[Congressional Record Volume 141, Number 147 (Wednesday, September 20, 1995)]
[Extensions of Remarks]
[Page E1811]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



[[Page E 1811]]


                             BANKING REFORM

                                 ______


                          HON. ELTON GALLEGLY

                             of california

                    in the house of representatives

                     Wednesday, September 20, 1995
  Mr. GALLEGLY. Mr. Speaker, what seemed to start out as a very 
promising year for important banking reform legislation seems to have 
once again come to a disappointing halt because of the ongoing dispute 
between banks and insurance agents.
  Pending before the Rules Committee are two banking bills which would 
offer the Congress a historical opportunity to modernize our financial 
services system and make significant reductions in paperwork and 
compliance burdens for our banks.
  It is clear that despite their current strength in the U.S. market, 
our banking system continues to face the threat of lost market share, 
especially in the international arena due to out-of-date, restrictive 
laws and unnecessarily burdensome regulations. Modernizing our banking 
system will help it keep pace with the rapidly changing, technology 
driven market and will offer new benefits to the banking consumer.


                           regulatory relief

  H.R. 1858, the Financial Institutions Regulatory Relief Act, contains 
over 80 provisions of regulatory relief for the banking industry. 
Regulating the commercial banking industry is complex and extremely 
broad in scope. However, while many of the current regulations seem to 
be appropriate on their face, they are often duplicative, sometimes 
contradictory, and impose unnecessary costs on our banking system. 
These costs are often paid by the consumer in the form of high fees and 
lower interest on accounts.
  As a cosponsor of the original bill, H.R. 1362, I believe the changes 
made by the Banking Committee to areas such as RESPA, small bank exams, 
environmental liability, and CRA are sensible and will help make our 
lending institutions more efficient.


                         glass-steagall reform

  Created more than 50 years ago, the Glass-Steagall Act was enacted to 
separate, in part, the commercial and investment banking functions of 
our financial institutions. In today's technologically advanced and 
integrated financial markets, this act has outlived its usefulness and 
now serves as a barrier to healthy competition and efficient market 
operation.
  H.R. 1062, the Glass-Steagall reform bill will create a more flexible 
financial services structure by stripping away old prohibitions which 
are no longer practical and will permit banks and securities firms to 
affiliate with each other. Glass-Steagall reform will create economic 
opportunity and growth by giving banks improved access to capital and 
financing and through the imposition of workable firewalls, without 
risk to the consumer or to federally insured deposits.
  Mr. Speaker, both bills are extremely important to the future of our 
banking and financial services industry as well as to consumers. I urge 
the Rules Committee to allow both regulatory burden relief legislation 
and Glass-Steagall reform to come to the floor separately and clean of 
any provisions that threaten their passage. However, the House should 
be allowed an unrestricted opportunity to engage in an insurance debate 
which would take place in the context of expanding business-related 
activities for the banks.


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