[Public Papers of the Presidents of the United States: George H. W. Bush (1992-1993, Book II)]
[October 28, 1992]
[Pages 2060-2062]
[From the U.S. Government Publishing Office www.gpo.gov]



Statement on Signing the Housing and Community Development Act of 1992
October 28, 1992

    Today I am signing into law H.R. 5334, the ``Housing and Community 
Development Act of 1992.'' This bill establishes a sound regulatory 
structure for Government-sponsored enterprises (GSEs), combats money 
laundering, provides essential regulatory relief to financial 
institutions, authorizes several key Administration housing initiatives, 
and reduces the risk of lead-based paint poisoning.
    This legislation addresses the problems created by the rapid 
expansion of certain GSEs in the last decade. It establishes a means to 
protect taxpayers from the possible risks posed by GSEs in housing 
finance. The bill creates a regulator within the Department of Housing 
and Urban Development (HUD) to ensure that the housing GSEs are 
adequately capitalized and operated safely.
    H.R. 5334 includes many of my Administration's regulatory relief 
proposals for depository institutions. The regulatory burden that the 
Congress has placed on our bank-

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ing system has reached a staggering level that prevents banks from 
providing the credit that is necessary to assure economic growth. By 
reducing the regulatory burden, this bill will assist banks, borrowers, 
and the economy as a whole.
    This legislation also improves the Federal Government's ability to 
combat money laundering. It penalizes financial institutions convicted 
of money laundering and strengthens Federal law enforcement capabilities 
significantly. These provisions create important new tools in fighting 
the war against illegal drugs and other serious criminal activities.
    The bill allows Federal prosecutors to obtain orders forfeiting tens 
of millions of dollars in assets belonging to drug kingpins that have 
been moved from the United States to foreign lands. It also authorizes 
the Government to prosecute those who launder the proceeds of corrupt 
foreign banks in the United States.
    The anti money-laundering provisions of the bill include authority 
to seize funds belonging to foreign banks involved in criminal 
activities when those funds are located in interbank accounts in the 
United States. Interbank accounts, of course, are used to facilitate the 
transactions of innocent third parties. Because of the potential impact 
on such transactions, it is important that this seizure authority be 
used judiciously and with attention to the effect such seizures might 
have on the interbank payment and clearing system. The Attorney General 
and the Secretary of the Treasury will work together to ensure 
coordinated review of such cases.
    This legislation also advances the Federal Government's efforts to 
eliminate lead-based paint hazards, especially among those most 
vulnerable--young children. The bill would focus inspection and hazard 
reduction efforts by HUD on older housing stock where the incidence of 
lead paint is greatest. It also supports the development of State 
programs to certify contractors who engage in lead-based paint 
activities.
    I regret, however, that the Congress chose to attach these important 
reforms to a housing bill that contains numerous provisions that raise 
serious concerns. My Administration worked diligently to craft a 
compromise housing bill that would target assistance where it is needed 
most, expand homeownership opportunities, ensure fiscal integrity, and 
empower recipients of Federal housing assistance.
    I also note that two provisions of the bill must be narrowly 
construed to avoid constitutional difficulties. Section 1313 would 
authorize the Director of the newly established Office of Federal 
Housing Enterprise Oversight within HUD to submit ``reports, 
recommendations, testimony, or comments'' to the Congress without prior 
approval or review by ``any officer or agency of the United States.'' 
The bill also provides the Director authority, exclusive of the 
Secretary of Housing and Urban Development, to promulgate safety and 
soundness regulations and to formulate an annual budget. When a member 
of the executive branch acts in an official capacity, the Constitution 
requires that I have the ultimate authority to supervise that officer in 
the exercise of his or her duties. In order to avoid constitutional 
difficulties, and without recognizing the Congress' authority to prevent 
the Secretary from supervising on my behalf an agency within HUD, I will 
interpret this provision to permit me to supervise the Director through 
other means, such as through the Office of Management and Budget.
    Section 911 of the bill requires the Secretary of Housing and Urban 
Development to establish guidelines for housing credit agencies to 
``implement'' section 102(d) of the Department of Housing and Urban 
Development Reform Act of 1989 (42 U.S.C. 3545(d)). That provision 
requires the Secretary to certify that HUD assistance to housing 
projects is not more than necessary to provide affordable housing, after 
taking other Federal and State assistance into account, and to adjust 
the amount of HUD assistance to compensate for changes in assistance 
amounts from other sources. To avoid the constitutional difficulties 
that would arise if section 911 were understood to vest in housing 
credit agencies the exercise of significant authority under Federal law, 
I interpret section 911 to permit the Secretary to formulate guidelines 
under which he will retain the ultimate authority

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to make the determinations required by section 102(d).

                                                             George Bush

The White House,
October 28, 1992.

                    Note: H.R. 5334, approved October 28, was assigned 
                        Public Law No. 102-550. This statement was 
                        released by the Office of the Press Secretary on 
                        October 29.