[Congressional Record Volume 144, Number 103 (Tuesday, July 28, 1998)]
[Senate]
[Pages S9089-S9098]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CREDIT UNION MEMBERSHIP ACCESS ACT
The PRESIDING OFFICER. Under the previous order, the Senate will now
resume consideration of H.R. 1151, which the clerk will report.
The assistant legislative clerk read as follows:
A bill (H.R. 1151) to amend the Federal Credit Union Act to
clarify existing law with regard to the field of membership
of Federal credit unions, to preserve the integrity and
purpose of Federal credit unions, to enhance supervisory
oversight of insured credit unions, and for other purposes.
The Senate resumed consideration of the bill.
Pending:
Gramm amendment No. 3336, to strike provisions requiring
credit unions to use the funds of credit union members to
serve persons not members of the credit union. (By 44 yeas to
50 nays (Vote No. 236), Senate failed to table the amendment.
Shelby amendment No. 3338, with respect to exempting
certain financial institutions from the Community
Reinvestment Act of 1977.
Amendment No. 3338
The PRESIDING OFFICER. Under the previous order, there will now be 15
minutes equally divided prior to a motion to table Shelby amendment No.
3338.
Mr. SHELBY addressed the Chair.
The PRESIDING OFFICER. The Chair recognizes the Senator from Alabama.
Mr. SHELBY. Mr. President, does this side have 7\1/2\ and a half
minutes and the other side 7\1/2\ minutes? That is my understanding.
[[Page S9090]]
The PRESIDING OFFICER. That is correct.
Mr. SHELBY. Mr. President, there has been a lot said about the
amendment that we have offered to exempt small banks from the Community
Reinvestment Act. A popular mantra is that if the small bank exemption
amendment passes, President Clinton will veto the bill; therefore, the
Senate should not take up this amendment. I have also been told this is
not the time or the place to take up an amendment to CRA. But I
believe, Mr. President, that such assertions are not valid.
H.R. 1151 essentially eliminates the common bond requirement,
allowing credit unions to serve virtually any and every group now.
In addition, H.R. 1151 explicitly authorizes credit unions to perform
commercial lending activities. In doing so, this Congress is
overturning a historical Supreme Court decision and the law of the land
for about 60 years. While expanding the role of credit unions, we
continue to protect the tax exemption credit unions now enjoy.
Small community banks, Mr. President, however, serve the local
community but have to compete with the higher cost of funds, a higher
regulatory burden, and of course a considerable tax burden. While we
increase the competitive advantage of small bank competitors in this
bill, we do nothing to help small banks compete on a more level playing
field.
So, Mr. President, for those who suggest that this is not the time or
the place for this amendment to exempt the small banks of America from
the CRA, I have to disagree. Credit unions are increasing their market
share over community banks in small local markets with higher savings
rates and lower lending rates, rates small banks cannot match thanks to
the tax and regulatory burdens that constitute the competitive
disadvantage here. The small bank exemption from the Community
Reinvestment Act has everything to do with the competitive equity we
are talking about--leveling the playing field between local community
banks and credit unions.
The President, of course, has the right to veto a bill if he so
chooses. That is the legislative process. We all know that. However, I
do not believe the President would veto this bill if this amendment
were part of it. The Senate Banking Committee worked very hard to draft
a responsible bill, and, by and large, I think we did just that.
Nevertheless, Mr. President, I believe H.R. 1151, the bill before us
now, can be improved. And, to that extent, this is the time and this is
the place to improve the bill.
Yesterday, the Senate failed to table Senator Gramm's amendment to
strike the community-reinvestment-like provisions on credit unions from
the bill. I supported that. As a result, it appears the Senate has
chosen to adopt Senator Gramm's amendment to eliminate the expansion of
regulatory burden and mandated credit allocation on to credit unions,
which I think is good.
If the Senate votes to table the small bank exemption from CRA, the
Senate will make a very hypocritical policy statement to the American
people, I believe, saying, essentially, that we do not support the
expansion of mandated credit allocation and regulatory burden on credit
unions, but, Mr. President, on the other hand, we do support the
mandated credit allocation and regulatory burden on small community
banks. Now that is not what we call competitive equity.
I believe the worst part about this inconsistent policy is that
consumers are the ones who bear the brunt of the cost of the Community
Reinvestment Act. The CRA tax on banks only gets passed on to the
consumer. While the intention, Mr. President, of the Community
Reinvestment Act may have been to help consumers, in practice I believe
it hurts them. CRA is bad for consumers. CRA is, I believe, bad public
policy.
Contrary to what opponents of the amendment would have you believe,
the small bank exemption would not gut CRA. Banks with less than $250
million in assets account for less than 12 percent of bank assets
nationwide. This is a vote for small community banks in America. I
think it is time to do it and the time is now.
Mr. D'AMATO addressed the Chair.
The PRESIDING OFFICER. The Chair recognizes the Senator from New
York.
Mr. D'AMATO. Mr. President, let me say that I am deeply appreciative
of the problem that my good friend, the senior Senator from Alabama,
Senator Shelby, expresses as it relates to community banks. I believe
they do need help. Indeed, I think we have to give them some tax
relief. I think we can and we should. That is why I have cosponsored
the Small Business Financial Institution Tax Relief Act. I believe
Senator Shelby is also a cosponsor. And I believe the Presiding Officer
is a cosponsor as well. There are other things we can do.
I think we have to examine CRA as it applies to those who have
outstanding records year after year. Should they be subjected to the
same compliance requirements or shouldn't there be some way to relieve
them of the annual reporting process? Shouldn't there be more
flexibility, if an institution has been exemplary for X number of
years? Let us discuss that in a different arena and let us not put it
on this bill. We can work towards a solution on this important issue
and other relief for small banks so they can continue to compete and
serve in communities that otherwise would be left without.
So I am sympathetic to the issue of CRA. But again, to put it on this
bill, when the administration said clearly they will veto it, I say,
will only undo all the effort put into preserving credit unions and
making them safer and sounder. I urge restraint on the part of my
colleagues, notwithstanding the fact that we need to do something to
help that segment of our community which is so vital--the community
bank.
Mr. REED. Mr. President, I rise in strong opposition to the Shelby
amendment to create a small bank exception to the Community
Reinvestment Act.
Mr. President, the Community Reinvestment Act requires financial
institutions to meet the credit needs of local communities--including
low and moderate income areas--consistent with safe and sound lending
practices.
Unfortunately, many proponents of the Shelby amendment have argued
that this obligation is tantamount to government mandated credit
allocation. Nothing could be further from the truth. Neither the Act
nor the regulations specify the number of loans, the type of loans, or
the parties to CRA loans. To the contrary, CRA relies on market forces
and private sector ingenuity to promote community development lending.
This is evidenced by the tremendous flexibility that financial
institutions have in satisfying CRA. For example, loans to nonprofits
serving primarily low- and moderate-income housing needs; loans to
financial intermediaries such as Community Development Financial
Institutions; and loans to local, state, and tribal governments may
qualify for CRA coverage. Moreover, loans to finance environmental
clean-up or redevelop industrial sites in low- and moderate-income
areas also qualify as CRA loans.
In addition to lending, CRA is satisfied through investments by
financial institutions in organizations engaged in affordable housing
rehabilitation, and facilities that promote community development such
as child care centers, homeless centers, and soup kitchens. These all
qualify for CRA coverage.
Even Federal Reserve Chairman Alan Greenspan has weighed in on this
issue, arguing:
The essential purpose of the CRA is to try to encourage
institutions who are not involved in areas where their own
self-interest in involved, in doing so. If you are indicating
to an institution that there is a foregone business
opportunity in an area X or loan product Y, that is not
credit allocation. That, indeed, is enhancing the market.
As illustrated by these examples and Chairman Greenspan's comments,
it is clear that CRA is a far cry from government mandated credit
allocation. To be sure, CRA is predicated on two simple assumptions
that should be shared by my colleagues on both sides of the aisle: (1)
that a public charter for a bank or savings institution conveys
numerous benefits, including deposit insurance, and it is fair for the
public to ask something in return, and (2) government cannot and should
not provide more than a limited part of the capital required for local
housing and economic development needs; financial institutions in our
free economic system must play the leading role.
In the words of former Comptroller of the Currency Eugene Ludwig,
``CRA is
[[Page S9091]]
in many respects a model statute. It requires no public subsidy, no
private subsidy, and no massive Washington bureaucracy.''
These simple concepts, which are the embodiment of CRA, are perhaps
most responsible for the significant democratization of credit that we
have seen over the last 20 years. Since its enactment in 1977, CRA has
resulted in more than $397 billion in loan commitments for low- and
moderate-income borrowers. In my state of Rhode Island, it has been
estimated that CRA has resulted in over $61 million in commitments for
community development lending since 1977.
Mr. President, I fear that the Shelby amendment will significantly
undermine these advances. This amendment will exempt 86 percent of all
banks from CRA, thereby doing irreparable harm to our communities that
are in dire need of investment and opportunity. The adverse impact on
community lending will be particularly severe in states such as Iowa,
Kansas, Minnesota, Montana, Nebraska, and Oklahoma, where 95 percent of
all banks are small and would be exempt from CRA. If communities in
these states are not able to turn to their financial institutions for
rural and community development lending, to whom will they turn?
Mr. President, this amendment is unnecessary. In response to concerns
about regulatory burdens voiced by small banks, CRA was revised in 1995
to provide regulatory relief. The new regulations provide a streamlined
examination process for independent banks and thrifts with assets under
$250 million. In addition, under the new regulations, the smallest
banks have been exempted from all reporting requirements, and are no
longer subject to process-based documentation requirements. Moreover,
the actual time spent in the smallest banks on CRA examinations has
dropped by 30 percent.
Following promulgation of the revised CRA regulations, many small
bankers were effusive in their praise of the reforms. For example,
Richard Mount of the Independent Bankers Association of America, which
represents small banks, indicated,
We commend the regulators for instituting a meaningful,
streamlined, tiered examination system that recognizes the
differences between community banks and their large regional
and multinational brethren. The new rules should eliminate
the paperwork nightmare of CRA for community banks and allow
them to concentrate on what they do best--reinvest in their
communities.
Finally, Mr. President, this amendment will significantly weaken one
of our most important tools in preventing lending discrimination.
Perhaps because of its success, many have forgotten the embarrassing
state of lending in many urban communities prior to CRA's enactment. In
a Senate Banking Committee hearing in 1977, a study of six banks was
presented which showed that these banks, which held $144 million in
deposits from low-income and minority communities, returned an
embarrassing one-half cent on the dollar in home loans. Throughout
hearings on CRA, witnesses from around the country recounted similar
stories of lending discrimination.
While certainly we have come a long way since 1977, lending
discrimination, unfortunately, persists. In a study published earlier
this year by the Fair Housing Council of Greater Washington, it was
revealed that Washington area lenders discriminate against two out of
five African American and Hispanic mortgage applicants. In one incident
cited in the study, a Rockville lender advised a black tester that the
lender did not make loans to first-time home buyers. The same lender
later met with a white tester, also posing as a first-time home buyer,
giving the tester an appointment and encouraging him to apply for a
mortgage loan. Lending studies by other organizations reveal similar
findings. These studies have shown that minority borrowers receive
fewer bank loans even when their financial status is the same as or
better than white borrowers.
By encouraging lenders to extend credit to all communities, CRA has
been an important weapon in fighting lending discrimination. Because
the Shelby amendment would exempt 86 percent of all banks from its
coverage, lenders could find it easier to discriminate in the provision
of credit.
Mr. President, I do not think we want to return to the dark days
before CRA, where access to credit and investment in our urban and
rural communities was limited for all the wrong reasons. Instead, with
the movement of assets out of the banking system and with increasing
industry consolidation, we should be seeking ways to expand community
investment, not limit it. For this reason, I will strongly oppose the
Shelby amendment, and I encourage my colleagues to do likewise.
Ms. COLLINS. Will the Senator from New York yield for a question?
Mr. D'AMATO. I am happy to yield.
Ms. COLLINS. The Senator from New York, the distinguished chairman of
the committee, knows I am very sympathetic to the goals of the
amendment offered by the Senator from Alabama. I am concerned about the
burden that the CRA imposes on our small community banks. It is my
understanding, however, based on the representations of the chairman
and a letter from the administration, that if this amendment is
adopted, it will lead to the veto of this legislation, which I strongly
support.
So I find myself in a real quandary. I support the amendment of the
Senator from Alabama, yet I strongly support the underlying bill and do
not want to jeopardize it being signed into law.
Could the distinguished chairman give me assurances that he is
willing to work with me, with the Senator from Alabama, and others who
are concerned about easing this burden on our small banks?
Mr. D'AMATO. I not only give that assurance to you, but to all of my
colleagues in the Senate and the House. I think we can do a better job
ensuring that small community banks have the ability to compete. We
will address some of the requirements that are placed upon them that
preclude them from using chapter S corporations in the bill Senator
Allard has introduced. And while we are at it, we will review some of
the regulatory requirements for reporting as required by CRA and we
will look for ways to diminish the burdens these requirements place on
banks that have exemplary CRA records.
That would be the absolute priority of this Senator, starting now. We
will begin with holding hearings, and from the information we gather,
we will craft and seek the support of legislation. Certainly I think
next year we will be able to come forth and pass, in both Houses, and
get signed into law, the kind of relief that does not jeopardize the
legitimate use of CRA but, by the same token, does not compromise those
institutions that are doing a good job.
I believe my colleagues on the Democratic side would join with us in
that effort, but not here, not now, without study and careful
craftsmanship.
Again, I understand the need to make these reforms.
Ms. COLLINS. I thank the Senator very much for his assurances. This
is a matter of great concern for me. I would very much like to vote for
this amendment, but in view of the fact that the President has made it
very clear he would veto the bill if it were included, I,
unfortunately, am going to have to vote against the amendment.
I thank the Senator.
Mr. SARBANES addressed the Chair.
The PRESIDING OFFICER. The Chair recognizes the Senator from
Maryland.
Mr. SARBANES. Mr. President, when this debate on the Shelby amendment
first began, my colleague from Alabama quoted the introductory
statement made by former chairman William Proxmire when he introduced
the CRA legislation. We pointed out at the time that we thought the
Proxmire rationale still supported his original position.
I have received a letter from Senator Proxmire and he has asked me to
read it into the Record. I will do that now.
Dear Paul: I would appreciate your reading this letter into
the Congressional Record at the appropriate time during the
debate on the Credit Union bill.
I am totally opposed to the Shelby amendment which would
exempt small banks from the Community Reinvestment Act and
take strong exception to the thrust of his ``Dear Colleague''
letter which quotes my remarks as the author of CRA and the
Chairman of the Banking Committee at some length.
Throughout my 32 year career in the Senate I championed the
cause of the independent small banks of America. In my home
state of Wisconsin they represented an important
constituency. As Chairman of the Banking Committee from 1975-
1980 and 1987-1989 and a member of the Committee from 1957-
1989 no one fought harder to protect their interests.
[[Page S9092]]
I count the enactment of CRA as one of the achievements of
which I am most proud. I introduced CRA in 1977 because banks
receive significant public benefits, such as federal deposit
insurance and access to the Federal Reserve Board's discount
window. In turn, banks have an obligation to help meet the
credit needs of the localities they are chartered to serve.
This obligation should apply to all banks, large and small
alike, all of whom receive significant public benefits.
I regret that the statement I made on the Senate floor in
1977 introducing the Community Reinvestment Act is being used
to undermine the purpose for which I introduced the
legislation.
Sincerely,
William Proxmire, U.S.S.
(Retired--D-Wis.)
That is Senator Proxmire's direct response to the effort to use his
statement to, in effect, undermine support for the CRA.
Mr. President, what is the time situation?
The PRESIDING OFFICER. The Senator from Maryland has 46 seconds
remaining.
Mr. SARBANES. Mr. President, very quickly, let me just say to my
colleagues that this legislation is not an allocation of credit. Larry
Lindsey has said, and I quote him, former member of the Federal
Reserve:
Many [institutions] now recognize in an era of growing
competition, CRA performance may be critical to an
institution's ability to adjust to the new banking
environment. CRA-related activities can help to develop new
markets, potentially profitable business and improve a bank's
public image.
Federal Reserve Chairman Alan Greenspan stated:
The essential purpose of the CRA is to try to encourage
institutions who are not involved in areas where their own
self-interest is involved in doing so. If you are indicating
to an institution that there is a foregone business
opportunity in an area X or loan product Y, that is not
credit allocation. That, indeed, is enhancing the market.
Let's continue to enhance the market by supporting CRA and rejecting
this amendment.
The PRESIDING OFFICER. All time has expired. The Senator from Alabama
has 2 minutes 12 seconds remaining.
Mr. SHELBY. I yield the remaining time to the distinguished Senator
from Oklahoma, the assistant majority leader.
Mr. NICKLES. Mr. President, first, I compliment my colleague from
Alabama for bringing this amendment because it is a really good,
commonsense amendment.
I might mention to our colleagues, yesterday we voted to exempt
credit unions from the Community Reinvestment Act. Most of us support
that amendment. I supported that amendment. I mentioned to somebody
that said I am not sure we should do that because banks have to comply,
and I said we have the Shelby amendment that will at least exempt small
banks.
Most of my banks in the State of Oklahoma are small banks. They don't
need the Federal Government to tell them to invest in their community--
they do it anyway. If you have a meeting with your bankers in your
State, particularly your small bankers, they will tell you the
Community Reinvestment Act is one of the most bureaucratic messes they
deal with. They really don't have to have the Federal Government to
tell them to invest in their own community. So now we are going to say
we will exempt credit unions from the CRA, but we will not exempt small
banks? That is not fair. That is not equitable.
Senator Shelby's amendment would correct that for the small banks. I
compliment him for doing it. I think now is the time to do it. We are
going to create greater inequities between credit unions and banks; I
don't think that is fair. So Senator Shelby's amendment would at least
provide relief for small banks. That is the right thing to do. It is
the timely thing to do.
The fact that the President says he might veto--if we pass this by an
overwhelming vote, and if we have the Shelby amendment, it would be
passed overwhelmingly, it would be adopted by the House, and I think
the President would see the wisdom of signing the bill as amended with
the Shelby amendment.
I thank my colleague from Alabama.
Mr. D'AMATO. Mr. President, I understand my colleague, the Senator
from Alabama, has yielded back the time.
The PRESIDING OFFICER (Mr. Santorum). All time has expired.
Mr. D'AMATO. I move to table the amendment and I ask for the yeas and
nays.
The PRESIDING OFFICER. Is there a sufficient second? There is a
sufficient second.
The yeas and nays were ordered.
The PRESIDING OFFICER. The question is on agreeing to the motion to
table the Shelby amendment. The yeas and nays have been ordered. The
clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. NICKLES. I announce that the Senator from North Carolina (Mr.
Helms), is absent because of illness.
I further announce that, if present and voting, the Senator from
North Carolina (Mr. Helms) would vote ``no.''
Mr. FORD. I announce that the Senator from Iowa (Mr. Harkin) is
absent due to a death in family.
I further announce that, if present and voting, the Senator from Iowa
(Mr. Harkin) would vote ``aye.''
The result was announced--yeas 59, nays 39, as follows:
[Rollcall Vote No. 238 Leg.]
YEAS--59
Akaka
Baucus
Biden
Bingaman
Bond
Boxer
Breaux
Bryan
Bumpers
Byrd
Campbell
Chafee
Cleland
Collins
Conrad
D'Amato
Daschle
Dodd
Domenici
Dorgan
Durbin
Feingold
Feinstein
Ford
Glenn
Graham
Hollings
Inouye
Jeffords
Johnson
Kennedy
Kerrey
Kerry
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lugar
Mikulski
Moseley-Braun
Moynihan
Murray
Reed
Reid
Robb
Rockefeller
Roth
Santorum
Sarbanes
Smith (OR)
Snowe
Specter
Stevens
Torricelli
Warner
Wellstone
Wyden
NAYS--39
Abraham
Allard
Ashcroft
Bennett
Brownback
Burns
Coats
Cochran
Coverdell
Craig
DeWine
Enzi
Faircloth
Frist
Gorton
Gramm
Grams
Grassley
Gregg
Hagel
Hatch
Hutchinson
Hutchison
Inhofe
Kempthorne
Kyl
Lott
Mack
McCain
McConnell
Murkowski
Nickles
Roberts
Sessions
Shelby
Smith (NH)
Thomas
Thompson
Thurmond
NOT VOTING--2
Harkin
Helms
The motion to lay on the table the amendment (No. 3338) was agreed
to.
Mr. D'AMATO. Mr. President, I move to reconsider the vote.
Mr. SARBANES. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Amendment No. 3336
The PRESIDING OFFICER. The question occurs on the Gramm amendment.
The Senator from Maryland.
Mr. SARBANES. Mr. President, we had a tabling motion on this
yesterday. I am prepared to take it on a voice vote, but I understand
there may be some colleagues either who didn't vote who weren't here to
vote yesterday or others who may want a rollcall vote.
We can have a rollcall vote at this point on the Gramm amendment, as
I understand it.
Mr. LOTT. Mr. President, will the Senator yield?
Mr. President, I believe that vote was 59--what was the vote?
The PRESIDING OFFICER. The motion to table was defeated 44 to 50.
Mr. LOTT. If we could avoid a vote and go on to final passage, I wish
we could do that.
Mr. President, I ask that we pass the Gramm amendment on a voice
vote.
The PRESIDING OFFICER. Is there objection?
Mr. BYRD. Mr. President, reserving the right to object--I shall not
object--I don't like to have voice votes by unanimous consent. I don't
believe we should do that, but we can have a voice vote.
The PRESIDING OFFICER. The question is on agreeing to the Gramm
amendment.
The amendment (No. 3336) was agreed to.
Mr. GRAMM. Mr. President, I move to reconsider the vote.
Mr. D'AMATO. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
[[Page S9093]]
Amendment No. 3339
(Purpose: To amend the bill with respect to review of regulations and
paperwork reductions, consultation with State supervisory agencies, and
the field of membership exception for underserved areas, and to require
a study by the Secretary of the Treasury of member business lending)
Mr. D'AMATO. Mr. President, I would like to send to the desk a
managers' amendment that has been approved by both sides and ask for
its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:
The Senator from New York [Mr. D'Amato], for himself and
Mr. Sarbanes, proposes an amendment numbered 3339.
Mr. D'AMATO. Mr. President, I ask unanimous consent that reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
On page 40, strike lines 6 through 11, and insert the
following:
``(i) is an `investment area', as defined in section
103(16) of the Community Development Banking and Financial
Institutions Act of 1994 (12 U.S.C. 4703(16)), and meets such
additional requirements as the Board may impose; and
On page 54, line 8, insert ``(a) In General.--'' before
``The''.
On page 57, between lines 16 and 17, insert the following:
(b) Study and Report.--
(1) Study.--The Secretary shall conduct a study of member
business lending by insured credit unions, including--
(A) an examination of member business lending over $500,000
and under $50,000, and a breakdown of the types and sizes of
businesses that receive member business loans;
(B) a review of the effectiveness and enforcement of
regulations applicable to insured credit union member
business lending;
(C) whether member business lending by insured credit
unions could affect the safety and soundness of insured
credit unions or the National Credit Union Share Insurance
Fund;
(D) the extent to which member business lending by insured
credit unions helps to meet financial services needs of low-
and moderate-income individuals within the field of
membership of insured credit unions;
(E) whether insured credit unions that engage in member
business lending have a competitive advantage over other
insured depository institutions, and if any such advantage
could affect the viability and profitability of such other
insured depository institutions; and
(F) the effect of enactment of this Act on the number of
insured credit unions involved in member business lending and
the overall amount of commercial lending.
(2) NCUA cooperation.--The National Credit Union
Administration shall, upon request, provide such information
as the Secretary may require to conduct the study required
under paragraph (1).
(3) Report.--Not later than 12 months after the date of
enactment of this Act, the Secretary shall submit a report to
the Congress on the results of the study conducted under
paragraph (1).
On page 57, line 16, strike the quotation marks and the
final period and insert the following:
``(e) Consultation and Cooperation With State Credit Union
Supervisors.--In implementing this section, the Board shall
consult and seek to work cooperatively with State officials
having jurisdiction over State-chartered insured credit
unions.''.
On page 92, strike line 7 and all that follows through page
93, line 15, and insert the following:
SEC. 402. UPDATE ON REVIEW OF REGULATIONS AND PAPERWORK
REDUCTIONS.
Not later than 1 year after the date of enactment of this
Act, the Federal banking agencies shall submit a report to
the Congress detailing their progress in carrying out section
303(a) of the Riegle Community Development and Regulatory
Improvement Act of 1994, since their submission of the report
dated September 23, 1996, as required by section 303(a)(4) of
that Act.
Mr. D'AMATO. Mr. President, I urge adoption of the amendment.
The PRESIDING OFFICER. The question is on agreeing to the amendment.
The amendment (No. 3339) was agreed to.
Mr. ROBB. Mr. President, I rise today in support of H.R. 1151, the
Credit Union Membership Access Act. I do so because I believe that the
legislation is necessary to preserve membership opportunities in these
financial cooperatives. Given the Supreme Court ruling limiting
membership, it is both appropriate and necessary for Congress to pass
this legislation to ensure that the requirements for membership in a
specific credit union reflect current practices.
As my colleagues know, since 1982, credit unions have been able to
take in new groups of members outside their original common bond
provided that the additional groups brought in shared a common bond.
Not only was this done for safety and soundness concerns, but it also
has helped individuals maintain their credit union ties through base
closings and other employment changes.
The bill before us today guarantees that no existing member will be
forced to give up his or her ties to their current credit union as a
result of the Supreme Court decision. It also allows credit unions to
continue to attract new members who are part of an existing membership
group as well as new groups provided that the new group has a common
bond of occupation or association and has less than 3,000 members at
the time they join the credit union. This effectively covers 98% of all
businesses in America.
I for one have never quarreled with the need for credit unions to
continue to attract new members. But with new opportunities come new
responsibilities. If credit unions are to have all the rights of a for-
profit financial institution, equity requires that they share in their
responsibilities. For this reason, I voted to keep the community
reinvestment responsibilities in the bill and I also voted to further
limit commercial lending activities of credit unions, hoping thereby to
keep them to their original focus of consumer lending. In my view, the
continuation of their tax-exempt status is threatened by efforts to
have credit unions undertake all the rights of a for-profit financial
institution.
In conclusion, Mr. President, I want credit union members in the
Commonwealth of Virginia to know that I am a strong supporter of their
institutions and their rights of membership. As a credit union member
myself, I will continue to preserve membership opportunities in these
important institutions.
Mr. GRASSLEY. Mr. President, I would like to say a few words about
the Community Reinvestment Act or ``CRA'' as it is commonly known. The
CRA requires banks to extend loans and credit to low- and moderate-
income Americans who reside in low-income areas.
Obviously, as we can tell by the tone of the debate in the Senate
today, there are strong feelings about whether it's a good idea for the
Federal Government to require that credit be extended to people of
modest means since these people may not be good credit risks. I would
like to focus on some of the comments of those who support the CRA.
They claim that credit should be as widely available as possible. The
supporters of the CRA argue that requiring banks to open up credit is
good for low- and moderate-income people. It gives these people the
opportunity to purchase a home, pay for college or better their lives
in important ways.
On last Friday--July 24th--several Senators took to the floor to talk
about the value of making credit as widely available as possible. For
instance, Senator Kennedy said ``In this period of sustained economic
growth, it is vital that all families have the opportunity to obtain
credit in order to buy a home, start a small business or send a child
to college.'' Senator Kennedy went on to observe that ``There is no
capitalism without capital.'' These are strong words in favor of making
credit widely available.
It will be interesting, Mr. President, to see if the supporters of
the CRA take the same position when my bankruptcy reform bill comes to
the Senate floor in September. There is a fringe element which opposes
all bankruptcy reform who wish to derail this legislation, which passed
the Judiciary Committee by a vote of 16 to 2. One part of the effort to
stop bankruptcy reform involves criticizing banks which send out a lot
of credit card solicitations. The argument is apparently that the banks
have made too many risky loans and that Congress should restrict these
lending practices. I've heard that bankruptcy reform which doesn't
include such restrictions wouldn't be fair or balanced.
Mr. President, I find it interesting that many of those who support
the CRA, which requires banks to make risky loans to low-income
Americans, are also arguing that we should punish banks for issuing
credit cards to low- and moderate-income Americans. It seems to me that
the opponents of bankruptcy reform can't have it both ways. It's
totally inconsistent to push
[[Page S9094]]
banks to make risky loans to poorer Americans, as the CRA would have
it, but then to oppose bankruptcy reform because banks have issued too
many loans to poorer Americans.
I wanted to point out this striking contradiction today, Mr.
President, while we're considering lending practices and the CRA and
while the memory of the debate is fresh in our minds. I will return to
this topic later, when the bankruptcy bill is on the floor.
Ms. MIKULSKI. Mr. President, I rise today to support the Credit Union
Membership Access Act of 1998. This legislation will clearly define who
is eligible to join a credit union. It will also provide important
safeguards and reforms to keep our credit unions strong and to protect
our constituents who use credit unions.
One of my priorities for Maryland is to maintain Maryland's robust
economy. Credit unions offer an important alternative to consumers in
the financial services market. Keeping financial services competitive
and keeping fees down will help to keep Maryland's economy strong.
I am pleased that the Senate is finally taking up this legislation
almost four months after it was passed overwhelmingly by the House. I
am pleased because I know how important credit unions are for Maryland
and the Nation. In fact, I helped to start a credit union at a church
in Baltimore.
Credit unions are important because they provide good value and good
service in a community setting. A setting where the person behind the
counter knows your name not just your account number. In the current
era of mega-mergers in the financial services industry, credit unions
are needed more than ever.
Credit unions are a part of our communities. I have heard from many
of my constituents in Maryland about this legislation. They have
written letters, sent e-mail, and visited my office, all to express
their support for their credit unions. I have heard from Marylanders
who are members of credit unions from the Allegany County Teachers
Credit Union in LaVale to the Douglas Memorial Credit Union in
Baltimore to the Choptank Electric Cooperative Credit Union in Denton.
They love their credit unions because they know their credit unions
deliver.
I have also heard from members of the Maryland banking community
about their concerns with this legislation. Although I can appreciate
their reservations, I believe many of their concerns are addressed in
this compromise legislation. However, on one significant point I
disagree with them. Credit unions should not pay taxes because credit
unions are non-profits. The credit union slogan is ``not for profit,
not for charity, but for service.'' I applaud that slogan and I stand
with the credit unions today.
There are several provisions in this legislation that I feel deserve
to be noted. Not only will this legislation allow small groups that
share a common bond to join credit unions, but this legislation will
improve credit unions by strengthening regulations to ensure safety and
soundness of credit unions and to strengthen the credit union deposit
insurance fund.
I also want to praise the ``common sense'' reforms that are included
in this legislation, such as the use of Generally Accepted Accounting
Principles in credit union reports filed with the National Credit Union
Administration, Independent Audits of Credit Unions with more than $500
million in assets, and restrictions on the compensation packages of
senior managers in credit unions that convert to for-profit banks.
Finally, Mr. President, I want to send my thanks to the 1.6 million
credit union members in Maryland. I am proud of them and the work they
do every day. I urge my colleagues to support this bill and to support
their local credit unions.
Mr. CHAFEE. Mr. President, I would like to clarify a point that was
raised on the floor yesterday concerning an unfortunate event that
occurred in my home State of Rhode Island almost a decade ago: the
failure of the Rhode Island Share Deposit Insurance Corporation
(RISDIC). Some Senators have suggested that the failure of RISDIC was
triggered by credit unions getting overly involved in business lending.
That is not entirely accurate.
The credit unions did not trigger the RISDIC crisis. Instead, the
collapse of the system can be traced to a substantial embezzlement from
the Heritage Loan and Investment Corporation, a type of state-chartered
bank. In fact, of all the credit unions that were closed in Rhode
Island during that crisis, none was federally insured and none was
either supervised or examined by federal regulators. Indeed, during
that entire period of the so-called credit union crisis, those credit
unions that were chartered, insured, supervised, and regulated by the
federal government continued to perform flawlessly, despite the
disastrous economic turmoil around them.
So I just want to say again that the RISDIC crisis was not caused by
credit unions. Rather, the credit unions were the unfortunate victims
of a crisis brought about by embezzlement from a bank.
Mr. TORRICELLI. Mr. President, today I rise in support of H.R. 1151.
Credit unions have been, and remain, a vital component of our national
banking system. At a time when credit unions serve more than 74 million
people nationally, any initiative that would impede the ability of
credit unions to provide services to their members, would seriously
undermine the financial well-being of the public, and the fortitude of
our financial industry. That is why today's action is so important to
the future of the credit union industry.
Despite the claims by opponents of credit unions that state
otherwise, credit unions are nonprofit entities that provide much
needed opportunities for hard-working people. To millions of Americans,
the low-interest loans that credit unions offer represent the
opportunity to buy their first home, the chance to purchase a much
needed automobile, the ability to send their children to college, or
achieving the dream of starting their own business. For example, in my
home State of New Jersey, there are over 315 credit unions that serve
more than 1.1 million people.
Passage of this credit union legislation demonstrates a commitment by
the U.S. Senate to millions of hard-working American families.
Supporting credit unions means bolstering our economy and providing
more financial opportunities to save and invest soundly.
Mr. President, I urge my colleagues to support credit unions by
voting in favor of H.R. 1151.
Mrs. MURRAY. Mr. President, I rise to state my strong support for the
Senate version of H.R. 1151. This legislation is important, bipartisan
and should be adopted unanimously by my Senate colleagues. I commend
the members of the Banking Committee, where I served for four years,
for crafting this legislation and moving it to the floor for full
Senate consideration.
I will vote for the Credit Union Membership Access Act. It is the
right thing to do and the Senate is overdue in taking this action. This
legislation clarifies credit union membership in a manner that protects
consumers and the competitive financial services industry. In the
Senate bill, existing credit union members are grand-fathered into
their current credit unions and new common bond criteria are
established for future growth in the credit union industry.
Mr. President, the credit union legislation is widely supported by
consumer rights organizations including the Consumer Federation of
America and the American Association of Retired Persons. Other key
supporters of this legislation include the National Farmers Union, the
National Rural Electric Cooperative Association, the National
Association of Counties, the Fraternal Order of Police and the American
Small Business Association. Perhaps most noteworthy to me is the strong
support of my constituents for this legislation. Thousands and
thousands of credit union members have contacted me, hundreds have
visited my office with personal credit union anecdotes, and numerous
others have approached me on my travels through Washington state. This
issue has resonated with my constituents who value and want to preserve
and protect credit unions and the services they provide.
Importantly, with the August recess approaching and the 105th
Congress soon to adjourn, we still have time to get this legislation to
President Clinton for his signature. That must be the
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Senate's objective today; to get this legislation to President Clinton
so that we may address the field of membership situation created by
last February's Supreme Court decision.
The Senate did make a number of important changes to the House passed
bill. For example, the Senate version of credit union legislation
includes new provisions to protect the soundness of credit unions, new
capital standards and prompt corrective action for undercapitalized
institutions, limitations on commercial lending, new accounting and
auditing procedures, and community reinvestment requirements.
While I support the Senate Banking Committee's efforts to improve the
House adopted bill, the field of membership issue is really what this
bill is all about. The Senate should not lose sight of this objective
and certainly, the Senate should not let additional issues imperil this
bill. Therefore, I will vote against the amendments to this bill; some
of which have been described as killer amendments, and others that will
complicate final passage of this bill.
I urge prompt passage of the credit union legislation.
Mr. McCAIN. Mr. President, as a strong supporter of the credit union
industry, I rise to express my support for H.R. 1151, the Credit Union
Membership Access Act, on which the Senate will vote today.
As my colleagues are aware, this bill was overwhelmingly passed in
the House of Representatives by a vote of 411-8. I anticipate that the
support for this bill in the Senate will reflect that of the House of
Representatives, and will again pass with a notable bipartisan
majority.
Mr. President, this issue came to the forefront when the Supreme
Court agreed to hear the Credit Union's arguments for increasing the
size of their base membership. While I understand the objections which
the banks raised regarding the growth of credit unions, I have always
believed that consumers should have the broadest range of choices in
financial services.
I support the Credit Union Membership Access Act because I believe
that members on both sides of the aisle have worked hard to ensure that
this bill is fair and balanced and protects both the rights and
securities of consumers.
Mr. KERRY. Mr. President, I would like to take this opportunity to
offer my congratulations to Chairman D'Amato and Democratic Ranking
Member Sarbanes for their fine work on the Credit Union Membership
Access Act and for successfully completing this work on this important
bill today. Working families in the United States, whether they live in
urban or rural areas, deserve access to fairly priced credit and other
financial services.
Credit unions have historically served as a way for people of average
means, without easy access to affordable credit, to pool their savings
to make credit available to themselves and their fellow credit union
members at competitive interest rates. In 1934, the Federal Credit
Union Act created the federal credit union charter. Today in
Massachusetts, there are 317 Credit Unions serving approximately 1.7
million people.
Since 1934, credit unions have been helping both individuals and
working families. They have helped launch and sustain small businesses.
Some of them have played an important role in the development and
revitalization of economically distressed communities.
Historic mergers, consolidations and acquisitions have taken place in
the financial service industry in recent years. Consumers have less
choice, not more. Simultaneously, the Supreme Court earlier this year
decided a case pertaining to how widely credit unions may reach for
membership. These factors have created a necessity for the Congress to
consider carefully the role credit unions should play in the mix of
financial institutions in our nation.
Federal credit unions have traditionally had ``fields of membership''
defined by ``common bond'' of association, occupation or geographic
location. In 1982, the National Credit Union Administration developed
regulations that allowed credit unions to be composed of multiple
unrelated employer groups, each having its own distinct common bond of
occupation. In February, the Supreme Court ruled that this NCUA
regulation interpreted the law so broadly that it would be permissible
to grant a charter to a conglomerate credit union whose members would
include employees of every company in the United States. Without the
passage of the Credit Union Membership Access Act, some credit unions
could be forced to expel current members not affiliated with the
original occupation group.
I believe that the members of all current multiple-group credit
unions should be allowed to continue in the credit unions they have
chosen. It is vital to maintain the current credit union model as a key
piece of the financial services system and credit unions must be
permitted to prospect for members sufficiently to maintain their
viability. Dislocating approximately 10 million credit union members
not affiliated with their credit union's original occupation group
could potentially have serious effects on the safety and soundness of
credit unions in Massachusetts, and across the nation.
This legislation establishes that separate groups having their own
common bond of occupation or association that have less than 3,000
members are eligible to join an existing credit union. It assures that
10 million Americans have continued access to their credit union. It
will allow another 25 million the right to join a credit union as a
result of their employment within a certain company or organization.
Finally, this act will help insure that 62 million Americans who own,
operate or are employed by a small business will not be limited in
their choice of financial institutions in the future.
The purpose of credit unions--and for the tax exemption they
receive--is to facilitate loans and other services to low-income
communities, individuals, and very small businesses. They were never
intended to be simply alternative, tax-exempt commercial banks.
I have heard from a number of community banks in Massachusetts that
believe credit unions which offer business loans have a substantial
advantage over banks because of their tax exemption. Most credit unions
are not involved in business lending and most of those who are focus on
assisting very small businesses. However, some community banks believe
that a small minority of credit unions that are involved in business
lending has taken advantage of the current rules and expanded their
product lines to the point that they are banks in all but name.
I am also concerned about the lack of available information on the
details of credit union business lending. The National Credit Union
Administration does not have accurate information on the size or types
of business loans made by credit unions.
That is why I successfully included in this legislation an amendment
requiring the Department of Treasury to study the issue of credit union
business lending. This study would include an overall examination of
credit union member business lending including the amount of business
lending more than $500,000 and less than $50,000, and a breakdown of
what types of businesses and the size of businesses that receive loans.
It would determine how much credit union business lending goes to low-
and moderate-income areas and the extent to which credit union member
business lending meets the financial services needs low- and moderate-
income individuals. Finally, it would determine whether credit unions
which engage in member business lending have an advantage over
community banks and if those advantages affect the survival and
profitability of community banks. I am grateful to Chairman D'Amato and
Democratic Ranking Member Sarbanes for including this study in the
credit union legislation.
I remain concerned as to how this legislation will affect the smaller
community banks in Massachusetts and across the nation. That is why I
worked to include in this legislation a study on legislative and
administrative action to reduce and simplify the tax burden for
community banks with less than one billion dollars in assets.
I strongly support the requirement that credit unions must hold seven
percent of net worth in retained earnings to be considered well-
capitalized. If a credit union is critically undercapitalized, this
legislation allows the NCUA to appoint a conservator or liquidating
agent to take action to avoid losses to
[[Page S9096]]
the National Credit Share Insurance Fund. This will limit the use of
taxpayer funds to assist insolvent credit unions, and insure the credit
union system remains safe and sound. In addition, I heartily endorse
the section of this legislation that requires prompt corrective action
for credit unions facing financial difficulty.
I am disappointed that the provision to require the NCUA to evaluate
annually the record of credit unions in meeting the credit needs of
their local communities and low- and moderate-income individuals was
taken out of the bill. I believe that this provision would have
assisted credit unions in refocusing their energies toward those who
need access to financial services the most. These are the people who
credit unions were designed to serve.
While not perfect, this legislation will ensure that credit unions
continue to offer needed financial services to underserved, low- and
moderate-income working families. This is a worthwhile compromise that
I believe is basically fair to both credit unions and banks, as well as
their customers. I will join my colleagues in supporting this important
legislation.
Mr. SARBANES. There is a special class of credit unions--known as
community development credit unions--that bear special mention.
Community development credit unions serve consumers, neighborhoods, and
rural areas that are predominantly low-income. Because of their special
mission and circumstances, some community development credit unions may
have difficulty in generating capital.
On the deposit side, community development credit unions have high
operating costs because they serve an extremely labor-intensive market
of very low-balance depositors. The average depositor in a community
development credit union has $1,462, which is one-third the $4,300 of
the average depositor in non-low-income credit unions. Typically, as
much as 40 percent to 60 percent of the community development credit
unions' membership base consists of persons with less than $200 on
deposit. Moreover, many of community development credit unions' very-
low-balance depositors use the credit union solely for transactions--
that is, they deposit checks and immediately withdraw virtually the
entire balance.
On the lending side, community development credit union's business
consists primarily of making small loans to borrowers with imperfect
credit. The average loan balance per member at a community development
credit union is $1,190 compared to $3,200 at all credit unions. Thus,
community development credit union loans tend to have more credit risk
and higher transaction costs (i.e., noninterest costs per dollar
loaned) than loans made by other credit unions, thereby resulting in
lower net returns. These lower net returns mean relatively lower income
for the community development credit union, which makes capital
accumulation more difficult.
The challenges community development credit unions face from credit
risk and low returns are exacerbated because communities served by
community development credit unions are especially vulnerable to
economic downturns. Unemployment rates in such communities are
typically two or three times the national average. Unemployment in low-
income communities is slow to decline as the economy improves, and
quick to worsen when the economy deteriorates.
Despite these challenges, most community development credit unions
today are quite strong and have capital ratios similar to those of
other credit unions. And the changes brought about by new capital
requirements and prompt corrective action will ultimately strengthen
all community development credit unions.
Does the Senator agree that this is a fair description of the
challenges facing community development credit unions?
Mr. D'AMATO. Yes. I think that the Senator has set forth a good
analysis of the challenges community development credit unions face.
Mr. SARBANES. The bill gives all credit unions two years before these
provisions become effective. Because of their mission and the special
characteristics that arise from that mission, some community
development credit unions may have unique difficulties in becoming and
remaining adequately capitalized. Accordingly, some community
development credit unions may need more time than most other credit
unions to build capital in order to comply with the legislation's new
capital standards and prompt corrective action provisions. Does the
Senator agree?
Mr. D'AMATO. Yes, it is possible that some community development
credit unions may require added time to increase their capital.
Mr. SARBANES. So, the question arises: How may the NCUA deal with
this issue while implementing the bill's safety and soundness
provisions?
In my view, the NCUA should be mindful of community development
credit unions' unique circumstances in applying the bill's prompt
corrective action provisions. In addition, community development credit
unions that demonstrate that they can build their capital over time to
the required levels--as evidenced by an acceptable net worth
restoration plan--should be given the full opportunity to do so.
Mr. D'AMATO. The Senator is correct. Community development credit
unions must meet the bill's capital requirements like any other credit
union. At the same time, there is a transition period, and the bill's
prompt corrective action provisions give the NCUA sufficient
flexibility to work with undercapitalized community development credit
unions that have an acceptable plan for meeting the bill's capital
requirements.
Mr. SARBANES. I thank the Senator.
Mr. D'AMATO. Mr. President, I rise to make a few closing remarks on a
job we are close to finishing--to preserve and protect the right of all
Americans to join a credit union, now and into the future, and ensure
that none of the 73 million Americans who are now members of credit
unions have their membership status threatened in any way.
credit unions work for the little guy
People love their credit unions and why? Because credit unions take
care of the little guy. This Senator is committed to not let these
people down. We must pass this legislation and have it enacted to
preserve the right of Americans to be members of a credit union.
credit unions invest in people and communities when others will not
For decades, the American dream has been made a reality by credit
unions. These cooperatives have reached out to individuals,
associations and communities that have had the door slammed in their
faces by other institutions. Tens of millions of hard working people
have improved their quality of life and passed the benefits along to
their families, but all of that could change if we don't act.
credit unions provide basic financial services without excessive fees
Mr. President, I know this is a very personal issue, a pocketbook
issue, for the over 70 million current members. For example, many
people may not be aware that--
Credit unions have had the highest customer service and satisfaction
ranking of any depository institution for the past 14 years.
Credit unions offer more services at lower costs than most banks.
Credit union competition is a major force keeping bank service fees
and loan rates lower, and interest on savings higher.
Why such amazing support for a financial institution? The answer is
simple. Credit unions are for the little guy. Credit unions make a
difference.
credit unions put consumers first
To their customers, credit unions are far more than just a safe place
to put away a few dollars for tomorrow. Making a deposit or withdrawal
is more than just a business transaction.
A credit union has an atmosphere that says friendship and family. The
elected leadership is made up of volunteers who actually listen.
Tellers actually talk to their customers. With service like that, why
wouldn't customers like going to their credit union? It's all about
neighbors and fellow employees getting together, working together and
investing together for everyone's benefit. Just ask any credit union
member.
Mr. President, let me emphasize that those who support credit unions
are not anti-bank. After all, many credit union members also have bank
accounts. And it also deserves comment that--without any cost to the
taxpayer--credit unions have weathered the serious economic downturns
that
[[Page S9097]]
have affected other financial providers. And that's something to be
proud of.
Mr. President, the Senate should follow the House vote of 411 to 8 to
act to save credit unions based on the principle that competition is
beneficial. Without competition, interest rates paid to customers would
be lower and loans and ATM fees would be more expensive. Congress
should only act in ways that would increase competition between
financial institutions.
credit unions care about hard working Americans
As a matter of principle, it should also be the responsibility of
Congress to put the consumer first. We should pass legislation that is
all about what is best for individuals, small businesses, large
businesses and anyone who needs the services of a financial
institution. And that means no one--no one--should be thrown out of a
credit union and then forced to do business with another financial
institution against their will.
This Senator intends to make sure that does not happen.
Mr. President, hardworking families have a right to choices and
opportunities. People with savings of less than $1,000--individuals who
struggle each week to pay the mortgage, put food on the table, and put
something away for the future--deserve the same financial choices and
opportunities that other Americans enjoy. Credit unions are good for
the consumer and good for the country.
Mr. President, credit unions work for working families.
Mr. President, again I urge my colleagues to support this legislation
and vote to pass H.R. 1151, the Credit Union Membership Access Act as
our colleagues did in the House with an overwhelming vote.
Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. D'AMATO. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. D'AMATO. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.
The PRESIDING OFFICER. If there be no further amendment to be
proposed, the question is on agreeing to the committee amendment in the
nature of a substitute, as amended.
The amendment was agreed to.
The PRESIDING OFFICER. The question is on the engrossment of the
committee amendment, as amended, and third reading of the bill.
The amendment was ordered to be engrossed and the bill to be read a
third time.
The bill was read a third time.
The PRESIDING OFFICER. The bill having been read the third time, the
question is, Shall the bill pass? The yeas and nays have been ordered.
The clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. NICKLES. I announce that the Senator from North Carolina (Mr.
Helms) is absent because of illness.
I further announce that, if present and voting, the Senator from
North Carolina (Mr. Helms) would vote ``no.''
Mr. FORD. I announce that the Senator from Iowa (Mr. Harkin) is
absent due to a death in family.
I further announce that, if present and voting, the Senator from Iowa
(Mr. Harkin) would vote ``aye.''
The result was announced--yeas 92, nays 6, as follows:
[Rollcall Vote No. 239 Leg.]
YEAS--92
Abraham
Akaka
Allard
Ashcroft
Baucus
Bennett
Biden
Bingaman
Bond
Boxer
Breaux
Brownback
Bryan
Bumpers
Burns
Byrd
Campbell
Chafee
Cleland
Cochran
Collins
Conrad
Coverdell
Craig
D'Amato
Daschle
DeWine
Dodd
Domenici
Dorgan
Durbin
Enzi
Faircloth
Feingold
Feinstein
Ford
Frist
Glenn
Gorton
Graham
Gramm
Grams
Grassley
Gregg
Hatch
Hollings
Hutchinson
Hutchison
Inouye
Jeffords
Johnson
Kempthorne
Kennedy
Kerrey
Kerry
Kohl
Kyl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lott
Lugar
McCain
McConnell
Mikulski
Moseley-Braun
Moynihan
Murkowski
Murray
Reed
Reid
Robb
Rockefeller
Roth
Santorum
Sarbanes
Sessions
Shelby
Smith (NH)
Smith (OR)
Snowe
Specter
Stevens
Thomas
Thompson
Thurmond
Torricelli
Warner
Wellstone
Wyden
NAYS--6
Coats
Hagel
Inhofe
Mack
Nickles
Roberts
NOT VOTING--2
Harkin
Helms
The bill (H.R. 1151), as amended, was passed.
Mr. D'AMATO. Mr. President, I move to reconsider the vote by which
the bill was passed.
Mr. SARBANES. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. D'AMATO addressed the Chair.
The PRESIDING OFFICER. The Senator from New York.
Mr. D'AMATO. Mr. President, I thank all of my colleagues, not only
for the final vote on this important legislation, but for the manner in
which an excellent debate was conducted. I very much appreciate Senator
Lott scheduling this important bill. But a special commendation is in
order to a number of people, starting with the ranking member, my
friend, Senator Sarbanes. I thank him for his steadfast support in
developing the opportunity for Members to be heard, and for Members to
have their concerns listened to, and debated, resulting in final
passage of the bill, notwithstanding some very contentious issues. I
believe that the credit unions, not only of Maryland but of this
country, have a demonstrated champion in Senator Sarbanes.
The fact is that credit unions support the little guy. Historically,
credit unions have invested in people and in communities when others
would not--yes, when others would not.
Credit unions have provided the basic financial services without
excessive fees, and they continue to do that. We need them in this day
of consolidations and megamergers to be out there to service all
communities, especially the small communities and, again, the little
guy. I don't mean ``little'' in terms of size and stature, because they
are the hard-working, middle-class Americans who are the backbone of
this country. Indeed, they set a standard and they challenge, even when
others don't like that challenge.
And likewise, there may be unfair burdens on some of the community
banks, and we have to deal with that challenge. But you don't do it at
the expense of an organization of the thousands and thousands of credit
unions and the hundreds and hundreds of members who work in these
credit unions on a voluntary basis, without pay, and in many cases,
without any compensation. Yes, truly, America can be proud of our
credit unions. Credit unions care about hard-working Americans.
None of this could have been possible without staff because I believe
that we have had the best staff that anyone could have, both
Republicans and Democrats, working to bring about substantial
improvements over the legislation that came from the House--I mean
substantial.
For the first time, we set rigorous standards to protect the
taxpayers of the United States--that is right--to protect them. For the
first time, we limit--and I think prudently so--commercial lending
activities that credit unions can undertake while giving them the
opportunity to continue doing so and to continue serving their
communities. And again, I believe we applied limits to commercial
lending in a prudent manner.
Mr. President, I take this opportunity to thank the hard-working
staff, a bipartisan staff. I want to acknowledge Senator Sarbanes'
staff--Steve Harris and Marty Gruenberg and Dean Shahinian. And Phil
Bechtel, Madelyn Simmons, Rachel Forward, and our staff director Howard
Menell, I thank them for their hard work on this bill. They have done a
unique job in working together, never allowing political differences to
interfere with the people's work.
Let me say, Mr. President, that the House is to be applauded for
moving so speedily on their legislation. I hope
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that they will accept the improvements that we have made without the
necessity of going to conference. Representatives Kanjorski and
LaTourette took the lead on this bill in the House. I am hopeful they
will view the Senate's well-considered modifications to the original
bill as positive changes to enhance the safety and soundness of credit
unions and expedite the enactment of this legislation.
I also commend Chairman Leach and the House leadership in sending us
H.R. 1151 as speedily as they did, because were we not to have gotten
it in such a timely manner, we could never have completed the
legislative changes that we have made part of the legislation.
Mr. President, again, I thank all of my colleagues for their
outstanding work and for their cooperation, notwithstanding the
differences that may have existed. We passed a good bill for working
Americans.
I yield the floor.
Mr. SARBANES addressed the Chair.
The PRESIDING OFFICER (Mr. Inhofe). The Senator from Maryland.
Mr. SARBANES. Mr. President, first of all, I express my appreciation
to the distinguished chairman for his very kind remarks about my
efforts with respect to this legislation. But I really want to
underscore the very skillful leadership which Chairman D'Amato provided
in helping to move the bill through the committee and then through the
Senate on the Senate floor.
This was not a bill without significant controversy in it. I think
the committee worked out a balanced package and preserved most of it on
the Senate floor--I regret not all of it. But in any event, I think the
legislation we now have passed is a reaffirmation for the credit union
movement of their important role in serving consumers.
When the cooperative movement was established in the early part of
the century, it was premised on the proposition that individuals coming
together, ``small people,'' would gain access to credit; that the
credit union movement would remain concerned and dedicated to their
needs and would provide them an opportunity to share in the American
economy.
Credit unions, by and large, have done a good job of that over the
years. And this legislation, I think, will enable them to continue to
do a good job. It has important safety and soundness provisions in it,
the consequence of a very comprehensive and thorough Treasury study on
the basis of which the committee was able to incorporate into the
legislation some very important safeguards.
But I say to the credit union movement: We worked very hard in the
aftermath of the Supreme Court decision which, of course, cast a pall
over the credit union movement. It really raised very severe questions
as to what the future of the credit union movement would be. This
legislation has answered that question.
But I think implicit on the part of the Congress, in answering that
question, is that credit unions will redouble their efforts in terms of
serving the purposes for which they were established.
Some have criticized the credit union movement. They say they are
getting away from those purposes. I am frank to say I do not think that
is generally true of the credit union movement. I think you can point
to isolated exceptions. And I only raise the warning flag that to the
extent those exist, they tarnish the image of the credit union movement
in the eyes of many.
So with this legislation, which has given them a path to move
forward, a firm and secure path to move forward, I look forward to the
credit union movement reaffirming its basic and original purposes and
look forward to continuing to try to work closely with them in
achieving those objectives.
I, too, like the chairman, express my very deep appreciation to the
staff on both sides, to Howard Menell and Phil Bechtel and Rachel
Forward and Madelyn Simmons on the Republican side--we depend very
heavily on our staff; they are extremely competent and dedicated; they
were in here many nights, late into morning hours in order to help put
this legislation together--and Steve Harris and Marty Gruenberg and
Dean Shahinian and Mike Beresik on our side of the aisle.
We were able to work together in a cooperative and positive and
constructive manner on this legislation. I always look forward to those
opportunities with the chairman. It is not always possible. Usually
when it is not possible, we set up a separate committee to deal with
the issues and work within our own committee.
I close, again, by commending the chairman for a very skillful job in
helping to move this legislation through the Senate.
Mr. President, I yield the floor.
Mr. LEAHY addressed the Chair.
The PRESIDING OFFICER. The Senator from Vermont.
Mr. LEAHY. Mr. President, I ask unanimous consent to proceed--I tell
my colleagues I will be very brief--as in morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
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