[Congressional Record Volume 144, Number 39 (Tuesday, March 31, 1998)]
[House]
[Pages H1824-H1827]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 PROVIDING FOR CONSIDERATION OF H.R. 10, FINANCIAL SERVICES ACT OF 1998

  Mr. SOLOMON. Mr. Speaker, by direction of the Committee on Rules, I 
call up House Resolution 403 and ask for its immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 403

       Resolved, That at any time after the adoption of this 
     resolution the Speaker may, pursuant to clause 1(b) of rule 
     XXIII, declare the House resolved into the Committee of the 
     Whole House on the state of the Union for consideration of 
     the bill (H.R. 10) to enhance competition in the financial 
     services industry by providing a prudential framework for the 
     affiliation of banks, securities firms, and other financial 
     service providers, and for other purposes. The first reading 
     of the bill shall be dispensed with. All points of order 
     against consideration of the bill are waived. General debate 
     shall be confined to the bill and the amendments made in 
     order by this resolution and shall not exceed two hours, with 
     one hour equally divided and controlled by the chairman and 
     ranking minority member of the Committee on Banking and 
     Financial Services and one hour equally divided and 
     controlled by the chairman and ranking minority member of the 
     Committee on Commerce. It shall be in order to consider as an 
     original bill for the purpose of amendment under the five-
     minute rule the amendment in the nature of a substitute 
     printed in part 1 of the report of the Committee on Rules 
     accompanying this resolution. That amendment in the nature of 
     a substitute shall be considered as read. All points of order 
     against that amendment in the nature of a substitute are 
     waived. No amendment to that amendment in the nature of a 
     substitute shall be in order except those printed in part 2 
     of the report of the Committee on Rules. Each amendment may 
     be offered only in the order printed in the report, may be 
     offered only by a Member designated in the report, shall be 
     considered as read, shall be debatable for the time specified 
     in the report equally divided and controlled by the proponent 
     and an opponent, shall not be subject to amendment except as 
     specified in the report, and shall not be subject to a demand 
     for division of the question in the House or in the Committee 
     of the Whole. All points of order against the amendments 
     printed in the report are waived. The chairman of the 
     Committee of the Whole may: (1) postpone until a time during 
     further consideration in the Committee of the Whole a request 
     for a recorded vote on any amendment; and (2) reduce to five 
     minutes the minimum time for electronic voting on any 
     postponed question that follows another electronic vote 
     without intervening business, provided that the minimum time 
     for electronic voting on the first in any series of questions 
     shall be 15 minutes. At the conclusion of consideration of 
     the bill for amendment the Committee shall rise and report 
     the bill to the House with such amendments as may have been 
     adopted. Any Member may demand a separate vote in the House 
     on any amendment adopted in the Committee of the Whole to the 
     bill or to the amendment in the nature of a substitute made 
     in order as original text. The previous question shall be 
     considered as ordered on the bill and amendments thereto to 
     final

[[Page H1825]]

     passage without intervening motion except one motion to 
     recommit with or without instructions.

                              {time}  1645

  The SPEAKER pro tempore (Mr. Barrett of Nebraska). The gentleman from 
New York (Mr. Solomon) is recognized for 1 hour.
  Mr. SOLOMON. Mr. Speaker, for purposes of debate only, I yield the 
customary 30 minutes to the gentleman from Texas (Mr. Frost), pending 
which I yield myself such time as I may consume. During consideration 
of this resolution, all time yielded is for purposes of debate only.
  Mr. Speaker, House Resolution 403 is a modified closed rule providing 
for consideration of H.R. 10, which is the Financial Services Act of 
1998. The rule provides 2 hours of general debate: 1 hour equally 
divided between the chairman and ranking minority member of the 
Committee on Banking and Financial Services, and 1 hour equally divided 
and controlled by the chairman and the ranking member of the Committee 
on Commerce. The rule also waives all points of order against 
consideration of this bill.
  The rule provides that the amendment in the nature of a substitute, 
which is printed in part 1 of the Committee on Rules report on the 
rule, which appears on these desks here, shall be considered as an 
original bill for the purposes of amendment. That amendment shall be 
considered as read.
  Mr. Speaker, let me take a moment to describe the amendment in the 
nature of a substitute, so the Members are clear on what this rule 
makes in order as a new base text for H.R. 10.
  Mr. Speaker, the amendment in the nature of a substitute consists of 
the following parts: The compromise text for H.R. 10 reached between 
the Committee on Banking and Financial Services and the Committee on 
Commerce, and printed in the Congressional Record of March 19, so if 
Members want to read the bill, they can look in the Congressional 
Record on March 19; the credit union legislation, as reported from the 
Committee on Banking and Financial Services and approved by voice vote 
last Thursday, March 26, in that committee; a new thrift title which 
replaces Title 4 with an amendment which closes the unitary thrift 
holding company loophole as of March 31, 1998. That is a change from 
September up to March 31, 1998. So Members should be aware of that, 
because a number of Members have come to me over the last several days 
and wanted to know what we are doing with this thrift section of the 
bill. That is what it does. And changes necessary to ensure that the 
legislation is fully offset.
  In order to comply with the Budget Act, the amendment in the nature 
of a substitute made in order by the rule transfers funds out of the 
Federal Reserve and into the general fund.
  Mr. Speaker, this rule also waives all points of order against the 
amendment in the nature of a substitute. The rule then makes in order 
five amendments which shall be offered in the order printed in the 
report, may only be offered by a Member printed in the report, shall be 
considered as read, shall be debatable for the time specified in the 
report, equally divided and controlled by a proponent and an opponent. 
The amendments shall not be subject to amendment except as specified in 
the report, shall not be subject to a demand for a division of the 
question in the House or in the Committee of the Whole.
  Mr. Speaker, the rule also allows the chairman of the Committee of 
the Whole to stack votes, and finally, the rule provides for one motion 
to recommit, with or without instructions.
  Mr. Speaker, this is an abundantly fair rule on an extremely 
complicated and delicate piece of legislation. It deals with the future 
of the banking industry in this country, of the securities industry in 
this country, and the insurance industry.
  If Members think about that, each of these three industries really is 
involved with all of the other industries throughout America, and more 
so in not only the Fortune 500 companies and how they conduct their 
business overseas in this new global economy, but also with the small 
entrepreneurial businesses, the businesses that really run the economy 
of this country, and how they can participate in this new world global 
economy. That is how important this bill is before us today.
  The chairmen of the committees of jurisdiction have spent countless 
days, they have spent months, even years, laboring to achieve some kind 
of consideration of this issue. It has been going on for at least the 
20 years that I have been a member of this body; I see the gentleman 
from New York (Mr. John LaFalce) sitting there, for as long as he has 
been here, and he has been here longer than I have.
  I salute the gentleman from Iowa (Mr. Leach) and my friend, the 
gentleman from Virginia (Mr. Bliley) for their work on this very, very 
important subject, as well as the gentleman from Ohio (Mr. John 
Boehner), who happens to be our conferences chairman, who has headed up 
the task force which has really brought all of these industries 
together.
  No industry is completely happy. If they were, then there would be 
something wrong with this bill. But the fact that they are not means 
that we have reached compromise, and we can now move forward into the 
21st century in making these industries competitive.
  Mr. Speaker, the rule makes in order an amendment in the nature of a 
substitute which I believe will garner a high degree of support on this 
floor. The compromise text of H.R. 10 has been met with considerable 
begrudging support from many of the industries, but again, they are now 
willing to sit down and understand that we have to have this bill. It 
has to become law.
  The credit union legislation received broad support in the Committee 
on Banking and Financial Services last week, which we just mentioned, 
and passed by voice vote; and the thrift fix addresses concerns 
expressed by many Members in the weeks since the committees reached a 
compromise on the underlying bill, so we have tried to bring all 
Members and all of these industries together.
  The rule allows for very important discussions on the commercial 
basket concept, with two alternataives allowed. It also allows a 
significant amendment by the ranking member of the Committee on 
Commerce.
  Finally, there is an amendment offered by the gentleman from Alabama 
(Mr. Bachus) to relieve some of the burden of the Community 
Reinvestment Act on small banks.
  I am going to tell the Members, small bankers have been out there 
calling Members of Congress saying they are all upset with this piece 
of legislation. I am going to tell the Members, the small bankers 
cannot have it all their way. It has to be a compromise. This is a 
tremendous compromise by making this amendment in order, which is going 
to benefit these small banks and community banks across this country.
  Mr. Speaker, this legislation represents, I think, a visionary effort 
to reform our Nation's complicated and outdated financial services law.
  The Glass-Steagall Act, the law which prohibits the affiliations 
between commercial banking and securities activities, dates back to 
1933. That is 3 years after I was born, Mr. Speaker. I have been amazed 
at how much the world has changed in just the last 5 years, let alone 
since 1933. The marketplace has evolved so much that it is 
unrecognizable from the era in which these laws were written.
  Congress, given the rapid pace of change in the market, has been 
perceived to be irrelevant to our Nation's financial services debate. 
Think about that. I am going to repeat it one time. Congress, given the 
rapid pace of change in the market, has been perceived to be irrelevant 
to our Nation's financial services debate. That is because we have not 
done our job on this issue over the last 20 years.

  Congress has, unfortunately, shirked its responsibility to write the 
Nation's laws, and the courts and regulators have written them for us. 
I am going to tell the Members, that is a disgrace. Any time this 
Congress sits back and refuses to face the important issues facing this 
country, and lets the courts and regulators do it for them, it is a 
shame. We all should be ashamed of it.
  Mr. Speaker, the inability of the legislative branch for many years 
to pass meaningful financial services reform has harmed our markets and 
our ability to compete in that world global market that I have spoken 
about earlier.
  American financial institutions, and all the affected industries with 
an interest in reforming these laws, have

[[Page H1826]]

been at a competitive disadvantage with our international competitors 
all over this world. Passage of this legislation is critical to our 
ability to compete overseas.
  Mr. Speaker, the bill before us today is balanced, it is fair, and it 
is a measured proposal which addresses all of the critical issues in 
the current financial landscape. It provides for affiliations between 
banks, securities firms, insurance companies, and other financial firms 
by eliminating the Glass-Steagall protections between those industries.
  The bill also allows for these expanded activities in a bank holding 
company structure, which is critical to ensure the safety and the 
soundness of our country's financial institutions.
  Recent history has shown the enormous cost that can result from rash 
and unfettered deregulation of certain types of financial institutions. 
As a result of the savings and loan debacle that we all went through 
here, and we had to spend billions of dollars of the taxpayers' money 
to bail out those S&Ls, the resulting explosive costs have just been 
insurmountable. A bipartisan consensus has developed around the holding 
company framework as the prudential way to allow for expanded financial 
services.
  The bill also addresses the critically important question of credit 
union membership, which has received a great deal of attention since 
the Supreme Court ruled in February on the ``common bond'' issue. The 
bill grandfathers existing multiple common bond groups and allows such 
groups to continue accepting members, thereby protecting all current 
credit union members, regardless of the Supreme Court decision.
  Mr. Speaker, this bill also contains important language ensuring 
functional regulation of insurance sales, and that is so terribly, 
terribly important. Insurance underwriting regulation will be the same 
for all competitors and regulated by the States, and that is the way it 
should be. That is what is provided for in the Constitution of our 
country. H.R. 10 also codifies a consensus definition of insurance, 
ensuring appropriate functional regulation and a level competitive 
playing field.
  Mr. Speaker, writing a financial services reform bill which 
contemplates a marketplace of the 21st century does not mean we should 
disregard the lessons of the past.
  This legislation will provide the legal structure for a marketplace 
of the future, while still ensuring regulatory structures which have 
demonstrated their effectiveness in acknowledging the importance of 
protecting depositors and protecting investors.
  Mr. Speaker, again, it just bothers me to see some Members shirk 
their duty. They worry about offending this group of constituents or 
that group. But there comes a time when we know better. We know best, 
we know what is going on here, and we have to put together something 
that is going to allow these three very important industries to be able 
to compete.
  This legislation will be a step in the right direction. It does not 
mean that we are going to solve it. This is not the final step, the 
passage of this legislation. As Members know, there is another body 
over there. It is called the Senate. They have no rules over there, but 
we are told that if we can pass this legislation with a substantial 
vote, that Senator Al D'Amato, the chairman of the Banking Committee, 
will take up this legislation. He will work with us to work together 
for a compromise that will be acceptable to all the industries. But if 
we do not pass the rule today and we do not pass the bill, we are not 
going to have that opportunity.
  I am going to say one more time to the Members here, they think there 
is a lot of time left, but there is not. We are going to hopefully 
adjourn this place at least by October 1 so Members can at least spend 
30 days home campaigning for reelection. If we do that, Members will 
only have about 40 legislative days on this floor to pass 13 
appropriation bills, to pass the conference report and the supplemental 
we just put out of here.
  To pass this kind of legislation, we need to do it now so we will 
have time to work with the other body and with the White House, because 
there is a third party of the government, before we can really put the 
bill together as a compromise. That is why Members need to come here 
today, they need to vote for this rule, and then they need to 
participate in the debate.
  There is plenty of debate time. Ask the questions, get the answers to 
questions, then vote one's conscience on this bill. But at least let us 
pass the rule and give ourselves the opportunity.
  Mr. Speaker, I reserve the balance of my time.
  Mr. FROST. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in opposition to this rule. I oppose it because 
the Committee on Rules Republicans have combined two major legislative 
initiatives, and in doing so, have denied the House the opportunity to 
fully examine, debate, and work its will on these matters.
  H.R. 10, the Financial Services Modernization Act, and H.R. 1151, the 
Credit Union Membership Access Act, are probably two of the most 
important and far-reaching legislative proposals this House will 
consider this year.
  H.R. 10, the financial services modernization bill, is very 
controversial and has been the subject of contentious debate in both 
the Committee on Banking and Financial Services and the Committee on 
Commerce for the past 10 years.
  The other bill, H.R. 1151, was reported last week by voice vote from 
the Committee on Banking and Financial Services.

                              {time}  1700

  And so in what seems to be an effort to find votes to pass the 
former, the Republican leadership has tied the credit union fix to it.
  Mr. Speaker, this tactic should be rejected. The House should have 
the opportunity to debate the merits of both financial modernization as 
well as the credit union fix, but the House should not be forced into 
using H.R. 1151 as the tail that wags the dog of H.R. 10.
  Each of these proposals are extremely important in their own right 
and considering them tied together does a disservice to the House. I 
urge every Member to reject this rule.
  Compounding the dilemma we now face, the Republican majority on the 
Committee on Rules has effectively cut off debate on H.R. 10 and has 
allowed for the House to consider only five amendments to the financial 
services modernization portion of the bill. In addition, no amendments 
were made in order to the credit union provisions.
  Forty amendments were submitted to the Committee on Rules for our 
consideration, including 19 amendments by Republican Members and 21 
amendments by Democratic Members. Only one Democratic amendment was 
included in the amendments made in order by the rule. While this 
amendment will be offered by the ranking Democratic Members of the 
Committee on Banking and Financial Services and the Committee on 
Commerce, other amendments offered by those two Members, as well as the 
ranking member of the Subcommittee on Financial Institutions and 
Consumer Credit, were shut out of the process.
  These Members proposed important and relevant amendments, and in some 
case those amendments reflected the action of the committees of 
jurisdiction which were exorcised from the text of H.R. 10 that is 
before us today. This action on the part of the Republican majority 
does nothing to open up the process and allow the House to 
comprehensively debate the issues surrounding this complex and 
controversial bill.
  Mr. Speaker, in the years I have served in Congress, it has never 
been easy for the House to consider banking legislation. But this rule 
makes it almost impossible for the House to fully consider the merits 
of these two major legislative proposals.
  First, by tying the two bills together the Republican leadership may 
be sabotaging the passage of the credit union legislation which, if 
considered on its own, might well pass on the suspension calendar. 
Second, the Republican leadership has denied many Members the 
opportunity to offer substantive amendments to the text of the 
underlying bill.
  For these two reasons I urge defeat of the rule.
  Mr. Speaker, I reserve the balance of my time.

[[Page H1827]]

  Mr. SOLOMON. Mr. Speaker, I yield 2 minutes to the gentleman from 
Virginia (Mr. Bliley), the chairman of the Committee on Commerce.
  Mr. BLILEY. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, I rise in support of the rule for consideration of H.R. 
10, the Financial Services Act of 1997. Congress has tried 10 times 
since 1979 to repeal Glass-Steagall. It is time that the elected 
representatives of the Congress, rather than appointed regulators, make 
the legislative decisions affecting the powers of the financial 
services industry.
  This rule eliminates the bulk of the thrift title from the 
legislation. This change will allow thrifts to continue to offer credit 
to customers for home ownership without having to become banks or to be 
subject to onerous restrictions on their authority. The revisions allow 
existing thrifts to continue operating exactly as they are now. It also 
preserves the ability of thrifts to be sold or transferred to new 
owners.
  The rule also incorporates provisions of H.R. 1151, the Credit Union 
Membership Act, which is of a great interest to many members of credit 
unions across this country. This rule allows for consideration of 
repeal of Glass-Steagall as well as a number of amendments from Members 
on both sides of the aisle. I urge its adoption.

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