Flake], who just spoke, for his help on 
this one point.
  Mr. Speaker, I represent thousands of middle-class coastal residents 
who would have been adversely affected by this title as reported by the 
House Banking Committee. The economic recovery is showing few signs of 
life on Long Island, and the committee provisions of sections 407 and 
604 would have depressed the struggling real estate industry in my 
district.
  Thanks to the work of the subcommittee chairman, the ranking member 
of the subcommittee, Mr. McCandless and his staff, a sound compromise 
was reached when the bill was brought to the floor as H.R. 3191.
  The compromise ensures compliance with the National Flood Program 
through lender compliance provisions which enjoy widespread support 
from the lending industry. Therefore, more people will be paying into 
the national flood insurance fund, more structures will meet minimum 
building codes, and lenders will have expanded powers to protect their 
collateral.
  The compromise mandates a study of the controversial erosion hazard 
zones. FEMA will have the authority to map erosion hazard zones in a 
sample survey of communities around the country. FEMA will also conduct 
a cost-benefit analysis of erosion hazard maps to determine if 
nationwide mapping will save the national flood insurance fund money. 
FEMA will also study the economic affects of such mapping on the 
affected communities. Many coastal communities rely on property taxes 
from coastal residents to pay for their local firemen, policemen, and 
teachers. The compromise recognizes the importance of giving Congress 
the facts first so an informed decision can be made.
  When I spoke during the debate on H.R. 3191, I mentioned reservations 
I had concerning the bill's purposes clause. As a member of the 
conference committee on title 5, I am happy to report to Members who 
shared my concern that this provision has been struck from the bill.
  Mr. Speaker, the rest of the conference report contains provisions 
that will enhance community development and financial institutions. 
Other Members have spoken about those provisions and I share their 
enthusiasm for the report.
  Mr. NEAL of North Carolina. Mr. Speaker, I yield 3 minutes to the 
distinguished gentleman from New Jersey [Mr. Klein].
  Mr. KLEIN. Mr. Speaker, I rise in strong support of the conference 
report on H.R. 3474, the Community Development and Regulatory 
Improvement Act.
  This legislation, which first passed the House on November 21 by 
voice vote, provides $382 million over the next 4 years to assist a 
wide variety of financial institutions and organizations to finance 
economic development in distressed urban and rural areas across the 
United States.
  Mr. Speaker, this money will be leveraged by attracting private bank 
funds to invest in rebuilding these areas which so sorely need it, and 
most important, it will help to create jobs, more new, good, high-
paying jobs in areas where unemployment is very high.
  The newly created Community Development Banking and Financial 
Institutions Fund would provide this financial assistance through 
equity investments, grants, loans, credit union shares, and deposits. 
The end result will be additional private investment in urban areas 
like so many we have in my area of northern New Jersey where there has 
been a longstanding credit shortage and where traditional lending 
institutions are nowhere to be found.
  Many cities in my own congressional district are positioned to reap 
the benefits of community development banking. Organizations eligible 
to receive assistance must have a long-term plan in place to serve the 
credit and development needs of disadvantaged groups or an economically 
distressed area. But this is not a handout my friends. These 
organizations must match the assistance they receive.
  Funds may be used for a wide variety of activities such as commercial 
facilities, business creation and expansion efforts, community services 
for low- and moderate-income people, development services and low- and 
middle-income housing. This is in truth an ideal public-private 
partnership.
  But this conference agreement does much more.
  It helps establish secondary markets for business loans in order to 
increase small business access to capital.
  And by doing that, again, it leverages the amount of funds that are 
available for investment in these areas which so sorely need it in 
order to create the new jobs.
  It contains a number of provisions to cut paperwork requirements for 
banks and exempt healthy small banks from annual examination 
requirements. The savings resulting from relieving these overburdened 
regulations can be passed on to consumers.
  Increased lending means increased investment. And again, I stress new 
jobs.
  Mr. Speaker, I was proud to be an original cosponsor of this bill, 
and I am proud to support it now. I urge all to vote for the conference 
report.
  Mr. BEREUTER. Mr. Speaker, I yield 3 minutes to the distinguished 
gentleman from Pennsylvania [Mr. Ridge], an active and involved member 
of the Committee on Banking, Finance and Urban Affairs.
  (Mr. RIDGE asked and was given permission to revise and extend his 
remarks.)

                              {time}  1310

  Mr. RIDGE. I thank the gentleman for yielding this time to me.
  Mr. Speaker, this community development bank bill is a worthy first 
step to address the banking needs of our poorest urban and rural 
Pennsylvania communities, and I support it as a downpayment on future 
activity.
  Almost 4 years ago, my colleagues, the gentleman from New York, Floyd 
Flake, and I came up with a new idea: Why not offer incentives to banks 
and thrifts seeking to expand their lending in underserved areas? Why 
not provide incentives for banks and thrifts that radically increase 
their investment in targeted areas? In creating the Bank Enterprise 
Act, we said then, as we still believe now, that ``neighborhoods 
without credit are like land without rain--nothing grows. No amount of 
direct government involvement, no amount at all, can compensate for a 
nonexistent private sector. Land without rain becomes lifeless desert, 
and neighborhoods without credit become desolate places as well.''
  We also inserted the first Federal statute on community development 
banks when we stipulated that banks could earn credit for capitalizing 
the South Shores of this country.
  In the bill before us today, I regret that two-thirds of the money 
goes to what I believe will become highly bureaucratic, government-
sponsored specialty lenders. I regret that we are supposed to have two 
kinds of financial institutions--mainstream ones for most 
Pennsylvanians and carve out lenders for our poorer areas. I have 
always believed that people left behind want to become part of the 
mainstreams gain. That is the American dream. Do not separate us with 
separate institutions--bring us back to the main office, the 
mainstream.
  But this shortcoming will be made up by the fact that the one-third 
of funds going to the Bank Enterprise Act will leverage at least ten 
times that amount in private dollars, and $125 million will become 
$1.25 billion in new activity. Neighborhoods in North Philadelphia, 
Erie, and Washington Counties are some places that come to mind 
immediately as benefitting from this bill. Others will benefit as well 
as banks and neighborhood groups put their heads together and learn to 
win.
  Finally, I thank my colleagues for their help and support on this 
measure. I believe we will see very soon that incentives work better 
and longer than punitive measures. We will find that banks can make a 
profit on these ventures and people in the neighborhoods will start 
rejoining the mainstream of opportunity.
  Mr. Speaker, I would like to recognize two former colleagues, the 
gentleman from Alabama, Ben Erdreich, and the distinguished Member, the 
gentleman from Delaware, Mr. Tom Carper, now Governor Carper, who both 
had elements in the earlier legislation. Their leadership continues to 
be felt in this legislation that we are passing here today.
  Finally, I would like to say that we have a great deal of dedication 
and effective staff assistants in the crafting of this multifaceted 
bill. I want to mention Joe Sidel, Rob Zimmer, Sean Cassidy, Terry 
Miller, Gary Parker, Jim Hyland, Stacey Kinkaid, and Joe Pigg, who 
joined in working very effectively and dedicatedly. I want to thank all 
those staff members who deserve any kind of recognition they receive, 
which is far too little for all the work that they do.
  Mr. BEREUTER. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I would say to the gentleman from Pennsylvania [Mr. 
Ridge] that I share his concerns just expressed. I appreciate very much 
the initiative of the gentleman from Pennsylvania and the gentleman 
from New York [Mr. Flake]. I feel that is a better provision in that 
particular title.
  Mr. Speaker, several Members have already made reference to the flood 
insurance reform elements of this multifaceted legislation.
  I would say while the revisions to the National Flood Insurance 
Program included in H.R. 3474 do move us in the right direction, a true 
reform of the program will not be achieved until the Congress exerts 
the will to put a stop to the repeated claims made on the NFIP by those 
who with great interstate and intrastate cross-subsidization, knowingly 
build and rebuild in unstable flood prone areas. Until such true reform 
is achieved, the solvency of the fund will continue to be threatened; 
bailouts from the taxpayers for the fund and much higher costs for 
flood and hurricane damage will continue. The necessary comprehensive 
reform provisions were reintroduced in this Congress by this Member 
once again in the form of H.R. 62, but only limited elements of its 
survived committee and conference action.
  This Member strongly urges his colleagues to support the passage of 
the conference report.
  In closing, let me say that literally years of work have gone into 
the CDFI bill and the interstate bill by Congress, the administration, 
the affected industry and consumer groups. While certain notable 
provisions were not included in the final package, such as the fair 
trade in financial services provision, the conference report represent 
one of the most constructive pieces of legislation that has been passed 
during my tenure on the Banking Committee. The conference report 
provides much needed financial industry reforms and regulatory 
improvements, and I urge its prompt adoption.
  Mr. Speaker, I yield such time as he may consume to the gentleman 
from Louisiana [Mr. Baker], a distinguished member of the Committee on 
Banking, Finance and Urban Affairs, who is very active in several of 
the provisions of this bill.
  Mr. BAKER of Louisiana. I thank the gentleman for yielding this time 
to me.
  Mr. Speaker, I wish to compliment the gentleman from Nebraska [Mr. 
Bereuter] for his work, and the gentleman from North Carolina [Mr. 
Neal] for his work on this measure. it does contain a number of 
important elements which I think are important to the modernization of 
our financial system, not the least of which is the community 
development bank proposal, to which the gentleman from Pennsylvania 
[Mr. Ridge], spoke just moments ago, which I think will make great 
strides in making access by those in minority communities, the 
opportunity to get access to needed credit.
  I also wish to speak to the important elements included in this 
measure relating to small-business loan securitization and commercial 
mortgage securitization, simply stating that these two aspects, I 
think, will probably enhance market opportunities for the Mom-and-Pop 
businesses of America to get access to credit for commercial needs that 
heretofore has been very difficult to obtain.
  Allowing these mortgages to be originated by the small bank in a 
rural community or an inner-city bank for a particular business growth 
plan, and take that loan and basically sell it off to Wall Street, this 
is a very important tool which will open up vast opportunities for 
extension of credit.
  The gentleman from New York [Mr. D'Amato] on the Senate side, was a 
strong advocate of the loan securitization measure in the Senate, and 
the gentleman from Massachusetts [Mr. Frank] on the commercial mortgage 
provisions. I have worked with their staffs, and I think we have 
accomplished a great deal with the inclusion of these two measures in 
this package.
  Mr. Speaker, last but certainly not least, the gentleman from 
Nebraska [Mr. Bereuter] is to be complimented for his hard work and 
effort on the regulatory relief measures. I think simplifying the 
regulatory process, lowering the cost to make credit available will 
ultimately work not just to the commercial mortgage and banking 
interests but to the consumer interests. The less regulatory 
interference we have in these activities, the lower costs required to 
get access, everybody wins.
  To those Members who have worked so many hours on this matter, let me 
say I appreciate your efforts, and I know the banks and consumers will 
eventually appreciate your efforts.
  Mr. BEREUTER. Mr. Speaker, I yield myself such time as I may consume.
  I simply want to say that I thank the gentleman for his kind remarks 
and thank him for all of his great work on this legislation. It bears 
his mark, as it does of many Members of the majority and the minority.
  Having no further requests for time, Mr. Speaker, I urge strong 
support of this legislation.
  Mr. Speaker, I yield back the balance of my time.
  Mr. NEAL of North Carolina. Mr. Speaker, I yield myself such time as 
I may consume.
  Mr. Speaker, we hear daily, constantly, a drumbeat of negative 
comments in the press and from other sources about our Congress, and so 
little is ever said about the positive contribution that this 
institution makes to the lives of the American people.
  I have become ever more troubled by this and do not know, frankly, 
what to do about it. I do not know that anything will be done about it. 
Maybe it has always been that way and always will be.
  But the fact of the matter is that the people that serve in the House 
are almost to a person fine, decent, honest, hardworking, dedicated 
people who are devoting their lives to serving others. Unfortunately, 
that message rarely comes through.
  Not only is that true in a general sense but it is true in a very 
specific sense. Hardly a day goes by here without legislation being 
reported out of committee or passing this body or the Senate, or 
finally, as today, being approved as a conference report--and much of 
that legislation would significantly improve the lives of the American 
public; legislation that would significantly improve the lives of the 
people we represent, the American people.
  Let me just point out that is our job here. Most of us see our jobs 
here as being servants of the American people, trying to improve the 
lives of our people, and laboring to improve the human condition. Day 
in and day out, we do things that accomplish that.

                              {time}  1320

  Let me just take a minute here in closing to point out what this 
legislation does. I cannot begin to do it justice, and I am not going 
to take long because we have other business to deal with--other 
business, I would say, that will help the American people.
  Earlier I commented briefly on the interstate bill we just passed, 
and how much easier it will make life. I pointed out how much less 
suffering there will be with interstate branching when economic 
conditions deteriorate in various parts of this country because those 
conditions will have less of an impact on people. I mentioned how less 
expensive it is likely that the financial system will be to the 
American public because the system will be strengthened by interstate 
branching legislation.
  The community development bill that is a part of this big bill before 
us now will in many ways improve the everyday living conditions of 
thousands of people all around this country. It will raise their 
standard of living, make it easier to educate their children, and help 
improve their standard of living. Likewise the small business loan 
securitization provisions will make it easier for small business to 
attract new capital, grow, provide jobs and thus improve the standard 
of living for thousands, tens of thousands of American citizens. The 
regulatory relief provisions in this bill may sound dry and dull, I am 
sure, to most people, but in over 50 ways they will reduce unnecessary 
red tape and regulations, to make it more possible for banks to do what 
they are there to do, which is to make loans to help our economy work 
for the benefit of all of our people. I commend the gentleman from 
Nebraska [Mr. Bereuter] and the gentleman from Florida [Mr. Bacchus] 
for their leadership on the regulatory relief title. I would also point 
out this bill's provisions to tighten the money laundering statutes, so 
that law enforcement agencies can spend their time tracking down drug 
dealers, instead of wasting their time shuffling paper.

  All of this, legislation has happened with the very strong support of 
the Clinton administration, which has led the way and has provided the 
initial push for much of this. All of this has also enjoyed great 
bipartisan support within the Congress, and is a very good example of 
this Congress working, as it should, for the benefit of the American 
people.
  So, Mr. Speaker, I want to say I am very grateful to all of my 
colleagues here who have worked hard on this legislation and who, day 
in, day out, after weekend in, weekend out as well, spend their lives 
working for the benefit of the American people. I also want to thank 
the administration for their tireless efforts on behalf of the American 
people, and also let me thank staff members who have worked tirelessly 
over many months on this and other legislation.
  This legislation that we are passing today is vastly complicated, and 
took months of hard work on the part of a number of people. I would 
just like to mention some of the full Banking Committee staff who 
worked on it. Armando Falcon, Amy Friend, Kevin Petrasic, Kelsay Meek; 
Rick Maurano; Briget Polichene; Leslie Fisher; and Joe Reilly have 
worked tirelessly to help us produce this very fine legislation and we 
could not have done so without them.
  Mr. Speaker, I thank them and, of course, the staffs of the other 
subcommittees for all their hard work in helping us develop and pass 
this legislation.
  Mr. MFUME. Mr. Speaker, will the gentleman yield?
  Mr. NEAL of North Carolina. I yield to the gentleman from Maryland.
  Mr. MFUME. Mr. Speaker, I rise to congratulate the gentleman from 
North Carolina [Mr. Neal] on his many years of work on the Committee on 
Banking, Finance and Urban Affairs, recognizing that for all intents 
and purposes this is probably the last major piece of legislation that 
he will be moving forward under his leadership here in the House. There 
are many of us who have served on that committee a number of years with 
him, have gone through a number of debates and worked on a number of 
issues, and I know I speak on behalf of all of them when I express our 
sincere thanks for his leadership over many difficult years through 
many major pieces of legislation and for being truly a gentleman and a 
distinguished, very distinguished, member of the Committee on Banking, 
Finance and Urban Affairs.
  Mr. NEAL of North Carolina. Mr. Speaker, I thank the distinguished 
gentleman from Maryland.
  Mr. BEREUTER. Mr. Speaker, will the gentleman yield?
  Mr. NEAL of North Carolina. I yield to the gentleman from Nebraska.
  Mr. BEREUTER. Mr. Speaker, the gentleman should know how this 
gentleman feels about him, and I expressed my views about the 
gentleman's service, his traits, his admirable qualities and the 
contributions he has made to his district, and State and Nation as we 
discussed the interstate banking bill, but I think it is true, as the 
gentleman from Maryland suggested, this may well be one of the last 
major bills where the gentleman from North Carolina plays a role, and I 
think he has provided one more service to the country by the 
perspective that he has just provided to, not only the body, but 
especially to people who are listening to the proceedings and who will 
read about these proceedings because he has talked about the valuable 
way that Members, with the assistance of their staff, make their 
contributions to serve the American public at a time when bashing the 
Congress is very popular, unfortunately, and when sometimes engaged in 
by Members of this institution for political purposes. The gentleman 
has put the proper perspective on the routine, positive activity that 
goes on in this body, and the gentleman has been a leader in providing 
that kind of bipartisan, positive action for the House, and we are 
going to miss him greatly, and I wish him well in his continued public 
service and in his private life.
  Mr. COBLE. Mr. Speaker, will the gentleman yield?
  Mr. NEAL of North Carolina. I yield to the gentleman from North 
Carolina.
  Mr. COBLE. Mr. Speaker, I may be completely out of line because I do 
not sit on the Committee on Banking, Finance and Urban Affairs, but, 
since we are extending roses to the gentleman from North Carolina [Mr. 
Neal], at this time I see no one on the floor who is from North 
Carolina.
  Mr. Speaker, the gentleman from North Carolina and I share a common 
area in the piedmont of North Carolina. Our districts are contiguous to 
one another. We represent jointly tobacco, textiles, furniture, other 
industries, and, being a nonmember of the Committee on Banking, Finance 
and Urban Affairs, I would like to add to what the gentleman from 
Maryland [Mr. Mfume] and the gentleman from Nebraska [Mr. Bereuter] 
have said and extend good wishes to him as he begins a new portion of 
his life.
  Mr. RUSH. Mr. Speaker, I rise today in strong support of the 
conference report for the Community Development Banking and Financial 
Institutions Act, a pivotal piece of legislation which the House will 
consider today. House Banking, Finance and Urban Affairs Committee 
Chairman Henry Gonzalez, Senate Banking, Housing and Urban Affairs 
Committee Chairman Donald Riegle, and President Clinton are to be 
heartily congratulated for their efforts in putting together this 
landmark legislation.
  When this legislation was introduced, I commended the administration 
for their extensive outreach effort to community, banking and consumer 
groups in putting this bill together. In May, I introduced the 
Community Development Financial Institutions Act of 1993, H.R. 2250. I 
must say that I considered it a mark of honor that their and my bills 
ended up looking so very similar--twin sons of different mothers, if 
you will. Through discussions with many of the same individuals and 
groups and because of the administration's and my mutual desire to 
generate effective and comprehensive community development, we 
developed analogous approaches to many of the critical issues 
fundamental to such an effort. And it is because we substantially came 
to share the same approach that I rise today in support of this bill.
  I strongly believe that this legislation will palpably and 
responsibly begin to address the credit and community development needs 
of our Nation's most disinvested areas. I support this bill because of 
my belief that meeting the economic needs of the people of inner city 
communities, rural areas and close-in suburban areas is one of a series 
of steps necessary to make sure that equal opportunities are fully 
extended to all Americans. The bill is designed to assist Americans 
who, as President Clinton has described them, are ``willing to work 
hard and play by the rules.''
  This legislation will create the Community Development Banking and 
Financial Institutions Fund, an entity with a mission of fostering the 
growth and, where necessary, the establishment that will increase 
access to credit and financial services by low- and moderate-income 
people as well as small, minority- and women-owned businesses. These 
are the groups and individuals which have traditionally been denied 
access to adequate levels of capital and credit. All too frequently, 
these groups and individuals are located within disinvested communities 
like many of those located in Illinois' First Congressional District, 
which I represent.

  Community development financial institutions, known as CDFI's across 
the country, which are innovative entities comprised of individuals who 
know first hand what steps to take to improve their communities, will 
now be able to better obtain the economic resources with which to do 
so. The fund, through competitive awarding of a wide range of 
assistance, will enable creative ventures to be undertaken including 
everything from supporting the efforts of local groups to demolish and 
remove abandoned buildings, to facilitating the development of low- and 
moderate-income housing, to helping groups with successful track 
records building small projects to obtain capital and credit to do more 
of their crucial work. Organizations and financial institutions will 
apply for assistance from the fund--such as community development 
banks, credit unions, loan funds, community development corporations, 
microlenders, and other entities.
  The administrator of the fund will determine which among competing 
proposals from CDFI's will do the most comprehensive job of 
rejuvenating all aspects of the target community's economic and social 
vitality. And, Mr. Speaker, the fund will accomplish these goals in a 
way that does not create one more Federal bureaucracy, but instead will 
build on the insights gained from some of the hard-fought struggles, 
and mistakes, of the past as these CDFI's learned what did and did not 
work in fostering community development.
  The fund will encourage healthy competition among applicants to get 
the most bang for its limited bucks. It will require matching private 
funds for much of the assistance it awards, which will mean that 
applicants will not only have to compete on the basis of the 
comprehensiveness of their application, but will be put through the 
additional real world filter of securing scarce private sector funds.
  Finally, the real significance of this legislation is that it is not 
just about credit or banking. It is about genuine, comprehensive, 
permanent community development. With this bill, we will give 
individuals the tools to determine their own destinies; to take their, 
and their families', futures into their own hands and work hard to 
achieve what, until now, has been on the horizon but still beyond their 
grasp--that elusive goal called prosperity. Real prosperity cannot 
exist without the economic building blocks that so many of the hard 
working men and women in disinvested urban, suburban, and rural 
communities lack. The kind of development that the fund will foster is 
that which will measurably and steadily increase the confidence of the 
residents, business owners, and workers in targeted communities that 
their own futures and opportunities are on the rise. But just as 
critically, it will also convince outside investors that these 
communities merit their careful and considered attention--and their 
investment dollars.
  I urge my colleagues to support this bill, which is designed to 
foster increased access to good-paying jobs; encourage entrepreneurship 
and self-sufficiency; increase living standards and quality of life; 
make credit and financial services more readily available; and give 
community members access to a broader spectrum of goods and services. I 
believe that it will engender myriad economic opportunities, including 
ownership of businesses, buildings, homes, and other assets within our 
communities.
  By devoting resources to precisely targeted community development 
financial institutions that are undertaking activities that aim to 
reduce the cycle of violence and hopelessness that so many of our 
citizens now experience, by putting our people back to work at decent 
jobs, and by helping to ensure that our communities believe in the 
possibilities that underlie even our Nation's most deep-seated 
problems, I firmly believe that the Community Development Banking and 
Financial Institutions Act will be a catalyst for real change in the 
lives of countless Americans during the years to come.
  Mr. ORTON. Mr. Speaker, I rise today in strong support of H.R. 3474, 
the Community Development and Regulatory Improvement Act.
  This bill proves that we in Congress can work together in a 
bipartisan manner to enact legislation which benefits people throughout 
our country. While this bill is popularly referred to as a banking 
bill, it would more appropriately be called a borrower's bill. Because 
that is who will most benefit by passage of this bill. Small 
businesses, individuals, homebuyers, and almost anyone seeking credit 
may be impacted by the provisions of H.R. 3474.
  I am particularly pleased to see this legislation becoming law. As a 
cosponsor of H.R. 962, the Regulatory Relief Act, I believe it is 
critical that we eliminate unneeded banking regulations which take time 
and resources away from banks' primary function--lending. I 
particularly commend Representatives Doug Bereuter and Jim Bacchus for 
their hard work in passing most of the provisions in their bill.
  I am also pleased to see us enact provisions to promote secondary 
markets transactions for small business and commercial real estate. 
This has not been given much attention. However, in the long run, it 
could have a significant impact on increasing credit in these areas. I 
was pleased to be an original cosponsor of the House version of the 
final bill that passed, and would like to commend my good friend and 
colleague, Paul Kanjorski, for his hard work in making this a reality.
  Finally, I am supportive of the administration's initiative to create 
more community development financial institutions. The purpose of this 
title is to provide leveraging for community-based lenders seeking to 
provide funds to borrowers having difficulty obtaining credit from 
traditional lending sources. I am pleased to see the conference report 
contain my Credit Union Community Development Enhancement Act, a bill I 
introduced to provide additional funds for the already successful 
community development credit union revolving loan fund.
  Most of all, I am pleased to see that the bill we are passing today 
contains so many recommendations made by participants at a 
congressional field hearing held in my district last fall.
  Last August, Representative Kanjorski agreed to have the Economic 
Growth and Credit Formation Subcommittee, which he chairs, hold a field 
hearing in West Valley City, UT. I invited a wide range of 
participants, including Utah Lt. Governor Olene Walker, and 
representatives of small businesses, banks, credit unions, realtors, 
and low-income and minority business groups.
  This field hearing focussed on credit availability for small 
businesses, real estate, housing, and consumers. The panelists made a 
very effective case that we in Washington need to take action to 
improve credit availability for businesses and consumers alike. Their 
recommendations were very specific.
  I would like all of the panelists to know that I listened very 
carefully to these recommendations. Upon returning to Washington, I 
pushed for adoption of changes to our banking and securities laws which 
reflected these recommendations. Today, with passage of H.R. 3474, many 
of these recommendations are becoming a reality. I believe this shows 
that legislators can be responsive to those they represent.
  Let me outline some specific examples. A number of the panelists of 
our field hearing made a strong case for the elimination of burdensome, 
unnecessary banking regulations. Specifically, Lt. Governor Walker made 
a ``plea for a reduction in banking regulations.'' She went on to 
explain how this is critical to maintain credit availability for a wide 
range of businesses, including software businesses, which are so vital 
in Utah.
  This plea was echoed by Robert Ligget, representing the Salt Lake 
Area Chamber of Commerce. Noting the difficulty small businesses have 
in obtaining financing, he asked us in Washington to ``remove excessive 
regulation that inhibits the banks from lending.'' He explained the 
link between unneeded regulations and reduced lending by noting that 
``The net effect for business has been that the lending banks have had 
to create larger, more complicated hoops for small businesses to jump 
through in order to comply with the new regulations.''
  These thoughts were also echoed by bankers who must comply with these 
regulations. Representatives of both big and small banks made a 
persuasive case that they are sidetracked from their primary role as 
lender by the need to comply with complicated and costly regulations. 
Many of these regulations serve no purpose in protecting the safety and 
soundness of these institutions.
  Similar comments were made by representatives of credit unions, 
homebuilders, and builders and advocates of affordable rental housing. 
The message was loud and clear: we have to eliminate burdensome banking 
regulations which impede loans for small businesses, for affordable 
housing, for homebuilding, and for consumers throughout Utah.
  So what have we done in Congress? We listened. Today, with passage of 
the regulatory relief portion of the bill, we will be eliminating 
dozens of unnecessary banking regulations. These include directing 
banking regulators to review and streamline regulations, requiring 
regulators to coordinate and unify banking examinations, providing for 
more flexibility with regard to micromanagement provisions, and many 
other provisions.
  At our field hearing, we also heard from panelists about the need for 
programs to provide credit to businesses and individuals who are 
creditworthy, but have trouble obtaining credit from traditional 
lenders. Veda Barrie-Weatherbee, the president of the Utah Association 
of Women Business Owners, described the special difficulties women 
entrepreneurs have in obtaining credit. She outlined a number of steps 
that should be taken.
  We also heard from Pete Suazo, of the Salt Lake Minority Business 
Development Center. He characterized the special problems that 
minorities sometimes have in obtaining credit, and also made 
suggestions to meet this need. These suggestions included eliminating 
unneeded banking regulations, which we have done in this bill. He also 
advocated expanded lending to minority businesses through programs 
targeted to these borrowers, but doing so within the private sector.
  I believe we are doing just that with the enactment of the Community 
Development Financial Institutions title of H.R. 3474. This title will 
provide leveraged financing for community-based lending institutions 
which serve low-income individuals and targeted populations within 
underserved areas. The program also provides training programs for 
financial institutions in order to help them undertake development 
financing. This need for training was specifically cited by Mr. Suazo 
and Ms. Barrie-Weatherbee.
  Finally, I would like to not a major recommendation Chairman 
Kanjorski made at this hearing. He mentioned the introduction of H.R. 
2600, his Business, Commercial and Community Development Secondary 
Market Development Act. I was pleased to be an original cosponsor of 
this bill, which became the House version of the secondary markets 
legislation that we are passing in H.R. 3474. As Chairman Kanjorski 
stated,

       A secondary market will expand the overall supply of credit 
     by purchasing loans made by banks and packaging them into 
     large pools of loans which are sold to institutional 
     investors like pensions funds and insurance companies. A 
     secondary market helps redeploy funds where they are needed.

  I believe this new title may prove to be especially beneficial for 
Utah. We are a high-growth State, in need of additional capital from 
other areas of the country not enjoying the same robust growth we have. 
Secondary markets allow local lending institutions to sell off portions 
of loan portfolios and use the funds to make additional loans. In the 
same way that secondary markets have become a tremendous source of low-
rate financing for the residential mortgage market, expanding these 
markets to small businesses and commercial real estate could have a 
dramatic long-term effect for credit in these areas.
  In short, the bill we are passing today is an important legislative 
achievement, which should have the practical effect of increasing 
lending and encouraging economic growth. I commend the many individuals 
in the House and Senate who have made this bill a reality and urge 
final adoption.
  Ms. ROYBAL-ALLARD. Mr. Speaker, I rise in strong support of the 
conference report for H.R. 3474, the Community Development and 
Regulatory Improvement Act.
  This landmark legislation includes a number of provisions that will 
help finance much-needed economic development in distressed areas of 
the country and stimulate community revitalization. The targeting of 
assistance to organizations and financial institutions geared toward 
community development, will enable the newly-created Community 
Development Banking and Financial Institutions Fund to significantly 
improve prospects for real and meaningful economic growth and community 
revitalization.
  H.R. 3474 also provides important incentives for banks and thrifts to 
make investments in distressed communities. Historically, these 
communities have simply been unable to break the vicious cycle that 
perpetuates chronic poverty because of the unavailability of adequate 
sources of private sector financing.
  I also strongly support the conference report because of the strong 
consumer protection provisions protecting homeowners against high cost 
loans and because of the meaningful reforms to the national flood 
insurance program. In addition, the provisions related to small 
business capital formation and paperwork reduction and regulatory 
relief will further stimulate opportunities for financial institutions 
to improve their operations.
  H.R. 3474 is one of the most important pieces of legislation to be 
considered by Congress in this session. I urge my colleagues to vote 
yes on the conference report.
  Mr. VENTO. Mr. Speaker, I rise in support of H.R. 3474, the Riegle 
Community Development Regulatory Improvement Act. I commend Chairman 
Gonzalez for his leadership on this legislation. I congratulate my 
colleagues on the House Banking Committee for their hard work on this 
important initiative.
  Mr. Speaker, H.R. 3474 is composed of several unrelated but important 
components. However, the key elements of this bill, along with H.R. 
3841, the Riegle-Neal Interstate Banking and Branching Efficiency Act, 
which we will consider separately, have somewhat common goals--to 
increase the efficiency of the total American financial services 
network and its ability to interface, while at the same time to provide 
needed credit opportunities to local communities and individual 
consumers.
  The centerpiece of H.R. 3474 is title I which authorizes the National 
Fund for Community Development Banking. This is a key initiative and 
while a larger authorization commitment could have accomplished more, 
this program provides a crucial, much needed lifeline in the areas 
slated for such institutions.
  President Clinton as a candidate in 1992 appropriately recognized the 
need for such a new mechanism to help communities and consumers. As 
this initiative has moved forward, I have been contacted by more and 
more groups with creative and exciting concepts to help the people in 
my district and across Minnesota; groups that need crucial financial 
help and that can bring the community development financial 
institutions proposal to fruition. It is important to note that those 
individuals who have contacted me represented low income neighborhoods 
or disadvantaged groups such as native Americans and the Hmong, a 
Southeast Asian minority group with a significant presence in 
Minnesota. I am pleased that the final product specifically includes 
Indian tribes as eligible recipients and Indian reservations as 
eligible communities. Equally important, the definition of targeted 
population is sufficiently broad to include Minnesota's Hmong 
population.

  Title I also contains a careful compromise on the issue of high cost 
mortgages. The House Banking, Financing and Urban Affairs Committee has 
seen egregious examples of lenders who have taken advantage of 
vulnerable, often elderly and low-income folks with exorbitant high 
interest rate loans. The outrageous consequence of such loans is too 
often foreclosure and displacement of people from their homes. This 
conference agreement balances the concern of the legitimate industry 
and consumer use of this type of loan with the need to regulate and 
prevent the unacceptable practices of some.
  Title II is an important title which will expand the availability of 
credit for small businesses by creating a secondary market for small 
business loans. I am pleased we were able to come to this agreement 
which will be another tool to assist with credit crunch concerns.
  Title III, the paperwork reduction and regulatory improvement title, 
includes modifications to reduce red tape to allow banks to efficiently 
conduct their business. An important section of this title requires 
Federal banking agencies to consider the burden and benefits of any new 
regulations.
  In addition, this bill requires Federal banking agencies to review 
and streamline its regulations and written supervisory policies within 
2 years. The goal of this review is to eliminate inconsistent, outmoded 
or duplicative requirements.
  Finally, this conference agreement includes flood insurance reform 
which represents many years of hard work by several members and their 
staff. And while I may have hoped for stronger environmental 
consideration in the mitigation efforts of this agreement, I am mindful 
that we have strengthened and expanded the insurance purchasing 
requirements. I support the codification of the community rating system 
which provides incentives for preventing actions by communities in 
order to reduce insurance losses. This goes hand in hand with the 
establishment of a national flood mitigation fund that will provide 
grants to reduce the risk of flood damage for use in relocation, 
demolition and other mitigation efforts.
  Mr. Speaker, today's proposed action by the House will represent 
major changes in our Nation's financial services network. Interstate 
banking and branching, the creation of the National Fund for Community 
Development Banking, flood insurance reform and the regulatory 
streamlined provisions will translate into greater access of capitol 
and better services for our constituents and communities--and better 
credit availability translates into more enterprise and a stronger, 
more effective, efficient U.S. economy.
  Mr. MORAN. Mr. Speaker, I rise in support of the conference report on 
the Community Development and Regulatory Improvement Act.
  This legislation provides many communities with the seed capital they 
desperately need to reverse redlining and revitalize their community.
  We are all familiar with the success of Chicago's Southside Bank.
  With the passage of this conference report, Chicago's success can be 
duplicated in other communities across this country.
  I also want to call attention to another provision in this bill that 
has gone largely unnoticed but will have comparable or greater impact 
on the availability of capital and credit for small businesses and 
commercial real estate development including the construction of more 
moderate- and low-income housing.
  This provision will facilitate the creation of a secondary market for 
commercial and small business loans.
  By removing the legal impediments, this legislation will create the 
financial mechanism through which the lending community will be able to 
attract more capital, provide greater liquidity, and lower the cost of 
borrowing.
  Just as Fannie Mae's and Freddie Mac's ability to convert residential 
mortgages into securities has expanded the opportunity for home 
ownership, this legislation will enable many struggling businesses to 
secure the capital they need to survive and grow.
  Mr. Speaker, more than 3 years ago during the height of the recession 
when businesses were failing for lack of credit, I offered a sense-of-
the-Congress resolution on the credit crunch.
  This resolution outlined a series of regulatory and tax policy 
changes necessary to end the crisis, stabilize collapsing real estate 
values, and revitalize the banking industry.
  This resolution called for restoration of the passive loss provision 
for real estate, liberalization of pension fund investment rules, 
removal of the tax penalties for loan restructuring, elimination of 
mark-to-market liquidation-based appraisals, and securitization of 
commercial loans.
  All but one of these recommendations have become a reality. with 
today's favorable vote, the securitization of business and commercial 
loans will soon become a reality.
  Mr. LaFALCE. Mr. Speaker, I rise in support of this legislation. This 
omnibus legislation contains several elements that are intended to 
facilitate the flow of credit to parts of our economy that have 
historically been underserved. Title I of the legislation, the 
Community Development Financial Institutions Act, will encourage the 
flow of capital to low- and moderate-income communities. The 
legislation builds on the framework of the administration's original 
proposal, which contemplates a network of independent community 
development banking entities. However, an important addition to the 
concept of community development banking has been made in the form of 
the Bank Enterprise Act, initially passed by Congress in 1991 as part 
of the FDICIA legislation, and finally provided with funding in this 
legislation.
  The Bank Enterprise Act is based on the proposition that the most 
effective way to increase the level of lending and investment in low- 
and moderate-income communities is to provide incentives for existing 
financial institutions to get involved in serving those communities. It 
is our commercial banking system that has the capital resources 
required to meet the needs of underserved communities. Therefore, our 
objective is to find ways to channel the available resources into the 
communities where they are needed.
  The Bank Enterprise Act is an effort to ensure that our underserved 
communities are brought into the mainstream of the financial services 
marketplace. We must avoid marginalizing low- and moderate-income 
communities by assuming they can only be served by a separate, 
specialized network of lending entities. This is not to suggest that 
lending institutions specializing in serving underserved communities do 
not have an important role to play, but this role must be in close 
cooperation with--rather than in conflict with--existing financial 
institutions. Our objective is an efficient and effective financial 
services marketplace which recognizes both the needs and opportunities 
involved in lending and investing in historically underserved 
communities.
  Title 2 of this legislation will encourage the development of a 
secondary market for small business loans. This is an issue that I have 
been involved with for the past decade. Whereas larger businesses can 
access the capital markets, small businesses remain dependent on bank 
loans for their financing. Yet because bank loans to small businesses 
are structured to meet the specific needs of individual businesses and 
are therefore difficult to standardize, the development of a secondary 
market in small business loans has been slow.
  This legislation will lift various regulatory barriers that have 
hindered the development of a secondary market for small business 
loans. It remains to be seen whether doing so will provide a sufficient 
incentive for the market to develop. However, this legislation 
represents a necessary first step in the process of encouraging the 
securitization of small business loans. This bill gives the Federal 
Reserve and the SEC the responsibility to study the development of the 
secondary market for small business loans. Within a few years, we may 
conclude that additional steps are needed to encourage the 
securitization process.
  Finally, title 3 of the bill represents an important first step in 
addressing the overwhelming regulatory burden currently stifling our 
regulated financial institutions. It has become increasingly difficult 
for our banks and thrifts to concentrate on providing credit when they 
are forced to spend so much of their time and resources addressing 
regulatory demands that too often have no relevance whatsoever to 
safety and soundness. Although there remains much more to be done in 
the area of relieving regulatory burden, this legislation hopefully 
represents a turning point.
  This is important legislation and I urge its passage.
  Mr. SCHUMER. Mr. Speaker, I rise in support of both banking 
conference bills that are on the floor today--the interstate banking 
bill and the Community Development and Regulatory Improvement Act.
  Both of these bills are good for consumers and good for the financial 
services industry, and they both deserve the bipartisan support that 
they have received thus far.
  The interstate banking bill will allow banks to merge and expand 
across State lines without needing to have a separately managed bank in 
each State. That means that banks can branch out to other States but 
not have to needlessly have a separate board of directors, group or 
executives, and capitalization requirement for each of the 50 States.
  Finally, after many attempts, we will have a truly integrated, 
national banking system. This means a more efficient banking system 
which will reduce the cost and expand services to consumers in every 
State.
  This bill will contribute to a stronger banking system that will be 
less vulnerable to the massive failures that we saw in the past. If you 
look at many of the bank failures in the eighties, a lot of the banks 
were governed by arcane and obtusive State regulations.
  The bill includes safeguards to protect small community banks, and 
banks will still have to follow State requirements on fair lending, 
consumer protection, community reinvestment, and taxation. In addition, 
the bill has strong requirements ensuring that all banks are adequately 
capitalized.
  Both the interstate branching bill and the CDFI bill deserves our 
strong support.
  In my limited time, I would like to express my disappointment that 
another very important bill was not included in the conference 
agreement. I am referring to the fair trade in financial services bill 
that I introduced with Congressman Leach and Congressman Stark.
  Fair trade in financial services and tremendous bipartisan support, 
passing the Senate by a wide margin and passing the House Banking 
Committee by, I believe, a unanimous vote.
  It would give the Treasury Department the right to sanction foreign-
owned banks in America if that country discriminates against our banks 
and financial services overseas.
  It makes complete sense. We should have the same opportunity to 
export our financial services that we give to virtually every other 
nation.
  For decades we have been victims of our own sense of fair play. 
Certain predator foreign trading partners have taken advantage of 
America's fair and open banking and financial services laws to invest 
heavily in the United States while our firms are shut out from 
competing in their country.
  We have the most advanced and most competitive financial services 
industry in the world.
  We are the champs.
  But in certain countries, like Japan, our firms cannot even play the 
game. It's like having an international basketball competition but not 
allowing the dream team to play. Our financial services industry is the 
dream team of the finance world. But, because U.S.T.R. is notoriously 
weak when it comes to the service sector--particularly the financial 
service sector--our team cannot even get off the bus.
  The Fair Trade in Financial Services Act was left out of the 
conference on purely jurisdictional grounds. Yes, jurisdiction is 
important, but each committee squandered a year-long opportunity to 
mark up and comment on the bill.
  What we have lost by not including fair trade in financial services 
is the chance to improve our trade balance by billions of dollars. Our 
dream-team, financial service sector, if allowed to fully compete in 
Japan, South Korea, Brazil and elsewhere would generate billions of 
dollars in wealth for our country. By having our banks in these 
countries, our companies would be able to find capital to expand our 
businesses abroad. All of these means American jobs and a stronger U.S. 
economy.
  It is a shame that we were not able to include this very important 
legislation which was endorsed, if I may add, by the Treasury 
Department, U.S.T.R., the banking industry, the insurance industry, and 
the securities industry.
  Chairman Gonzalez and Congressman Frank, I would like to express my 
gratitude to you for your attempts to find a way to include this 
language in the conference report. I greatly appreciate the hours and 
hours that both of you spent to try and get this fair trade language in 
the bill. Unfortunately, we have missed a great opportunity, and one of 
our strongest industry sectator will continue mostly as a specter in 
the competition of world trade.
  Mrs. UNSOELD. Mr. Speaker, I rise in strong support of the two 
banking bills before us on the floor today. The Interstate Banking and 
Branching Efficiency Act is a vital initiative to increase the 
efficiency of interstate banking while also protecting the rights of 
States to control entry into their markets. This legislation not only 
provides a workable solution to a problem that has been plaguing 
legislators for decades--but it does so in a bi-partisan and non-
controversial way.
  I am also delighted that we are about to pass the Community 
Development and Regulatory Improvement Act, legislation which will 
establish a fund to finance economic development in distressed 
communities, restrict the activities of lenders targeting high-cost 
loans to low-income areas, and reduce unnecessary paperwork. I am 
particularly pleased over the inclusion in this bill of regulatory 
burden relief provisions authored by Representatives Bachus and 
Bereuter. Whenever possible we should remove paperwork burdens that 
fail to protect taxpayers and may serve only to confuse consumers.
  Mr. MARKEY. Mr. Speaker, I am pleased to support, on behalf of the 
Subcommittee on Telecommunications and Finance, the conference 
committee's report on the Riegle-Neal Community Development and 
Regulatory Improvement Act of 1994. As you know, this legislation 
represents the fulfillment of a major Clinton administration 
initiative, and I am extremely pleased to rise in support of it here 
today.
  My subcommittee looked carefully at the provisions of this 
legislation which are designed to greatly increase the capital 
available to small businesses for growth and expansion. Increasing the 
flow of capital, and making the flow more steady and predictable, is 
vitally important to the health of our Nation's economy.
  Small businesses employ more than 57 million Americans. They also 
employ more than half of the workers in my home State. Despite their 
crucial role in the economy, however, these small businesses--the same 
ones that help put dinner on the table in over half the homes in 
Massachusetts--experienced in the late 1980's and early 1990's a 
devastating credit crunch from which they have only recently begun to 
recover. A few weeks ago, however, I was reminded of how far we still 
have to go. The New England Regional Administrator of the Small 
Business Administration said that ``many [small] business owners are 
still financing their businesses and inventories on their credit cards. 
That's a crime. [But] they can't get the door open to get access to 
capital.''
  Although some statistics indicate that the worst problems are behind 
us and that many small businesses are now helping to rebuild and 
restore the nation's economic muscle, and Congress owes it to workers 
and taxpayers to take reasonable steps to make sure that the credit 
crunch does not reappear.
  The small business provisions of the administration's community 
development banking bill should go a long way to protect us against 
future cyclical credit crunches. The key elements of the bill are the 
provisions that will, for the first time, help create a vibrant 
secondary market for small business loans, a process known as 
securitization. Securitization is one of those Wall Street words that 
has a numbing effect on most intelligent people. Unlike most other 
arcane Wall Street words, however, this one is both important and 
relevant to anyone who cares about real economic growth.
  Securitization enables lenders to provide more capital, borrowers to 
get more reliable access to credit, and investors to purchase new types 
of financial instruments. This is possible by allowing banks and other 
lenders to sell loans. Many people with home mortgages, or car loans, 
or student loans, are familiar with this because for many years now, 
banks have routinely sold these loans to other institutions. Buyers of 
these loans typically join or pool them together with hundreds or even 
thousands of other similar loans that have also been purchased from 
banks or other lenders. This single pool of near-identical loans is 
then registered with the Securities and Exchange Commission, often by 
means of a simplified and less expensive process, and interests or 
shares in the securitized pool are sold to investors. The cash flow 
generated by the loan payments made by the borrowers finances the 
payments to investors. Perhaps most important, however, the bank now 
has the ability to make new loans because its capital--which is the 
most important indicator of how much money it has available to lend--
was replenished when it sold the original loan.
  The evidence suggests that these benefits are both real and lasting. 
Securitization has worked successfully in the residential mortgage 
market. In 1984, the Energy and Commerce Committee helped draft the 
Secondary Mortgage Market Enhancement Act [SMMEA], which facilitated 
the development of a private secondary market for residential 
mortgages. It is noteworthy that even in the worst days of the credit 
crunch in New England and other parts of the country, mortgages 
remained readily available to qualified borrowers. The small business 
securitization proposal is modeled almost exactly on SMMEA.
  Mr. Speaker, the securitization provisions of the community 
development banking bill will increase capital available to small 
businesses, will make the flow of capital more steady and predictable, 
and will achieve all of this at no cost to taxpayers and without 
creating new risks for investors.
  Finally, I also note that the Senate provisions on fair trade in 
financial services were not included in the conference report. I regret 
that we were not able to reach an agreement in this area and hope that 
we will continue our work on this issue in the next Congress. I hope 
that U.S. trade representatives will work on this area in the interim 
and help secure national treatment for American securities firms 
abroad.
  I wish to commend Chairman Gonzalez and Chairman Riegle for their 
outstanding leadership on this issue, and to compliment the conferees 
and their respective staffs on the House and Senate Banking Committees, 
the Energy and Commerce Committee, as well as my own subcommittee, all 
of whom together worked diligently and effectively to bring the small 
business provisions of this bill to the floor today. I urge my 
colleagues in the House to give this legislation their full support.
  Mr. DINGELL. Mr. Speaker, I rise in support of the conference report 
on H.R. 3474, the Riegle Community Development and Regulatory 
Improvement Act. I especially want to commend the gentleman from Texas 
[Mr. Gonzalez] and Senator Riegle, the distinguished Senator from 
Michigan, for their leadership, and the memberships of the House and 
Senate Banking Committees and the members of the conference committee 
for their diligence and hard work on this legislation and for the 
courtesies that they extended to the conferees from the Committee on 
Energy and Commerce. We pledge to do our part within our jurisdiction 
to see that the laws that we enact today are implemented in the public 
interest and for their intended purposes. We are pleased to have been 
able to contribute to this important effort to facilitate community 
development and small business capital formation.
  The following is provided as clarification of conference report 103-
652 as it relates to certain matters within the rule X jurisdiction of 
the Committee on Energy and Commerce over ``securities and exchanges'' 
and shall constitute the legislative history along with that conference 
report:

        Title I.--Community Development And Consumer Protection

 Subtitle A--Community Development Banking and Financial Institutions 
                                  Act.

       1. Establishment of Fund. Section 104(h) expressly 
     prohibits the Fund from issuing stock, bonds, debentures, 
     notes, or other securities. The Fund would not have authority 
     to issue securities of any kind. In addition to prohibiting 
     the issuance of the Fund's own securities, this provision 
     prohibits the Fund from engaging in securitization activity 
     with respect to loans or equity investments in its portfolio. 
     It is not the intent of Congress that the Fund engage in 
     securities activities, including any secondary market 
     activities with respect to securities.
       2. Assistance Provided by the Fund. Section 108(a)(2) 
     requires that the Fund's equity investment assistance be 
     structured in such a way that the Fund does not own more than 
     50 percent of the equity of an assisted community development 
     financial institution and may not ``control'' the operations 
     of such institution. The Fund may only hold transferable, 
     nonvoting equity investments; however, such investments may 
     provide for convertibility to voting stock upon transfer by 
     the Fund.
       It is not the intent of Congress that the Fund engage in 
     making and selling equity investments on a regular basis. 
     While the Fund may seek to sell an equity investment in its 
     portfolio from time to time, in general, the Fund is not 
     authorized to engage in the securities business, including 
     any secondary market activities with respect to securities.
       In addition, this provision is not intended to impact the 
     determination of ``control'' for purposes of the federal 
     securities laws. As such, the Fund's equity ownership 
     position and its involvement in the operations of the 
     community development financial institution would be among 
     the facts and circumstances considered in determining 
     ``control'' for purposes of the federal securities laws. 
     Similarly, although the Fund may hold only nonvoting equity 
     securities, the potential conversion of those securities of 
     voting stock upon a transfer would be a factor in determining 
     ``control'' for purposes of the federal securities laws. If 
     the Fund is determined to ``control'' the issuer of the 
     equity securities, the Fund would be an ``affiliate'' of the 
     issuer under the Securities Act of 1933 and, absent an 
     available exemption from registration, would be required to 
     register its resales of the equity securities described in 
     this section. As a general matter, Congress intends that 
     investors purchasing securities from the Fund should have the 
     benefits of disclosure and prospectus delivery requirements 
     imposed under the federal securities laws.
       Section 108(f)(3) provides that the Fund has authority to 
     impose sanctions against assisted community development 
     financial institutions if such entitles engage in, among 
     other things, fraud or mismanagement. To the extent that any 
     such fraud or malfeasance involves securities activities of 
     an assisted institution, the Fund shall also refer such 
     matter to the Securities and Exchange Commission for its 
     investigation.
       Section 108(g) would permit the Fund to invest in, and then 
     resell, its equity investments (e.g., securities). It is not 
     the intent of Congress that the Fund engage in making and 
     selling equity investments on a regular basis. While the Fund 
     may seek to sell an equity investment in its portfolio from 
     time to time, in general, the Fund is not authorized to 
     engage in the securities business, including any secondary 
     market activities with respect to securities.

              Title II--Small Business Loan Securitization

       1. Underwriting. Section 206 should not be interpreted to 
     permit national banks (which are exempt from broker-dealer 
     regulation pursuant to the Securities Exchange Act of 1934) 
     to participate in the underwriting of small business related 
     securities.

       Title III.--Paperwork Reduction and Regulatory Improvement

     Section 340. Simplified Disclosure for Existing Depositors.
       Section 340 amends Section 43(b)(3) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1831t(b)(3)) to require depositors 
     to acknowledge that a ``noninsured depository institution'' 
     is not federally insured. As a matter of law, registered 
     broker-dealers and investment companies are not engaged in 
     the type of activities that would render them ``depository 
     institutions'' for the purpose of Sec. 1831t. Moreover, due 
     to the disclosure requirements already contained in the 
     federal securities regulatory scheme, customers of such firms 
     are already comprehensively regulated under a federal scheme 
     that promotes investor protection.
     Section 347. Commercial Mortgage Related Securities.
       1. Underwriting. Section 347 should not be interpreted to 
     permit national banks (which are exempt from broker-dealer 
     regulation pursuant to the Securities Exchange Act of 1934) 
     to participate in the underwriting of mortgage related, 
     including commercial mortgage related, securities.
       2. Effective date. Section 347(d) provides that Section 347 
     will not go into effect until the Comptroller of the Currency 
     has promulgated final regulations regarding bank purchases of 
     commercial mortgage related securities as investment 
     securities.

  Mr. FIELDS of Texas. Mr. Speaker, through the joint efforts of the 
Banking Committee and the Energy and Commerce Committee leadership, 
including Chairman Dingell, ranking member Carlos Moorhead and 
Subcommittee Chairman Markey, we have produced agreement on some 
critical titles of this bill relating to the securitization of small 
business and commercial real estate loans. I also want to commend 
Senator D'Amato the distinguished Senator from New York, for his 
leadership and hard work on this legislation.
  Small businesses are vitally important to employment and the overall 
vitality of the U.S. economy. They account for at least half of the 
entire U.S. gross domestic product and have always been an important 
source of new jobs, new products, and new technologies.
  In order to play their crucial role in economic growth and job 
creation, small businesses must have access to capital.
  Title II, subtitle A of the bill amends the Federal securities laws 
to encourage the securitization of, and the growth of, a secondary 
market for small business and commercial real estate loans.
  The approach of the bill is based on the framework for securitization 
of mortgage loans developed in the Secondary Mortgage Market 
Enhancement Act of 1984 [SMMEA]. SMMEA removed a number of legal 
impediments to the securitization of residential mortgages which has 
led to a large and thriving secondary market for mortgage loans.
  The adoption of a SMEAA-like approach for small business loans will, 
among other things, increase the supply of capital to small businesses. 
That is, by selling loans to investors, thereby transferring risks and 
generating fee income, lenders will free up resources to make new 
loans.
  The legislation extends to small business related securities the same 
exemptions to margin requirements and delivery rules that are available 
to mortgage-backed securities under SMMEA. It also amends the Federal 
securities laws to include commercial real estate loans in the 
definition of mortgage-related securities under SMEAA.
  The legislation also encourages the sale and marketing of small 
business and commercial real estate related securities by preempting 
current State blue sky and legal investment laws with respect to such 
securities. States will be able to opt out of these preemptions so long 
as they do so within 7 years after the bill's enactment.
  In short, enactment of this legislation will make it easier for small 
firms to raise capital and for investors, directly or indirectly, to 
invest in small firms and commercial real estate ventures.
  This legislation is a narrow, focused, and consistent approach based 
on a proven regulatory framework that has been tested in the 
marketplace and is working extremely well.
  It encourages securitization and fosters a secondary market without 
sacrificing market integrity and investor protection, the touchstones 
of the Federal securities laws.
  Mr. NEAL of North Carolina. Mr. Speaker, I move the previous question 
on the conference report.
  The previous question was ordered.
  The SPEAKER pro tempore (Mr. Bilbray). The question is on the 
conference report.
  The question was taken; and the Speaker pro tempore announced that 
the yeas appeared to have it.
  Mr. MFUME. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Evidently a quorum is not present.
  The Sergeant at Arms will notify absent Members.
  The vote was taken by electronic device, and there were--yeas 410, 
nays 12, answered ``present'' 2, not voting 10, as follows:

                             [Roll No. 375]

                               YEAS--410

     Abercrombie
     Ackerman
     Allard
     Andrews (ME)
     Andrews (NJ)
     Andrews (TX)
     Applegate
     Bacchus (FL)
     Bachus (AL)
     Baesler
     Baker (CA)
     Baker (LA)
     Ballenger
     Barca
     Barcia
     Barlow
     Barrett (NE)
     Barrett (WI)
     Bartlett
     Barton
     Bateman
     Becerra
     Beilenson
     Bentley
     Bereuter
     Berman
     Bevill
     Bilbray
     Bilirakis
     Bishop
     Blackwell
     Bliley
     Blute
     Boehlert
     Boehner
     Bonilla
     Bonior
     Borski
     Boucher
     Brewster
     Browder
     Brown (CA)
     Brown (FL)
     Brown (OH)
     Bryant
     Bunning
     Burton
     Buyer
     Byrne
     Callahan
     Calvert
     Camp
     Canady
     Cantwell
     Cardin
     Carr
     Castle
     Chapman
     Clay
     Clayton
     Clinger
     Clyburn
     Coble
     Coleman
     Collins (GA)
     Collins (MI)
     Combest
     Condit
     Conyers
     Cooper
     Coppersmith
     Costello
     Coyne
     Cramer
     Crapo
     Cunningham
     Danner
     Darden
     de la Garza
     Deal
     DeLauro
     DeLay
     Dellums
     Derrick
     Deutsch
     Diaz-Balart
     Dickey
     Dicks
     Dingell
     Dixon
     Dooley
     Doolittle
     Dornan
     Dreier
     Duncan
     Dunn
     Durbin
     Edwards (CA)
     Edwards (TX)
     Ehlers
     Emerson
     Engel
     English
     Eshoo
     Evans
     Everett
     Ewing
     Farr
     Fawell
     Fazio
     Fields (LA)
     Fields (TX)
     Filner
     Fingerhut
     Fish
     Flake
     Foglietta
     Ford (MI)
     Fowler
     Frank (MA)
     Franks (CT)
     Franks (NJ)
     Frost
     Furse
     Gallegly
     Gallo
     Gejdenson
     Gephardt
     Geren
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Gingrich
     Glickman
     Gonzalez
     Goodlatte
     Goodling
     Gordon
     Goss
     Grams
     Grandy
     Green
     Greenwood
     Gunderson
     Gutierrez
     Hall (OH)
     Hall (TX)
     Hamburg
     Hamilton
     Hansen
     Harman
     Hastert
     Hastings
     Hayes
     Hefley
     Hefner
     Herger
     Hilliard
     Hinchey
     Hoagland
     Hobson
     Hochbrueckner
     Hoekstra
     Hoke
     Holden
     Horn
     Houghton
     Hoyer
     Huffington
     Hughes
     Hunter
     Hutchinson
     Hutto
     Inglis
     Inhofe
     Inslee
     Istook
     Jacobs
     Jefferson
     Johnson (CT)
     Johnson (GA)
     Johnson (SD)
     Johnson, E. B.
     Johnston
     Kanjorski
     Kaptur
     Kasich
     Kennedy
     Kennelly
     Kildee
     Kim
     King
     Kingston
     Kleczka
     Klein
     Klink
     Klug
     Knollenberg
     Kolbe
     Kopetski
     Kreidler
     Kyl
     LaFalce
     Lambert
     Lancaster
     Lantos
     LaRocco
     Lazio
     Leach
     Lehman
     Levin
     Levy
     Lewis (CA)
     Lewis (FL)
     Lewis (GA)
     Lewis (KY)
     Lightfoot
     Linder
     Lipinski
     Livingston
     Lloyd
     Long
     Lowey
     Lucas
     Machtley
     Maloney
     Mann
     Manton
     Manzullo
     Margolies-Mezvinsky
     Markey
     Martinez
     Matsui
     Mazzoli
     McCandless
     McCloskey
     McCollum
     McCrery
     McCurdy
     McDade
     McDermott
     McHale
     McHugh
     McInnis
     McKeon
     McKinney
     McMillan
     McNulty
     Meehan
     Meek
     Menendez
     Meyers
     Mfume
     Mica
     Michel
     Miller (CA)
     Miller (FL)
     Mineta
     Minge
     Mink
     Moakley
     Molinari
     Mollohan
     Montgomery
     Moorhead
     Moran
     Morella
     Murphy
     Murtha
     Myers
     Nadler
     Neal (MA)
     Neal (NC)
     Nussle
     Oberstar
     Obey
     Olver
     Ortiz
     Orton
     Owens
     Oxley
     Packard
     Pallone
     Parker
     Pastor
     Paxon
     Payne (NJ)
     Payne (VA)
     Pelosi
     Penny
     Peterson (FL)
     Peterson (MN)
     Petri
     Pickett
     Pickle
     Pombo
     Pomeroy
     Porter
     Portman
     Poshard
     Price (NC)
     Pryce (OH)
     Quillen
     Quinn
     Rahall
     Ramstad
     Ravenel
     Reed
     Regula
     Reynolds
     Richardson
     Ridge
     Roberts
     Roemer
     Rogers
     Ros-Lehtinen
     Rostenkowski
     Roth
     Roukema
     Rowland
     Roybal-Allard
     Rush
     Sabo
     Sanders
     Sangmeister
     Santorum
     Sarpalius
     Sawyer
     Saxton
     Schaefer
     Schenk
     Schiff
     Schroeder
     Schumer
     Scott
     Sensenbrenner
     Serrano
     Sharp
     Shaw
     Shays
     Shepherd
     Shuster
     Sisisky
     Skaggs
     Skeen
     Skelton
     Slattery
     Slaughter
     Smith (IA)
     Smith (MI)
     Smith (NJ)
     Smith (OR)
     Smith (TX)
     Snowe
     Spence
     Spratt
     Stark
     Stearns
     Stenholm
     Stokes
     Strickland
     Studds
     Stupak
     Swett
     Swift
     Synar
     Talent
     Tanner
     Tauzin
     Taylor (NC)
     Tejeda
     Thomas (CA)
     Thomas (WY)
     Thompson
     Thornton
     Thurman
     Torkildsen
     Torres
     Torricelli
     Towns
     Traficant
     Tucker
     Unsoeld
     Upton
     Valentine
     Velazquez
     Vento
     Visclosky
     Volkmer
     Vucanovich
     Walker
     Walsh
     Waters
     Watt
     Waxman
     Weldon
     Wheat
     Whitten
     Williams
     Wise
     Wolf
     Woolsey
     Wyden
     Wynn
     Yates
     Young (AK)
     Young (FL)
     Zeliff
     Zimmer

                                NAYS--12

     Archer
     Armey
     Crane
     Gekas
     Hancock
     Johnson, Sam
     Rangel
     Rohrabacher
     Royce
     Solomon
     Stump
     Taylor (MS)

                        ANSWERED ``PRESENT''--2

     Brooks
     Hyde
       

                             NOT VOTING--10

     Clement
     Collins (IL)
     Cox
     DeFazio
     Ford (TN)
     Laughlin
     Rose
     Sundquist
     Washington
     Wilson

                              {time}  1348

  Mr. ROHRABACHER changed his vote from ``yea'' to ``nay.''
  Mr. STUPAK changed his vote from ``nay'' to ``yea.''
  Mr. HYDE changed his vote from ``yea'' to ``present.''
  So the conference report was agreed to.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________