[Congressional Record Volume 140, Number 127 (Tuesday, September 13, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: September 13, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
      INTERSTATE BANKING EFFICIENCY ACT OF 1994--CONFERENCE REPORT

  The PRESIDING OFFICER. The clerk will report the conference report at 
this time.
  The legislative clerk read as follows:

       The committee on conference on the disagreeing votes of the 
     two Houses on the amendment of the Senate to the bill (H.R. 
     3841) to amend the Bank Holding Company Act of 1956, the 
     Revised Statutes of the United States, and the Federal 
     Deposit Insurance Act to provide for interstate banking and 
     branching having met, after full and free conference, have 
     agreed to recommend and do recommend to their respective 
     Houses this report, signed by a majority of the conferees.

  The PRESIDING OFFICER. Without objection, the Senate will proceed to 
the consideration of the conference report.
  (The conference report is printed in the House proceedings of the 
Record of August 2, 1994.)
  The PRESIDING OFFICER. The Chair recognizes the majority leader.
  Mr. MITCHELL. Mr. President, I note the presence of the distinguished 
Republican leader on the Senate floor.
  As we have discussed previously in a private conversation, it is my 
hope that we can complete action on this banking bill conference report 
as soon as possible and today if possible.
  I have inquired, and now inquire again, from my colleague whether we 
will be permitted to go to a vote on this matter today. That is our 
strong desire to complete action on this measure.
  The PRESIDING OFFICER. The Chair recognizes the minority leader.
  Mr. DOLE. Mr. President, if the majority leader will yield, I will 
get back to what the majority leader said in the next 40 or 45 minutes. 
I have to do some checking on this side.
  I know of no desire to hold up the bill. I know one Senator on this 
side who has a specific problem. I can get back to the majority leader 
very quickly.
  Mr. MITCHELL. Mr. President, I thank my colleague for that.
  In light of that, we will withhold any further action on this matter 
until such time as the distinguished Republican leader is able to do 
that consultation and respond.
  I thank my colleagues.
  The PRESIDING OFFICER. The Chair recognizes the Republican leader.
  Mr. DOLE. Mr. President, I wonder if the managers would permit me to 
use my morning business time. Is the leader time reserved?
  The PRESIDING OFFICER. The Senator is correct.
  The Senator from Kansas is recognized.
  Mr. DOLE. I thank the Chair.
  (The remarks of Mr. Dole and Mr. Mitchell pertaining to the 
introduction of S. 2431 are located in today's Record under 
``Statements on Introduced Bills and Joint Resolutions.'')
  The PRESIDING OFFICER (Mrs. Feinstein). Who seeks recognition?
  Mr. RIEGLE addressed the Chair.
  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. RIEGLE. Madam President, let me thank all colleagues who voted 
earlier for the motion to proceed on the interstate banking bill.
  Mr. MITCHELL. Madam President, the Senate has voted overwhelmingly to 
proceed to consideration of the banking bill. We are now awaiting a 
response by the distinguished Republican leader to my request to have a 
vote on this matter as soon as possible.
  I want to inquire of the manager of the bill whether there is any 
further debate on this matter or whether we can now return to 
consideration of the Defense Department conference report, which we are 
still hoping to get action on today as well.
  Mr. RIEGLE. Let me just say to the majority leader, it is my hope 
that we can finish this bill today. I know of no one on the floor at 
the moment wishing to speak. I know at some point Senator Metzenbaum 
will want to raise a point with respect to an issue of concern to him 
that we have dealt with.
  Mr. FORD. Madam President, may I say to the floor manager, that I 
have about a 5-minute statement in favor of the piece of legislation. I 
will be glad to make that statement at any time he wishes. I can do it 
now or later, file it for the Record if it is his wish--however.
  Mr. RIEGLE. I am wondering, in light of the fact that there are other 
matters that the majority leader wants to go to, maybe filing the 
statement for the Record.
  Mr. FORD. I can do that at a later time. It is perfectly all right 
with me. I will be glad to file it.
  Mr. MITCHELL. Madam President, I believe there will be ample time for 
the Senator to give his remarks later on. I have just been advised that 
our Republican colleagues are agreeable to resuming consideration of 
the Defense Department bill and voting on that at 4:45 today, and that 
the time between now and then be divided between the two. Therefore, 
may I suggest to our colleagues that I proceed to get that agreement 
and, following that, we can resume debate on this matter and any 
Senator will be able to speak for as long as he or she wants. And at 
that time, we hopefully will be able to get an agreement on completing 
action on this bill as well.
  Mr. RIEGLE. Today, it would be my hope, yes.
  The PRESIDING OFFICER. Has the majority leader yielded the floor?
  Mr. MITCHELL. Madam President, I am now advised that there has to be 
consultation with one additional Republican Senator. So I am not ready 
at this time to proceed to putting the agreement. So I will at this 
time suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. METZENBAUM. Madam President, I ask unanimous consent that the 
order for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. METZENBAUM. Madam President, I rise to indicate my support for 
this legislation, notwithstanding the fact that at an earlier point I 
had concerns and indicated I was prepared to speak at some length in 
opposition to it by reason of the action of the conference committee. 
Let me explain what I am talking about.
  When the bill went over to the House, it was satisfactory and did not 
affect the right of the RTC and the FDIC to bring action against those 
officers, directors, professionals, and others of savings and loans who 
had defaulted and were subject to being brought to account in the 
courts of this country. But when it got to the conference committee, 
certain Members of the House insisted upon limiting the right of the 
RTC and the FDIC to bring such actions so that only where you could 
prove certain intentional misconduct or fraud would it be possible to 
bring an action. That meant that the hands of the RTC and the FDIC were 
seriously infringed upon, seriously limited and, in the RTC's own 
words, they felt that it would cost the Government at least $1.6 
billion that they knew about, not counting hundreds of millions in 
cases that they were yet to file, but by reason of the certain court 
decisions and the actions of the amendments from the Members of the 
House, that right was being restricted.
  With all due respect, Senators Riegle and Sarbanes made a spirited 
effort to keep the House from putting in the egregious language. But by 
reason of the failure of the Republicans on the conference committee on 
the Senate side and some of the Democrats, we were not able to prevail. 
Senators Riegle and Sarbanes tried their hardest to preserve the Senate 
position, but the House provision prevailed and, as a consequence, the 
RTC and the FDIC were limited in their right to go forward, costing the 
taxpayers of this country literally billions of dollars, $1.6 billion 
already known, hundreds of millions in other cases yet to be filed 
against those officers and directors, lawyers and accountants, and 
other thrift officials who had been guilty of malfeasance, misfeasance, 
and nonfeasance. The RTC and FDIC were precluded from suing them in the 
courts.
  It was shameful. This Senator had decided and had determined that I 
would speak at some length and hold up passage of this bill, 
notwithstanding the tremendous respect I have for the chairman of the 
committee and the other members of the Banking Committee who have been 
wonderfully cooperative on this side of the Senate--wonderfully 
cooperative. I wish I could say the same for some Members on the other 
side of the aisle. They have been less than cooperative.
  But the fact is, there is that limit placed in this bill. So I felt 
that the only way to preserve the rights of the public was to keep this 
bill from being enacted into law. That gave me concern because Senator 
Riegle has put much of himself into this bill, and it is a good bill, 
except for this provision that the House insisted be put into the bill.
  Then we learned that the Office of Thrift Supervision had the right, 
and has the right, to maintain actions on its own, under separate 
legislative authority, and even has a Federal statute of limitations 
which is longer than that which was originally contemplated in this 
bill as it went to the conference. It is an unusual situation. But the 
sad part was that a responsible leader at the Office of Thrift 
Supervision, OTS had, by memorandum to members of her staff, indicated 
that they should not be devoting their time to investigative and 
enforcement efforts. In fact, the OTS announced this April that it was 
giving reduced priority to cases involving officials of failed thrifts.
  So here you had an agency of Government that had the authority--has 
the authority--and was not moving forward because somebody over at the 
OTS said, ``Take it easy. We have other priorities. Don't spend your 
time on this.''
  I ask unanimous consent that at the conclusion of my remarks, a copy 
of that memorandum be printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. METZENBAUM. Madam President, so we opened discussions with the 
leadership of the OTS and said to them, that if you will step into this 
breach, if you will stand up and meet your responsibilities, I would 
not oppose this bill and I think we can solve the problems and the 
rights and concerns of the taxpayers of this country would be 
protected.
  With all due respect, Jonathan Fiechter, the acting Director of the 
OTS, was particularly cooperative. He indicated his willingness to work 
to do that which had to be done, notwithstanding that earlier 
memorandum about which I spoke that had been signed by the head of the 
legal division of the OTS.
  And so Senators Riegle, Boxer, John Kerry, Patty Murray, and I, sent 
a letter to Mr. Fiechter and urged him to move on this subject and to 
strengthen the OTS position.
  Madam President, I ask unanimous consent that a copy of the letter 
signed by the five Senators be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                             Committee on Banking,


                                   Housing, and Urban Affairs,

                               Washington, DC, September 12, 1994.
     Jonathan Fiechter,
     Acting Director, Office of Thrift Supervision, Washington, 
         DC.
       Dear Mr. Fiechter: Recent court decisions substantially 
     limit the ability of the Resolution Trust Corporation (RTC) 
     and the Federal Deposit Insurance Corporation (FDIC), as 
     receivers, to bring legal actions to recover funds against 
     those culpable for thrift failures.
       We believe that the Office of Thrift Supervision (OTS), as 
     a regulator, has separate, and different, statutory authority 
     which can protect taxpayers in the event of a shortfall in 
     the RTC and FDIC powers.
       The OTS's separate statutory authority includes the 
     authority to seek, on its own initiative, administrative 
     orders and affirmative remedies, including civil monetary 
     penalties and restitution from affiliated parties of failed 
     institutions.
       According to the RTC and FDIC, the recent decisions, FDIC 
     v. Cocke, 7 F.3d 396 (4th Cir. 1993); FDIC v. Dawson, 4 F 3d 
     1303 (5th Cir. 1993), cert. denied, U.S. Sup. Ct. No. 93-1486 
     (June 13, 1994); and others in the Federal district courts, 
     jeopardize more than $1 billion in pending claims. If these 
     claims cannot be prosecuted, innocent taxpayers, rather than 
     wrongdoers, will pay.
       The OTS can prevent this from happening. For example, 
     although the recent court decisions will prevent the RTC and 
     FDIC from pursuing many pending cases due to the expiration 
     of state statutes of limitations, the OTS is not subject to 
     state statutes of limitations. With regard to officials of 
     failed thrifts, the OTS has a six-year, federal statute of 
     limitations. See 12 USC Sec. 1818(i)(3). The six-year statute 
     of limitations is running out on many pending cases.
       We write to urge the Office of Thrift Supervision to 
     utilize its authority in cases where the RTC's and FDIC's 
     ability to protect taxpayers has been limited. Time is of the 
     essence. If the OTS will act, it could recover a significant 
     amount of money for the taxpayers.
           Sincerely,
     Howard M. Metzenbaum.
     John F. Kerry.
     Barbara Boxer.
     Don Riegle,
       Chairman.
     Patty Murray.

  Mr. METZENBAUM. Madam President, I am pleased to say that in a letter 
dated September 13, the acting Director, Mr. Fiechter, who, as I 
already said, was very cooperative, responded and said:

       I want to assure you that OTS shares your concern about 
     recent court decisions regarding failed thrift institutions. 
     OTS enforcement policy is committed, to the fullest extent 
     permitted by law, to the vigorous pursuit of individuals and 
     entities whose misconduct caused harm to the thrift industry.
       One of our specific supervisory objectives is the recovery 
     of losses from institution-affiliated parties of closed 
     thrifts. The OTS policy will not differentiate between open 
     and closed institutions.

  He went on to say:

       We understand that our enforcement authority is different 
     from and independent of RTC and FDIC authorities as receiver 
     and insurer.

  He went on to say:

       We also recognize that recent court decisions, including 
     the Supreme Court's denial of certiorari in Dawson, will 
     require a greater OTS commitment of resources. The OTS, 
     therefore, will review and, if necessary, streamline the 
     initiation and pursuit of investigations within the 
     Enforcement Division.

  It is a strong letter. It is a strong response to the letter sent by 
Senator Riegle, myself, and three other members of the Banking 
Committee.
  Madam President, I ask unanimous consent that the entire language of 
the letter addressed by Mr. Fiechter to Senator Riegle and myself be 
printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                     Office of Thrift Supervision,


                                   Department of the Treasury,

                               Washington, DC, September 13, 1994.
     Hon. Howard Metzenbaum,
     Committee on Banking, Housing and Urban Affairs, U.S. Senate, 
         Washington, DC.
       Dear Senator Metzenbaum: This is in response to the 
     September 12, 1994 letter from you and your colleagues 
     concerning the authority of the Office of Thrift Supervision 
     (``OTS'') to bring enforcement actions concerning closed 
     thrifts.
       I want to assure you that OTS shares your concern about 
     recent court decisions regarding failed thrift institutions. 
     OTS enforcement policy is committed, to the fullest extent 
     permitted by law, to the vigorous pursuit of individuals and 
     entities whose misconduct caused harm to the thrift industry. 
     One of our specific supervisory objectives is the recovery of 
     losses from institution-affiliated parties of closed thrifts. 
     The OTS policy will not differentiate between open and closed 
     institutions.
       We understand that our enforcement authority is different 
     from, and independent of, RTC and FDIC authorities as 
     receiver and insurer. OTS' authority is not a backup to the 
     FDIC's and RTC's. We also recognize that recent court 
     decisions, including the Supreme Court's denial of certiorari 
     in Dawson, will require a greater OTS commitment of 
     resources. The OTS, therefore, will review, and if necessary, 
     streamline the initiation and pursuit of investigations 
     within the Enforcement Division. I am also directing the 
     staff to seek a Memorandum of Understanding or other similar 
     formal agreements with the FDIC and RTC to assist the OTS in 
     formulating and funding enforcement actions. This effort will 
     add to a number of existing joint agreements and efforts. We 
     believe that these efforts have been very efficient, 
     recovering millions of dollars for the taxpayers at very 
     little cost to the OTS and the taxpayers.
       We look forward to working with you as we implement and 
     carry forward this policy.
           Sincerely,
                                            Johnathan L. Fiechter,
                                                  Acting Director.

  Mr. METZENBAUM. Madam President, I am pleased to say that by reason 
of the cooperation of the chairman of the Banking Committee and other 
members of his committee, and by reason of cooperation of the head of 
the OTS, this Senator feels we are resolving a problem by going around 
the corner in order to make it possible to pursue those officers and 
directors, lawyers and other professionals, and others associated with 
failed savings and loans who otherwise would have been relieved of 
their obligations by reason of the House action. I think we have made a 
step in the right direction. I appreciate the cooperation of all those 
who have been involved in this effort.
  I yield the floor.

                               Exhibit 1

                                     Office of Thrift Supervision,


                                   Department of the Treasury,

                                 Washington, DC, January 15, 1993.
     Memorandum from Carolyn B. Lieberman, Acting Chief Counsel, 
         re formal examinations and investigations.
     To Therese D. Pritchard, Richard Stearns, Bruce Rinaldi, Ken 
         Guido.
       During the recent reviews of the enforcement docket with 
     the Regional Directors, it appeared that some cases were 
     initiated without first considering the impact on the current 
     case load, which is an important consideration in view of our 
     increasingly limited resources. Before opening a new formal 
     examination or investigation (``investigation''), it is 
     important that we consider the impact of the proposed 
     investigation on our other work.
       To this end, effective immediately, my prior approval is 
     necessary to initiate an investigation. The memorandum 
     recommending initiation of an investigation must include a 
     short summary of the facts giving rise to the investigation 
     and the identity of the known targets of the investigation.
       In addition, an investigation may not be commenced without 
     an engagement memorandum executed by the Regional Director or 
     his or her designee. Engagement memoranda must specify the 
     supervisory objective of the action and the time period in 
     which the Regional Director believes enforcement action must 
     be achieved to provide useful supervisory results. The 
     engagement memorandum should specify an investigative plan 
     for achieving the desired supervisory results within the time 
     frame established by the Regional Director. The engagement 
     memorandum must also address the feasibility of completing 
     any necessary investigation no later than thirty days before 
     the end of the period specified by the Regional Director for 
     achieving results.
       The cover memorandum transmitting the package to me for 
     review also must identify the lawyers and investigators to be 
     assigned to the matter, the percentage of each lawyer's time 
     that is presently available to handle the matter, and the 
     nature and amount of support that will be required from the 
     supervisory staff. Please also state whether the proposed 
     assignment of attorneys and investigators is likely to result 
     in delays in the completion of other cases and, if so, 
     identify the affected case or cases and specify the length of 
     the anticipated delay.
       Finally, in accordance with established procedures, a 
     detailed written plan of investigation must be provided to me 
     within two weeks of initiation of the investigation.
       Please distribute this memorandum to your staffs.

  Mr. RIEGLE. Madam President, I so appreciate the statement and the 
leadership of the Senator from Ohio. Few Senators, I think, in the 
history of this country have given as much or as effectively to the 
Senate's work than has Senator Metzenbaum. In this area, we have been 
working as colleagues with a common cause now stretching back many, 
many years.
  In fact, I remember one time during a previous administration, during 
the Christmas-New Year holiday period, we were on the telephone with 
one another, and we were jawboning the then Secretary of the Treasury 
to try to crack down on some of these abuses at that time. So our 
history together goes back even much further than that, but the Senator 
from Ohio has been a tireless fighter on this issue.
  I think it is fair to say that hundreds of millions, in fact, I think 
billions, of dollars have been saved and recovered and not otherwise 
wasted and squandered as a result of his efforts.
  When we were in the conference committee with the House, I made 
arrangements for Senator Metzenbaum to come over, although he is not a 
member of our committee, to present his views on this issue, and he did 
so with great effectiveness.
  To my disappointment, we were not able to prevail on the vote that we 
had, although I strongly supported him, as he has noted, and voted with 
him. We did not have the votes we needed to prevail. I do think that 
the letter from Jonathan Fiechter, the Acting Director of the Office of 
Thrift Supervision, which Senator Metzenbaum has inserted in the 
Record, is a very important document. I think it lays down a solid 
basis for further action here that will mean more financial recoveries.
  So I think we have done all we can do within the scope of the 
leverage that we have to bring at this time in this matter. I 
appreciate the leadership of the Senator from Ohio on this issue and on 
the other issues that have come before the Banking Committee.
  I might just say again that I think it is rare in the Senate to have 
someone with the energy and the vision and range of interest of the 
senior Senator from Ohio, Senator Metzenbaum. He is one of the great 
ones that has come down the track here and will be greatly missed in 
the future.
  Mr. D'AMATO. Madam President, I rise today in support of the 
conference report on H.R. 3841, the Riegle-Neal Interstate Banking and 
Branching Efficiency Act of 1994.
  The conference report retains many of the provisions in the Senate 
passed bill, adopts some important provisions from the House-passed 
bill, and makes pragmatic and reasonable compromises reconciling other 
differences between the House and Senate passed bills.
  Adopting the conference report will significantly advance the 
development of interstate banking and branching in the United States. 
This, in turn, will increase the safety and soundness of our banking 
system, provide increased convenience and services to consumers, and 
save millions of dollars that are wasted in unnecessary administrative 
expenses and overhead costs. Funds now being used to pay for 
unnecessary and duplicative administrative costs will be freed up--
making more credit available to our businesses and other consumers.
  Interstate banking and branching has been a priority of both 
Republican and Democratic administrations. In 1991, the Bush 
administration fought hard for an interstate banking bill similar to 
the Riegle-Neal bill. That legislation passed the Senate, but not the 
House. The Riegle-Neal bill, modeled after the 1991 Senate passed bill, 
is enthusiastically supported by the current administration, academic 
experts, and industry representatives. According to Federal Reserve 
Board Governor LaWare, ``the elimination of geographic restraints will 
provide an important tool in diversifying individual bank risk, 
providing for stability of the banking system, and improving the flow 
of credit to local economies under duress.''
  FDIC Acting Chairman Hove, testified before the Banking Committee 
that full interstate banking will strengthen the Federal deposit 
insurance funds. Citing the FDIC's experience with bank failures in the 
1980's, he noted that the failure of banks to diversify geographically 
makes them particularly vulnerable to regional economic downturns.
  Likewise, the General Accounting Office [GAO] found that 90 percent 
of the banks that failed in 1987 were in States that allowed only unit 
banks or limited branching. The GAO noted that ``when a bank's assets 
are not geographically diversified, the quality of its balance sheet 
can be severely affected by fluctuations in the local economy.'' 
Interstate branching will permit banks to diversify their loan 
portfolio, thus making our banking system less vulnerable to downturns 
in any particular community or region.
  The Congressional Budget Office [CBO] also found that nationwide 
interstate banking will enable banks to increase geographic and 
industry diversification, thereby reducing the probability of bank 
failure and ``lead to a healthier and more stable banking system.''
  As I mentioned, interstate branching will eliminate unnecessary 
overhead costs, and make banking more efficient. Some of the larger 
banking companies have estimated that they could each save between $30 
and $50 million per year if they were allowed to consolidate their 
separate bank subsidiaries into branches. These savings will be used to 
replenish bank capital, thus increasing the ability of the banking 
industry to provide the credit essential for the continued growth of 
our economy.
  Madam President, the conference report takes into consideration the 
rights of the States with respect to interstate banking and branching. 
Section 101 of the legislation repeals a current provision, known as 
the Douglas amendment, that restricts the ability of a bank holding 
company to acquire a bank outside of its home State. Instead, the 
conference report provides that the Federal Reserve Board may approve 
an application by an adequately capitalized and managed holding company 
to acquire a bank outside of its home State. However, a State may 
insist that the out-of-State bank holding company only acquire an 
existing bank in that State. Further, the State may, if it so chooses, 
limit the banks that may be acquired to those institutions that have 
been in existence for a given period of time, up to 5 years. A State 
may also limit the size of the institution, based on deposit share, 
that may be acquired, so long as this limitation does not have a 
discriminatory effect against out-of-State bank holding companies or 
banks.
  The bill also respects State's rights with respect to interstate 
branching. Under section 102 of the conference report, beginning on 
June 1, 1997, banks having different home States may merge into one 
bank with interstate branches. The resulting bank may establish 
additional branches at any location where the former separate banks 
could have branched under applicable Federal or State law. However, a 
State may opt-out of this provision by passing a law prior to June 1, 
1997, that specifically prohibits such interstate mergers.
  Madam President, the legislation also protects the authority of the 
States to tax interstate branches in the manner that they determine 
appropriate, provided of course that the tax does not contravene other 
Federal statutes or the U.S. Constitution. Thus, this bill in no way 
affects the taxation authority that a State otherwise possesses.
  The authority of foreign banks to establish interstate branches and 
agencies is dealt with in section 104. This section provides that, with 
appropriate regulatory approval, a foreign bank may establish and 
operate branches and agencies outside of its home State to the same 
extent that domestic banks may establish and operate interstate 
branches. However, regulatory approval may not be granted if the 
foreign bank's financial resources are not equivalent to the financial 
requirements imposed on domestic banks seeking to establish interstate 
branches.
  Under section 105, State bank supervisors are specifically authorized 
to examine branches of out-of-State State banks, but not branches of 
national banks, for purposes of determining compliance with State laws 
and to ensure that the activities of the branch are not conducted in an 
unsafe or unsound manner. This section also authorizes State banking 
examiners to enter into cooperative agreements to facilitate regulatory 
supervision of State banks with interstate branches.

  Other provisions of the conference report provide additional 
protection for consumers. The bill mandates enhanced disclosures when 
an interstate branch is to be closed, modifies the Communities 
Reinvestment Act to take into account the development of interstate 
branching, and prohibits deposit production offices. The Federal 
Reserve Board is also required to conduct a study of bank fees.
  In addition, title II of the conference report contains several 
provisions that are not related to interstate branching. Among these 
provisions is one that I authored expressing the sense of the Senate 
that the President should work to achieve a clearly defined and 
enforceable agreement with our allies to establish a multilateral 
export control system to control the export of products and 
technologies that could jeopardize the national security of the United 
States.
  Also incorporated into this conference report is an array of 
commemorative coin authorizations. Included in this package are coins 
to commemorate the 1995 Special Olympics, World Games, and the 
bicentennial of the U.S. Military Academy at West Point. I am pleased 
to have been an original cosponsor of the Special Olympic coin bill and 
to have introduced, along with my esteemed colleague from New York, 
Congressman Hamilton Fish, the West Point Bicentennial coin. I 
appreciate my colleagues' support for including these provisions in the 
conference report.
  Madam President, while I have some reservations about particular 
compromises agreed to by the conference committee, the conference 
committee overall took a balanced approach in resolving the differences 
between the House- and Senate-passed bills. The conference report takes 
into consideration the historic role of the States in regulating 
financial institutions, and the concerns of the Federal Government to 
protect the safety and soundness of our banking system and to avoid 
losses to the deposit insurance funds and the taxpayer. This 
legislation will increase the safety of our financial system, and 
improve the efficiency and delivery of financial products. It will 
ultimately lead to a healthier and more competitive banking system to 
efficiently and effectively serve the needs of our economy into the 
next century.
  We should act now to pass this legislation. I urge my colleagues to 
vote for this bill.
  Mr. FAIRCLOTH. Madam President, we live in a world economy. Capital 
is the lifeblood of the world economy, and market forces are its 
master. The time has come to lift the ban on interstate banking, and to 
recognize the reality of those market forces.
  Politicians sometimes try to artificially control the flow of 
capital. They try to defeat the laws of supply and demand. They may 
even get away with it for a short while. But in the long run--or the 
not so long run--the tide of market forces will prevail.
  If politicians make our capital markets more inefficient than our 
international competitors, then that capital will just go somewhere 
else. Socially desirable goals won't be met. Our society will just be 
poorer.
  The ban on interstate banking makes our capital markets less 
efficient. Perhaps at one time it made sense to ban interstate banking. 
If it ever did, it does not make sense today.
  Today money can move across State lines or across international 
borders with a few strokes on a computer keyboard. Banning interstate 
banking doesn't stop the movement of that money. It just makes managing 
money more inefficient, which in turn makes it less likely that money 
will enter our banking system in the first place, which in turn makes 
our economy less competitive.
  Interstate banking will make our capital markets more efficient. By 
recognizing the reality of interstate banking that already exists, we 
will eliminate hundreds of millions of dollars in Government-created 
overhead that makes our banking system less efficient.
  Banks will no longer have to file mountains of duplicate paperwork 
for each of their subsidiaries. Customers will no longer have to put up 
with the Government-created barriers to banking where they live and 
work.
  By reducing the overhead and inefficiency in our banking system, we 
will lower the cost of capital and make our economy more competitive.
  In North Carolina we have had a fiercely competitive banking industry 
for generations. Our small banks and community financial institutions 
have done will in that environment.
  Our small banks in North Carolina have found their place in the 
shadow of NationsBank, First Union, and Wachovia. They do not fear 
interstate banking. They fear Government regulation and overhead that 
makes it impossible to survive as small independent banks.
  We cannot fear the future. We cannot fear the markets. Fear of the 
future and of markets will not stop the tide of market forces. It will 
only make us weak, and poorer as a nation.
  I urge my colleagues to join me in supporting the interstate banking 
bill, so that we can make our country a stronger and more prosperous 
place.
  Mr. FEINGOLD. Madam President, I congratulate Senator Riegle, 
chairman of the Senate Committee on Banking, Housing, and Urban 
Affairs, for his work on this legislation. Though I oppose its 
fundamental provisions, the chairman deserves credit for his hard work 
on this legislation.
  I thank him for his help in addressing a variety of concerns that I 
had relating to the ability of States to prepare for the significant 
changes in the structure of our financial institutions.
  And I also thank him for his support for including language to ensure 
that the new banking system structure will not result in the loss of 
information that is vital to congressional and regulatory oversight.
  But, Madam President, I do have several concerns with the interstate 
banking and branching bill. First, I am not persuaded that consumers, 
businesses, and banks, in Wisconsin and elsewhere, will benefit from 
this legislation.
  As chair of the Wisconsin State Senate Banking Committee for 10 
years, I participated in a number of debates related to structural and 
regulatory changes for financial institutions. Perhaps the most 
important of those bills was legislation to permit regional interstate 
banking.
  I opposed that legislation then, and I oppose this measure now in 
part because of my concern that our well-managed, conservative, stable 
Wisconsin banks would be attractive prey for out-of-State financial 
institutions.
  In fact, Madam President, in a matter of only a few weeks after 
passage of the regional interstate banking bill, Wisconsin lost one of 
its major bank holding companies to an out-of-State bank holding 
company.
  The ability of the mammoth out-of-State institutions to buy up 
locally owned banks only increases with national interstate banking, 
and the loss of locally owned and controlled capital cannot be a 
benefit for either businesses or consumers.
  Second, Madam President, this legislation only accelerates the 
further concentration of capital throughout the country.
  Wisconsin's own former Senator William Proxmire has noted that as 
banking assets become more concentrated, the banking system itself 
becomes less stable as there is greater potential for system-wide 
failures.
  Beyond that, the trend toward further concentration of economic power 
and economic decisionmaking is not healthy for the Nation's economy.
  Banks have a very special role in our free market system; they are 
the rationers of capital. When fewer and fewer banks are making more 
and more of the critical decisions about where capital is allocated, 
there is an increased risk that many worthy enterprises will not 
receive the capital needed to grow and flourish.
  A strength of the American banking system has been the strong 
community and local nature of that system. Locally made decisions made 
by locally owned financial institutions--institutions whose economic 
prospects are tied to the financial health of the community they 
serve--have played a critical role in the economic development of our 
Nation, and especially for our smaller communities and rural areas.
  Madam President, I am concerned that this legislation is inconsistent 
with that tradition, and for that reason, I oppose the measure.
  Mr. DASCHLE. Madam President, today this body has an opportunity to 
take the final step in approving the Riegle-Neal Interstate Banking and 
Branching Efficiency Act. This fact is attributable in no small part to 
the unparalleled dedication and hard work of Senator Don Riegle, the 
chairman of the Senate Banking Committee, and Representative Steve 
Neal, the chairman of the House Financial Institutions Subcommittee.
  Both men have distinguished legislative records, and their 
contributions as Members of Congress will be missed long after their 
retirements this year. Passage of this legislation bearing their names 
will serve as a small but meaningful tribute to the leadership roles 
they have played on the Senate and House Banking Committees for many 
years.
  As we enter the hectic final weeks of this Congress and struggle to 
sort out a crowded legislative agenda, we should not lose sight of the 
act that the Interstate Banking and Branching Efficiency Act has 
negotiated the tortuous path through committee, the floor and 
conference, and that its enactment will benefit consumers and financial 
institutions alike. Without this landmark legislation, our banking 
system will continue to suffer under a confusing jumble of State laws 
that govern bank expansion across State lines, a situation that truly 
does not benefit anyone.
  Most obviously, the restrictions on interstate banking hamper the 
ability of banks to make rational, economically driven decisions about 
where and how to expand their operations. In effect, the various State 
laws place artificial limits on the ability of banks to respond to 
market realities, limiting both their efficiency and profitability.
  In a time when many of us are extolling the virtues of free and open 
trade for other sectors of our economy, we owe it to our financial 
institutions to break down some of the unnecessary trade barriers they 
face within the country.
  Less apparent but equally true is the fact that consumers also suffer 
from the restrictions States place on interstate banking. Because the 
limits prevent banks from expanding in response to customer demand, 
customers are not able to choose from among the full array of banking 
services that otherwise would be available to them.
  Without the benefit of a truly competitive financial services market, 
consumers frequently suffer from unnecessarily high prices and 
inconvenient service. The Riegle-Neal act would go a long way toward 
solving these problems, while still offering depositors adequate and 
effective protection.
  Finally, there is some evidence that soundness of our Nation's 
banking system is impaired by the inability of banks to expand their 
operations across State and regional lines. Banks that depend on the 
economic success of one State or region are particularly vulnerable to 
the regional recessions that we have experienced throughout the 1980's 
and early 1990's. Not only do the banks occasionally have trouble 
staying afloat during regional recessions, but the regions that suffer 
from them have difficulty turning around their economies because of 
inadequate credit supplies and skittish lenders.
  By allowing freer bank expansion, the legislation we are considering 
today would reduce the system's exposure to regional economic shocks.
  I would also like to note that this legislation contains a provision 
important to efforts to restore and preserve the Mount Rushmore 
National Monument. The bill would correct a problem created by the 1990 
Mount Rushmore Commemorative Coin Act, which authorized the Mint to 
sell coins commemorating the 1991 golden anniversary of the Mount 
Rushmore National Memorial.
  The Mount Rushmore situation is unusual. Congress attached a 
provision to the original Mount Rushmore Commemorative Coin Act that 
required half of the coin surcharge proceeds to go to the Treasury. 
Almost no other commemorative coin bills have had this same 
stipulation. To make up for this requirement, the bill authorized twice 
the amount of coin sales necessary to fund the project so both the 
Treasury and the Mount Rushmore Preservation Society could receive 
their expected proceeds.
  When sales fell far below what was expected and only generated $12 
million, only $6 million was left for Mount Rushmore--less than a third 
of what was expected and not nearly enough to fund the planned budget 
of the Mount Rushmore Preservation Society.
  The interstate banking bill addresses this shortfall in proceeds, by 
dedicating the first $18.75 million of them to the Mount Rushmore 
Preservation Society and the remainder of them to the Treasury. In 
effect, this provision will result in the Government transferring to 
the preservation society the $6 million the Treasury has already 
collected.
  Without this additional revenue the preservation society's efforts, 
which have been described by the Department of the Interior and 
National Park Service as ``a model public/private partnership'' for 
protecting and improving our national parks, would not be able to 
successfully complete its planned renovations.
  With this money the preservation society will be able to construct a 
new interpretive center, which will serve as the centerpiece of the 
educational program at Mount Rushmore. Through this facility, nearly 3 
million Americans and foreign visitors annually will learn how the 
colossal sculpture was carved and, more importantly, why. The story of 
America's birth, growth, preservation and expansion will at last be 
fully told in the interpretive center's exhibit halls and theaters.
  Once again, I would like to commend Chairman Reigle for his patience 
and skill in guiding interstate banking over the long road to passage. 
The legislation before us has been thoroughly examined and formulated 
through a broad and open hearing process. It has enjoyed overwhelming 
support in subcommittee votes, full committee votes, and on the floors 
of both Chambers. The conference committee was able to iron out major 
differences between the House and Senate versions, and the final 
product has garnered the support of the banking industry and consumer 
groups alike.
  Madam President, the Riegle-Neal Interstate Banking and Branching 
Efficiency Act is worthy of the distinguished names it carries and 
worthy of our support. We should not delay any longer in taking this 
step towards a more efficient, stable, and consumer-oriented banking 
system.

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