[Congressional Record Volume 140, Number 124 (Thursday, August 25, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 25, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
        AVAILABILITY OF CREDIT FOR PEOPLE AFFECTED BY DISASTERS

  Mr. FORD. Mr. President, I ask unanimous consent that the Senate turn 
to the consideration of S. 2430, a bill introduced earlier today by 
Senators Nunn and Coverdell, regarding the availability of credit for 
people affected by disasters; that the bill be deemed read a third time 
and passed; the motion to reconsider laid upon the table and any 
statements thereon appear at the appropriate place in the Record as 
though read.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  So the bill (S. 2430) was deemed read a third time and passed.
  (The text of the bill will appear in a future edition of the Record.)
  Mr. NUNN. Mr. President, I rise today to introduce legislation on 
behalf of myself and my colleague, Senator Coverdell. This legislation, 
which if enacted, would enhance the availability of credit in disaster 
areas created by the flooding associated with Tropical Storm Alberto by 
reducing the regulatory burden imposed upon insured depository 
institutions to the extent such action is consistent with the safety 
and soundness of these institutions.
  Last year, in response to the Midwest floods, Senator Bond and others 
sponsored legislation, S. 1273, which provided similar relief for banks 
impacted by last summer's Midwest floods. Like S. 1273, this bill will 
help provide credit to individuals and small businesses damaged by the 
flooding in Georgia, Alabama, and Florida, by giving the Federal bank 
regulatory agencies the discretion to waive regulations that inhibit 
the operation of banks operating in disaster areas. The waivers must be 
made in order to enhance credit availability and be consistent with the 
financial safety and soundness of the institution.
  Last summer, I am informed that many Midwest banks faced problems 
arising from the provisions in the Truth in Lending Act [TILA]. TILA 
affects the ability of a consumer to waive the 3-day right of recision 
on getting funds disbursed from a loan. Midwest bankers found that the 
pace of construction repair grew exponentially and contractors had 
difficulty scheduling jobs and work crews when their customers could 
not get the proceeds from loans on the day the loans were made.
  Another example is the need to grant banks more flexibility in 
dealing with the Expedited Fund Availability Act. This law was designed 
to force banks to make deposited funds more quickly available to 
consumers. Banks were still given the ability to hold checks from 
unknown or suspicious makers for periods of up to 14 days. Georgia 
banks anticipate that they will begin receiving deposits from their 
customers from all sorts of places such as charities, church groups, 
and philanthropic organizations from all over the country. Georgia 
banks would like the same administrative flexibility made available to 
their counterparts in the Midwest last summer to handle these 
situations so that customers can be given their money without the banks 
taking undue risks.
  Another example is the problem some banks in the Midwest ran into 
difficulty when their customers received insurance checks and deposited 
them into their accounts pending the use of the funds for repairs. 
Because these deposits grew quite rapidly, some banks' capital was 
insufficient to support these deposits and the banks became 
undercapitalized by regulatory standards. As my colleagues know, there 
are severe penalties in the FDICIA legislation dealing with 
undercapitalized banks, and the proposed legislation would allow 
flexibility to the regulators in these circumstances.
  This legislation, like S. 1273, provides Federal banking agencies the 
flexibility and discretion to waive temporarily regulations--like those 
mentioned above--to make it easier to extend existing credit lines, to 
simplify how loans are written, to speed access to funds, and to 
minimize paperwork.

  The bill would require the financial institution to be located within 
a disaster area or have a significant portion of its service area 
located in a disaster area. A disaster area is defined as an area 
determined by the President, pursuant to section 401 of the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act, to be the 
location of a major disaster.
  Before yielding the floor, I would like to make a couple of final 
notes. Georgia Banking Commissioner Jack Dunn concurs with the need to 
pursue this legislation. The Georgia Bankers Association supports this 
legislation, and it is also my understanding that the Treasury 
Department has no objection to this legislation.
  Finally, it is important to keep in mind that this proposed 
legislation does not give carte blanche authority to the banks to waive 
any of the provisions of these laws. Rather, it gives such authority to 
Federal banking regulators to grant waivers and retains their 
responsibility for continued oversight. As they did last summer and in 
the aftermath of Hurricane Andrew, I urge my colleagues to support this 
legislation and join our efforts for its expeditious enactment.

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