[Congressional Record Volume 144, Number 96 (Friday, July 17, 1998)]
[Extensions of Remarks]
[Pages E1333-E1334]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        OMB CONFIRMS CREDIT UNION BILL HAS NO NET BUDGET IMPACT

                                 ______
                                 

                         HON. PAUL E. KANJORSKI

                            of pennsylvania

                    in the house of representatives

                        Thursday, July 16, 1998

  Mr. KANJORSKI. Mr. Speaker, I am pleased to report to the House that 
the Director of the

[[Page E1334]]

Office of Management and Budget, Jacob Lew, has confirmed that 
enactment of the LaTourette-Kanjorski, Credit Union Membership Access 
Act (H.R. 1151) would have, ``no net budget impact'' and ``no PAYGO 
cost.''
  This finding by OMB, which applies to both the House-passed, and 
Senate Committee-reported versions of H.R. 1151, verifies what most of 
us have intuitively known for some time. Expanding access to credit 
unions will give consumers additional choices but will not negatively 
affect the federal budget. Nor will it violate the Balanced and 
Emergency Control Act. Claims to the contrary are merely efforts by 
opponents of consumer choice to throw obstacles in the way of this 
important pro-consumer legislation.
  The Office of Management and Budget has had an excellent record in 
recent years for accurately projecting the budget impact of 
legislation. OMB's analyses are prepared by dedicated professionals who 
take their responsibilities seriously. We should be thankful for their 
conclusions and should all work to ensure that a final version of the 
LaTourette-Kanjorski Credit Union Membership Access Act is presented to 
the President for his signature as soon as possible.
  The full text of OMB Director Lew's letter follows:

      Executive Office of the President, Office of Management and 
                                                           Budget,
                                    Washington, DC, July 15, 1998.
     Hon. Paul E. Kanjorski,
     U.S. House of Representatives, Washington, DC.
       Dear Representative Kanjorski: Thank you for your letter 
     inquiring about the budget impact of H.R. 1151, the Credit 
     Union Membership Access Act. OMB estimates that there would 
     be no net budget impact from either the House or Senate 
     versions of H.R. 1151 under section 252 of the Balanced 
     Budget and Emergency Deficit Control Act of 1985's Pay-As-
     You-Go budget scoring rules (known as ``PAYGO'').
       Sections 101 and 102 of H.R. 1151 (as passed by the House 
     and as reported by the Senate Banking Committee) redefine the 
     circumstances under which a credit union may expand its field 
     of membership. By increasing credit union membership beyond 
     what was permissible after the recent Supreme Court decision, 
     the new field of membership rules may allow consumers to 
     shift funds from tax-paying financial institutions to tax-
     exempt credit unions, resulting in reduced revenues. By 
     longstanding convention, OMB only scores revenue changes 
     resulting directly from modification of tax law; it does not 
     score indirect changes resulting from modification of 
     consumer behavior. This is consistent with OMB's 
     interpretation of the Budget Enforcement Act requirement to 
     score costs resulting from legislation. Because Sections 101 
     and 102 do not change tax law, OMB estimates that these 
     sections would have no PAYGO costs.
       The new definition also would lead credit unions to acquire 
     more insured shares (deposits), thus increasing deposit 
     insurance assessments received by the National Credit Union 
     Share Insurance Fund (NCUSIF). The Balanced Budget and 
     Emergency Deficit Control Act of 1985, section 252(d)(4)(A), 
     exempts provisions that provide for the full funding and 
     continuation of the government's deposit insurance commitment 
     from the PAYGO scoring rules (known as the ``deposit 
     insurance exemption''). The additional deposit insurance 
     assessments that NCUSIF would receive as a result of this 
     provision come under the deposit insurance exemption and are, 
     therefore, PAYGO exempt. OMB estimates no PAYGO cost from 
     expansion of the common bond authority.
       H.R. 1151 would prevent the National Credit Union 
     Administration (NCUA) from issuing a rebate of NCUSIF funds 
     to insured credit unions until the fund's reserve ratio 
     exceeds 1.5% of insured shares. Currently the NCUA pays 
     rebates whenever the fund reserve ratio exceeds 1.3%. This 
     provision would decrease NCUSIF outlays until the fund 
     reaches 1.5% currently estimated to happen in 2003. As above, 
     this provision contributes to the full funding and 
     continuation of deposit insurance, and is therefore exempt 
     from PAYGO.
       Finally, H.R. 1151 increases NCUA's administrative 
     expenses. The NCUA's policy, however, calls for charging 
     member credit unions fees sufficient to offset all 
     administrative costs. Thus, these additional expenses would 
     be PAYGO neutral.
       Thank you for your interest in OMB's analysis of H.R. 1151.
           Sincerely,
                                                     Jacob J. Lew,
                                                  Acting Director.

     

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