[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

[[Page S9095]]

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

[[Page S9098]]

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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