[Weekly Compilation of Presidential Documents Volume 35, Number 45 (Monday, November 15, 1999)]
[Pages 2361-2363]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks on Signing Legislation To Reform the Financial System

November 12, 1999

    Thank you, and good afternoon. I thank you all for coming to the 
formal ratification of a truly historic event. Senator Gramm and Senator 
Sarbanes have actually agreed on an important issue. [Laughter] Stay 
right there, John. [Laughter] I asked Phil on the way out how bad it's 
going to hurt him in Texas to be walking out the door with me. 
[Laughter] We decided it was all right today.
    Like all those before me, I want to express my gratitude to those 
principally responsible for the success of this legislation. I thank 
Secretary Summers and the entire team at Treasury, but especially Under 
Secretary Gensler, for their work, and Assistant Secretary Linda 
Robertson. I thank you, Chairman Greenspan, for your constant advocacy 
of the modernization of our financial system. I thank you, Chairman 
Levitt, for your continuing concern for investor protections. And I 
thank the other regulators who are here.
    I thank Senator Gramm and Senator Sarbanes, Chairman Leach and 
Congressman LaFalce, and all the Members of Congress who are here. 
Senator Dodd told me the Sisyphus story, too, over and over again, but 
I've rolled so many rocks up so many hills, I had a hard time fully 
appreciating the significance of it. [Laughter]
    I do want to thank all the Members here and all those who aren't 
here. And I'd like to thank two New Yorkers who aren't here who have 
been mentioned, former Secretary of the Treasury Bob Rubin, who worked 
very hard on this, and former chairman, Senator Al D'Amato, who talked 
to me about this often. So this is a day we can celebrate as an American 
day.
    To try to give some meaning to the comments that the previous 
speakers have made about how we're making a fundamental and historic 
change in the way we operate our financial institutions, I think it 
might be worth pointing out that this morning we got some new evidence 
on the role of new technologies in our economy, which showed that

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over the past 4 years, productivity has increased by a truly remarkable 
2.6 percent. That's about twice the rate of productivity growth the 
United States experienced in the 1970's and the 1980's. In the last 
quarter alone, productivity grew at 4.2 percent.
    This is not just some aloof statistic that matters only to the 
Federal Reserve, the Treasury, and Wall Street economists. It is the key 
to rising paychecks and greater security and opportunity for ordinary 
Americans. And the combination of rising productivity, more open borders 
and trade, working to keep down inflation, the dramatic reduction of the 
deficit and the accumulation of the surplus, and the continued 
commitment to the investment in the American people, research and 
development, and new productivity-inducing technologies has given us the 
most sustained real wage growth in more than two decades, with the 
lowest inflation in more than three decades.
    I can tell you that back in December of 1992, when we were sitting 
around the table at the Governor's Mansion, trying to decide what had to 
be in this economic program, the economists that I had there, who 
normally are thought to be--you know, you say, well, they're Democrats; 
they'll be more optimistic--none of them believed that we could grow the 
economy for this long with an unemployment rate this low and an 
inflation rate this low. And it's a real tribute to the American people.
    So what you see here, I think, is the most important recent example 
of our efforts here in Washington to maximize the possibilities of the 
new information age global economy, while preserving our 
responsibilities to protect ordinary citizens and to build one nation 
here. And there will always be competing interests. You heard Senator 
Gramm characterize this bill as a victory for freedom and free markets. 
And Congressman LaFalce characterized this bill as a victory for 
consumer protection. And both of them are right. And I have always 
believed that one required the other.
    It is true that the Glass-Steagall law is no longer appropriate to 
the economy in which we live. It worked pretty well for the industrial 
economy, which was highly organized, much more centralized, and much 
more nationalized than the one in which we operate today. But the world 
is very different.
    Now we have to figure out, what are still the individual and family 
and business equities that are still involved that need some 
protections? And the long and often tortured story of this law can be 
seen as a very stunning specific example of the general challenge that 
will face lawmakers of both parties, that will face liberals and 
conservatives, that will face all Americans as we try to make sure that 
the 21st century economy really works for our country and works for the 
people who live in it.
    So I think you should all be exceedingly proud of yourselves, 
including being proud of your differences and how you tried to reconcile 
them. Over the past 7 years, we've tried to modernize the economy, and 
today what we're doing is modernizing the financial services industry, 
tearing down these antiquated walls, and granting banks significant new 
authority.
    This will, first of all, save consumers billions of dollars a year 
through enhanced competition. It will also protect the rights of 
consumers. It will guarantee that our financial system will continue to 
meet the needs of underserved communities, something that the Vice 
President and I tried to do through the empowerment zones, the 
enterprise communities, the community development financial 
institutions, but something which has been largely done through the 
private sector and honoring the Community Reinvestment Act.
    The legislation I signed today establishes the principles that as we 
expand the powers of banks, we will expand the reach of that act. In 
order to take advantage of the new opportunities created by the law, we 
must first show a satisfactory record of meeting the needs of all the 
communities the financial institution serves.
    I want to thank Senator Sarbanes and Congressman LaFalce for their 
leadership on the CRA issue. I want to applaud the literally hundreds of 
dedicated community groups all around our country that work so hard to 
make sure the CRA brings more hope and capital to hard-pressed areas.
    The bill I signed today also does, as Congressman Leach says, take 
significant steps

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to protect the privacy of our financial transactions. It will give 
consumers, for the very first time, the right to know if their financial 
institution intends to share their financial data and the right to stop 
private information from being shared with outside institutions. Like 
the new medical privacy protections I announced 2 weeks ago, these 
financial privacy protections have teeth. We granted regulators full 
enforcement authority and created new penalties to punish abusive 
practices. But as others have said here, I do not believe that the 
privacy protections go far enough. I am pleased the act actually 
instructs the Treasury to study privacy practices in the financial 
services industry and to recommend further legislative steps. Today I'm 
directing the National Economic Council to work with Treasury and OMB to 
complete that study and give us a legislative proposal which the 
Congress can consider next year. Without restraining the economic 
potential of new business arrangements, I want to make sure every family 
has meaningful choices about how their personal information will be 
shared within corporate conglomerates. We can't allow new opportunities 
to erode old and fundamental rights.
    Despite this concern, I want to say again, this legislation is truly 
historic. And it indicates what can happen when Republicans and 
Democrats work together in a spirit of genuine cooperation, when we 
understand we may not be able to agree on everything, but we can 
reconcile our differences once we know what the larger issue is: how to 
maximize the opportunities of the American people in a global 
information age and still preserve our sense of community and protection 
for individual rights.
    In that same spirit, I hope we will soon complete work on the 
budget. I hope we will complete work on the Work Incentives Improvement 
Act, to allow disabled people to go to work. And I know Senator Gramm 
has been working with Senator Roth and Senator Jeffords and Senator 
Moynihan and Senator Kennedy on that.
    There are a lot of things we can do once we recognize we're dealing 
with a big issue, over which we ought to have some disagreements but 
where we can come together in constructive and honorable compromise to 
keep pushing our country into the possibilities of the future.
    This is a very good day for the United States. Again I thank all of 
you for making sure that we have done right by the American people and 
that we have increased the chances of making the next century an 
American century. I hope we can continue to focus on the economy and the 
big questions we will have to deal with revolving around that. I hope we 
will continue to pay down our debt. I still believe in a global economy. 
We will maximize the opportunities created by this law if the Government 
is reducing its debt and its claim on available capital. So I hope very 
much that that will be part of our strategy in the future.
    But today we prove that we could deal with the large issue facing 
our country and every other advanced economy in the world. If we keep 
dealing with it in other contexts, the future of our children will be 
very bright, indeed.
    Thank you very much. I'd like to ask all the Members of Congress to 
come up here while we sign the bill. Thank you.

Note: The President spoke at 1:37 p.m. in the Presidential Hall 
(formerly Room 450) in the Dwight D. Eisenhower Executive Office 
Building. S. 900, the Gramm-Leach-Bliley Act, approved November 12, was 
assigned Public Law No. 106-102.