Congressional Record, Volume 143 Issue 128 (Tuesday, September 23, 1997)

[Congressional Record Volume 143, Number 128 (Tuesday, September 23, 1997)]
[House]
[Pages H7614-H7617]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

THRIFT DEPOSITOR PROTECTION OVERSIGHT BOARD ABOLISHMENT ACT

The Clerk called the bill (H.R. 2343) to abolish the Thrift Depositor
Protection Oversight Board, and for other purposes.
The Clerk read the bill, as follows:

H.R. 2343

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Thrift Depositor Protection
Oversight Board Abolishment Act''.

SEC. 2. ABOLISHMENT OF THE THRIFT DEPOSITOR PROTECTION
OVERSIGHT BOARD.

[[Page H7615]]

(ii) are in effect at the end of the 3-month period
beginning on the date of the enactment of this Act,
shall continue in effect according to the terms of such
orders, resolutions, determinations, and regulations until
modified, terminated, set aside, or superseded in accordance
with applicable law.
(B) Enforceability of orders, resolutions, determinations,
and regulations before transfer.--Before the effective date
of the transfer of the authority and duties of the Resolution
Funding Corporation to the Secretary of the Treasury under
section 3, all orders, resolutions, determinations, and
regulations pertaining to the Resolution Funding Corporation
shall be enforceable by and against the United States.
(C) Enforceability of orders, resolutions, determinations,
and regulations after transfer.--On and after the effective
date of the transfer of the authority and duties of the
Resolution Funding Corporation to the Secretary of the
Treasury, all orders, resolutions, determinations, and
regulations pertaining to the Resolution Funding Corporation
shall be enforceable by and against the Secretary of the
Treasury.

SEC. 3. TRANSFER OF THRIFT DEPOSITOR PROTECTION OVERSIGHT
BOARD AUTHORITY AND DUTIES OF RESOLUTION
FUNDING CORPORATION TO THE SECRETARY OF THE
TREASURY.

The authority and duties of the Thrift Depositor Protection
Oversight Board under sections 21A(a)(6)(I) and 21B of the
Federal Home Loan Bank Act are hereby transferred to the
Secretary of the Treasury (or the designee of the Secretary)
as of the end of the 3-month period beginning on the date of
enactment of this Act.

SEC. 4. MEMBERSHIP OF THE AFFORDABLE HOUSING ADVISORY BOARD.

Effective on the date of enactment of this Act, section
14(b)(2) of the Resolution Trust Corporation Completion Act
(12 U.S.C. 1831q note) is amended--
(1) by striking subparagraph (C); and
(2) by redesignating subparagraphs (D) and (E) as
subparagraphs (C) and (D), respectively.

The SPEAKER pro tempore. Pursuant to the rule, the bill is considered
read for amendment.

Committee Amendment in the Nature of a Substitute

The SPEAKER pro tempore. The Clerk will report the committee
amendment in the nature of a substitute recommended by the Committee on
Banking and Financial Services.
The Clerk read as follows:

Committee amendment in the nature of a substitute:
Strike out all after the enacting clause and insert:

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Thrift Depositor Protection
Oversight Board Abolishment Act''.

SEC. 2. ABOLISHMENT OF THE THRIFT DEPOSITOR PROTECTION
OVERSIGHT BOARD.

(a) In General.--Effective at the end of the 3-month period
beginning on the date of enactment of this Act, the Thrift
Depositor Protection Oversight Board established under
section 21A of the Federal Home Loan Bank Act (hereafter in
this section referred to as the ``Oversight Board) is hereby
abolished.
(b) Disposition of Affairs.--
(1) Power of chairperson.--Effective on the date of the
enactment of this Act, the Chairperson of the Oversight Board
(or the designee of the Chairperson) may exercise on behalf
of the Oversight Board any power of the Oversight Board
necessary to settle and conclude the affairs of the Oversight
Board.
(2) Availability of funds.--Funds available to the
Oversight Board shall be available to the Chairperson of the
Oversight Board to pay expenses incurred in carrying out the
requirements of paragraph (1).
(c) Savings Provision.--
(1) Existing rights, duties, and obligations not
affected.--No provision of this Act shall be construed as
affecting the validity of any right, duty, or obligation of
the United States, the Oversight Board, the Resolution Trust
Corporation, or any other person which--
(A) arises under or pursuant to the Federal Home Loan Bank
Act, or any other provision of law applicable with respect to
the Oversight Board; and
(B) existed on the day before the abolishment of the
Oversight Board in accordance with subsection (a).
(2) Continuation of suits.--No action or other proceeding
commenced by or against the Oversight Board with respect to
any function of the Oversight Board shall abate by reason of
the enactment of this Act.
(3) Liabilities.--
(A) In general.--All liabilities arising out of the
operation of the Oversight Board between August 9, 1989, and
the end of the 3-month period beginning on the date of
enactment of this Act shall remain the direct liabilities of
the United States.
(B) No substitution.--The Secretary of the Treasury shall
not be substituted for the Oversight Board as a party to any
such action or proceeding.
(4) Continuations of orders, resolutions, determinations,
and regulations pertaining to the resolution funding
corporation.--
(A) In general.--All orders, resolutions, determinations,
and regulations regarding the Resolution Funding Corporation
which--
(i) have been issued, made, and prescribed, or allowed to
become effective by the Oversight Board, or by a court of
competent jurisdiction, in the performance of functions which
are transferred by this Act; and
(ii) are in effect at the end of the 3-month period
beginning on the date of the enactment of this Act,
shall continue in effect according to the terms of such
orders, resolutions, determinations, and regulations until
modified, terminated, set aside, or superseded in accordance
with applicable law.
(B) Enforceability of orders, resolutions, determinations,
and regulations before transfer.--Before the effective date
of the transfer of the authority and duties of the Resolution
Funding Corporation to the Secretary of the Treasury under
section 3, all orders, resolutions, determinations, and
regulations pertaining to the Resolution Funding Corporation
shall be enforceable by and against the United States.
(C) Enforceability of orders, resolutions, determinations,
and regulations after transfer.--On and after the effective
date of the transfer of the authority and duties of the
Resolution Funding Corporation to the Secretary of the
Treasury, all orders, resolutions, determinations, and
regulations pertaining to the Resolution Funding Corporation
shall be enforceable by and against the Secretary of the
Treasury.

SEC. 3. TRANSFER OF THRIFT DEPOSITOR PROTECTION OVERSIGHT
BOARD AUTHORITY AND DUTIES OF RESOLUTION
FUNDING CORPORATION TO THE SECRETARY OF THE
TREASURY.

SEC. 4. MEMBERSHIP OF THE AFFORDABLE HOUSING ADVISORY BOARD.

SEC. 5. TIME OF MEETINGS OF THE AFFORDABLE HOUSING ADVISORY
BOARD.

(a) In General.--Section 14(b)(6)(A) of the Resolution
Trust Corporation Completion Act (12 U.S.C. 1831q note) is
amended--
(1) by striking ``4 times a year, or more frequently if
requested by the Thrift Depositor Protection Oversight Board
or'' and inserting ``2 times a year or at the request of'';
and
(2) by striking the 2d sentence.
(b) Clerical Amendment.--The heading for section
14(b)(6)(A) of the Resolution Trust Corporation Completion
Act (12 U.S.C. 1831q note) is amended by striking ``and
location''.

Mr. LEACH (during the reading). Mr. Speaker, I ask unanimous consent
that the amendment in the nature of a substitute be considered as read
and printed in the Record.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Iowa?
There was no objection.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Iowa [Mr. Leach] and the gentleman from New York [Mr. LaFalce] each
will control 30 minutes.
The Chair recognizes the gentleman from Iowa [Mr. Leach].
Mr. LEACH. Mr. Speaker, I yield myself such time as I may consume.
(Mr. LEACH asked and was given permission to revise and extend his
remarks.)
Mr. LEACH. Mr. Speaker, the bill before us, H.R. 2343, would abolish
a Federal agency, the Thrift Depositor Protection Board, which was
established to oversee the activities of the now defunct Resolution
Trust Corporation and the Resolution Funding Corporation.
By background, the oversight board was created in the Financial
Institutions Reform, Recovery and Enforcement Act, FIRREA, in 1989.
FIRREA was the Federal Government's response to the massive financial
crisis of the savings and loan industry and its insolvent insurance
fund, the Federal Savings and Loan Insurance Corporation.
With the enactment of FIRREA, the Resolution Trust Corporation was
created to close or sell the failed institutions transferred to it by
the industry's new regulator, the Office of Thrift Supervision. The RTC
was then tasked with selling the assets of failed thrifts.
FIRREA also established the Resolution Funding Corporation, REFCORP,
a mixed-ownership Government corporation for the purpose of providing
financing for the RTC. The oversight board was created to oversee the
RTC

[[Page H7616]]

and its use of taxpayer funds, as well as activities of REFCORP.
Today, the oversight board is no longer needed, given that its
primary responsibility ceased when the RTC's doors were closed on
December 31, 1995. The oversight board's remaining programmatic
responsibilities are: First, oversight of the REFCORP; and Second,
through fiscal year 1998, a nonvoting membership on the Affordable
Housing Advisory Board.
H.R. 2343 would transfer the REFCORP oversight responsibilities to
the Secretary of the Treasury, and the Affordable Housing Advisory
Board would be restructured to eliminate the nonvoting seat held by the
oversight board. As a result, CBO estimates the passage of this bill
would result in annual savings of over $250,000 in personnel and
overhead costs for the remaining 33 years of the board's life. In
short, the bill will abolish a Government agency that is no longer
needed and result in significant savings to the taxpayers.
H.R. 2343 has the support of all three members of the oversight
board, Acting Chairman Hawke, Secretary Cuomo, and Chairman Greenspan.
In addition, the Committee has been informed that the Office of
Management and Budget has no objection to this legislation.
In terms of procedure, the committee held a hearing on September 9
and favorably reported the bill on a unanimous voice vote. In this
context, I would like to express my appreciation to Mr. LaFalce and Mr.
Vento for their cooperation in this endeavor and for the corrections
day task force for its constructive support. I hope this commonsense
legislation will receive the approval of the House. After all, the bill
eliminates an unneeded Government agency, has bipartisan support, and
saves the taxpayer money.
Mr. Speaker, I reserve the balance of my time.

{time} 1430

Mr. LaFALCE. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I join with the distinguished chairman of the Committee
on Banking and Financial Services in urging the House to pass H.R.
2343, the Thrift Depositor Protection Oversight Board Abolishment Act.
The legislation was adopted unanimously by our Committee on Banking
and Financial Services by voice vote. It formally abolishes the Thrift
Depositor Protection Oversight Board which Congress created in 1989 to
oversee the Resolution Trust Corporation.
The Oversight Board played a significant role in supervising the
RTC's takeover and resolution of nearly 750 failed thrift institutions.
However, since its elimination in 1995, the Oversight Board's
activities have been minimal. Its only remaining responsibility
involves overseeing repayment of the $30 billion in REFCorp bonds
issued between 1989 and 1991 as part of the RTC's initial funding. This
responsibility requires that the Oversight Board remain in existence
for another 33 years, when the last REFCorp bonds are repaid.
Since the Treasury Department pays approximately $2.3 billion of the
$2.6 billion in annual interest payments on the REFCorp bonds, most
responsibilities relating to REFCorp repayment are performed by
Treasury staff. Nevertheless, the Oversight Board must by law maintain
separate offices and separate staff, and perform administrative and
reporting functions imposed largely because of its existence as a
separate entity of the Government. These functions require annual
expenditures of over one-quarter of a million dollars.
Mr. Speaker, these are unnecessary costs that taxpayers should not
have to continue paying for another 33 years. The abolition of the
Oversight Board is supported by the administration, by the Treasury
Department, and by all three members of the Oversight Board, including
Federal Reserve Board Chairman Alan Greenspan. CBO reports that the
legislation will produce annual savings of over $250,000, and OMB
reports no objections to the bill.
An additional provision of the bill added during markup by our
colleague, the gentleman from Alabama [Mr. Bachus], would provide
additional savings to taxpayers by reducing the mandated meeting
requirements of the Affordable Housing Advisory Board. That board was
created by Congress to advise the FDIC on the use of the sizeable stock
of foreclosed residential properties it acquired from failed thrift
institutions.
The FDIC also supports these changes. It is time to put these last
vestiges of the S&L crisis behind us and to provide some tangible
savings for taxpayers. I would urge adoption of the legislation.
Mr. Speaker, I reserve the balance of my time.
Mr. LEACH. Mr. Speaker, I yield 5 minutes to the gentlewoman from New
Jersey [Mrs. Roukema], the distinguished chairwoman of the Committee on
Banking and Financial Services's Subcommittee on Financial Institutions
and Consumer Credit.
(Mrs. ROUKEMA asked and was given permission to revise and extend her
remarks.)
Mrs. ROUKEMA. Mr. Speaker, I thank the gentleman for yielding time to
me, and I certainly thank the chairman of the subcommittee.
Mr. Speaker, I rise today as a full-fledged battle-scarred veteran of
the savings and loan debacle. I was a member of this committee when we
put into place the mechanisms that have been identified today that were
so desperately needed to clean up and put this scandal behind us.
During the long hours we spent passing FIRREA back in 1989, as has
been explained by the chairman and ranking member, we created the
Resolution Trust Corporation so we were able to close or sell the
failed institutions transferred to it by the OTS. That has all been
clearly pointed out, and I think we did a good job, or they did a good
job of that over the years. The chairman has already pointed out how in
the process of that we created not only RTC, but REFCorp and this
Oversight Board. And the dispositions of these properties valued at
hundreds of millions of dollars was done without scandal.
However, I think that the fact now remains that since 1995, when RTC
was terminated, having concluded its business, essentially, the primary
role of the cleanup and oversight is now nonexistent. Its remaining
functions are formal and routine at most, and can easily be carried out
by the Treasury Department.
This legislation, in fact, transfers the REFCorp oversight and the
board oversight to the Secretary of the Treasury and portions to the
Affordable Housing Advisory Board. I strongly support that.
I want to commend the gentleman from Iowa, Chairman Leach, for his
leadership on this, and also reiterate the fact that all responsible
people, including Alan Greenspan of the Federal Reserve Board, the
chairman, and the Department of the Treasury and OMB have no
exceptions. They all support this legislation.
It has been pointed out that the estimate is that it is going to save
millions of dollars for the taxpayer, $250,000 per year, and it seems
to me that in this age when we are all talking in the Congress about
downsizing government and finding constructive ways to reduce
overburdening regulation, this is a wonderful example of how we can
constructively move in that direction, and at the same time, save the
taxpayers' money.
Mr. LEACH. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I thank the gentlewoman for her terrific leadership on
this and so many other issues related thereto.
Mr. Speaker, I reserve the balance of my time.
Mr. LaFALCE. Mr. Speaker, I yield 3 minutes to the distinguished
gentleman from Minnesota [Mr. Vento], ranking Democrat on the
Subcommittee on Financial Institutions and Consumer Credit.
Mr. VENTO. Mr. Speaker, I thank the gentleman from New York [Mr.
LaFalce], the ranking member, for yielding time to me. I rise with the
chairman and my colleagues to support the passage of this bill.
Mr. Speaker, the Resolution Trust Corporation initiated in FIRREA,
the Financial Institutions Reform, Recovery, and Enforcement Act of
1989, was very important. In fact, they managed the closure or the
assets of nearly 750 different S&L's, literally managing a half a
trillion dollars over the course of its history, which, as my
colleague, the gentlewoman from New Jersey [Mrs. Roukema], pointed out,
the RTC was

[[Page H7617]]

folded into the Federal Deposit Insurance Corporation in 1995. In fact,
many of the policies they followed were the policies of the insurance
agency, the Federal Deposit Insurance Corporation, and one of its
successors, the insurer of the S&L's.
In any case, the Oversight Board, which they are talking about today,
played an oversight role. But many of us as well closely monitored the
success and the problems of the RTC as they tried to navigate their way
through the disposal of, as I said, literally hundreds of billions of
dollars worth of assets. It was very controversial at times.
I think the Oversight Board did a good job. I think we in Congress
did a good job in terms of monitoring the RTC, too, especially with the
backdrop of the S&L crisis of the 1980's. We really needed to do that
type of task. I commend my colleagues that we have reached this
particular chapter. Hopefully we will continue to watch the FDIC and
monitor its progress, if in fact problems should arise with the
substantial issue of managing the billions in assets, a result of
failed institutions that faced the Resolution Trust Corporation in the
recent past.
Our congressional task force did a good job as did the oversight of
the RTC. Now we are going to save $250,000 a year by eliminating it. It
is no longer needed as an oversight group. I commend this measure to my
colleagues.
Mr. Speaker, I rise in support of H.R. 2343, the Thrift Depositor
Oversight Board Abolishment Act. I joined as a cosponsor of this
legislation before its passage by the Banking Committee 2 weeks ago.
Passage of this legislation is key for several reasons. First, it will
draw the RTC era to a close. Second, this closure will potentially save
the taxpayer more than $250,000 a year by ending the Thrift Depositor
Oversight Board and transferring the few remaining and relatively
routine functions to the Treasury Department. And third, they will
provide for the abolition of an agency for all the right reasons:
basically, the unique function and mission of the Oversight Board have
been completed.
As any of my colleagues know, I served as the Chairman of the
Resolution Trust Corporation [RTC] Oversight Task Force for several
years. During those early times of the RTC, there were many, many
implementation problems. We worked hard on the RTC Task Force, and with
the Oversight Board on some occasions, to call for and require
improvements in several areas such as internal controls and information
systems. The task focused on a number of contract issues including
procurement systems. I am certain that without our oversight,
monitoring, and the improvements made because of it, the costs of the
S&L crisis to the U.S. taxpayers would have been higher. There were
ample problems with the RTC, and the practices of the FDIC deserve our
continued monitoring.
Through the end of 1995, of the $105 billion provided for thrift
resolution and asset disposition activities, $91.3 billion was released
by the Oversight Board to the RTC. Actual loss funds used by the RTC
from its inception through December 31, 1995, were originally estimated
to be $87.9 billion. According to the latest GAO financial statement
audit of the FDIC, however, total costs incurred were $86.4 billion.
Innovation provisions written into the 1989 law, the Financial
Institutions Reform, Recovery, and Enforcement Act (FIRREA], had to be
congressionally monitored and followed closely. The RTC Oversight Board
and the House's RTC Task Force did their jobs to be certain that the
public focus was not lost.
During the 6 years of the RTC, 747 failed thrifts transferred to it
were resolved. In the process, the RTC protected 25 million federally
insured deposit accounts. The RTC disposed of $458 billion in assets
through December 21, 1995, recovering $397 billion with a rate in
excess of 86 percent of book value. The RTC disposed of more than 98
percent of the assets that came under its supervision. Roughly $7.7
billion--book value--in assets were placed under FDIC management when
the RTC closed. These numbers do not adequately tell the story of the
immensity of their task and the complex issues that this new Agency
faced. They do show clearly, however, why vigilant oversight was very
pertinent and critical at the time and in the future should the FDIC be
engaged in a greater number of financial institution closures.
Additionally, Mr. Speaker, there was also a silver lining on the RTC
cloud. The Affordable Housing Program disposed of 24,000 properties
with a book value of $2.5 billion and also provided more than 109,000
housing units for low- and moderate-income families through the single-
family program and the multifamily buildings. This program took assets
we had in abundance and turned them into much needed housing
opportunities for folks across the country.
Mr. Speaker, it is time to put the Oversight Board to rest. The RTC's
work has been completed for some time now and the few tasks that remain
can easily be absorbed by the Department of Treasury. The transition of
assets, personnel and operations to the FDIC is complete. I thank the
gentleman from Iowa for moving this bill expeditiously. I support
passage of H.R. 2343 and urge my colleagues to support it as well.
Mr. LaFALCE. Mr. Speaker, I have no further requests for time, and I
yield back the balance of my time.
Mr. LEACH. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I would like to conclude with one brief observation.
Methodologically, this bill is being brought up under the Consent
Calendar, and I would just simply like to state that I think this is a
very appropriate manner to bring a bill of this nature to the floorup.
I think it has been a very constructive and helpful circumstance to
have the calendar which this is being brought up under. I apologize, I
do not mean the Consent Calendar, I mean the new Corrections Calendar
that was established for this kind of correction.
In any regard, I also want to particularly thank the minority for
their help in this matter, and our committee for its unanimous support.
Mr. Speaker, I have no further requests for time, and I yield back
the balance of my time.
The SPEAKER pro tempore (Mr. Pease). Pursuant to the rule, the
previous question is ordered on the amendment in the nature of a
substitute recommended by the Committee on Banking and Financial
Services and on the bill.
The question is on on the amendment in the nature of a substitute
recommended by the Committee on Banking and Financial Services.
The amendment in the nature of a substitute was agreed to.
The SPEAKER pro tempore. The question is on the engrossment and third
reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken.
Mrs. MALONEY of New York. 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.
Pursuant to clause 5 of rule I, further proceedings on this question
are postponed until after 5 p.m. today.
The point of no quorum is considered withdrawn.

____________________