[Congressional Record Volume 145, Number 97 (Monday, July 12, 1999)]
[Extensions of Remarks]
[Pages E1515-E1516]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     FINANCIAL SERVICES ACT OF 1999

                                 ______
                                 

                               speech of

                        HON. SHEILA JACKSON-LEE

                                of texas

                    in the house of representatives

                         Thursday, July 1, 1999

       The House in Committee of the Whole House on the State of 
     the Union had under consideration the bill (H.R. 10) to 
     enhance competition in the financial services industry by 
     providing a prudential framework for the affiliation of 
     banks, securities firms, and other financial service 
     providers, and for other purposes;

  Ms. JACKSON-LEE of Texas. Mr. Chairman, Today I rise in support of 
H.R. 10, the Financial Services Competition Act of 1999. I would be 
remiss if I did not acknowledge the hard work of the Banking and 
Commerce Committees in crafting this legislation.
  I support the idea of updating the rules that our Nation's financial 
institutions operate under to bring their activity in line with the 
realities of life in today's America.
  Today's vote represents groundbreaking financial services legislation 
that would dismantle many of the depression era laws currently 
hindering the financial services industry from engaging in a modern 
global marketplace.
  In Congress, we have spent more than twenty years debating how to 
update the Nation's antiquated banking laws that prohibit banks, 
securities firms and insurance companies from entering into another's 
businesses. H.R. 10 would permit streamlining of the financial service 
industry thereby creating one-stop shopping with comprehensive services 
choices for consumers. The streamlining of financial services will not 
only mean increased consumer confidence, it would also mean increased 
savings for consumers. The Treasury Department estimates that financial 
services modernization could mean as much as $15 billion annually in 
savings to consumers.
  I am heartened that many provisions of the Community reinvestment Act 
(CRA) remain in H.R. 10. The CRA, enacted in 1977 to combat 
discrimination in lending practices, encourages federally-insured 
financial institutions to help meet the credit needs of their entire 
communities by providing credit and deposit services in the communities 
they serve.
  Indeed, in many respects, H.R. 10 strengthens the CRA. Under the 
bill, CRA would be extended to the newly created wholesale financial 
institutions, which are institutions that could only accept deposits 
above $100,000 and are not FDIC-insured. Additionally, H.R. 10, 
provides consumer protection provisions that require institutions to 
ensure that consumers are not confused about new financial products 
along with strong anti-tying and anti-coercion provisions governing the 
marketing of financial products. Further, the bill requires that all of 
a holding company's subsidiary depository institutions have at least a 
``satisfactory'' CRA rating in order to affiliate as a financial 
holding company and in order to maintain that affiliation.
  CRA is a success story. Between 1993 and 1997, the number of home 
purchase loans to African Americans soared 62 percent; Hispanics saw an 
increase of 58 percent, Asian Americans nearly 30 percent; and loans to 
Native Americans increased by 25 percent. Since 1993, the number of 
home mortgages extended to low- and moderate-income borrowers has risen 
by 38 percent.
  Indeed, in my district, Hispanic students from the east end district 
of Houston historically have had a high dropout rate. Using funds made 
available by the CRA, the Tejano Center for Community Concerns built 
the Raul Yzaguirre School for Success to meet the special needs of 
students from low-income families in this inner-city neighborhood. This 
school has performed outstandingly in its three years in existence. In 
fact, over the past two years, the school's students' average Texas 
assessment of academic skills scores increased 18 to 20 percent.
  In addition to the school, funding made available by the CRA has 
helped the Tejano Center for Community Concerns build and sell 15 homes 
to new home buyers, with nine additional homes planned, as well as a 
health clinic that serves approximately 1,500 patients per year. 
Examples such as this speak volumes on the CRA's ability to positively 
impact people's lives.
  This is why I am concerned that H.R. 10 does not extend the CRA to 
non-banking financial companies that affiliate with banks. 
Specifically, H.R. 10 does not require securities companies, insurance 
companies, real estate companies and commercial and industrial 
affiliates engaing in lending or offering banking products to meet the 
credit, investment and consumer needs of the local communities they 
serve.
  The exclusion of nonbank affiliates' banking and lending products 
from the CRA is significant because increasingly, businesses such as 
car makers and credit card companies, securities firms and insurers are 
behaving like banks by offering products such as FDIC-insured 
depository services, consumer loans, as well as debit and commercial 
loans. Additionally, private investment capital is decreasingly covered 
by CRA requirements, making it more difficult for underserved rural and 
urban communities to access badly-needed capital for housing, economic 
development and infrastructure.
  Madam Chairman, I am also troubled by the fact that rules committee 
did not make in order several key amendments offered by the democrats 
including my own to address issues such as redlinging, stronger 
financial and medical record privacy safeguards and community

[[Page E1516]]

lending. I hope that during the course of our debate we can address 
these concerns.
  Both our financial service laws and consumer protection laws need to 
be modernized. On balance, H.R. 10, is a positive step in the right 
direction to achieve this goal. I urge my colleagues to join with me in 
supporting this bill.

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