[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.

                          ____________________