[Congressional Record Volume 144, Number 60 (Wednesday, May 13, 1998)]
[House]
[Pages H3122-H3132]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FINANCIAL SERVICES COMPETITION ACT OF 1997
Mr. SOLOMON. Mr. Speaker, by direction of the Committee on Rules, I
call up House Resolution 428 and ask for its immediate consideration.
The Clerk read the resolution, as follows:
H. Res. 428
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 shall not exceed one hour,
with thirty minutes equally divided and controlled by the
chairman and ranking minority member of the Committee on
Banking and Financial Services and thirty minutes 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
[[Page H3123]]
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 passage without intervening motion except one motion to
recommit with or without instructions.
The SPEAKER pro tempore. The gentleman from New York (Mr. Solomon) is
recognized for 1 hour.
Mr. SOLOMON. Mr. Speaker, for the 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 the purpose
of debate only.
Mr. Speaker, this legislation before us is a structured rule
providing for the consideration of H.R. 10, the infamous H.R. 10. It is
the Financial Services Modernization Act of 1998.
This rule is balanced and fair to both supporters and opponents of
the legislation. The rule allows for consideration of all of the major
substantive issues in the realm of financial services reform dealing
with banking, dealing with securities and dealing with the insurance
industry, three of the most important industries in this Nation
because, as their success goes, so goes the success of all of the other
industries throughout our country.
Passage of the rule today is another step forward in the deliberative
process in this Congress on this issue that has been going on now for
more than a decade, and it is important that we take this stride here
today.
Mr. Speaker, the rule provides for 1 hour of general debate, 30
minutes equally divided between the chairman and ranking member of the
Committee on Banking and Financial Services.
The rule also waives all points of order against consideration of the
bill. The rule makes in order an amendment in the nature of a
substitute which is printed in part 1 of the committee report and which
shall be considered as an original bill for the purposes of amendment
and shall be considered as read.
This text, which has been available to the House since March 30, is
identical, and Members back in their offices or wherever they might be,
this is very important, the text that is before us today is identical
to the text the Committee on Rules made in order during an earlier rule
for this bill, except the credit union title, which was dropped and
passed by the House under suspension of the rules on April 1. So the
legislation is identical, minus the credit union legislation.
In addition, for the further information of Members, the gentleman
from Iowa (Mr. Leach) printed this text in the Congressional Record on
April 30 so, again, if they do not have a copy of the bill itself, if
Members get the Congressional Record of April 30, it lays out the
entire matter before us.
The rule also waives all points of order against the amendment in the
nature of a substitute.
{time} 1130
The rule further provides that no amendment shall be in order except
those printed in the Committee on Rules report, which may be offered
only in the order printed, which may be offered only by a Member
designated in the report, which 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, and shall not be subject
to amendment except as specified in the report.
The rule also waives all points of order except the amendments
printed in the report. The rule allows the chairman of the Committee of
the Whole to stack votes, and, finally, the rule provides for one
motion to recommit with our without instructions.
Mr. Speaker, this rule allows for consideration of a total of 12
amendments and one bipartisan manager's amendment. There are 7
Republican amendments and there are 4 Democratic amendments. The rule,
like the underlying legislation, enjoys bipartisan support, strong
support from both sides of the aisle.
The manager's amendment, which includes important consumer protection
provisions, agreed to by the chairman of the committee of jurisdiction
and the ranking member of the Committee on Commerce, the gentleman from
Michigan (Mr. Dingell), one of the most respected Members of this body,
and the most senior Member of this entire body, by the way, will be
considered first after general debate.
The House will then proceed immediately, and this is important for
Members to be listening to, the House will then proceed immediately to
a major substantial proposal offered by the ranking member of the
Committee on Banking and Financial Services, the gentleman from my home
State of New York (Mr. LaFalce), which allows for additional financial
activities by a bank performed in an operating subsidiary structure,
and revises section 104 of the bill governing insurance sales.
That is a very, very controversial issue, but it speaks to this
divided House on the issue. And the amendment of the the gentleman from
New York (Mr. LaFalce) will speak very clearly to that.
In addition, I would point out that the gentleman from New York (Mr.
LaFalce) is the ranking member of the Committee on Banking and
Financial Services and, therefore, he should have the first priority of
offering that amendment dealing with operating subsidiaries. But in
addition to that, the gentleman from Louisiana (Mr. Baker), a
Republican, who is a member of the Committee on Banking and Financial
Services and a subcommittee chairman, also has a comprehensive
amendment which makes several major changes in the bill, including
operating subsidiaries.
So Members have two bites at the apple dealing with that very, very
controversial issue. His amendment amends also the insurance title of
the bill. It eliminates community reinvestment requirements for
institutions with assets less than $100 million. And, finally, it
contains an operating subsidiary proposal, as I just outlined.
These two amendments are debatable for 40 minutes each. And I would
suggest that Members ought to come over here and they ought to listen
to that debate in about an hour because it is very, very important to
the final passage of the bill.
The rule also addresses the contentious issue of commercial baskets
in an evenhanded manner as well. The gentlewoman from New Jersey (Mrs.
Roukema), who is chairman of a subcommittee of the Committee on Banking
and Financial Services, will offer her amendment to increase the
percent of the amount of annual gross revenue from which a financial
holding company would be permitted to derive from commercial
activities.
The bill, keep in mind, has a 5 percent basket in it, and the
gentleman from Iowa (Mr. Leach) will then offer an amendment to
eliminate the commercial basket entirely. Each of the basket amendments
are debatable for 30 minutes.
So the bill, containing a 5 percent basket, is then allowed to be
amended by Members from both sides of the issue, one that would
increase that basket and another that would decrease it to zero. That
is fair and that is why Members should come over and vote for this
rule.
The rule then allows for seven other amendments debatable for 10
minutes each, and that could be expanded by unanimous consent if need
be, which address several issues in the insurance field, the thrift
field, and the small bank areas, all of which Members have divided
attention to. In this way, the rule allows significant financial
services alternatives to be debated and
[[Page H3124]]
voted on this floor. Everybody will be heard.
Mr. Speaker, this rule meets the twin goals the Committee on Rules
grappled with yesterday, allowing fair and vigorous debate on various
alternatives and yet moving this delicate compromise forward to House
passage.
Mr. Speaker, the rule continues the spirit of compromise surrounding
this legislation. I have learned many things in my 20 years in this
institution, but one of the best lessons I have learned was the value
of compromise for the public good, and that is what we need to have
here today to move this legislation forward.
In this regard, I wish to salute my friend, the gentleman from
Virginia (Mr. Bliley), the chairman of the Committee on Commerce, and
the gentleman from Iowa (Mr. Leach), chairman of the Committee on
Banking and Financial Services, as well as the gentleman from Ohio (Mr.
Boehner), chairman of the Republican Conference conference. These
Members deserve great acclaim, as well as the gentleman from Michigan
(Mr. Dingell) and the gentleman from New York (Mr. LaFalce) for their
patient attention to this very, very important matter.
Mr. Speaker, many Members of Congress on both sides of the aisle have
made substantial compromises in order to move this legislation forward.
In addition, the affected industries have participated in good faith in
these talks and made significant changes in their positions to
accommodate the concerns of other stakeholders.
Mr. Speaker, the willingness to compromise among several major banks
and the insurance industry and the securities industries have allowed
this legislation to proceed to where it is today. Unfortunately, this
spirit of compromise was not pervasive in the Washington-based banking
trade associations, who have flatly rejected any compromise.
The letter that we received from the Business Bankers Roundtable,
from the American Bankers Association, and the Independent Bankers
Association had the mitigated gall to write a letter and say no matter
what this Congress does on this floor, no matter what combination of
amendments are adopted, that they oppose the bill. If my colleagues
want to know why, it is because they want a free reign. I will get back
to that in just a minute. This is so disappointing, given the strong
support for this legislation among some of the country's most prominent
financial institutions.
When I was 3 years old, the Glass-Steagall Act prohibiting
affiliation with commercial banking and securities activities was
passed. And that was 64 years ago. The pace of change in the world and
in the marketplace has been absolutely stunning over time. Our
financial services laws are, without question, obsolete for a modern
global economy.
Mr. Speaker in, this new global environment it is imperative that the
banking industry, the insurance industry and the securities industries
of the United States be able to compete internationally, because our
whole economy depends on it. Jobs in America depend on it. A healthy
and competitive financial services sector of the economy leads to
overall growth and stability in this country.
Mr. Speaker, the recent waive of mega-mergers and the resulting media
attention to those activities only point out further the need for this
legislation in the way that it is crafted today, and the way it will be
crafted on this floor under a fair debate.
A bipartisan consensus has coalesced around the bank holding company
structure as the prudent way to allow for increased financial
activities, and the chairman of the Federal Reserve Board has weighed
in in strong favor of this report. One of the most respected people in
the United States. Any attempt to modernize our financial services law
should clearly not toss out the lessons of history, and I will talk
about that in just a minute.
Mr. Speaker, having served in the House during the S&L crisis, I can
assure Members that financial services modernization should be crafted
in a manner which does not jeopardize the interest of the investor, and
that means not only people living on fixed incomes that have
accumulated a little stock over their lives and now live on that
income, it means the pension systems throughout this country, union
pensions or the New York State retirement system, all investing in the
stock market. These have to be protected. We cannot let the same thing
happen to them that happened with the S&L crisis back in the early
1980s.
Mr. Speaker, the news in the last few weeks should be enough evidence
for Members to be convinced the time has finally arrived to pass this
bill, to get it over to the Senate, and then get it to conference so
that the administration can weigh in as well as the Senate and as well
as the House. Defeat of the bill today will prevent that from happening
and could, my colleagues, result in chaos throughout the financial
markets of not only the United States but the world itself.
The world market has changed right before our eyes and we are
diminishing the credibility of this lawmaking body if we do not act
here today.
Mr. Speaker, the Committee on Rules is presenting the House with a
variety of alternatives on this financial services reform with this
rule today. The House will have an opportunity to work its will, and
that is the way that it should be.
Mr. Speaker, I believe that Members of Congress have a responsibility
to lead and to legislate. If Congress does not act now, one day we will
wake up and the world will suddenly be so completely different it will
be unrecognizable and we will have done nothing to shape it, and every
Member of this body can be ashamed of themselves.
Mr. Speaker, I would urge Members to move this process forward. We
have studied these issues extensively in our committees for years now.
More than 10 years. We now have an appropriate rule before the House.
Let us pass the rule and then the bill and send it to the other body
for their consideration.
Mr. Speaker, I reserve the balance of my time.
Mr. FROST. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, 7 weeks ago the House Republican leadership was forced
to withdraw from consideration an unfair and ill-considered rule. Today
the Republican leadership has recommended a rule which, while not
perfect, is much more fair and one which allows the House to debate
many of the issues related to modernizing the financial services
industry in this country.
Most importantly, the ranking members of both the committees of
jurisdiction have been given the opportunity to offer important
amendments to the bill. Seven weeks ago, the Republican majority denied
these Members the opportunity to offer these amendments and that action
contributed to the eventual withdrawal of the rule.
Mr. Speaker, without a doubt, H.R. 10 is a controversial bill, but I
think all Members will agree that financial modernization is essential
to ensure that our financial services industry can remain competitive
in today's global economy. More than ever, the ability of our financial
institutions to compete globally is critical to maintaining our
position of economic strength. There is little debate on that point.
Moreover, the question of how we construct a financial modernization
scheme is a subject of heated debate. This rule, unlike the rule
brought up last month, allows for debate on some of the major points of
contention in the whole question of financial services modernization.
First, Mr. Speaker, this rule allows for the House to choose between
two structures for modernizing financial institutions and for
eliminating the barriers between banking securities and insurance
activities. As currently written, H.R. 10 allows for a direct
affiliation of these activities through the creation of a new holding
company structure which would be overseen by the Federal Reserve Board.
Each affiliate, however, would be subject to regulation by its own
functional regulator; in other words, banks by banking regulators,
securities by the SEC, and insurance by State insurance regulators.
This rule, unlike its predecessor, allows the ranking member of the
Committee on Banking and Financial Services the opportunity to offer an
amendment to this key provision. The LaFalce-Vento amendment would
allow banks to choose between the holding company concept or an
operating subsidiary system, which would be subject to regulation by
the office of Comptroller of the Currency. Without going into the
details of the differences between those two regulatory schemes,
suffice
[[Page H3125]]
it to say that this is a critical difference which deserves
consideration and debate in the House.
In addition, Mr. Speaker, the rule includes as a manager's amendment,
proposals first brought up by the ranking member of the Committee on
Commerce. In the first rule proposed for consideration of H.R. 10, the
Republican leadership excluded from debate the consumer protection
amendments proposed by the gentleman from Michigan (Mr. Dingell).
However, in round two, the Dingell amendment has now become the Bliley-
Dingell-Leach manager's amendment and will be the first amendment
considered under the rule.
Allowing these amendments to be considered is not only fair, Mr.
Speaker, it is necessary for the House to consider them if we are to
truly debate the issue of modernizing banking laws that are from
another age. Regardless of each Member's position of how to accomplish
this long overdue change in our banking laws, it is important the House
be able to examine this issue thoroughly, something that the Republican
earlier had not tried to do. This is a much better rule and will allow
for comprehensive debate on bringing our financial services industry
into the 21st century.
Mr. Speaker, I reserve the balance of my time.
Mr. SOLOMON. Mr. Speaker, I yield such time as he may consume to the
gentleman from Finley, Ohio (Mr. Oxley), one of the most respected
Members of this body, who has contributed so much time to this issue as
a subcommittee chairman of the Committee on Commerce.
Mr. OXLEY. Mr. Speaker, I thank the gentleman from New York for
yielding me this time and congratulate him on an excellent product,
this rule. Indeed, this does allow the House to work its will on
several important issues dealing with H.R. 10, and I do rise in support
of the rule for the Financial Services Act of 1997.
This is the 10th time that Congress has tried to repeal Glass-
Steagall since 1979. In the absence of congressional action, regulators
have stepped in and essentially usurped congressional authority to make
national policy for financial services. I believe it is time now for
Congress to consider this issue and for elected representatives to
discharge their constitutional authority rather than unelected
regulators. We are, indeed, responsible and answerable to our
constituents, and that is the way it should be. Accountability is what
this body is all about.
{time} 1145
The rule makes in order a bipartisan manager's amendment dealing with
important issues, including consumer protection, SEC backup authority,
information sharing among the regulators, and provides for a study of
community needs.
And indeed, I congratulate the gentleman from Michigan (Mr. Dingell),
our ranking member on the Committee on Commerce, working very closely
with the gentleman from Virginia (Mr. Bliley) and the gentleman from
New York (Mr. Manton), our ranking member on my subcommittee; as well
as the Committee on Banking and Financial Services members, led by the
gentleman from Iowa (Mr. Leach) the gentleman from Minnesota (Mr.
Vento) and the gentleman from New York (Mr. LaFalce) and others who
were able to craft this very important manager's amendment that
provides some reasonable consumer protection, but still allows the
competitive nature of the enterprises to go forward.
In addition, the rule also eliminates the bulk of the thrift title,
which has been of great concern to many thrifts throughout the country
who understandably have not wanted to give up their charter. The
legislation will now essentially leave all thrifts as they are under
current law.
I look forward, Mr. Speaker, to an informed debate on these necessary
changes to enhance the competitiveness of our financial services
system. Let us hope that, after all these years, Congress can come
together, pass a measured bill that breaks down a lot of these barriers
to competition, allows for the affiliation between banks and insurance
companies and securities companies to give the consumer the kind of
savings that have been projected in the $15 billion and more range per
year with the reduction of fees and the necessary advantages that come
with these changes that are inherent in this bill.
So this is a fair rule. It is one that was carefully crafted to allow
all sides in the debate to have their say and to have their vote, and I
commend it to the membership.
Mr. FROST. Mr. Speaker, I yield 4 minutes to the gentleman from New
York (Mr. LaFalce).
Mr. LaFALCE. Mr. Speaker, I thank the gentleman for yielding me the
time.
The bill does some good things with respect to the Glass-Steagall law
with respect to bank holding company law. But it does some very bad
things with respect to the totality of the national bank charter. It is
primarily for those reasons and the adverse impact that those changes
would have on consumers and the ability of any administration to
effectuate bank policy and economic policy that virtually every
consumer organization in America that I am aware of opposes H.R. 10,
even with the passage of the manager's amendment, and that the
administration a month ago, yesterday, and today has indicated that it
would veto H.R. 10 in its present form even with the passage of the
manager's amendment. That is the bill that we have, and we will address
that later.
Now to the rule. The rule under consideration makes in order a number
of thoughtful amendments which do frame some of the most difficult
issues this House will face this Congress. The implications of mixing
commerce and banking raise sensitive questions involving the safety and
soundness of our federally insured banking system.
The viability of the traditional national bank charter and the issue
of what we expect in return for the granting of these charters in the
form of Bank Community Reinvestment Act obligations will be forcefully
and passionately debated under this rule. That was not true of the rule
a month or so ago. I commend the chairman of the Committee on Rules for
permitting it under today's rule.
However, in speaking for the Democrats on the House Committee on
Banking and Financial Services, I am not able to say that we are
adequately satisfied with the rule. Simply stated, it is incomplete.
The issue of financial modernization is one of the most complex bills
we shall ever consider. We must try to anticipate the future and
interject policy considerations into an intense marketplace struggle
between industry giants.
Why must we consider such matters? Millions of our constituents use
financial services daily and depend on the accuracy and dependability
of these services. They demand to be protected against abusive business
practices and insured against the loss of their savings.
The rule we have before us is incomplete. The managers of the
Financial Services Act of 1998 have expended hundreds and hundreds of
hours of work in the two major committees of the House that have
considered this bill; and under the rule, we each will have but 15
minutes to present our views in general debate. I think that is
inadequate.
Secondly, while there are a dozen amendments that have been made in
order, most of them are either studies or peripheral issues to the key
provisions of the legislation. They could have been accepted in large
part in the manager's amendment.
On the other hand, 17 amendments were filed by Democratic members and
not made in order. I do not say every one should have been made in
order. But many of those amendments went to the heart of the bill's
purpose.
For example, amendments were filed by the gentleman from
Massachusetts (Mr. Kennedy) that would condition the affiliation of
financial giants on their compliance with fair housing and anti-
redlining practices. The gentleman from New York (Mr. Hinchey) filed
amendments that dealt with ATM fees and the practice of consumers
receiving unsolicited loan checks in the mail. The gentlewoman from
California (Ms. Waters) raised real questions about the commitments of
financial institutions to their community needs. These amendments
should also have been made in order.
Mr. FROST. Mr. Speaker, I yield 5 minutes to the gentleman from
Michigan (Mr. Dingell).
[[Page H3126]]
(Mr. DINGELL asked and was given permission to revise and extend his
remarks.)
Mr. DINGELL. Mr. Speaker, I rise in support of the rule, and I rise
in support of the bill, and I rise in support of the manager's
amendment.
This is a fair rule. It deserves the consideration and support of
every Member of the House. The rule makes in order 12 amendments to be
offered by Members of the majority and the minority. These amendments
deal with the major issues that were raised during the committee
consideration of this legislation, and they make possible full and fair
and open debate on an important piece of legislation.
I am pleased to tell my colleagues that the process that has brought
us to where we are at this moment is a fair, open, and bipartisan one.
I want to thank my good friend, the gentleman from Virginia (Mr.
Bliley), of the Committee on Commerce and the gentleman from Iowa (Mr.
Leach) of the Committee on Banking and Financial Services for their
leadership and for their courage and for their willingness to work with
me to build reasonable consumer and investor protection into this bill.
I want to point out that the leadership of the majority has been fair
in their actions on this matter and that we on this side should
appreciate that fact. With the support of my good friend, the gentleman
from California (Mr. Fazio) and many other Members on both sides of
this aisle, I am pleased to be joining the gentleman from Virginia (Mr.
Bliley) and the gentleman from Iowa (Mr. Leach) in offering the
manager's amendment, which is made in order under the rule.
That amendment includes the consumer and investor protections that I
have sought throughout the process. It provides a safe and sound
framework so that the financial services industry, which accounts for
some 18 percent of the GNP of this Nation, can compete efficiently and
effectively in the new global financial marketplace of the 21st
century.
With recently announced mergers, including giant banks and other
large financial institutions, a lot of fear has been raised over what
the new financial marketplace will look like. The truth is that,
without H.R. 10, the financial industry megamergers and consolidations
will continue. The regulators will continue their turf wars. The new
finance giants will overwhelm a regulatory patchwork process that lacks
adequate authority. And U.S. taxpayers will probably face another
savings and loan bailout situation and litigation will prevail. This
time, however, it will be the banks.
On the other hand, if H.R. 10 is enacted, clear regulatory authority
will be present, boundaries will be established within which financial
services firms will be free to compete in a fair and open manner, and
litigation, confusion, and taxpayer exposure will be reduced.
The choice, then, here before us is clear. I intend to vote for the
rule on H.R. 10, and I intend to vote for the manager's amendment. I
intend to vote against all other amendments, including amendments which
would permit greatly expanded high-risk activities in bank operating
subsidies, a real danger to our economic system, and greater mixing of
banking and commerce activities than the bill allows.
I urge my colleagues to support the rule. I urge them to support the
manager's amendment. And I urge my colleagues to oppose all those other
amendments which I view as unwise.
This is a good rule. The bill, if crafted according to the language
of the rule, will be a good bill. Let us pass the rule. Let us pass the
bill. Let us support the manager's amendment. And let us resolve an
issue that has plagued this country for a long time, in an honorable
fashion, in a way which serves the interest of the country.
I want to again commend my colleagues who have made this possible,
including my good friend, the gentleman from New York (Mr. Solomon),
the chairman of the Committee on Rules.
The SPEAKER pro tempore (Mr. Camp). The gentleman from New York (Mr.
Solomon) has 14 minutes remaining, and the gentleman from Texas (Mr.
Frost) has 18 minutes remaining.
Mr. SOLOMON. Mr. Speaker, I yield myself such time as I may consume.
Even though the time is not balanced yet, Mr. Speaker, I will yield
some more time.
But I want to say to my good friend, the gentleman from Michigan (Mr.
Dingell), the senior Member of this entire body from either side of the
aisle, he is one of the most respected Members on the other side of the
aisle, and we appreciate his statement.
Let me just briefly take to task my good friend, the gentleman from
New York (Mr. LaFalce), because he has insinuated that we have
discriminated against the minority in this rule; and let me just state
for the record, and here is the record, that every single Democratic
amendment that was offered dealing with policy was made in order in one
form or another. That includes LaFalce and Vento and Markey and Sanders
and Dingell and Moran.
So the gentleman, if he had other issues in mind, other policies, he
should have introduced them as amendments. And out of respect to him as
the ranking member of the Committee on Banking and Financial Services,
I would have made them in order without question.
Mr. Speaker, I yield 3 minutes to the gentlewoman from New Jersey
(Mrs. Roukema) one of the most distinguished Members of this body. She
is the gentlewoman from the Fifth Congressional District in New Jersey,
chairman of the Subcommittee on Financial Institutions and Consumer
Credit.
Mrs. ROUKEMA. Mr. Speaker, I thank the chairman of the Committee on
Rules.
Mr. Speaker, I rise in strong, strong support of this rule. We have
to have this debate today. It is an essential debate, and it must move
forward with approval of this rule. If we fail to act today, and I have
got to stress this, I have been on this Committee on Banking and
Financial Services for a long time, and I have seen lots of changes
here, but I have got to stress that if we fail to act today, we are
losing the opportunity to reform our financial system in a meaningful
and rational way. In my opinion, it is now or never for this Congress.
I certainly appreciate the strong support of the ranking member of
the Committee on Commerce, the gentleman from Michigan (Mr. Dingell),
who brings not only his own personal strong support but establishes
bipartisan cooperation here.
I might stress to those who are not on the Committee that may have
followed this, particularly our newer Members, we will lose the
opportunity here to bring to conclusion the Depression era. We are
talking about Depression era laws, 1930s, we have got to update them.
The important thing is that if we do not do it here today, we will lose
the opportunity to stop the regulators and the courts from doing the
jobs that Members of Congress should be doing.
{time} 1200
Congress must act now, not allow the regulators, in an ad hoc,
piecemeal action and the courts to do what Congress is refusing to do
with its statutory responsibility.
Technology and market forces have broken down the barriers between
banking, securities, and insurance. Our current framework, our current
law, however, is stuck in the 1930s, and it has limited our financial
institutions' ability to compete in the marketplace, the global
marketplace.
By not acting here today, we do not change what is transpiring around
the world and here in our own domestic market with foreign bankers and
securities people coming in. In the absence of our action here today,
again, I want to repeat it, Federal agencies and the courts will find
the loopholes and novel interpretations to allow financial institutions
to adapt to the marketplace. It will be a blot on the reputation of
this Congress.
We have had recent examples of the Comptroller's decision to allow
national bank subsidiaries to engage in activities that they never
should have been allowed to accept under new statutes. Congressional
inaction has led to this piecemeal kind of regulatory reform, and
honestly, Members do not want to go home and tell their people in a few
years, when we have another savings and loan type debacle, that they
voted against strong statutory reasons to redefine financial
institutions.
[[Page H3127]]
Mr. Speaker, I do congratulate and concur with the Committee on
Rules. They dealt with a very difficult subject, and they have provided
for a fair and comprehensive debate under this rule with complexities
here that it is hard to find a parallel to; but I think they have done
it in a very fair way, 12 amendments with all the substance of the
issues.
The rule for H.R. 10 makes in order 12 amendments, two of which are
mine. The Rules Committee worked hard on this Rule, and Mr. Solomon and
his Committee should be commended. The new Rule is an improvement over
the rule from late March. Under the new Rule, members will get a chance
to vote on many of the most contentious issues--insurance sales by
bank, deference to the Comptroller, the National Bank Operating
Subsidiary, CRA relief for small banks, and other provisions. Giving
the members a chance to vote on the issues is a measure of our
commitment to fair and comprehensive full debate on the complexities of
modernization of financial institutions today's global financial
network.
I am disappointed, however, that one amendment was not permitted. Mr.
McCollum offered an amendment to the thrift title. His amendment was
similar to provisions of the bill which were voted out of both the
Banking and Commerce Committees. Regardless of your position on the
issue, it should have been ruled in order. Members should have had an
opportunity to vote on this issue.
Mr. Speaker, as with most things in life, things are not always
perfect. I will support the Rule. I urge my colleagues to vote ``for''
the rule.
Mr. FROST. Mr. Speaker, I yield 4 minutes to the gentleman from
Minnesota (Mr. Vento).
(Mr. VENTO asked and was given permission to revise and extend his
remarks.)
Mr. VENTO. Mr. Speaker, I rise with concern for this rule and
significant concern for the outcome of this product, based on the
amendments and status that exists.
We are really facing here a bill that was not written in the
Committee on Banking and Financial Services, not written in the
Committee on Commerce, a 400-page bill and a smorgasbord of amendments
to it that, frankly, will tend to grow if, indeed, some of these
amendments are added and as consumed could provide acute indigestion.
Mr. Speaker, I am for banking modernization; I am for deregulation.
But the fact of the matter is that what has worked itself into this
bill in a haphazard manner and a muddled manner is obviously, on one
hand, we claim to be repealing Glass-Steagall, which, of course, the
regulators have helped us along with over the years; and the fact is
that there is a mixture today just in the very instruments of loans, of
annuities, and securities which constitute our financial entities, so
much so that they are almost a distinction without a difference.
I am for modernization, but the fact is that this bill is really, and
it is still, in a state of denial. It is like finally we dropped
somebody in the middle of the ocean; they admit they are in the water,
but they have not got the ability to swim, or to take a boat for that
matter. Maybe the boat they are taking here is referred to as the H.R.
Titanic.
The fact is that this bill is still in denial. It is a grudging
permission. In fact, what happens in this bill in the name of
modernization is that we take the national bank charter, and it gets
shredded. We shred it. That is what happens in this bill.
You permit States bank subsidiaries to do certain activities. You
permit bank subsidiaries to do activities in foreign countries, but you
will not let the banks subsidiaries function in the U.S. In this bill,
incredibly, at a time of megamergers and acquisitions, we diminish the
voice of consumers in terms of programs like CRA the Community
Reinvestment Act. Some interests do not like CRA, but it is one of the
only voices that we have for consumers. So there is a grudging
reluctance.
I admit we have to face up and deal with this. The fact is, this bill
is muddled. The administration does not support the bill in this form,
and 49 of the 50 banking associations do not. Why? In the name of
modernization, this bill is not worthy of its name because it takes
away from financial institutions activities what they can do today, and
then it calls it modernization. That does not make any sense.
That is why every bank in the country, practically, is in an uproar,
other than those that need this fig leaf in order to accomplish their
acquisition and merger activities.
That is where this Congress is at. I think we can do a lot better. I
do not blame the Committee on Rules. This rule, they have done the best
they could. They had a bill that was delivered to them, 400-plus pages,
that in a sense is going to grow, that they did not have anything to do
with; and I did not have very much to do with as one of the ranking
members in the Committee on Banking and Financial Services. And that is
what is being proposed to be moved. This is put together by people who
really, in my judgment, do not want banking modernization. It is a
grudging, limited approach that has bound them. It is a balkanized, a
re-regulation of the financnail institutions market.
Banks in this country, my friends, are the foundation of our economic
growth. We ought to be wise enough and prudent enough in this body to
admit that. Nobody may love banks, I guess, but the fact is that they
are essential to our economic development and growth. We are writing
them off in this bill. That is what we are doing. The national bank
charter is being shredded; it is being written off in this bill.
We can make some changes, modifications by adopting the good
amendment that the gentleman from New York (Mr. LaFalce) and myself
have offered, but that is about the only hope we have to come through
this process and keep this process moving.
Frankly, this bill is a mess. I suggest, even if we pass it today, it
is going to go to the Senate. It is not going to fare very well unless
it gets substantially changed. I think most of us have a good deal of
reticence about trusting that the Senate will straighten everything
out, as my colleagues might agree, and of course the administration
strong opposition and veto threat persists. I think it is time to sit
down and work out what needs to be done and really do true
modernization.
It should be noted that the basic text of this, some 400 page,
measure is a curious product, claimed to be derived from the Banking
and Commerce Committee products, but frankly many provisions and
specifics were in neither of the committee products. That is why, I am
strongly opposed to the underlying text of H.R. 10. The manager's
amendment made in order under this rule does next to nothing to address
the serious concerns I have about the overall industry balance of this
bill. No doubt many Members have heard from consumer groups, community
groups, bankers, and state groups alike, that this bill is flawed. I
hope we can make some substantial improvements. And therefore be able
to move forward with this measure with some hope of a workable measure
and better policy.
I would argue that on an issue of such importance, the future of our
financial services industries in our country, Members may need more
than an hour of general debate. While the amendments made in order have
done a better job of making time to address the key issues on this
bill, there actually are some issues that are not addressed clearly,
among them, the thrift charter issues. Fortunately the credit union
measure, H.R. 1151, is not clouding the issue, as in the March 30
version which was pulled from consideration.
The rule importantly does make in order the key amendment, that is,
the LaFalce-Vento amendment to preserve the national bank charter. This
amendment makes some balancing changes in the insurance provisions,
assures stronger consumer laws apply when there are both federal and
state laws, clarifies the matter of deference to the federal banking
regulator, reinstates important study and report provisions previously
in the bill, and restores a financially viable and safe operating
subsidiary for national banks so that national bank subs can engaged in
all activities that are financial in nature except insurance
underwriting and real estate development and investment. This national
bank amendment raises issues of great import to the overall issue of
financial modernization, to the Members of the Banking Committee and
the Administration. Its passage will be critical to the future of H.R.
10.
The Baker amendment that was made in order in my judgment a
troublesome amendment made in order by this rule. It attempts to
address several issues and has some positive points. However, it does
bring in this bill the issue of even further exempting banks from the
Community Reinvestment Act. Under the Baker amendment, banks with less
than $100 million in assets will be exempt from CRA.
[[Page H3128]]
That is not modernization. If we are to bring extraneous issues into
this bill, I would suggest that we should have looked to amendments
that helped consumers, like banning live loan checks, instead of those
that hurt consumers and communities.
It should be noted that the new text of H.R. 10 in an era of mega-
merger and acquisition across financial entities lines shrinks the
opportunities for consumers and communities to have a voice through
CRA.
Further, the Baker amendment muddies the water with regard to what
would be an appropriate financial operating subsidiary of national
banks. Make no mistake Mr. Baker's operating subsidiary is not workable
or fair has been rejected by the Administration, or for others who want
to see a strong and viable national bank with real strength for the
federal bank regulator, for communities and for consumers. Furthermore
this amendment further seriously undermines the community reinvestment
act. Having the Federal Reserve Board define what the OCC's banks'
subsidiaries can do is the fox guarding the hen house, a hollow
subsidiary for symbolic purposes isn't the answer to avoid
concentration, promote competition and serve our communities.
Mr. Speaker, I have worked long and hard and in good faith on a
financial services modernization bill for many years as have most of my
colleagues on the Banking and Financial Services Committee. This bill
jeopardizes the appropriate balance and marginalizes the deliberate
consideration and contributions of many Members. While this rule is not
egregious as the rule was in March, the process leaves must to be
desired. Without passage of key amendments, H.R. 10 will not have my
support. With passage of certain amendments, H.R. 10 will not have my
support.
The rule today is apparently as good as it gets in the House this
Congress, hopefully we will be able to work the will of the House and
made a good judgment on the final product. This measure H.R. 10 in its
current form even with amendments is not a product which I would take
any pride we could and should have done much better.
Mr. FROST. Mr. Speaker, how much time is remaining on each side.
The SPEAKER pro tempore (Mr. Hansen). The gentleman from Texas (Mr.
Frost) has 14 minutes remaining. The gentleman from New York (Mr.
Solomon) has 10 minutes remaining.
Mr. FROST. Mr. Speaker, I yield 3 minutes to the gentleman from
Massachusetts (Mr. Kennedy).
Mr. KENNEDY of Massachusetts. Mr. Speaker, I rise in strong
opposition to this rule, and I think that it is important that we
recognize that, while all of us are focused on the whole issue of how
this bill is going to affect the biggest and most powerful institutions
in this country, and perhaps now, in the world, with the new speed of
mergers and acquisitions taking place, we are creating ever larger,
ever more powerful banks and insurance companies and securities firms.
We are allowing them to gobble up one another in a situation that
makes a Pacman machine look, itself, like child's play. But the fact of
the matter is, that nowhere in this legislation is there a word printed
about how this bill is going to affect the poor. Nowhere in these long
pages do we see any indication of whether or not small business lending
is going to increase.
Every major study shows that once this legislation passes, we will
see the number of branch offices shrink. We will see the number of
employees that are going to be working for these institutions shrink.
We are going to see, much more importantly, the amount of coverage
under the Community Reinvestment Act dramatically reduced. We are going
to see the tremendous engine of growth that we have seen in our urban
areas dry up as a result of the shrinkage of the Community Reinvestment
Act.
Yet, even the Fair Housing Act, the Fair Housing Act, which just says
that the biggest banks and the insurance companies and the real estate
firms in this country cannot discriminate based on race, color, or
creed, when the Justice Department has entered into consent decrees
with various banks and insurance companies in the United States of
America, we are still going to allow them, without any hindrance, to go
out and merge and acquire one another.
We ought to say, fine, it is great. I think it is wonderful that we
are going to allow our biggest companies to get bigger and to be able
to compete with other nations' large institutions. There is nothing
wrong with growing big institutions. But what we ought to make certain
of, if we are going to grow those big institutions, is that they look
out for the little people. That is what this bill misses.
There is nothing in this bill that makes certain that people are no
longer discriminated against because of the color of their skin.
Believe me, in the financial institutions of this country, we have
rampant discrimination. You go in and try to look at how many
minorities get home mortgage loans, get small business loans, compared
to whites coming from the same neighborhoods with the same income
levels. It is atrocious.
Look at how insurance companies discriminate against people around
America. We do not do anything, and we are going to allow them to
gobble one another up, to protect the poorest people in America. Come
on, this ``chamber of deputies'' of America. Come on and stand up as
parliamentarians for the people that in the United States need you.
The big banks and insurance companies do not need us. It is the
working families of America that need their representatives. Stand up
against the insurance. Stand up against the securities. Stand up
against the banks. Stand for the working families of America.
Mr. FROST. Mr. Speaker, I yield 3 minutes to the gentleman from New
York (Mr. Hinchey).
Mr. HINCHEY. Mr. Speaker, I thank the gentleman for yielding to me.
Mr. Speaker, I have some very serious objections to the bill in
chief, but I want to focus my remarks at this particular moment on the
rule.
Although this rule, as has been noted, is a better rule and a more
open rule than the one which was originally advanced for this bill some
time ago, it is still, nevertheless, seriously deficient in that it is
still too closed and not open enough.
This particular bill, H.R. 10, is the most substantial and
significant piece of financial legislation to come before this House in
a very long time. I dare say that there will be few Members presently
serving here who will vote on more significant legislation, even if
they stay as long as the dean of the House, our revered friend, the
gentleman from Michigan (Mr. Dingell), some 30 years. This bill is
critically important and is far-reaching.
Let me just talk a little bit about the issue of fees and how this
rule refused to address the issue of bank fees. Customers of banks find
themselves increasingly paying more and more and more in fees.
This bill fails to address that problem, and the rule objected to our
introducing an amendment which would have limited ATM fees. This is an
amendment which had the support of the very respected gentleman from
Iowa (Mr. Leach), the chairman of the Committee on Banking and
Financial Services.
Nevertheless, the Committee on Rules decided that they should not
allow an amendment on this floor which would restrict or prevent banks
from charging their customers at ATM machines. There are 90 percent of
the banks across the country now charging at ATM machines, and those
fees are going up. They were $1 in most instances. Now they are going
up to $1.50. How long will it be before they are $2 and $2.50 and $5?
The banks are insatiable in this regard. This rule does nothing to
prevent them from continuing to fleece the American public by charging
them higher and higher fees.
Furthermore, there is a broad, sweeping provision in this bill. It is
section 104(b)(1), which preempts State legislative bodies in a very
broad, sweeping way from enacting protections for customers, consumers
across this country.
So even if this Congress is not prepared to protect the banking
customers, to protect financial consumers, the bill goes beyond that
and makes it difficult, if not impossible, for State legislative bodies
to enact fair, reasonable consumer protection laws.
This is an outrageous position, and it is an outrageous position on
the part of the Committee on Rules to prevent an amendment which was
suggested and offered by the gentleman from Ohio (Mr. Kucinich), which
would have preempted this particular sweeping provision of the bill.
These are just some of the reasons why this outrageous, tight, wrong
rule ought to be defeated.
Mr. SOLOMON. Mr. Speaker, I yield myself 1 minute to take exception
to
[[Page H3129]]
the previous speaker and to my good friend, the gentleman from
Massachusetts (Mr. Kennedy), as well.
Mr. Speaker, in this legislation, everyone knows that Jerry Solomon
is proinsurance and has been for many years. The very fact that I am up
here supporting this rule and supporting this bill is because the
insurance industry is protected. State regulation is protected in this
bill; and do not think it is not, or I would not be standing here
supporting it.
As far as the gentleman from Massachusetts (Mr. Kennedy) is
concerned, you know, we are talking about bank modernization and how to
protect the investor. We are not talking about red-lining districts. We
are not talking about fair housing authorities. That is a subject from
a different committee, from the Committee on the Judiciary. It ought it
be brought to the floor under those jurisdictions, not under this
banking bill.
{time} 1215
We ought to be concentrating on this, because it is so terribly
important, and I will tell you why in a minute.
Mr. Speaker, I yield one minute to the gentleman from Iowa (Mr.
Leach).
Mr. LEACH. Mr. Speaker, I want to make several points on the consumer
protection and CRA protection issue. In several ways, CRA is expanded
in this bill. One is all subsidiary depository institutions will have
to have a satisfactory CRA rating to take on any new powers. That is
the first extension of CRA in this regard.
Secondly, for the first time, CRA is partially placed on the
securities industry and the so-called wholesale financial institutions.
Those are expansions, not contractions, of CRA.
The third point I would like to stress is that we are looking at
expanding in addition the antitrust authorities of the United States of
America. If the managers amendment is adopted, we will have stronger
antitrust laws. We will move in the direction of greater oversight, not
less, of the antitrust laws of the United States, as applied to
financial institutions.
These are very important consumer provisions, and I think that one
should be very cautious about reaching judgments to the contrary.
Mr. FROST. Mr. Speaker, I yield 3 minutes to the gentleman from
Massachusetts (Mr. Kennedy).
Mr. KENNEDY of Massachusetts. Mr. Speaker. I want to thank my good
friend for yielding me time.
Mr. Speaker, I just would like to respond by pointing out that the
chairman of the Committee on Banking and Financial Services knows full
well that under the legislation that is before us there will be a
dramatic shrinking of the amount of money that goes into the
communities across this country under the Community Reinvestment Act,
by virtue of the fact that the subsidiaries will now be pushed out of
the bank and into these various affiliates and will no longer be
covered under CRA.
I know that the chairman is about to make the point to me that he has
an amendment, which I think most people do not believe is going to
pass, or the gentleman from New York (Mr. LaFalce) and the gentleman
from Minnesota (Mr. Vento) have an amendment which we believe is going
to have a very difficult time getting through, because of the fact that
it stands up for the consumer.
I would like to get back to the point of the gentleman from New York
(Mr. Solomon). The gentleman indicates that this bill is about looking
out after the stockholders and the shareholders of the banks of
America. That is almost directly what the gentleman said.
I cannot believe that that is what in fact we view our job in the
Congress of the United States to be. It is not to look out after the
stockholders and shareholders of these institutions; it is to look out
after the people whose taxes back up the Federal Deposit Insurance, the
BIF, the SAIF, and all of the basic protections, to make certain that
people are not discriminated against.
To say we are not going to stand idly by as banks suck the deposits
out of a local community, as insurance companies refuse to write
insurance policies to particular sections of communities, as insurance
companies refuse to invest their huge deposit base into whole sections
of America, those are the protections that we are missing in this bill.
Those are the protections that should be foremost on the minds of the
people that make up the Congress of the United States.
Mr. VENTO. Mr. Speaker, will the gentleman yield?
Mr. KENNEDY of Massachusetts. I yield to the gentleman from
Minnesota.
Mr. VENTO. Mr. Speaker, I would point out that one of the Dingell-
LaFalce amendments, which was offered on March 30th, which was supposed
to have been in order, would have provided an expansion of CRA to some
of the other financial entities. That is conspicuously absent from
consideration of what is being considered on today. I would just point
out that that is conspicuously absent from the managers amendment
today.
I intend to support the managers amendment. I think it is good, as
far as it goes. I think the concern is that, in and of itself, it does
not go far enough to address the concerns of consumers and the
community.
I appreciate the antitrust provisions, as our chairman, the gentleman
from Iowa (Mr. Leach) and I together had written and worked on those
and put them in the bill and are now included in the managers
amendment. It is one good thing we brought back that was not in the
March 30 configuration. But the fundamental issue is that there is a
shrinkage of CRA that goes on, will be adverse, and gives less voice to
consumers than what they have in today's marketplace.
Mr. KENNEDY of Massachusetts. Mr. Speaker, reclaiming my time, I
would also point out that while the committee of the gentleman from
Iowa (Mr. Leach) incorporated an amendment to handle the Federal
Housing Administration, the discrimination in housing when it went to
the Committee on Rules, when the banking bill went to the Committee on
Rules that amendment was conspicuously dropped, which is one of the
reasons I am opposing the bill, despite being one of the few Democrats
that supported the bill of the gentleman from Iowa (Mr. Leach) in the
committee.
Mr. SOLOMON. Mr. Speaker, I yield myself such time as I may consume
to respond to my very good friend, the gentleman from Massachusetts
(Mr. Kennedy), who is retiring, and this body is going to miss him
because he brings a lot to the body.
I want to just clarify what the gentleman was trying to quote me as
saying. I said, ``This Financial Services Modernization Act should be
crafted in a manner which does not jeopardize the interests of the
investor or the depositor.''
Who are those investors and who are those depositors? Are they all
these rich moguls all over this country and the world? I am going to
tell you who they are. They are all of your constituents, who are
investing their lifetime savings.
I am going to sum up when we get done here and tell you what happened
in the S&L crisis, where the investors lost their money, the depositors
lost their money and the taxpayers lost their money, and that is why we
ought to be dealing with this legislation today.
Mr. Speaker, I yield one minute to the gentleman from Iowa (Mr.
Leach), the chairman of the Committee on Banking and Financial
Services.
Mr. LEACH. Mr. Speaker, just briefly to respond to the gentleman from
Massachusetts (Mr. Kennedy), whose perspective I think we should listen
to very carefully, this bill does advance low cost banking accounts as
obligations of certain kinds of banking institutions, which is a very
powerful step forward to protect low income people.
Secondly, in terms of protecting smaller institutions, this bill
allows community institutions of a smaller size to tap into the Federal
Home Loan Bank system, which is a government-sponsored enterprise, to
be able then to marshal low cost loans for farmers and for small
businesses. This is a new power designed for small institutions,
basically to serve smaller communities. These are very extraordinary
new powers.
Finally, let me just conclude by saying all of us are concerned about
some of the trends in finance today. The question is not whether the
trends are all wrong, but whether this bill applies
[[Page H3130]]
more humanity and more reasonableness in controlling and constraining
those trends. I believe it does.
Mr. FROST. Mr. Speaker, I yield 3 minutes to the gentleman from
Texas, Mr. Bentsen.
(Mr. BENTSEN asked and was given permission to revise and extend his
remarks.)
Mr. BENTSEN. Mr. Speaker, first of all I want to say I have the
greatest respect for the chairman of the banking committee, as well as
the ranking member of the Committee on Commerce, but I am opposed to
this rule.
This bill, first of all, will not greatly, if at all, in my opinion,
affect the announced mergers that are going on. A lot are going to
occur regardless, and others, like the Citigroup merger, really are not
affected by this bill. They have other fish to fry down the road.
This bill is not about size, it is about powers and who has what
powers. This bill has changed as it left the Committee on Banking and
Financial Services from Glass-Steagell reform to a balkanization of the
Nation's financial services structure. It is no longer about financial
modernization in the whole; it is about who gets to protect what
powers, and that is unfortunate. Maybe we want to do that, but we ought
to be honest about what we are doing here.
With all due respect to the chairman of the Committee on Rules, and
granted, I am new, I am only in my second term, but the fact we are
only going to spend one hour of general debate on a 400 page bill
dealing with the bank laws that was filed in the Congressional Record a
week and a half ago, is absurd to me.
In the business the gentleman was in before and the business I was in
before, we would be subject to violations of not having proper
disclosure, because we clearly are not disclosing what is going on in
this bill today.
If one is concerned about protecting Members from voting against
various amendments so they are not voting against particular interest
groups that are affected by this bill, you just not are going to be
able to do that and deal with the issues. This bill is fraught with
peril for Members trying to hide from various interest groups.
Now, I am for modernization, probably for more modernization than
some of my colleagues on the other side of the aisle and colleagues on
this side of the aisle. But this bill, unfortunately, will not have the
Congress moving the banking laws and the financial laws to where the
marketplace is today. In effect, I think it will have us moving
backwards.
There are some amendments that we can address, that we can try and
adopt. The LaFalce-Vento amendment and the Bliley-Dingell-Leach
amendment are good amendments and they ought to be adopted. But,
otherwise, if they are not, I think to argue that this is our last
chance to pass this bill in this Congress really reminds me of what my
mother would say. My mother would say, you should have thought about
that before you decided to spend most of the Congress in recess,
instead of staying here and doing your work.
We could have tried to work on this earlier. We could have brought
the parties together, instead of having three or four people put the
bill together in a back room. We could have tried to pass it. We can
always change it. That is what we are elected to do. But we chose not
to do so.
So, unfortunately, and with all due respect for the chairman, I am
going to have to oppose the rule. I think this bill in its current form
is a real step backward. It may be good for the Congress, but the
marketplace is going to run circles around it.
Mr. SOLOMON. Mr. Speaker, I yield myself such time as I may consume
just briefly to say to the gentleman, the gentleman is new here, but he
was a cosponsor of an amendment dealing with the operating
subsidiaries. We made both of those amendments in order in LaFalce and
we made in order the gentleman from Louisiana's amendment.
But let me say, if the gentleman had other amendments, the gentleman
should have offered them, and perhaps we could have looked on them
kindly.
Let me just point to the fact that the gentleman said there is only
one hour of general debate. I want the gentleman to come back here at
11:30 tonight and tell me that there is only one hour of debate on this
issue. We will still be on this floor debating this issue at 11:30
tonight, and the gentleman should pay attention to the clock.
Mr. Speaker, I yield one minute to my very good friend, the gentleman
from Des Moines, Iowa, (Mr. Ganske) a member of the Committee on
Commerce.
Mr. GANSKE. Mr. Speaker, I rise in support of the rule and the bill.
Mr. Speaker, let me speak about consumers. This bill utilizes the
holding company structure to build safe fire walls to separate insured
bank liabilities from uninsured liabilities of other financial
obligations. I think the holding company approach is safer for
consumers than having insurance and security subsidiaries. Functional
regulation is a consumer safeguard.
Mr. Speaker, this bill ensures that banks which become holding
companies will provide low cost basic banking accounts to consumers,
that there is full disclosure on which bank products are and are not
insured, that loan applications cannot be conditioned on the purchase
of insurance, that complaints can be referred to the appropriate
regulator and that a new source of low cost credit through the Federal
Home Loan Bank system is available to farmers, small businesses and
persons involved in community development.
Most importantly, Mr. Speaker, modernizing these depression-era laws
as we enter this next century will allow greater competition in the
financial services industry and result in lower prices and better
services. This could save $15 billion each year.
Support the bill and the rule.
Mr. FROST. Mr. Speaker, I yield 30 seconds to the gentleman from
Texas (Mr. Bentsen).
Mr. BENTSEN. Mr. Speaker, with all due respect to the chairman,
actually the gentleman did not make my amendment in order. It was the
Vento-Bentsen amendment. It was a narrow operating subsidiary
amendment, which was not made in order, just for the record.
But with respect to being here at 11:30, I am happy to be here at
11:30. That is what we get paid to do. I guess my point is, why do we
have to do it all in one day? If it is such an important bill, let us
spend a lot of time on it. I think that is what the American people
would want us to do.
Mr. SOLOMON. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, let me just say to the gentleman that we could make all
of these amendments in order. We could spend four days on this. But,
there are things like ISTEA, which deal with roads and bridges and
construction in this country, there are things like campaign finance
reform, all of which have to get done before the time that we go home
for the break.
Mr. Speaker, I yield one minute to my good friend, the gentleman from
Ohio (Mr. Gillmor).
(Mr. GILLMOR asked and was given permission to revise and extend his
remarks.)
Mr. GILLMOR. Mr. Speaker, I thank the gentleman for yielding me time.
Mr. Speaker, I am happy to rise in support of this rule, and I am
also happy that the bill includes an amendment that I offered which has
been called Fed Lite.
Earlier versions of this legislation would have created an umbrella-
like regulatory framework subjecting many financial entities to
excessive and conflicting regulatory requirements. No clear argument
had been made to authorize Federal Reserve umbrella regulation over
securities and insurance entities that had functioned effectively
without Federal Reserve supervision. That is why I offered an amendment
in the Committee on Commerce to scale back this broad expansion of
unwarranted regulatory authority and emphasize true functional
regulation.
My amendment, which was passed unanimously in the Committee on
Commerce, is commonly known as Fed Lite because it scales back much of
the unnecessary authority of the Federal Reserve to require reports and
conduct examinations in nonbank subsidiaries of a holding company.
Essentially, Fed Lite eliminates most duplicative and burdensome
regulations.
{time} 1230
Mr. FROST. Mr. Speaker, I yield 1 minute to the gentleman from
Massachusetts (Mr. Kennedy).
[[Page H3131]]
Mr. KENNEDY of Massachusetts. Mr. Speaker, I think that what we are
hearing on the floor here at the moment is that this bill is designed
to expand the powers and the capabilities of the major financial
institutions of this country. While I support that and while I was one
of 10 Democrats on the Committee on Banking and Financial Services that
voted for this bill, 9 of them are now off of it.
The reason why is because when the gentleman from Iowa (Mr. Leach),
chairman of the Committee on Banking and Financial Services, a few
moments ago referred to lifeline banking and the fact that that is
contained in the bill, something happened between the lifeline banking
we passed in the Committee on Banking and Financial Services and the
lifeline banking portion of this bill that is on the House floor today;
and that is that it no longer has any teeth. It no longer is a
requirement. It is now something that a bank might opt to do; they
might not opt to do it, as well. They do not do it now, so I do not
know why they would opt in.
The fact is that what we see here is a grab by the powerful interests
of America without even an acknowledgment of the base of the financial
institutions.
I wish we were not all done, Mr. Speaker. We have more to say, but
not enough time to say it.
The SPEAKER pro tempore (Mr. Hansen). The gentleman from Texas (Mr.
Frost) has 30 seconds remaining.
Mr. FROST. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, we have heard the sharp differences on this piece of
legislation. We should move to consideration of the bill, and I urge
adoption of the rule.
Mr. SOLOMON. Mr. Speaker, I yield myself the balance of my time.
Let me come over on this side and talk to some of my good friends for
a minute.
Mr. Speaker, my good friend from Massachusetts just said it is a
power grab by the strong interests of America. That is exactly what we
are trying to prevent here.
Mr. Speaker, the administration does not want a bill. They do not
want a bill under any circumstances. Why? It is a turf war where the
Government of the United States wants to control all of this stuff.
Well, that is a shame. Alan Greenspan, the Federal Reserve Board
Chairman, one of the most respected people in the country, wants this
bill. Arthur Levitt, who is the Chairman of the Securities and Exchange
Commission, wants this bill, because they want to make sure we are
going to protect the investors and depositors and taxpayers of this
Nation.
Mr. Speaker, anyone who comes over here and votes against this rule,
I say to my colleagues, in my opinion, is voting to protect their own
backsides. My colleagues do not want to have to cast the tough votes.
They do not want to debate this issue on the floor.
Let me just say one more thing. I was here in 1980; I came here in
1978. In 1980 a little, small, innocuous bill came on the floor. What
it did, among other things, was raise the guarantee on deposits from
$25,000 up to $100,000 and it said to Jerry Solomon, who had just sold
all of his businesses and had come to Washington, you can invest all of
your money in all of these new start-up banks that are going to risk
your investments; but it is going to be protected by the FDIC, every
single $100,000 account that I invest in.
Well, guess what happened? That brought on the S&L crisis. And then
what happened? In a lot of cases, people lost their money. In other
cases, the Federal Government came in with the taxpayers' money and
bailed them out.
I say to my colleagues, we have seen nothing like what is going to
happen in the years down the pike if we have to come in and bail out
all of these megamergers. We let all of this happen with no controls
out there. My colleagues had better be responsible and vote for this
legislation.
Let us go to the Senate, and then let us sit down and negotiate with
the White House about making sure that the Federal Reserve Board and
the Securities and Exchange Commission and others outside this
government are going to have a say, because we all know how we
politicians are sometimes. We do not always look out for the best
interests of the people. Sometimes we are looking out for our own
backsides. Let us do not do it today.
Mr. Speaker, I yield back the balance of my time, and I move the
previous question on the resolution.
The previous question was ordered.
The SPEAKER pro tempore. The question is on the resolution.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. FROST. 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.
The SPEAKER pro tempore. Evidently a quorum is not present.
The Sergeant at Arms will notify absent Members.
The vote was taken by electronic device, and there were--yeas 311,
nays 105, not voting 16, as follows:
[Roll No. 142]
YEAS--311
Abercrombie
Ackerman
Allen
Andrews
Archer
Armey
Baker
Ballenger
Barcia
Barr
Barrett (NE)
Bartlett
Barton
Bass
Bereuter
Berry
Bilbray
Bilirakis
Bishop
Blagojevich
Bliley
Blumenauer
Blunt
Boehlert
Boehner
Bonilla
Bonior
Bono
Boucher
Boyd
Brady
Brown (OH)
Bryant
Bunning
Burr
Burton
Buyer
Callahan
Calvert
Camp
Campbell
Canady
Cannon
Capps
Castle
Chabot
Chambliss
Chenoweth
Clayton
Clement
Coble
Collins
Combest
Condit
Cook
Cooksey
Cox
Coyne
Crane
Crapo
Cubin
Cummings
Cunningham
Davis (FL)
Deal
DeGette
DeLauro
DeLay
Deutsch
Diaz-Balart
Dingell
Doggett
Dooley
Doolittle
Doyle
Dreier
Dunn
Edwards
Ehlers
Ehrlich
Emerson
Engel
English
Ensign
Eshoo
Etheridge
Fawell
Fazio
Foley
Forbes
Ford
Fossella
Fowler
Fox
Franks (NJ)
Frelinghuysen
Frost
Furse
Gallegly
Ganske
Gejdenson
Gibbons
Gillmor
Gilman
Goodlatte
Goodling
Gordon
Goss
Graham
Granger
Green
Greenwood
Gutknecht
Hall (TX)
Hamilton
Hansen
Hastert
Hastings (WA)
Hayworth
Herger
Hill
Hinojosa
Hobson
Hoekstra
Holden
Hooley
Horn
Hostettler
Houghton
Hulshof
Hunter
Hutchinson
Hyde
Inglis
Jackson-Lee (TX)
Jefferson
Jenkins
John
Johnson (CT)
Johnson, E.B.
Johnson, Sam
Kaptur
Kasich
Kelly
Kennedy (RI)
Kennelly
Kildee
Kim
Kind (WI)
King (NY)
Kingston
Kleczka
Klink
Klug
Knollenberg
Kolbe
Largent
Latham
LaTourette
Lazio
Leach
Levin
Lewis (CA)
Linder
Livingston
LoBiondo
Lofgren
Lucas
Maloney (NY)
Manton
Manzullo
Markey
Mascara
McCarthy (NY)
McCrery
McDade
McGovern
McHugh
McInnis
McIntosh
McKeon
McKinney
McNulty
Meeks (NY)
Metcalf
Mica
Miller (FL)
Minge
Moakley
Mollohan
Moran (KS)
Moran (VA)
Morella
Murtha
Myrick
Nadler
Neal
Nethercutt
Neumann
Ney
Northup
Norwood
Nussle
Oberstar
Ortiz
Oxley
Packard
Pallone
Pappas
Parker
Pascrell
Pastor
Paul
Paxon
Pease
Peterson (MN)
Peterson (PA)
Petri
Pickering
Pickett
Pitts
Pombo
Pomeroy
Porter
Portman
Pryce (OH)
Quinn
Rahall
Ramstad
Rangel
Redmond
Regula
Reyes
Rivers
Rodriguez
Roemer
Rogan
Rogers
Rohrabacher
Ros-Lehtinen
Roukema
Royce
Rush
Ryun
Sabo
Salmon
Sanchez
Sanders
Sanford
Saxton
Scarborough
Schaefer, Dan
Schaffer, Bob
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Shimkus
Shuster
Sisisky
Skeen
Smith (MI)
Smith (NJ)
Smith (OR)
Smith (TX)
Smith, Linda
Snowbarger
Snyder
Solomon
Souder
Spence
Spratt
Stabenow
Stark
Stearns
Stenholm
Strickland
Stump
Stupak
Sununu
Talent
Tanner
Tauscher
Tauzin
Taylor (NC)
Thomas
Thornberry
Thurman
Towns
Traficant
Upton
Velazquez
Visclosky
Walsh
Watkins
Watts (OK)
Weldon (FL)
Weldon (PA)
Weller
Wexler
Weygand
White
Whitfield
Wicker
Wise
Wolf
Woolsey
Wynn
Young (AK)
Young (FL)
NAYS--105
Aderholt
Bachus
Baesler
Baldacci
Barrett (WI)
Becerra
Bentsen
Berman
Borski
Boswell
Brown (CA)
Brown (FL)
Cardin
Carson
Clyburn
Coburn
Conyers
Costello
Cramer
Danner
Davis (IL)
Davis (VA)
DeFazio
Delahunt
Dickey
Dicks
Dixon
Duncan
Evans
Everett
Farr
Fattah
Filner
[[Page H3132]]
Frank (MA)
Gephardt
Goode
Gutierrez
Hastings (FL)
Hefley
Hilleary
Hinchey
Hoyer
Istook
Jackson (IL)
Johnson (WI)
Jones
Kanjorski
Kennedy (MA)
Kucinich
LaFalce
LaHood
Lampson
Lantos
Lee
Lewis (GA)
Lewis (KY)
Lipinski
Lowey
Luther
Maloney (CT)
Martinez
Matsui
McCarthy (MO)
McCollum
McDermott
McHale
McIntyre
Meehan
Meek (FL)
Menendez
Millender-McDonald
Miller (CA)
Obey
Olver
Owens
Payne
Pelosi
Poshard
Price (NC)
Riley
Rothman
Roybal-Allard
Sandlin
Sawyer
Schumer
Scott
Serrano
Sherman
Skelton
Slaughter
Smith, Adam
Stokes
Taylor (MS)
Thompson
Thune
Tiahrt
Tierney
Torres
Turner
Vento
Wamp
Waters
Watt (NC)
Waxman
Yates
NOT VOTING--16
Bateman
Christensen
Clay
Ewing
Gekas
Gilchrest
Gonzalez
Hall (OH)
Harman
Hefner
Hilliard
Kilpatrick
Mink
Radanovich
Riggs
Skaggs
{time} 1254
Messrs. WAMP, LEWIS of Kentucky, EVERETT, HASTINGS of Florida,
DICKEY, DELAHUNT, WAXMAN, STOKES, and CRAMER changed their vote from
``yea'' to ``nay.''
So the resolution was agreed to.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
The SPEAKER pro tempore (Mr. Hansen). Pursuant to House Resolution
428 and rule XXIII, the Chair declares the House in the Committee of
the Whole House on the State of the Union for the consideration of the
bill, H.R. 10.
____________________