[Congressional Record Volume 145, Number 2 (Thursday, January 7, 1999)]
[Extensions of Remarks]
[Page E60]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 COMMUNITY REINVESTMENT IMPROVEMENT ACT

                                 ______
                                 

                           HON. BILL McCOLLUM

                               of florida

                    in the house of representatives

                       Wednesday, January 6, 1999

  Mr. McCOLLUM. Mr. Speaker, today I rise to reintroduce the Community 
Revinestment Improvement Act of 1999.
  The original purpose of CRA was to encourage banks to loan into the 
communities in which they maintained deposit taking facilities. The 
enforcement mechanism chosen was to have CRA performance taken into 
account when regulators were deciding on applications by the banks. 
When CRA passed in 1977, the Senate report stated that no new paperwork 
would be required under the new law. It was believed that examiners had 
all the information they needed on hand from call reports and their 
examination reports to enforce CRA. This is not the case. Instead of 
relying on existing information, regulators have created expansive new 
reporting requirements resulting in mounds of additional paperwork and 
many wasted hours that could have been used to serve the community.
  This paperwork and regulatory burden can create even larger problems 
for smaller banks which cannot absorb the costs of compliance without 
passing them on to consumers. This bill is geared to reduce the cost of 
credit to consumers by allowing smaller banks with a track record of 
reinvesting in their communities to be released from some of the 
regulatory red tape.
  If a bank with assets under $500,000,000 is not in violation of 
section 701(a) of the Equal Credit Opportunity Act and has not received 
a rating of ``needs to improve'' or ``substantial noncompliance'' in 
its most recent evaluation, the bank would undergo a modified CRA 
evaluation. The bank would need to maintain internal policies to help 
meet the needs of its local community consistent with the safe and 
sound operation of a bank and make a record of its reinvestment efforts 
available for public inspection. The appropriate regulator, when 
checking for CRA compliance, would then use existing business documents 
for its review.
  The bill would exempt small town banks of less then $100,000 from CRA 
evaluation altogether since, in order to survive, such banks have to 
meet the credit needs of their communities without government 
bureaucracy involvement.
  Finally, the bill would specify that a bank shall not have an 
application to a regulator denied if such bank has received an 
``outstanding'' or ``satisfactory'' rating within the past 24 months 
unless the bank's compliance has materially deteriorated since such 
evaluation.
  Mr. Speaker, I believe this is a prudent step in reducing unnecessary 
government bureaucracy. Furthermore, by reducing the cost federal 
regulation, we can help lower the cost of credit to consumers. It is my 
hope that my colleagues will support this reform.

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