[Congressional Record Volume 146, Number 62 (Thursday, May 18, 2000)]
[Extensions of Remarks]
[Page E763]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       INTRODUCTION OF THE FIRST ACCOUNTS ACT OF 2000 (H.R. 4490)

                                 ______
                                 

                          HON. JOHN J. LaFALCE

                              of new york

                    in the house of representatives

                         Thursday, May 18, 2000

  Mr. LaFALCE. Mr. Speaker, today I'm proud to introduce legislation to 
bring more low-income Americans, those who remain ``unbanked,'' into 
America's financial mainstream. This legislation reflects an initiative 
proposed by President Clinton in his FY 2001 budget, which is referred 
to as the ``First Accounts'' initiative. I am pleased to note that a 
number of my colleagues, including Jim Leach, Maxine Waters, and Barney 
Frank, have joined me as original co-sponsors of this legislation. With 
their support, I look forward to enacting this important initiative 
into law in this session of Congress.
  The bill I am introducing today, the First Accounts Act of 2000 (H.R. 
4490), will help bridge the financial divide in America through the 
implementation of innovative strategies by the Department of the 
Treasury. This initiative complements the Treasury's Electronic 
Transfer Accounts, or ETAs, which are low-cost electronic accounts 
offered to recipients of Federal benefits. President Clinton proposed 
$30 million from the FY 2001 budget for the First Accounts initiative, 
which unlike ETA, applies to non-recipients of Federal benefits. The 
First Accounts Act of 2000 consists of the following three basic 
elements: (1) Providing financial incentives to depository institutions 
to create low-cost bank accounts for low- and moderate-income 
individuals; (2) expanding access to ATMs in safe, secure and 
convenient locations, including U.S. Post Offices in low-income 
neighborhoods; and (3) implementing a financial literacy campaign to 
educate low- and moderate-income Americans about the benefits of a bank 
account for managing household finances and building assets over time.
  Mr. Speaker, we often take for granted the significance to our daily 
lives of being part of the financial mainstream--that is, having the 
ability to direct-deposit our paychecks, write checks to pay our bills, 
and withdraw cash from ATMs. Unfortunately, roughly 8.4 million low-
income Americans, according to the Federal Reserve, do not enjoy the 
simple privilege of a low-cost transaction or savings account that the 
rest of us enjoy. As a consequence, their financial condition, and 
ability to fully participate in the nation's current economic 
prosperity, suffers greatly.
  The First Accounts Act of 2000 represents a meaningful effort to 
redress the imbalance between those of us who can afford and enjoy the 
convenience of readily available basic financial services, and those 
less fortunate American families who can't. Providing low-cost access 
to bank accounts would help save the scarce resources of America's less 
fortunate working families, many of whom pay more than $15,000 over a 
lifetime for check-cashing and bill-paying services from less-regulated 
financial institutions, such as check-cashers and payday lenders.
  The First Accounts initiative also represents sound economic policy. 
Research indicates that once ``unbanked'' families enter the doors of 
depository institutions as regular account holders, they are likely to 
become savers and begin to accumulate assets. Mainstream depository 
institutions will also benefit from the First Accounts initiative. A 
Federal Reserve study indicates that many low-income families with bank 
accounts also routinely used other bank products, including credit 
cards, automobile loans, first mortgages and certificates of deposits.
  Mr. Speaker, the First Accounts Act of 2000 is good policy and makes 
good sense. I urge my colleagues on both sides of the aisle to support 
this bill.

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