[Congressional Record Volume 143, Number 2 (Thursday, January 9, 1997)]
[Extensions of Remarks]
[Page E81]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   INTRODUCTION OF THE DEPOSITORY INSTITUTION AFFILIATION AND THRIFT 
                   CHARTER CONVERSION ACT (H.R. 268)

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                          HON. BRUCE F. VENTO

                              of minnesota

                    in the house of representatives

                       Thursday, January 9, 1997

  Mr. VENTO. Mr. Speaker, I am pleased to join Chairwoman Roukema in 
sponsoring the reintroduction of the Depository Institution Affiliation 
and Thrift Charter Conversion Act. This bill is a marker of our intent 
to move forward this year in a bipartisan manner on legislation that we 
are hopeful will translate into meaningful financial services 
modernization. It is a product of compromise between the most 
significant groups in the financial services industry who refer to 
themselves as the ``Alliance''.
  Many members of the Banking Committee and other committees in the 
House have labored the past Congress to advance the cause of 
modernization. It has been a difficult road and efforts in the last 
Congress did not resolve the issue.
  Our current U.S. financial laws and policy are lagging actual 
marketplace conditions, a circumstance that has been apparent for at 
least the past 6 years. The U.S. mixed economy can best be served by a 
modernized legal framework, serving the dynamic U.S. financial system 
shaped by the marketplace and facilitated by congressional debate and 
law, rather than by incremental uncertain regulatory change. We advance 
this proposed measure as a continuation of, and building upon 
successful efforts to modernize that began with the passage of 
interstate banking in 1994.
  While each provision of this bill may not be supported by every 
organization of the Alliance, nor members within the organizations, 
this comprehensive effort certainly demonstrates that groups can come 
to the table and work constructively together for modernization. I'm 
hopeful that we can build upon this strong base a still broader 
coalition and act to modernize our laws in this complex financial 
marketplace.
  In the last Congress, Chairman Roukema and I worked together on 
charter conversion as part of the BIF-SAIF bill (H.R. 2363) that 
finally evolved into the House position last year and became the basis 
for provisions enacted into law. Importantly, the comprehensive 
Depository Institution Affiliation and Thrift Charter Conversion Act we 
now introduce includes thrift charter conversion and the many attendant 
issues of thrift conversion. This bill is a comprehensive approach that 
establishes a policy of functional regulation involving all the 
regulators, Glass Steagall reform, and the affiliations issues. I am 
confident we will continue to work together to make improvements in the 
legislation so that it will not only modernize financial systems, but 
will also protect the safety and soundness of the deposit insurance 
funds and better serve and preserve our economic role in the world.

  Changes have been made to the bill since it was introduced last fall. 
Several amendments were suggested by the American Council of Life 
Insurance. Others were incorporated at the suggestion of the thrift 
industry which continues to prefer an even broader approach to 
affiliations. As we move forward with the necessary subcommittee 
hearings and proceed to a markup, we will continue to modify the 
legislation. Even as we have introduced this legislation this week, I 
have reservations about several aspects of the bill including the 
regulatory framework for financial services holding companies. This 
more SEC-like structure will certainly require further scrutiny as we 
evaluate its appropriateness and its fit with the structure of insured 
depository institutions.
  As this broad legislation moves forward, I am able to envision a 
number of improvements as questions are resolved. We will be looking to 
ensure that any measure we bring to the full House will provide 
assurance that tough firewalls are intact and that the measure will not 
expose the taxpayers to new costs from activities with more risk 
potential. Congress must also ensure that a proper focus is kept clear 
for service and responsibilities to local communities and consumers. As 
the U.S. strives to be more competitive internationally, financial 
institutions must remain active and viable in our localities even as 
the law provides and prepares U.S. financial institutions for 
competition in the global marketplace.
  This bill's overall approach reflects a compromise between a 
substantial portion of the players active in providing financial 
services--key banking, thrift, and securities participants with input 
from some in the insurance industry. This bill represents positions 
that they, too, have tried to bring into harmony for the purpose of 
shaping a policy for the future. It is a sound framework, a base, not 
necessarily the final product or policy. By placing this bill on the 
agenda, it is my hope to advance this debate and dynamic to a 
successful change in policy in the near future which will serve 
American enterprises and consumers in our mixed economy today and 
tomorrow.

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