[Congressional Record (Bound Edition), Volume 147 (2001), Part 10]
[Extensions of Remarks]
[Pages 14188-14189]
[From the U.S. Government Publishing Office, www.gpo.gov]



      H.R. 2273, THE NATIONAL BANK OFFSHORE ACTIVITIES ACT OF 2001

                                 ______
                                 

                         HON. JOHN CONYERS, JR.

                              of michigan

                    in the house of representatives

                         Monday, July 23, 2001

  Mr. CONYERS. Mr. Speaker, I am pleased to have recently introduced HR 
2273, the National Bank Offshore Activities Act of 2001, which was 
referred to the Committee on Financial Services on June 21, 2001. If 
enacted, this legislation would amend banking laws with respect to 
offshore activities, investments, and affiliations of national banks, 
which are chartered by the United States Comptroller of the Currency. 
Specifically, the legislation tightens regulations and closes loopholes 
in this country's supervision of the national banks it charters when 
they operate overseas. In this global economy, banks chartered and 
regulated by our government must maintain the highest legal and ethical 
standards wherever they operate, yet far too often, our banks have not 
been as scrupulous as they should be when they get involved in overseas 
activities.
  I am introducing this legislation because it has been brought to my 
attention that there have been recent allegations of great 
improprieties committed by our national banks chartered by the 
Comptroller of the Currency when they operate overseas, and that the 
Office of the Comptroller of the Currency has concluded it is powerless 
to act against these U.S. chartered banks under certain circumstances. 
There have even been allegations that some of our chartered banks have 
been involved in illegal activities, including possible money 
laundering, yet our own Office of the Comptroller of the Currency, 
which is supposed to investigate these matters, has determined that it 
does not have the power to stop these practices given its current 
enforcement authority. As I stand here today, I am aware that the 
ownership and control of one overseas company in particular has been 
transferred in a bankruptcy proceeding to a trustee approved by a group 
of U.S. chartered and foreign banks, and that there have been 
allegations that the appointed trustee in this matter has committed 
embezzlement, money laundering, and other crimes. Yet it is my 
understanding that the Office of the Comptroller of the Currency has 
not fully investigated these matters, and that they may need further 
enforcement

[[Page 14189]]

authority in order to do so. This is why I believe that H.R. 2273 is 
such an important piece of legislation. Congress needs to make certain 
that the Office of the Comptroller of the Currency has full enforcement 
powers so they may act to enforce our nation's banking laws.
  Above all, H.R. 2273 improves upon the existing enforcement regime of 
the Office of the Comptroller of the Currency so that they may better 
identify possibly harmful bank relationships and practices before they 
hurt U.S. depositors and shareholders. Our global economy requires that 
U.S. banking laws reach activity affecting U.S. shareholders and 
investors wherever it occurs. From the standpoint of international 
relations, we also do not want U.S-chartered and licensed banks to 
engage in unsound and unsafe practices in other countries that we would 
not tolerate in America's backyard. H.R. 2273 is also an important step 
towards addressing offshore risks to the U.S. financial system's 
integrity.
  We need to make certain that our banks are accountable when they 
operate overseas. Simply put, our vital system of banking regulation 
and our confidence in our financial system is compromised when a U.S. 
chartered bank or its agents are implicated in criminal activities 
anywhere in the world. Therefore, our Comptroller of the Currency must 
have full power and authority to investigate these offshore activities 
of our national banks, and to order these banks to cease their 
involvement in an overseas interest, if this activity leads to Illegal 
activities, or other violations of law.
  To achieve this end, H.R. 2273, among other things, increases the 
reporting requirements our national banks must comply with when they 
acquire, directly or indirectly, a beneficial interest in any offshore 
company. When our national banks engage in such activities, this 
legislation will require them to provide a full disclosure of 
information to the Comptroller of the Currency about the offshore 
interest they will be acquiring. Specifically, they will be required to 
submit a report listing the names of all the shareholders, principals, 
or holders of a beneficial interest in the offshore company, provide 
the names of any directors, officers, or managing agent of the offshore 
company; provide the identity and value of any assets held or owned by 
the offshore company; supply the Comptroller of the Currency with 
information about the criminal histories and any legal accusations 
filed against any of the named individuals in the report; and provide 
such other information as the Comptroller of the Currency may require. 
These banks will also be required to provide periodic updates of this 
information to the Comptroller of the Currency.
  H.R. 2273 also prohibits certain relations between national banks and 
certain violators of Federal, State, or foreign criminal law, banking 
or financial services law, or labor law, or any regulations prescribed 
under any such law, by any agent or affiliate of the national bank, or 
any other entity with which the national bank maintains a correspondent 
banking relationship, which has been finally adjudicated or determined 
by any adjudicative, regulatory, or other governmental authority.
  In addition, H.R. 2273 provides that both national banks and any 
other persons or entities, including any Federal or State official, 
department, or agency, may file a notice with the Comptroller of the 
Currency to notify the Comptroller of any violation of law that has 
occurred as a result of the affiliation of the national bank and the 
offshore interest, and to petition the Comptroller of the Currency to 
prohibit any further relationship between the national bank and the 
entity with respect to whom such notice is filed. Upon receiving any 
such complaint, the Comptroller of the Currency would then be required 
by the legislation to serve on the national bank a written notice to 
show cause why the Comptroller should not issue an order prohibiting 
any further relationship between the national bank and any such agent, 
affiliate, or other entity.
  Third parties would also be given the right under H.R. 2273, to 
petition for a hearing before the Comptroller of the Currency 
concerning the relationship at issue between a national bank and an 
offshore interest, and that person making the request for a hearing 
shall be provided with an opportunity to be heard on the record at a 
hearing. The Comptroller of the Currency would also be granted the 
authority to issue a cease and desist order to stop the involvement
  Mr. Speaker, H.R. 2273 is an important first step toward improving 
our nation's banking laws. I would ask my colleagues to join me in 
seeking passage of this important bill.

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