[Congressional Record Volume 151, Number 138 (Wednesday, October 26, 2005)]
[House]
[Pages H9123-H9125]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        HURRICANE KATRINA FINANCIAL SERVICES RELIEF ACT OF 2005

  Mr. BAKER. Mr. Speaker, I move to suspend the rules and pass the bill 
(H.R. 3945) to facilitate recovery from the effects of Hurricane 
Katrina by providing greater flexibility for, and temporary waivers of 
certain requirements and fees imposed on, depository institutions and 
Federal regulatory agencies, and for other purposes, as amended.
  The Clerk read as follows:

                               H.R. 3945

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Hurricane Katrina Financial 
     Services Relief Act of 2005''.

     SEC. 2. FINDINGS.

       The Congress finds as follows:
       (1) On August 29, 2005, Hurricane Katrina, a category 4 
     storm with an impact area of 90,000 square miles, reached 
     landfall devastating the States of Louisiana, Mississippi and 
     Alabama, causing loss of life and property.
       (2) Levee breaches in the flood control system for the city 
     of New Orleans as a result of Hurricane Katrina resulted in 
     tragic flooding, causing additional loss of life and 
     property.
       (3) Due to the substantial damage to both property and 
     infrastructure, more than 1,000,000 people were made homeless 
     or brought under financial duress by the effects of Hurricane 
     Katrina.
       (4) At least 120 insured depository institutions and 96 
     insured credit unions are located in the areas of Texas, 
     Louisiana, Mississippi and Alabama, declared as major 
     disaster areas by the President.

     SEC. 3. DEFINITIONS.

       For purposes of this Act, the following definitions shall 
     apply:
       (1) Appropriate federal banking agency.--The term 
     ``appropriate Federal banking agency'' has the same meaning 
     as in section 3 of the Federal Deposit Insurance Act.
       (2) Insured credit union.--The term ``insured credit 
     union'' has the same meaning as in section 101 of the Federal 
     Credit Union Act.
       (3) Insured depository institution.--The term ``insured 
     depository institution'' has the same meaning as in section 3 
     of the Federal Deposit Insurance Act.
       (4) Qualified disaster area.--The term ``qualified disaster 
     area'' means any area within Alabama, Louisiana, or 
     Mississippi in which the President, pursuant to section 401 
     of the Robert T. Stafford Disaster Relief and Emergency 
     Assistance Act, has determined, on or after August 28, 2005, 
     that a major disaster exists due to Hurricane Katrina.

     SEC. 4. SENSE OF THE CONGRESS ON CASHING OF GOVERNMENT 
                   CHECKS.

       It is the sense of the Congress that--
       (1) it is vital that insured depository institutions and 
     insured credit unions continue to provide financial services 
     to consumers displaced or otherwise affected by Hurricane 
     Katrina, which includes the cashing of Federal government 
     assistance and benefit checks;
       (2) the Secretary of the Treasury and the Federal financial 
     regulators should seek to educate insured depository 
     institutions and insured credit unions on the proper 
     application of the guidance issued by the Secretary on 
     cashing of Federal government assistance and benefit checks 
     and published in the Federal Register while such guidance is 
     in effect; and
       (3) the Federal financial regulators should continue to 
     work with the insured depository institutions and insured 
     credit unions operating under extraordinary circumstances to 
     facilitate the cashing of Federal government assistance and 
     benefit checks.

     SEC. 5. WAIVER OF FEDERAL RESERVE BOARD FEES FOR CERTAIN 
                   SERVICES.

       Notwithstanding section 11A of the Federal Reserve Act or 
     any other provision of law, during the effective period of 
     this section, a Federal reserve bank shall waive or rebate 
     any transaction fee for wire transfer services that otherwise 
     would be imposed on any insured depository institution or 
     insured credit union that as of August 28, 2005, was 
     headquartered in a qualified disaster area.

     SEC. 6. FLEXIBILITY IN CAPITAL AND NET WORTH STANDARDS FOR 
                   AFFECTED INSTITUTIONS.

       (a) In General.--Notwithstanding section 38 of the Federal 
     Deposit Insurance Act, section 216 of the Federal Credit 
     Union Act, or any other provision of Federal law, during the 
     18-month period beginning on the date of enactment of this 
     Act, the appropriate Federal banking agency and the National 
     Credit Union Administration may forbear from taking any 
     action required under any such section or provision, on a 
     case-by-case basis, with respect to any undercapitalized 
     insured depository institution or undercapitalized insured 
     credit union that is not significantly or critically 
     undercapitalized, if such agency or Administration determines 
     that--
       (1) the insured depository institution or insured credit 
     union derives more than 50 percent of its total deposits from 
     persons who

[[Page H9124]]

     normally reside within, or whose principal place of business 
     is normally within, a qualified disaster area;
       (2) the insured depository institution or insured credit 
     union was at least adequately capitalized as of August 28, 
     2005;
       (3) the reduction in the capital or net worth category of 
     the insured depository institution or insured credit union is 
     directly attributable to the impact of Hurricane Katrina; and
       (4) forbearance from any such action--
       (A) would facilitate the recovery of the insured depository 
     institution or insured credit union from the disaster in 
     accordance with a recovery plan or a capital or net worth 
     restoration plan established by such depository institution 
     or credit union; and
       (B) would be consistent with safe and sound practices.
       (b) Capital and Net Worth Categories Defined.--For purposes 
     of this section, the terms relating to capital categories for 
     insured depository institutions have the same meaning as in 
     section 38(b)(1) of the Federal Deposit Insurance Act and the 
     terms relating to net worth categories for insured credit 
     unions have the same meaning as in section 216(c)(1) of the 
     Federal Credit Union Act.

     SEC. 7. DEPOSIT OF INSURANCE PROCEEDS.

       (a) In General.--The appropriate Federal banking agency and 
     the National Credit Union Administration may, by order, 
     permit an insured depository institution or insured credit 
     union, during the 18-month period beginning on the date of 
     enactment of this Act, to subtract from such institution's or 
     credit union's total assets in calculating compliance with 
     the leverage limit, applicable under section 38 of the 
     Federal Deposit Insurance Act or section 216(c)(2) of the 
     Federal Credit Union Act with respect to such insured 
     depository institution or insured credit union, an amount not 
     exceeding the qualifying amount attributable to insurance 
     proceeds, if the agency or Administration determines that--
       (1) such institution or credit union--
       (A) derives more than 50 percent of its total deposits from 
     persons who normally reside within, or whose principal place 
     of business is normally within, a qualified disaster area;
       (B) was at least adequately capitalized as of August 28, 
     2005; and
       (C) has an acceptable plan for managing the increase in its 
     total assets and total deposits; and
       (2) the subtraction is consistent with the purpose of 
     section 38 of the Federal Deposit Insurance Act, in the case 
     of an insured depository institution, and section 216 of the 
     Federal Credit Union Act, in the case of an insured credit 
     union.
       (b) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       (1) Leverage limit.--The term ``leverage limit''--
       (A) with respect to an insured depository institution, has 
     the same meaning as in section 38 of the Federal Deposit 
     Insurance Act; and
       (B) with respect to an insured credit union, means the net 
     worth ratio that corresponds to the leverage limit, as 
     established in accordance with section 216(c)(2).
       (2) Qualifying amount attributable to insurance proceeds.--
     The term ``qualifying amount attributable to insurance 
     proceeds'' means the amount (if any) by which the 
     institution's or credit union's total assets exceed the 
     institution's or credit union's average total assets during 
     the calendar quarter ending before the date of the earliest 
     Presidential determination referred to in section 3(4), 
     because of the deposit of insurance payments or governmental 
     assistance, including government disaster relief payments, 
     made with respect to damage caused by, or other costs 
     resulting from, the major disaster within a qualified 
     disaster area.

     SEC. 8. EFFECTIVE PERIOD.

       (a) In General.--Except as provided in sections 4(2), 6(a), 
     and 7(a) and subject to subsection (b), the provisions of 
     this Act shall not apply after the end of the 180-day period 
     beginning on the date of the enactment of this Act.
       (b) 30-Day Extension Authorized.--With respect to the 
     provisions of section 5, the 180-day period referred to in 
     subsection (a) may be extended for 1 additional 30-day period 
     upon a determination by the Board of Governors of the Federal 
     Reserve System that such extension is appropriate to achieve 
     the purposes of this Act.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Louisiana (Mr. Baker) and the gentleman from Massachusetts (Mr. Frank) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Louisiana (Mr. Baker).
  Mr. BAKER. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise today in support of H.R. 3945 and express 
appreciation to the chairman and the ranking member and the members of 
the Committee on Financial Services for their continuing assistance for 
those who are victims of Hurricane Katrina.
  In this instance, it is relative to financial institutions who now 
find themselves under some financial duress as collateral for loan 
obligations has been impaired, or in the case of loan repayments, the 
revenue streams available to the borrower are no longer available for 
repayment of loan obligations.
  Under current regulatory law, the regulator must act when a financial 
institution's financial characteristics take on certain problems. In 
the instance of this legislation, we are providing unprecedented 
flexibility for the regulator with regard to capital and net worth 
standards for lending institutions. Stated another way, we know these 
institutions are only impaired as a result of the consequences of 
Hurricane Katrina as they were all adequately-to-well-capitalized the 
day before the storm made landfall.
  In addition to that capital and net worth forbearance, we also extend 
terms relative to deposit of insurance proceeds. Normally, when there 
is a large influx of assets into the bank, deposits or really 
liabilities, the bank is then required to take certain financial 
actions to ensure its financial solvency. This provides the regulator 
with the ability to allow that aberrant behavior brought on by 
Hurricane Katrina insurance payments not trigger normal regulatory 
responses.
  To say it a different way, the bill provides relief to financial 
institutions which today could be found to be troubled which are fully 
capable of restoration of their responsibilities over time if the 
regulator is given the ability to exercise the powers in this 
legislation.

                              {time}  1200

  I think it is well crafted. I think it is responsive to the problems 
identified, and I would hope the House would act favorably on its 
consideration.
  Mr. Speaker, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield myself such time as 
I may consume.
  Mr. Speaker, I concur with the gentleman from Louisiana, this is a 
very narrowly and appropriately drafted bill that provides relief that 
is both in timing and geography restricted. It allows flexibility in 
dealing with the affected area.
  None of us believe that this is enough. None of us believe that this 
resolves all the problems. There continue to be serious problems for 
people there, but what this will do will be to give the financial 
institutions the flexibility and give the regulators the power to allow 
this flexibility to help us get through this immediate period.
  We will, I hope, soon be working on in our committee some broader 
measures of relief, not just in our committee, but elsewhere. But at 
this point, this relief, which is carefully restricted, is entirely 
necessary to minimize the damage.
  The financial system in this country serves us well. Our financial 
intermediaries do an excellent job. While not everything worked well, 
obviously, during the response to the hurricane, I think credit should 
be given to the financial regulators, to the Federal Reserve, the FDIC, 
the Office of Thrift Supervision, the Comptroller of the Currency, the 
Credit Union Administration, because sometimes the news is what you do 
not hear. It is the dog that does not bark that could be significant.
  Among the things that you have not heard in these months since that 
problem, nearly 2 months now, you have not heard criticism of the 
financial regulators. They deserve credit for having taken maximum 
advantage of the flexibility they have.
  What this bill does is, frankly, to say, yes, we have confidence in 
them. We believe that they have behaved appropriately, and this gives 
them even more flexibility to take into account the short-term concerns 
that we have there while we work collectively on a longer-term fix. I 
think this is an entirely appropriate piece of legislation. I am glad 
to support it.
  Mr. Speaker, I have no further requests for time, and I yield back 
the balance of my time.
  Mr. BAKER. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I certainly appreciate the comments of the gentleman 
from Massachusetts and his courtesy extended during the course of 
consideration of this and a number of other measures relating to the 
response to the Katrina effort. I feel it entirely appropriate, in 
light of the many people who are still adversely affected by the storm, 
to not appear that we are only expressing interest in the financial 
institutions.
  There are many individuals today where their employment is no longer

[[Page H9125]]

possible because the structure where they worked is no longer there. 
There are folks who cannot go back to work because other employees are 
unable to be located. There are many people still without homes living 
in a variety of circumstances across the country. The state of 
emergency continues.
  In reaching out to those individuals, we are at work on a number of 
measures, one of which I hope the House will soon consider, H.R. 4100, 
relative to the Louisiana Recovery Corporation. I will be speaking to 
that issue at length in hearings over time, but I certainly wanted to 
take advantage of the opportunity presented to let individuals 
adversely affected by the current storm circumstance understand that 
this is only one small part of a very large effort by all of the 
members of the House delegation from Louisiana, as well as the members 
of the Committee on Financial Services, to be responsive to the entire 
array of identified difficulties.
  In fact, the corporation, once created and authorized by the 
Congress, would enable to assist financial institutions and homeowners 
with the acquisition of mortgages and assuming the debt obligations for 
those borrowers, as well as some restoration of the equity homeowners 
may have in their property prior to the storm.
  It is intended to help communities rebuild, not simply build homes. 
The overall effort from extending assistance and forbearance through 
the regulatory process to financial institutions, as well as extending 
assistance to homeowners who are now displaced from their property, is 
a massive long-term effort, which will require the work of this 
Congress, I suspect, for years to come.
  To those who are concerned about Louisianans rebuilding in 
circumstances which are less than desirable, we share the view. Only 
when levee restoration is complete, only when environmental remediation 
is complete will the rebuilding begin, and then to the highest 
hurricane standards available and applicable for our circumstance.
  But make no mistake. Because of the vital nature of the energy 
industry, the aquaculture industry, the shipping and exporting 
business, which is conducted through one of the world's largest ports, 
the Baton Rouge/New Orleans, there is an evident and obvious necessity 
for people to return to the great city of New Orleans and the 
surrounding area because of the jobs that are necessary to provide the 
rest of the Nation with energy independence and the abundance of 
natural resources which our State produces.
  Accordingly, the bill now before us is an important measure to help 
provide that economic stability going forward. It is a small part of a 
much larger package, but there is a plan, coming through in various 
pieces through each of the appropriate committees, to respond to the 
needs of the people of Louisiana in an appropriate and professional 
manner.
  I simply ask the indulgence of those people in Louisiana who are 
still dealing with FEMA, living in a trailer, not certain about 
tomorrow, to understand the Congress is responsive to their concerns, 
and over the course of the next several weeks, actions will be taken we 
hope all will find appropriate and responsive.
  Mr. Speaker, I yield back the balance of the time.
  The SPEAKER pro tempore (Mr. Simpson). The question is on the motion 
offered by the gentleman from Louisiana (Mr. Baker) that the House 
suspend the rules and pass the bill, H.R. 3945, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of 
those present have voted in the affirmative.
  Mr. BAKER. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this question will 
be postponed.

                          ____________________