[Congressional Record Volume 151, Number 57 (Wednesday, May 4, 2005)]
[House]
[Pages H2889-H2891]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  PROVIDING FOR CONSIDERATION OF H.R. 1185, FEDERAL DEPOSIT INSURANCE 
                           REFORM ACT OF 2005

  Mr. SESSIONS. Mr. Speaker, by direction of the Committee on Rules, I 
call up House Resolution 255 and ask for its immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 255

       Resolved, That at any time after the adoption of this 
     resolution the Speaker may, pursuant to clause 2(b) of rule 
     XVIII, declare the

[[Page H2890]]

     House resolved into the Committee of the Whole House on the 
     state of the Union for consideration of the bill (H.R. 1185) 
     to reform the Federal deposit insurance system, and for other 
     purposes. The first reading of the bill shall be dispensed 
     with. All points of order against consideration of the bill 
     are waived. General debate shall be confined to the bill and 
     shall not exceed one hour equally divided and controlled by 
     the chairman and ranking minority member of the Committee on 
     Financial Services. After general debate the bill shall be 
     considered for amendment under the five-minute rule. It shall 
     be in order to consider as an original bill for the purpose 
     of amendment under the five-minute rule the amendment in the 
     nature of a substitute recommended by the Committee on 
     Financial Services now printed in the bill. Each section of 
     the committee amendment in the nature of a substitute shall 
     be considered as read. During consideration of the bill for 
     amendment, the Chairman of the Committee of the Whole may 
     accord priority in recognition on the basis of whether the 
     Member offering an amendment has caused it to be printed in 
     the portion of the Congressional Record designated for that 
     purpose in clause 8 of rule XVIII. Amendments so printed 
     shall be considered as read. At the conclusion of 
     consideration of the bill for amendment the Committee shall 
     rise and report the bill to the House with such amendments as 
     may have been adopted. Any Member may demand a separate vote 
     in the House on any amendment adopted in the Committee of the 
     Whole to the bill or to the committee amendment in the nature 
     of a substitute. The previous question shall be considered as 
     ordered on the bill and amendments thereto to final passage 
     without intervening motion except one motion to recommit with 
     or without instructions.

  The SPEAKER pro tempore. The gentleman from Texas (Mr. Sessions) is 
recognized for 1 hour.
  Mr. SESSIONS. Mr. Speaker, for the purpose of debate only, I yield 
the customary 30 minutes to the gentlewoman from California (Ms. 
Matsui), pending which I yield myself such time as I may consume. 
During consideration of this resolution, all time yielded is for the 
purpose of debate only.
  Mr. Speaker, the rule before us today is a fair and completely open 
rule that allows any Member with a germane amendment to this 
legislation to come to the floor and offer it for consideration by the 
whole House. It provides for 1 hour of general debate, equally divided 
and controlled by the chairman and ranking minority member of the 
Committee on Financial Services. It waives all points of order against 
consideration of the bill, and provides that the amendment in the 
nature of a substitute recommended by the Committee on Financial 
Services now printed in the bill shall be considered as an original 
bill for the purpose of amendment.
  Finally, it provides that the bill shall be considered for amendment 
by section and that each section shall be considered as read. It 
authorizes the Chair to accord priority and recognition to Members who 
have preprinted their amendments in the Congressional Record, and 
provides for one motion to recommit, with or without instructions.
  I rise today in strong support of this rule and the underlying 
legislation, which addresses some fundamental and largely 
uncontroversial reforms of the deposit insurance system, a system that 
dates back to 1934 and has served as a source of stability for the 
banking system of this country for over 7 decades. This legislation, 
which has the support of 40 bipartisan cosponsors, closely resembles 
legislation that was H.R. 3717 from the 107th Congress which 
overwhelmingly passed the House by a vote of 408 to 18, and a bill from 
the 108th Congress, H.R. 522, which passed the House by an even greater 
margin of 411 to 11.
  The improvements that this legislation makes to the Federal Deposit 
Insurance Act are simple. First, the bill merges the separate insurance 
funds that currently protect the deposits of banks and savings 
associations, creating an even stronger, more stable fund than either 
fund can provide by itself.
  Second, the bill addresses the ``pro-cyclical bias'' of the current 
system that requires sharply higher premiums at low points in the 
business cycle, when banks are least able to pay them and funds are 
most needed for lending to create economic growth. By giving the FDIC 
the tools it needs to manage these funds more appropriately, this 
legislation will ease volatility in the banking system and speed up 
recovery during economic downturns.
  Third, the bill increases the amount of deposit insurance available 
to depositors while also indexing it for future inflation. The system 
has gone 25 years without such an adjustment, the longest period in 
history; and this small increase in the safety net for savings of 
American families is now necessary if deposit insurance is to maintain 
its future relevance. By raising the levels to $130,000 for personal 
savings accounts, $260,000 for personal retirement accounts, and $2 
million for in-state municipal deposits, it will encourage more people 
to save and to reinvest in their local communities.
  Mr. Speaker, I have spent a great deal of time with community bankers 
from my district and all across north Texas, and one of the things that 
I have heard them say is that strengthening the deposit insurance 
system will help small neighborhood-based financial institutions to 
continue playing an important role in financing their own local 
economic development.
  Deposits that community banks are able to attract through the Federal 
deposit insurance guarantee return to the community in the form of 
consumer and small business loans, community development projects, and 
home mortgages. We simply cannot allow such an important economic 
generator for our local communities to evaporate or to be rendered 
irrelevant by inflation. The savings of Americans should not be allowed 
to go unprotected, and we cannot forget how important the role of 
community banks is to the economic development and vitality of our 
Nation.
  Mr. Speaker, I would like to thank today my friend, the gentleman 
from Alabama (Mr. Bachus), the chairman of the Subcommittee on 
Financial Institutions and Consumer Credit, for his hard work in 
bringing this legislation to the floor today. I would also like to 
thank the gentleman from Ohio (Chairman Oxley) for all of his 
leadership and vision on this issue on behalf of American families, and 
the safety and soundness of our Nation's banking system.
  Mr. Speaker, I reserve the balance of my time.

                              {time}  1100

  Ms. MATSUI. Mr. Speaker, I thank the gentleman from Texas for 
yielding me this time.
  Mr. Speaker, I yield myself such time as I may consume.
  (Ms. MATSUI asked and was given permission to revise and extend her 
remarks.)
  Ms. MATSUI. Mr. Speaker, I rise in support of this resolution and the 
underlying bill to reform the Federal Deposit Insurance. I am also very 
pleased that we will be able to fully debate this bill on the floor of 
the House under an open rule. This is only the second open rule the 
committee has reported this year, and I certainly hope it is a trend we 
will continue.
  Since the creation of deposit insurance after the stock market crash 
in the early 1930s, Federal Deposit Insurance has created financial 
stability in our country for almost 70 years. Its effectiveness has 
been proven in our Nation's fiscal crises in the 1980s and 1990s, they 
were handled very differently with a far different outcome.
  Also since the 1930s Congress had to evaluate deposit insurance and 
make changes to update this program. In 1980, Congress decided to 
increase the previous $40,000 coverage limit to $100,000 per account. 
It is common sense for us to increase the amount a deposit can be 
insured for, as inflation has eroded the current limits.
  Increasing the limit to $130,000 is a wise decision. Indexed for 
inflation, the level would have risen to about $140,000. Further, this 
bill would increase the amount of security behind retirement accounts. 
This is especially important as companies eliminate their defined 
benefit plans and switch to providing benefits through defined 
contribution plans, like 401(k)s.
  Deposit insurance reform has broad support. Even the FDIC staff 
agrees. The majority of the reforms included in this bill are the same 
recommendations they suggested in its April 2001 report, ``Keeping the 
Promise: Recommendations for Deposit Insurance Reform.''
  I see no reason why we would not do this today. I urge my colleagues 
to support this resolution and the underlying bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SESSIONS. Mr. Speaker, at this time, I would like to inquire of 
my colleague if she has any additional speakers. I do not have any at 
this time, and

[[Page H2891]]

would allow the gentlewoman to go ahead and run down her time that I 
might close.
  Ms. MATSUI. Mr. Speaker, I have no more speakers.
  Mr. SESSIONS. Mr. Speaker, I would allow the gentlewoman, with the 
permission of the Speaker, to go ahead and make her closing.
  Ms. MATSUI. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I encourage all of my colleagues to support this open 
rule. I look forward to hearing the debate on this legislation to 
reform Federal Deposit Insurance, and am hopeful that we can pass this 
legislation today.
  Mr. Speaker, I yield back the balance of my time.
  Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, today for the first time, I have had an opportunity now 
after being on the Committee of Rules for 8 years to have the 
gentlewoman from California (Ms. Matsui) present the rule where we have 
worked together. I enjoyed this very much. I appreciate the gentlewoman 
working with us.
  Mr. Speaker, I support this common sense legislation to improve the 
Federal Deposit Insurance system, and encourage reinvesting in our 
country's local communities.
  I urge all of my colleagues to support this open rule and the 
underlying legislation.
  Mr. Speaker, I yield back the balance of my time, and I move the 
previous question on the resolution.
  The previous question was ordered.
  The resolution was agreed to.
  A motion to reconsider was laid on the table.

                          ____________________